DEP LOSES LAWSUIT, GAINS REORGANIZATION OK

Byline: Vicki M. Young

NEW YORK — Clinique has won this round.
A federal judge in Manhattan has barred Dep Corp. from using “basique simplified skin care” in combination with a logo with the single letter “b” because in doing so, it infringed on trademarks owned by Clinique Laboratories.
Clinique, a wholly owned subsidiary of Estee Lauder Cos., sued Los Angeles-based Dep in September, claiming that Dep’s launch of the Basique skin care line would infringe on Clinique’s trademarks due to similarities in the product lineup and the packaging. Dep was then testing the line at selected mass merchandisers and drugstores.
U.S. District Court Judge Shira A. Scheindlin, in a 38-page decision, said the issue is “whether consumers are likely to be confused.” Scheindlin found that Dep “blatantly copied nine items” from Clinique’s skin care line.
According to Scheindlin, “the Basique line — visually and functionally — attempts to look as much like Clinique as possible, stopping just short of using Clinique’s actual marks on the products.”
As for the packaging, Scheindlin determined that Dep “consciously imitated” Clinique, explaining that “the shape of each Basique container is virtually identical to the shape of its Clinique counterpart, as is the size of each container.”
The likenesses “carry through to similarities in the boxes in which they are packaged [and] Dep has mimicked the textured shading of the Clinique boxes, and the dimensions of the boxes are the same.”
According to Robert Berglass, Dep’s president and chairman, the company has already recalled Basique in accordance with the court’s order.
The court ruled that Dep can still use the line “basique simplified skin care,” provided it is combined with different packaging materials and as long as the mark is not used in combination with the single letter “b.” The use of the small letter “b” as part of Basique’s logo was deemed to be too visually similar to Clinique’s “C” trademark, combined with the brand name.
Berglass said Dep is “working on developing a new trade dress to conform with what the court wants us to do” and plans to relaunch the line during the first quarter of 1997.
Not all the news from court was bad for Dep. The company, which sells hair care, skin care and oral care products under names like Agree, Topol, Porcelana and Cuticura, had its bankruptcy plan of reorganization confirmed by U.S. Bankruptcy Court in Los Angeles on Oct. 23.
Under the plan, unsecured creditors will be repaid in full with 5 percent interest over 18 months. In addition, a lender group, led by Foothill Capital Corp., will provide Dep with $62 million in long-term financing at an interest rate of prime rate plus 2 percent, with a maturity date of July 31, 2002.
Dep was forced to file for Chapter 11 protection due to a heavy debt load incurred when it acquired the Agree and Halsa hair care brands from S.C. Johnson & Son Inc. in August 1993 for $45 million.
Dep has since filed suit against S.C. Johnson in Los Angeles federal court for breach of contract, charging that the company altered its North American marketing and sales practices in violation of the purchase agreement. S.C. Johnson has countered with a libel suit, and both suits are pending in federal court.

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