Intellectual Property Rights

Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co.

799 F.2d 867 (2d Cir. 1986)

Facts

Levi Strauss owned a registered and incontestable trademark in its distinctive arcuate stitching design placed on the back pockets of jeans.
The stitching had become closely associated with Levi’s products.
Lois Sportswear imported and sold jeans bearing a highly similar back-pocket stitching pattern.
Lois used its own brand name and labels on the jeans.
It argued that consumers would therefore know that the products were not Levi’s.
Levi sought an injunction for trademark infringement and unfair competition.
The District Court granted summary judgment for Levi and restrained the similar stitching.
Lois appealed.
It argued that:
the parties’ labels differed;
jeans purchasers were careful;
no meaningful confusion existed at the point of sale.

Product-design features may function as trademarks where they identify source and are non-functional.
Likelihood of confusion is assessed through the overall marketplace context.
Confusion is not limited to the person making the original purchase.
Post-sale confusion may occur when members of the public observe the product after purchase and mistakenly associate it with the trademark owner.
Different labels may not cure confusion where:
the labels are removed;
the disputed design remains visible;
observers rely primarily upon the protected feature.
An incontestable mark receives strong protection against confusingly similar use.

Levi’s stitching was a strong source identifier.
Consumers had long encountered the arcuate design on Levi’s jeans.
Lois’s stitching was essentially identical in its overall visual impression.
The placement was also the same—prominently displayed on the back pockets.
Lois relied upon its own labels.
The Court held that labels did not eliminate the problem.
Jeans are frequently observed after:
tags have been removed;
the purchaser has begun wearing them;
no verbal brand name is visible.
Persons seeing the jeans from behind would encounter the stitching but not necessarily Lois’s label.
They might assume the jeans were made by Levi.
This could harm Levi in several ways:
observers could attribute lower-quality goods to Levi;
Lois could benefit from the prestige associated with Levi’s design;
Levi’s stitching could lose its ability to identify a single source.
The Court rejected the idea that only purchaser confusion at the cash counter matters.
Trademark law also protects the public’s understanding of goods in the post-sale environment.
Even if the actual buyer knowingly purchased Lois jeans, the buyer could obtain value from others mistakenly believing they were Levi’s.
The competing goods were identical in nature and sold in closely related markets.
The strength of the mark, similarity of design and proximity of goods overwhelmingly supported Levi.
No full trial was necessary because the material facts concerning the designs were undisputed.

The Second Circuit upheld the injunction protecting Levi’s arcuate stitching.
Lois’s labels did not prevent likely post-sale confusion.
The essentially identical pocket design infringed Levi’s registered mark.
Use this case for: trademark confusion includes post-sale confusion where observers identify the product’s source from a visible design after labels are no longer apparent.