Cosmetic Warriors Ltd. has been defeated on the trademark battlefield.
But Cosmetic Warriors (CWL) waited too long to bring its case, the U.S. Court of Appeals for the Ninth Circuit ruled last week. The court published its opinion to establish that the equitable defense of laches—unreasonable delay that prejudices an opponent—still applies in trademark cases, even though the Supreme Court has eliminated it in the last few years in copyright and patent cases.
“The principle at work in those cases—a concern over laches overriding a statute of limitations—does not apply here,” Judge Jay Bybee wrote June 29 for a unanimous panel, “where the Lanham Act has no statute of limitations and expressly makes laches a defense to cancellation.”
Cosmetic Warriors v. Pinkette Clothing is a win for Kevin Bringuel, who argued the appeal for Pinkette Clothing Inc, and five of his colleagues at South San Francisco-based LTL Attorneys. Merchant & Gould represented CWL.
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Pinkette was founded by two siblings and a cousin in 2003. They say they picked the LUSH name out of a dictionary. When researching internet domain names they came across CWL’s LUSH brand, but figured they were on safe ground because LUSH wasn’t used on clothing. Today Pinkette sells LUSH women’s clothing through Nordstrom, Bloomingdale’s and TJ Maxx.
Pinkette registered the LUSH mark in 2010, without opposition from CWL. CWL says it wasn’t aware of Pinkette’s use until 2014, when its own attempt to register LUSH clothing was rejected over the Pinkette registration. CWL, whose use of LUSH dates back to 1996, then sued for trademark infringement in Los Angeles.
A jury found that Pinkette was indeed infringing, but the jury and U.S. District Judge James Otero in Los Angeles ruled for Pinkette on laches. The Ninth Circuit affirmed Thursday.
CWL argued that laches should not apply because it had acted within the five-year period after which a trademark becomes incontestable. “Laches is not supposed to be a gotcha defense,” CWL attorney Rachel Zimmerman Skobe told the court at April oral arguments. Allowing laches will encourage companies like Pinkette to “stay under the radar of the senior user long enough” to defeat their trademark rights.
Bybee disagreed. There is no statute of limitations on trademark infringement, and the incontestability period is not analogous, Bybee wrote. Plus, unlike the Patent and Copyright acts, the Lanham Act explicitly contemplates use of the laches defense.
“Applying laches to a cancellation claim against a contestable mark neither overrides a clear directive from Congress nor fills a gap where there is none to fill,” Bybee wrote. Judges Paul Watford and John Rogers, visiting from the Sixth Circuit, concurred.
Otero did not abuse his discretion by finding Laches applied in CWL’s case, Bybee concluded. CWL was on notice of Pinkette’s registration but did not bring suit for nearly five years; during that time Pinkette invested substantially in developing its brand; and there was no evidence that Pinkette tried to free-ride on CWL’s brand or that the companies were competing against each other.
“As a result of laches,” Bybee wrote, “CWL can neither enforce its trademark rights against Pinkette’s use of the LUSH mark on clothing nor cancel Pinkette’s registration for use of the mark on clothing.”