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During trial on behalf of Quiksilver Inc., a women’s surfing apparel designer, Michael Yoder, faced with several obstacles in the case, chose to pare down his demands against the defendant, which his client had sued for trademark infringement. He won. But in a second trial, which ended four years later this spring, following a 9th U.S. Circuit Court of Appeals decision that reversed the first verdict, Yoder raised new facts in the case. He also took the more aggressive tactic in requesting that the defendant, Kymsta Corp., completely stop using its label, “Roxywear,” which infringed on his client’s “Roxy” brand. He won again. “I’m a firm believer that with a jury or judge, you have to do some analysis of what a right and fair result is,” said Yoder, a partner in the Newport Beach, Calif., office of O’Melveny & Myers. “If you ask for more than that, it comes back to haunt you. That’s not my style.” Quiksilver Inc. v. Kymsta Corp., No. 02-5497 (C.D. Calif.). Kymsta was seeking $30 million to $50 million in Quiksilver profits derived from the Roxy brand. Yoder noted that at stake was the Roxy brand itself, which generates $400 million a year for Quiksilver. In both of the Quiksilver cases, the jury was to decide some of the issues, a judge the rest. During the first trial, in 2004, Yoder confronted a big challenge: Explaining why his client waited so long to sue Kymsta, a small clothing designer that for several years had attached the “Roxywear” label to the inside of its juniors line of clothes. In truth, he said, a few retailers, such as Nordstrom, had begun confusing their products. But he didn’t want Quiksilver made out to be the bully. “The challenge in the first trial, in part, was that because Quiksilver had waited to object to Kymsta’s use, we were concerned that the jury and judge might not be very sympathetic if Quiksilver came in and asked to bar Kymsta from any use of Roxywear,” Yoder said. “We had to do a balancing act where we needed to keep the jury on our side and not lose them by being overly aggressive, yet we knew the judge would decide exactly what relief would be issued.” Consequently, he asked that Kymsta be prevented from expanding the “Roxywear” label to a wider distribution, not stop its use altogether. A federal judge dismissed the jury and ruled, as a matter of law, that Quiksilver had the senior trademark but had waited too long to bring a claim under the doctrine of laches. He granted Quiksilver some relief, however, in restricting Kymsta from licensing rights to “Roxywear.” Kymsta appealed. The 9th Circuit, in reversing the verdict, concluded that a jury should have decided some of the case. Four years passed, which “made a critical difference in the outcome and the way we approached the trial,” Yoder said. ‘Litigation maneuver’ During depositions, for example, Yoder discovered that Kymsta, since the first verdict, had dropped its juniors clothing line but added the “Roxywear” label to its contemporary apparel. He called the move a “litigation maneuver. There was no legitimate business reason to do what they did,” he said. “We saw this as an opportunity to do better at the second trial and actually ask for an injunction that would prevent Kymsta from any future use of Roxywear.” Also, Yoder introduced new testimony about the growing number of retailer Web sites that confused “Roxywear” with “Roxy” products. He also used a focus group to test whether jurors would accept such an injunction. The group “did not seem to be concerned about Quiksilver being overreaching or unfair in asking for that relief,” he said. This time, the jury found that Quiksilver had the senior trademark, and the judge concluded that, given the new facts, Quiksilver was not barred by the doctrine of laches to bring an infringement action. As injunctive relief, he ordered Kymsta to phase out use of its “Roxywear” label within 18 months. In both cases, Yoder said Kymsta attempted to paint Quiksilver, which has 1,000 employees, as the Goliath attacking David. Yoder deflected the issue by putting several of Quiksilver’s executives on the stand, including the chief executive, who told the story of how he started the company selling board shorts from the back of a Volkswagen. He said the authenticity of that story has helped him win recent verdicts in two other cases involving Quiksilver: a breach of fiduciary duty case on behalf of a subsidiary, DC Shoes, against one of its former executives, and a case involving a former watch licensee, GMT Corp. Kymsta has appealed the recent verdict to the 9th Circuit. Kymsta’s lawyer, Jimmy Nguyen, a partner in Foley & Lardner’s Century City, Calif., office, disagreed that Quiksilver’s story influenced the outcome of either case against his client. But he said the two new facts in the second trial — the proliferation of infringement on the Internet and Kymsta’s change in its business — had an impact on the ultimate verdict.

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