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The Abboud Trial: JA Apparel Strikes Back

Joseph Abboud is known for his composure but the savvy designer faced a tough challenge keeping his usual cool as JA Apparel's lawyers picked apart his defense

NEW YORK – Joseph Abboud is known for his composure and charm, but the savvy designer faced a tough challenge keeping his usual cool last Friday as JA Apparel’s lawyers picked apart his defense on the third day of the much-anticipated trademark infringement trial.

During the opening days of the trial, the plaintiffs have worked to establish JA Apparel’s complete ownership of the Joseph Abboud name, and on Friday attorney Thomas Smart of Kaye Scholer kicked that strategy into high gear, grilling Abboud on the language of the agreement with GFT, to which he sold his trademarks in 2000 for $65.5 million.

Ever since Marty Staff and JA Apparel filed a suit last September charging that Abboud’s intention to use his name to promote his new label Jaz infringed on the trademarks they own, the designer has argued that he never sold his publicity rights and therefore is able to use his name "in a descriptive way." DNR reported that Abboud had considered using "a new composition by Joseph Abboud" as a tagline for Jaz. The designer also said he’d like to use his name in advertisements for the new brand.

But Smart, who could double for Christopher Walken and at times channeled the actor’s most intimidating characters, challenged Abboud on that interpretation: "Does it say explicitly in the agreement that you retain rights to use the name "Joseph Abboud?"

"We didn’t sell the exclusive rights to my name," Abboud explained. "It was always a trademark issue." JA Apparel is seeking a permanent injunction to prevent Abboud from using his name in any marketing or promotional materials related to the Jaz brand.

But Smart worked to box the designer in, focusing on the terms of the agreement, which stipulate that he sold all rights to his name, including "designed by Joseph Abboud," "by Joseph Abboud," "JA," or "anything similar or derivative thereof, either alone or in combination with other words or symbols."

"Is it your view, Mr. Abboud, that ‘a new composition by Joseph Abboud’ is not similar to ‘designed by Joseph Abboud’?" asked Smart.

"It is not the same thing," Abboud replied.

"So you think [GFT] would have paid $65.5 million if you told [them] you were going to use "designed by Joseph Abboud" when you reentered the business?" Smart asked.

Abboud’s attorney, Louis Ederer of Arnold & Porter, objected to the question and his client did not have to reply.

It was not the only time Abboud avoided questions. The designer redirected many of Smart’s questions to his attorney.

"I’m not a lawyer," he said. "You’ll have to ask Ted Dinsmoor."

Dinsmoor, the attorney who represented Abboud during negotiations with GFT as well as help establish the Jaz label, will have to answer tough questions when he testifies on March 10, assuming the trial resumes on schedule.

Abboud also blanked on the details of a number of meetings with GFT where the terms of the trademark sale were negotiated. "I don’t recall the specifics of that," he said a number of times.

Judge Theodore Katz, presiding over the trial held at the U.S. Southern District Court in lower Manhattan, seemed irritated that Abboud and his lawyers were reluctant to specify exactly how they intend to use "Joseph Abboud" in relation to Jaz. He asked repeatedly for specifics for Abboud’s plans.

Defense attorney Ederer, clearly not wanting to show his client’s hand, said he’d hoped the judge would help them work out a compromise.

JA Apparel is also charging that Abboud violated the terms of his non-compete agreement by starting work on Jaz before that agreement expired on July 13, 2007.

Smart painstakingly demonstrated how Abboud began to develop the line well before summer 2007. He cited meetings with Jack Victor, the Canadian tailored clothing company that currently makes suits and sport coats for the Jaz label under license.

Abboud testified he made four trips to Jack Victor’s headquarters before May 2007 where he proposed sketches of Jaz suits and discussed make, trim and silhouette with company executives.

Though the license was officially signed after July 2007, Smart made the case that the deal began well before then. Abboud claimed that the meetings during that time were "exploratory."

JA Apparel is seeking $500,000 in damages for the violation.

Smart also attacked Abboud about the circumstances surrounding his acquisition of Fall River Shirt Company, a manufacturer of better woven shirts based in New Beford, Mass.

Testimony revealed that the designer began making payments to the factory well before July 2007. In March of that year he toured the factory, and soon after that Abboud learned the facility, in considerable debt, would fold if it didn’t receive money to hold off its debt.

Two of Abboud’s agents, one of which was Dinsmoor, then established a new company, Alden Shirts. According to testimony, Abboud loaned $1.5 million to Alden over the spring and summer of 2007-funds that were in turn passed on to Fall River Shirt Company to cover debts and operating expenses.

Smart introduced evidence, including email chains, that suggested Abboud was aware of the arrangement between Fall River Shirt Company and Alden Shirts, but Abboud said he was unable to remember the email.

"You were copied on this email. Do you recall seeing it?" asked Smart.

"I don’t recall seeing this," Abboud replied.

Smart dug in. "Wasn’t Alden Street created … so you wouldn’t violate your non-compete?"

"I did not want to violate my non-compete," Abboud said. The designer acquired the factory in September 2007.

After a tense six-hour cross examination, Abboud and his attorney altered their strategy and for the first time offered some concrete examples of how Abboud intended to use his name to promote Jaz.

Ederer said Abboud could use his name in promotional and advertising materials in type equal in size and emphasis to the words surrounding the name. For instance, in "Designed by Joseph Abboud," the designer’s name would not be larger than the words "designed by." Ederer also said the name would be printed much smaller than the trademark, Jaz.

Testimony is scheduled to resume March 10, when some big names in men’s wear are reported to take the stand, including Lord & Taylor chairman Richard Baker. But he and others may not get the opportunity. At the end of the day Friday, Judge Katz pressed both JA Apparel and Abboud to work out a deal before then.

"I urge you to use this time to come up with some agreement," he said.