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Feb. 2 — Macy's still holds trademark rights in the names of regional department stores that were retired about a decade ago, the U.S. District Court for the Northern District of California ruled Feb. 1 on a motion for partial summary judgment.
The court granted partial summary judgment in favor of Macy's against a company that set up a website to sell T-shirts bearing the logos of now-defunct stores such as Filene's and Marshall Field's that have been converted to Macy's over the years. With respect to eight Macy's “heritage” brands, the company running the Retro Department Stores website was found to have infringed Macy's trademark rights by offering for sale T-shirts bearing the logos.
The case implicates the question of whether someone else can start using a brand name once the original owner has decided to retire it. Trademark law generally does not allow a trademark owner to continue to exercise exclusive rights in a mark if that mark is no longer being used in commerce.
Over the decades, Macy's Inc.'s predecessor, Federated Department Stores Inc., had acquired numerous regional and local department store brands. But by 2006, it had decided to use the Macy's name nationwide.
Macy's started selling T-shirts and bags bearing the old names through its Macy's Heritage Store online.
In 2011, Strategic Marks LLC of Irvine, Calif., declared its intent to “revive” numerous defunct department store brands and started selling T-shirts bearing their logos on the Retro Department Stores site.
Macy's moved for partial summary judgment, seeking judgment on its trademark infringement claims with respect to T-shirts being sold on the Retro website bearing the logos of the eight heritage brands: Marshall Field's, I. Magnin, Burdines, Kaufmann's, Lazarus, Meier & Frank, Rich's and Strawbridge's.
The court rejected Strategic's argument that the T-shirts and handbags being sold by Macy's through its heritage store should not count as use in commerce—because those are merely “ornamental” uses.
The court emphasized that the names in question are still known by consumers for their associations with the old regional department stores. Indeed, it noted that Strategic Marks was relying on this continued goodwill in order to sell its retro T-shirts.
The court rejected the argument that, just because the old department stores had closed, the trademarks in question had necessarily been abandoned by Macy's.
“Simply because a store has ceased operations does not mean that its proprietor or owner does not maintain a valid interest in the registered trademark of the business,” the court said. “A trademark can still exist and be owned even after a store closes. If an accused infringer uses the mark, a consumer may still be confused as to whether the owner of the trademark authorized or licensed the infringer.”
The court also rejected Strategic's argument that the T-shirts and handbags being sold by Macy's should be deemed as not bona fide uses in commerce.
Having determined that Macy's still held enforceable trademark rights in the eight heritage brands, the court applied an eight-factor test for likelihood of confusion as set forth by AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 204 U.S.P.Q. 808 (9th Cir. 1979).
Taking the factors together, the court found no genuine outstanding question of material fact regarding confusion.
“Because Strategic Mark's infringing activity consists of the deliberate sale of the same product sold by Macy's (T-shirts), bearing the same exact mark, and sold at [a] relatively inexpensive price which likely results in limited consumer care,” the court found a “high likelihood of confusion” and granted summary judgment in Macy's favor.
This partial summary judgment did not address the allegations in Macy’s complaint that Strategic Marks had infringed any rights held by Macy’s in the Foley’s, Goldsmith’s, Hecht’s and Stern’s names. Nor did it address Macy’s complaints regarding Strategic’s sales of candy or what seemed to be its intent—as stated on its website—to “revive” the old department stores. Also not addressed were Macy’s claims of false designation of origin and unfair competition, false advertising, trademark dilution, and claims of unfair competition under California state statute. A trial date has been set for May 2.
The court's ruling was issued by Judge Edward M. Chen.
Macy's was represented by Hanson Bridgett LLP, San Francisco. Strategic Marks was represented by the KB Ash Law Group P.C., Pleasanton, Calif.
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