A judge on Friday partially ruled in favor of Fred Segal LLC on a trademark infringement and unfair competition dispute the retailer originally filed in September 2016 against Melrose building owner CormackHill LLP in Central District Court. Fred Segal LLC, which is majority owned by Evolution Media Capital, resorted to the courts in a bid to sever the brand’s ties with the building at Melrose Avenue and Crescent Heights, home of Fred Segal since 1961.
U.S. District Judge Virginia Phillips wrote in her decision CormackHill – a Canadian investment firm, which was reportedly started by Herschel Supply Co. founders Lyndon and Jamie Cormack, along with Aritzia ceo Brian Hill – does not have rights to keep the signs up at the Melrose compound, thereby striking down the argument that such rights transferred over when it acquired the property in 2015.
The issue is far more complicated than that initial statement of fact due to allowances made in individual tenant agreements allowing for use of the Fred Segal name. This allows, at least in the near term, for the brand’s signage to remain at Melrose.
Fred Segal’s request for collection of damages, which it argued should be paid out in the near term, the judge said it is not entitled to any earlier than Oct. 31, 2019 – when the leases for Melrose tenants Ron Robinson Inc. and Ron Herman Inc. expire – or so long as tenants who do retain the rights to use of the name in their leases remain. The café’s lease, according to court documents, is set to expire Dec. 31, 2020.
CormackHill’s Jason Cormack, when asked if it is the intention of the company to continue renewing the leases of Ron Robinson, Ron Herman or the cafe once those contracts expire responded via email calling it speculative to comment on “what independent businesses might or might not agree to in the future.”
CormackHill had attempted to countersue Fred Segal LLC on grounds the Fred Segal flagship, which opened in the fall less than two miles from Melrose at Sunset and La Cienega boulevards was prohibited under an existing three-mile radius clause. The judge also wrote in Friday’s ruling, CormackHill has no rights to enforce said radius clause.
Business at Melrose, according to Cormack, hasn’t been impacted by the opening of the Sunset door.
“Despite the distraction of false rumors that 8100 Melrose is closing, business is very strong,” CormackHill said when asked if the Sunset location was impacting business at Melrose. “Ron Herman, Ron Robinson, Evelyn Joan of Mauro’s Fred Segal Café and the team at Gregory’s Shoes who have operated from Fred Segal’s original location for decades, remain today and will do so into the future launching new brands, curating the latest fashions, and providing great food and experiences at 8100 Melrose for years to come.”
Whether Gregory’s lease allows for use of the Fred Segal name or signage, Cormack responded the “lease is not at issue in the litigation.”
A trial set for April 17 would determine, among other things, whether the rights to use of the Fred Segal name for the cafe transferred over after changes were made in the ownership structure of the business, whether Ron Herman had severed ties with the Fred Segal name and clarity on whether Fred Segal LLC can technically be considered owner — and thereby enforcer — as it relates to use of the Fred Segal brand.
Both parties in the case appear to interpret Friday’s ruling as a win for their respective sides.
“We are looking forward to closing this chapter and moving Fred Segal forward,” Fred Segal chief executive officer Allison Samek said in a statement. “We have received an overwhelming response since opening our [Sunset] flagship in October and we [will] continue Fred Segal’s retail expansion.”
A spokeswoman for Fred Segal LLC said Friday the issue of when the signage would be removed is to be determined at next month’s trial, a fact CormackHill disputes.
Cormack in his own statement said, “Fred Segal sold the building almost two decades ago and promised that the signage at the original Fred Segal center could be maintained. The ruling confirms this and we’re pleased for our tenants and their clients. The current licensee, not the owner of the brand, has been forcibly trying to impose change at 8100 Melrose and this ruling confirms their actions were unfounded. The original Fred Segal center at 8100 Melrose has been operating outside of any influence from Fred Segal or the current licensee for decades and will continue as such into the future. Our signs on the building will remain while our existing tenants with historical naming rights remain.”