Some of you might recall my Keeping Up With The Kardashian’s post from mid-January where I summarized a brouhaha developing over the Kardashian’s use of the mark “Khroma” in connection with a cosmetics line. I previously noted that owners of “Chroma” and “Kroma” marks were involved in litigation with the Kardashian’s reps over the marks. On March 11, the Judge in the “Kroma” case venued in California issued a preliminary injunction precluding further sales of the “Khroma” branded products, although retailers will be allowed to sell existing stock. The decision is here.
This decision represents a major defeat for the Kardashians’s makeup brand and could ultimately result in the loss of millions of dollars (although the loss will probably be born more by the licensing company, Boldface, rather than the Kardashian’s themselves). For those with a general interest in preliminary injunctions, the entire opinion is worth a read. It’s detailed and provides a good analysis of all the typical preliminary injunction factors. However, I wanted to highlight three key takeaways.
First, the Court noted the importance of the fact that “Kroma” was a federally registered trademark. Notably, the opinion in this case came after a preliminary injunction had been denied in the “Chroma” case by the same judge. The Court distniguished that decision on a number of grounds, but none more important than this:
The plaintiff there had only common law rights in an unregistered mark, which were limited in scope, and Boldface would have been injured far beyond the rights the plaintiff had established had it been enjoined even in the limited area where the plaintiff’s rights were protected. However, in this case, Tillett has a federally registered trademark, which significantly changes the Court’s balancing and ultimately justifies issuing the injunction in this case.
This is just another example of the critical importance of having a federal registration to protect your brand.
Second, the Court essentially held, base on the evidence before it at the time, that this was a clear case of willful infringment:
Here, Boldface was unquestionably aware of Tillett’s rights and still proceeded with the multi-million-dollar rollout of the KHROMA BEAUTY product line. As early as January 2012, Boldface had constructive knowledge of Tillett’s rights when Tillett’s registration issued. It is unclear whether Boldface’s initial trademark search uncovered Tillett’s registration (although even a cursory PTO search should have); yet, by June 2012, Boldface had actual knowledge of Tillett’s rights through Tillett’s first cease-and-desist letter. Undeterred, Boldface began its extensive KHROMA BEAUTY product rollout in August 2012 that has continued unabated, even after Boldface received refusals of its trademark applications from the PTO in September 2012, putting Boldface on notice that its marks created likely confusion with Tillett’s registration; after Tillett sent a second cease-and-desist letter in October 2012; and after settlement negotiations ended in November 2012. This factor therefore weighs in favor of likely confusion.
Willful infringement is a big deal in trademark cases, as it can open up additional remedies, including attorneys’ fees.
Third, the Court forcefully rejected Boldface’s argument that it would be harmed by an injunction because Boldface was aware of the risks when it rolled out its product:
Here, the Court is well-aware of the impact an injunction will have on Boldface’s business, which could amount to millions of dollars in losses. But the Court is also fully convinced that withholding an injunction will destroy Tillett’s business, which it has built over a decade, causing losses of hundreds of thousands (and perhaps millions) of dollars in past investment and future revenue. The difference between the two is that Tillett has superior rights to Boldface. As a result, the balance of hardships tips sharply in Tillett’s favor.
The equities also rest firmly with Tillett. Boldface moved forward with its multi-million-dollar product rollout using a trademark it knew was similar to Tillett’s registered mark based upon the thinnest of reeds: as few as 13 days of silence from Tillett after receipt of Boldface’s July 18 email. While it admittedly could have changed the KHROMA BEAUTY marks at that time “without suffering serious harm” (Ostoya Decl. ¶ 31), it did not. And it forged ahead even when a neutral arbiter in the PTO sided with Tillett’s view that the KHROMA BEAUTY marks caused likely confusion. This is precisely the type of case in which “any injury that [Boldface] may suffer if preliminarily enjoined may be discounted by the fact that [Boldface] brought the injury upon [itself] by intentionally adopting deceptively similar trademarks and packaging.” (Citations omitted.)
Just as in my first post, I again ask, “What the hell were they thinking?”
Note: A tip of the hat to Lora Friedemann for notifying Duetsblog that the injunction order had been filed.