Levi Strauss loses out on US court examining EU infringement

UK

Catherine White-staff reporter

US clothing brand Levi Strauss has lost a request for a EU trademark infringement suit to be examined in a US court after a judge ruled he did not have a duty to decide if an online seller breached EU laws.

 Levi Strauss & Co (LS&Co) filed a suit against Papikian Enterprises claiming that the online retailer violated the EU's Trademark Directive by buying Levi trademarked goods outside the EU and selling them to third parties and individuals within the territory without its permission.

Papikian claims he registered the domain name"501usa.com" through which he sells discontinued or out-of-stock styles of LS&Co brand jeans.

He claims he developed this business model after he saw "USA501.com", a website that offered used LS&Co products for sale. Papikian also claims that LS&Co previously referred its customers to 501USA.com, when they were looking for out-of-stock items.

However, LS&Co claim that, except for sales through its retail stores and websites, it sells products in the US and abroad directly to authorised retailers only and that it does not sell through distributors, wholesalers or jobbers. LS&Co added that "its retailers are not permitted to re-sell first quality merchandise".

In 2003, LS&Co said they sent a cease-and-desist letter to Papikian to "cancel or transfer any domain names that appropriate LS&Co marks, refrain from using LS&Co marks in metatags, refrain from using LS&Co marks on Papikian's websites, and refrain from selling LS&Co branded goods to customers in European Union countries."

LS&Co alleges that upon looking at the website "recently",  the "website had changed radically, in that it looked more professional, offered LS&Co products exclusively, and made more extensive use of LS&Co trademarks".

As a result, Levi accuses the trader of violating US federal and state laws on cybersquatting, trademark infringement, unfair competition and trademark dilution.

However, District Judge Jeffrey S White of the US District Court of California, declined Levi's case because it had failed to provide adequate reasons why the matters should be dealt with by the US court and not in the courts of the relevant EU member states.

Judge White said of LS&Co, "It cannot present facts essential to justify its opposition to Papikian's motion on that claim, let alone specified what such facts would be. Accordingly, the court overrules LS&Co objection."

Further, he questioned whether he should rule on the claims based on the 'comity doctrine' (a doctrine that governs the interactions of courts in different states, localities and foreign countries).

He therefore ruled that EU courts were better prepared to make rulings on mark protection in that geographic area.

"Trademark rights exist in each country solely according to that country's statutory scheme. Furthermore, LS&Co has not convinced this court that exercising supplemental jurisdiction over this claim would not prejudice the rights of European governments."

He added that it was not "in the interests of judicial economy" to further examine the EU law claims, but said that it was for other courts to determine whether individual cases like this should be decided upon.

Papikian's motion for summary judgment is "granted in part and denied in part", Judge White said.