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Lucky Brand Fined for Conduct in Lawsuit

Lucky Brand, a Liz Claiborne unit, could pay more than $225,000 in sanctions.

Lucky Brand Dungarees Inc. and its parent company, Liz Claiborne Inc., could be forced to pay more than $225,000 in sanctions after a federal judge found earlier this month that the companies failed to abide by court rules in a trademark infringement suit.

This story first appeared in the January 22, 2009 issue of WWD.  Subscribe Today.

In an order filed in district court in Manhattan on Jan. 8, Judge Michael Dolinger ruled Liz Claiborne and its subsidiary did not properly conduct themselves in the discovery phase of their case against apparel maker Marcel Fashion Group Inc. During the pre-trial discovery period, plaintiffs and defendants are obliged to provide each other with requested evidence.

Liz Claiborne and Lucky Brand first brought the suit in July 2005. They accused Marcel Fashion Group and its licensee, Ally Apparel Resources, of trademark infringement in some elements of their Get Lucky line.

Marcel Fashion, which trademarked the Get Lucky brand in 1986, filed counterclaims in return. The two companies have a contentious history related to the mark. In 2003, they reached an agreement that Liz Claiborne would no longer use the “Get Lucky” phrase to promote Lucky Brand. Claiborne acquired Lucky in 1999.

During discovery, Lucky Brand said it had only used the phrase in an infringing manner once after the 2003 agreement, but Marcel Fashion found another instance. Lucky Brand then produced a series of internal documents and testimony related to its use of the phrase “get lucky” in product designs that, Dolinger said, it was obligated to have released earlier. Calling the company’s pace during the proceedings “paralytic,” Dolinger wrote: “this pattern of inaction and misdirection…amply demonstrates, at a minimum, gross negligence, and lends itself more readily to an inference of willfulness.”

He ordered that Marcel Fashion should be compensated for the time and money in legal proceedings that Lucky Brand’s actions had caused. On Jan. 15, lawyers for Marcel Fashion requested Liz Claiborne be made to pay $225,378.71 in attorney’s fees and costs. The judge has yet to rule on the exact amount of the penalty.

“We acknowledge that our company’s discovery failings, although explainable and not intentional, are not excusable,” said Nicholas Rubino, senior vice president and chief legal officer at Liz Claiborne. “We agree that a reasonable award of attorneys’ fees is appropriate. However this does not diminish the validity of our original claims against the defendant.”