Trademark Issues Hotly Contested At Abboud Trial

The digs were fierce in the opening days of the long-awaited trial between Marty Staff and Joseph Abboud

NEW YORK — Joseph Abboud, irrelevant? Marty Staff, a saboteur?

The digs were fierce in the opening days of the long-awaited trial between Marty Staff and Joseph Abboud, which got under way here last week as the two executives and onetime business partners took the stand to defend, via alternately aggressive and startling testimony, their competing claims to the Joseph Abboud name.

At issue: a civil suit filed last September by Staff’s company, JA Apparel, which charged that Joseph Abboud’s intention to use his own name to help market his new men’s wear line, Jaz, is an infringement of the Abboud trademarks, which are owned by JA Apparel.

DNR reported that Abboud had considered using “a new composition from designer Joseph Abboud” as a tagline for Jaz, though Abboud denied that in court. However, Abboud has asserted his right to use his name “in a descriptive way to let the public know who is making these clothes.” JA Apparel maintains that Abboud forfeited the rights to use his name in business when he sold the trademarks in 2000 for $65.5 million.

Vagaries of intellectual property law aside, the trial, held at the U.S. Southern District Court in lower Manhattan and heard by Judge Theodore Katz, is proving to be something of a bloodletting for the two high-profile figures, whose attorneys have lobbed thorny and at times legally debatable queries at each of them in turn.

Staff was the first on the chopping block, on Wednesday. Men’s wear’s bad boy appeared out of his element in a pressed suit, but he was nimble and clearly well-coached as he deflected an aggressive, three-hour cross-examination, which sought in part to demonstrate that Joseph Abboud’s fame entitled the designer to publicity rights that extended beyond and in some cases preempted the Abboud trademarks.

In court, Abboud’s attorney, Louis Ederer, of Arnold & Porter, repeatedly attempted to illustrate the designer’s fame and his de facto publicity rights, but Staff repeatedly pushed him away, even going so far as to say that Abboud was “irrelevant” as a designer “to the retailers, suppliers and media in the [apparel] industry.”

Ederer parried, asking Staff whether the words “Joseph Abboud” employed in an ad could ever refer to the man, and not the brand.

“I haven’t considered it because we would never do that,” Staff replied coolly.

But the jabs were also aimed at Staff. Ederer not only questioned the limits of JA Apparel’s trademark rights, but also raised eyebrows when he assailed Staff’s abilities as a CEO, questioning the performance of certain brand extensions, the slump in the brand’s 2007 sales and the move by parent company J.W. Childs Associates to increase oversight of Staff. Ederer even suggested that the entire lawsuit was Staff’s last-ditch effort to save his job at JA Apparel—a charge at which Staff was clearly indignant.

Testimony also revealed some surprises. For instance, JA Apparel hired a private investigator to shadow Abboud at public appearances after the designer left the company in 2005. Staff also admitted to asking licenses to sign agreements that forbade the companies from doing business with Joseph Abboud. In at least one case—JA Apparel’s license with Superba—such language was written into the contract.

“Exclusivity agreements are standard requests with licenses,” Staff explained.

Staff denied charges that he was trying to sabotage Abboud’s new business. “I welcome competition,” he said. “Just not with our name.

JA Apparel also asked Joseph Abboud to come back to the company as little as a year ago, when Abboud had already begun preliminary conversations with his current partners about Jaz. JA Apparel had offered the designer a job as creative director of a new high-end men’s line. Abboud turned it down, and the line never materialized.

Staff’s own lawyers, led by Phillip Geraci and Thomas Smart of Kaye Scholer, worked to shore up the company’s claims to all iterations of the Joseph Abboud name, reviewing the language of the sale agreement that Abboud signed in 2000. “The trademarks are our key asset,” Staff said. “It’s the foundation of our company and we wouldn’t have paid millions of dollars for them if we didn’t have complete rights to the name.”

JA Apparel’s attorneys also cited confusion among reporters, retailers and industry types regarding the difference between Jaz and the Joseph Abboud brand. After the news of Jaz was reported in DNR and other publications, a number of people called JA Apparel to congratulate them on the new line, according to testimony. Lawyers say consumer confusion is an important standard in trademark infringement cases.

On Thursday, Abboud took the stand and Ederer painstakingly established the designer’s credentials and reputation by having Abboud enumerate every job, award and commendation he ever received in his long career. The point: to assert that Abboud has authority and a persona distinct from the Joseph Abboud brand—an authority that might give him certain rights to use his name.

Abboud also revealed in testimony how the current tension between Abboud the Brand and Abboud the Man stretches back to 2004. At the time, Marty Staff, along with equity firm J.W. Childs, had just purchased JA Apparel from GFT, which had originally bought the trademarks from Abboud in 2000. Staff hired Abboud to serve as a creative consultant, but the two quickly clashed over Abboud’s role in the company.

Abboud made frequent public appearances—on the Today Show and the Imus show, among others—that Staff considered inappropriate for the brand. Abboud maintained he had a right to make appearances where and when he wanted, and that he had publicity rights distinct from JA Apparel’s brand. Staff found his publicity difficult to manage and Abboud left in July 2005, at which time his non-compete agreement kicked in.

Abboud was to be cross-examined after presstime on Friday, when JA Apparel’s litigators were expected to attack the designer’s claims to the Abboud name as well as pursue their charge that Abboud began work on Jaz before the end of his non-compete agreement, which expired July 13, 2007.

JA Apparel’s attorneys have raised doubts that Abboud would have been able to line up licenses, and design prototypes and marketing materials in the three weeks between the end of his non-compete agreement and July 30, when he previewed Jaz to DNR.

Additionally, Abboud testified Thursday that he made loans to Alden Street Shirts, a factory he eventually purchased, before the end of his non-compete. The designer made five or six loans to the facility starting in April 2007. The factory, Abboud said, was in financial straits and would have been shuttered had he not made the loans. “It was a dilemma,” he said. “But had I not loaned the money [Alden Street Shirts, now called Herringbone Shirt Mfg.] would not be here today.” The factory currently makes woven shirts for the Jaz line. Plaintiff attorneys said they will seek damages up to $500,000 for breaking the non-compete agreement.

Industry brass are also expected to take the stand after Abboud’s cross-examination Friday. Witnesses will include Lord & Taylor chairman Richard Baker, who is expected to address allegations that Marty Staff threatened to pull JA Apparel’s business from the retailer if Baker continued to support Jaz and its designer.

Judge Katz is expected to render a decision a week or two after testimony is complete.