A three-judge panel of the Ninth Circuit Court of Appeals agreed Friday that Los Angeles-based jeweler Chris Aire was shortchanged during underlying litigation over Hublot’s use of “red gold” to describe certain of its rose gold watches. Aire’s company Solid 21 registered a trademark for the term in 2003 and the company sells a “Red Gold” collection of jewelry and watches.
Although a California federal court in June 2015 found that the term was too generic to maintain trademark protection, leaving Aire and Solid 21 without a genuine claim to pursue, the appeals court found that the court improperly excluded elements of discovery that should have been considered, and possibly would have aided Aire’s case.
The appeals court specifically pointed to the unexplained exclusion of expert testimony from a linguist regarding certain “associations” that English speakers have with the term “red gold,” as well as a number of declarations by consumers as to their understanding of the term.
“Consumer perception goes to the heart of the genericness inquiry, so the exclusion of consumer declarations put a substantial hurdle in the way of Solid 21’s effort to mount a successful opposition to summary judgment,” the appellate judges said.
The judges added that “Hublot could have cured any prejudice” it felt by carrying out additional discovery of its own and that the district court generally “[did] not justify its ruling” to exclude the declarations.
Even a declaration by a former Solid 21 employee saying that it was her understanding that “red gold” had not been used to describe watches before the company started using the term should have been allowed, according to the opinion.
“This is the type of evidence that courts have admitted for purposes of determining genericness,” the judges added.
They went on to say that with the excluded declarations, Aire “raised a triable issue of material fact” around whether shoppers think “red gold” refers to a specific brand of goods, which would mean the term is not generic, or whether they associate it only with a product in general, meaning the term is generic.
The court reversed the underlying decision and sent the case back down to the federal level for further review.
Representatives of LVMH, Hublot and Aire could not be reached for comment.
Solid 21 sued Hublot and its parent LVMH in 2011, telling a California federal court that the luxury watchmaker only began using “red gold” to describe certain of its products after Solid 21 had been using the term in advertising and various promotions for years.
The company also alleged that the practice amounts to unfair business practices and unfair competition, leading to lost profits, sales and dilution of the trademark, which will continue unless LVMH and Hublot is prohibited from using the term.
Solid 21 is also seeking unspecified damages.
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