The Latest Retailer

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American Eagle is the Latest Retailer Targeted by "LES NYC" Trademark
Troll

American Eagle has been named in a trademark infringement lawsuit filed by
seeming trademark troll, Robert Lopez. In his complaint, which was filed in the
Southern District of New York court last week, Lopez, who splits his time
between working as a paralegal and pursuing his clothing venture, alleges that
the teen retailer is selling t-shirts bearing his federally registered “LES NYC”
trademark.

Lopez, who claims to have used the LES NYC mark since 1999, asserts that
American Eagle has "falsely described, represented, and designated the origins
of its goods and services” and stands to cause “confusion where consumers of
clothing products will think that all LES NYC clothing related products are
sponsored or produced by [American Eagle].”

THE LES NYC TRADEMARK

Interestingly, Lopez has held the federally registered trademark for “LES
NYC” since June 17, 2014, following an extensive battle with the U.S. Patent and
Trademark Office (USPTO) over the mark, beginning in 2011. Lopez’s early
attempts to register the mark were shot down by the USPTO, which held that the
“LES NYC” mark was ineligible for registration because it “is primarily
geographically descriptive of the origin of applicant’s goods.” As the USPTO
noted in its Office Action (the formal document from the USPTO rejecting an
application to register a trademark), a three-part test is applied to determine
whether a mark is primarily geographically descriptive of the goods and/or
services within the meaning of Trademark Act (and thereby ineligible for
registration).

To this, Lopez responded, asserting that while the mark may be geographically
descriptive, it was not merely that, as it had acquired a level of
distinctiveness “in connection with clothing based upon his long standing and
continuous use of the mark in interstate commerce.” As a result, Lopez argued
that the mark was, in fact, operating as a trademark (aka an identifier of
source) and thereby, should be registered.

And the USPTO seemed to agree, as its response – a second Office Action – did
not include a claim of geographic descriptiveness but a claim instead that
Lopez’s LES NYC mark was too similar to an existing trademark application of
another to be registered. As a result, Lopez’s application was suspended in
October 2011 until the other party’s application for the same or similar mark
was processed.

Lopez’s application was revived in June 2013 and formally registered with the
USPTO in June 2014 in Class 25, which extends to “Baseball caps and hats; Hooded
sweatshirts; Short-sleeved or long-sleeved t-shirts; T-shirts.”

LITIGATION HISTORY

Interestingly, even before Lopez was awarded the LES NYC federal
registration, he has been on quite a litigation spree in connection with the
mark, filing lawsuits since 2007 against major retailers on state law trademark
grounds. According to Law360, a number of the lawsuits that Lopez filed were, in
fact, based on federal trademark claims and thus, had to be “trimmed down,” as
Lopez held no federal rights in his mark.

As Bowery Boogie, a lifestyle website dedicated to New York’s Lower East
Side, wrote in 2011: “Each time fashion behemoths attempt to capitalize on the
popularity of the neighborhood designation, Lopez is there keeping them in
check. Recent lawsuits of trademark infringement included cases against
Aeropostale [he sued that company twice], Urban Outfitters, and the Gap.” Lopez
has also filed lawsuits against Forever 21, J. Crew, Puma, Payless, Hanes,
Macys, Sears, MITCHELL & NESS, Bloomingdales, and American Rag, amongst
other retailers.

Not surprisingly, most of the aforementioned lawsuits have settled out of
court with Lopez likely walking away with a monetary reward. Chances are, the
retailers that have agreed to settle could have prevailed at trial, but it is
both cheaper and less time consuming to settle the case than to pursue it in
court. Having said that, Lopez lost at least one of the cases he filed, when
U.S. District Judge Paul A. Engelmayer granted Gap’s motion for summary
judgment, holding that Lopez “did not prove a likelihood of confusion between
the two shirts that Old Navy was selling and [his] Lower East Side Co.
products.”

DESIGNER OR TRADEMARK TROLL?

Considering the significant number of lawsuits that Lopez has filed against
companies with deep pockets in connection with his trademark, it is certainly
worth arguing that he may be acting far more like a trademark troll than an
actual clothing designer.

As you may know, the term “troll” when used in connection with intellectual
property has distinct definitions depending on what type of IP we are actually
talking about. When used in a patent context, a troll (or "non-practicing
entity" as the white house recently coined) is an entity that buys up ambiguous,
vague or broad patents (typically patents that are not otherwise being used) and
then tries to make money off of them by threatening to sue (i.e. demanding a
license fee from) anyone who could arguably be said to be using them without
permission ("infringing them"). When we are talking about copyright trolls, the
focus is not on whether the party that is filing suit is actually a practicing
entity or not (which is key in a patent troll context). Instead, a copyright
troll is a party that enforces copyrights it owns for purposes of making money
through litigation, in a manner considered unduly aggressive or
opportunistic.

While we most commonly see trolls in the two aforementioned contexts, the
concept does, in fact, apply in to trademarks, as well. It often takes the form
of one party acquiring rights in a famous trademark before the legitimate
trademark user is able to do so. We see this quite regularly in China, where
native business people file to register famous Western marks, such as Apple or
Hermès, before the Western brands do, and then either use the trademarks to sell
counterfeit goods and/or attempt to demand a large sum of money from the
legitimate trademark owner in exchange for the right to use its name in
China.

Since Lopez is very clearly only operating in the U.S., we do not have a
Chinese cybersquatting trademark troll on our hands. Instead, it appears that,
if anything, Lopez is operating more like a copyright troll (in a trademark
context, however), as he is, in fact, using his “LES NYC” trademark on the
clothing he offers for sale on his small web-based store. However, he also is
filing a significant number of lawsuits in connection with his trademark. And
chances are, he is doing so with the goal of extracting monetary settlements
from the named defendants, which are larger brands with deep pockets and likely,
the desire to settle cases.

With this in mind, we will have to wait and see how Lopez fares in his
recently initiated battle with American Eagle and whether he pursues additional
lawsuits in the future (our guess is, he will).

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