NEW YORK — First round to Rachel Roy.
This story first appeared in the May 19, 2014 issue of WWD. Subscribe Today.
New York State Supreme Court Justice Jeffrey Oing on Friday granted designer Rachel Roy a preliminary injunction barring The Jones Group from proceeding with the sale of her business to Bluestar Alliance for $14.6 million.
The granting of the preliminary injunction allows Roy’s lawsuit to proceed to trial.
Roy said, “I am pleased with today’s ruling and that the court has recognized my rights to creative control and approval over the designs and licenses for my brand. I have worked hard to develop the Rachel Roy brand, and my team and I are eager to continue our focus on design, development and production.”
The designer entered into a series of interrelated agreements with Jones in 2008 to develop and sell products under the Rachel Roy brand. The agreements include the transfer of intellectual property assets, an asset purchase agreement, a licensing agreement and an employment agreement establishing Roy as artistic director for the Rachel Roy brand. She is still an employee of Jones, although her business was shut down by the group prior to its acquisition by Sycamore Partners for $2.2 billion.
Roy on April 11 filed a lawsuit against Jones claiming breach of a contractual agreement in connection with the sale of her business, which allegedly was done “free and clear” of the designer’s approval rights. Named as defendants were Jones Investment Co. Inc., Jones Apparel Group USA Inc. and The Jones Group Inc. Neither Sycamore nor Bluestar was named as a defendant in the suit.
After a hearing, Oing in a bench ruling said, “The injunction is now against the defendants, and it prevents them pending trial of this matter [from] selling or transferring the Rachel Roy brand trademarks in any manner that does not fully preserve Ms. Roy’s rights of approval and creative control over the use of the trademark.”
As for Oing’s reasoning, he went on to say in court: “Irreparable harm is that, you know, when it comes to trademarks, when it comes to designs, it’s very personal in nature.…This is something that she created, it’s her baby in that sense.…And I can’t help but think that [her trademark or] what she has worked hard at to develop would somehow go downscale or may go downscale, and it may go down to lower end, which is not what she envisioned, and that’s why this contract is written the way it’s written.”
Marc Kasowitz of Kasowitz, Benson, Torres & Friedman, who represents the designer, said, “We are very pleased to have achieved this important victory for Rachel. The judge clearly recognized that Rachel Roy herself is the critical component of her business and her brand.”
Oing’s ruling and reasoning on Friday goes solely to the question of whether Roy has sufficiently shown likelihood of success and irreparable harm, the two requirements that must be met before a preliminary injunction can be granted.
The parties still have to go to trial on the actual merits of the case. There is no guarantee that just because Roy has met the conditions for a preliminary injunction, she will also win at trial.
A spokesman for Sycamore, Jones’ new owner, declined comment.
Roy’s designer collection is what was shut down by Jones. There is also a Rachel Rachel Roy contemporary collection that is sold exclusively to Macy’s, which Jones will continue to produce.