U.S. Supreme Court rules Lucky Brand not barred from raising new claims in trademark infringement case

Lucky Brand Dungarees v. Marcel Fashion Group was argued on January 13, 2020. The case came on a writ of certiorari to the U.S. Court of Appeals for the 2nd Circuit. It concerned trademark infringement and three legal challenges between apparel companies Marcel Fashion Group, Inc. (“Marcel”) and Lucky Brand Dungarees, Inc. (“Lucky Brand”).

The case: Marcel and Lucky Brand filed several lawsuits for trademark infringement in 2003, 2005, and 2011. In the 2011 action, Marcel sued Lucky Brand for trademark infringement. The U.S. District Court for the Southern District of New York granted summary judgment to Lucky Brand, ruling the 2003 lawsuit barred Marcel from suing Lucky Brand.

On appeal, the 2nd Circuit reversed the decision and remanded the case. On remand, Lucky Brand moved to dismiss the suit, arguing a settlement agreement resulting from the 2003 lawsuit prevented Marcel from suing Lucky Brand. Marcel countered that Lucky Brand could not use this argument because Lucky Brand could have pursued this defense in the 2005 litigation but did not. The district court granted Lucky Brand’s motion to dismiss. Marcel appealed again to the 2nd Circuit, which vacated the lower court’s ruling. Lucky Brand appealed to the U.S. Supreme Court, arguing the 2nd Circuit’s decision conflicted with decisions from other circuit courts on similar issues.

The outcome: The court reversed the U.S. Court of Appeals for the 2nd Circuit’s judgment and remanded the case. In a unanimous opinion written by Justice Sonia Sotomayor, the court held that Marcel cannot prevent Lucky Brand from raising new defense arguments in the case because the 2003 and 2005 lawsuits challenged different actions involving different trademarks occurring at different times.

In her opinion, Justice Sotomayor wrote, “This Court is asked to determine whether Lucky Brand’s failure to litigate the defense in the earlier suit barred Lucky Brand from invoking it in the later suit. … Marcel’s 2011 Action challenged different conduct—and raised different claims—from the 2005 Action. Under those circumstances, Marcel cannot preclude Lucky Brand from raising new defenses.”

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