By  on December 26, 2000

Judge Jed Rakoff, the Manhattan federal district court judge presiding over the trademark-infringement dispute filed by Calvin Klein Inc. against its largest licensee Warnaco Group Inc., granted Warnaco's motion to dismiss some of CKI's claims.The Dec. 19 order, in effect, places even greater emphasis on trademark and distribution questions in the trial slated to begin next month.Among those that were dismissed were CKI's claim that it was entitled to an injunction barring Warnaco from distributing CK Jeanswear and men's accessories bearing the trademarks at issue to Costco, Sam's Club, BJ's and other alleged unauthorized channels of distribution. In granting part of Warnaco's motion, the court also sided with Warnaco's contention that CKI was not entitled to a declaratory judgment stating that the defendants breached the jeanswear license, the men's accessories license and the store license, and that the May 30 lawsuit was sufficient notice to properly terminate the agreements.The Calvin Klein underwear license with Warnaco is not part of the suits because it is covered in an arbitration clause.The court declined to grant CKI's request to have Warnaco indemnify CKI for costs and expenses incurred in connection to the legal dispute.Judge Rakoff also denied CKI's motion for summary judgment, a request seeking a judicial ruling that CKI is the winner on the merits of its lawsuit based on court documentation alone.The issues that will go to trial include Warnaco's claims of trade libel and defamation against CKI and Calvin Klein personally, and CKI's trademark infringement and breach of contract claims against Warnaco.One issue that could be hotly contested centers on the "past practice" of CKI and Designer Holdings Inc., which held the Jeanswear license prior to its acquisition by Warnaco in September 1997.The court wrote in its order that it agreed with Warnaco's position that the "past practice" of CKI and DHI in distributing jeanswear "establishes a separate, alternative basis for distributions permitted under that agreement." The court said it found that "genuine issues of material fact exist as to precisely what this 'past practice' was and as to whether the distribution decisions made by defendants complied with such past practice."CKI is seeking a recision of the Jeanswear license, and Warnaco, in its counterclaims, is seeking monetary damages.A Warnaco attorney declined comment on the ruling.A spokesman for CKI said, "We are pleased that the court has now cleared the way for us to go to trial on our claims of trademark violation and breach of contract."As reported, CKI filed its lawsuit against Warnaco on May 30. Warnaco, a month later, shot back with some legal firepower of its own -- a series of counterclaims, including defamation charges against the designer personally.Judge Rakoff in August granted some of the requests by both sides over what claims were to be dismissed and what could proceed to trial late next month.The August order dismissed Klein's general claims against all defendants for breach of fiduciary duty and constructive trust, as well as the state law claim of deceptive acts or practices. The court also granted Warnaco's motion to dismiss the intentional misrepresentation claim against Warnaco chief executive Linda Wachner and to stay that claim against Warnaco Inc., pending arbitration. Additionally, the court had granted Wachner's motion to dismiss her from four additional counts. These are breach of quality assurance, jeanswear, accessories and outlet store agreements.

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