If you are keeping up with the Kardashians, you know that Kim, Kourtney and Khloe Kardashian command not only a broad media presence but also an empire of clothing, perfume, shoes, diet and exercise, and cosmetics brands. It is difficult to walk up to a magazine stand and not see one of their faces gracing the cover of any given magazine or tabloid. Although marketed extensively, one item that you may not see in stores soon is their Khroma Beauty by Kourtney, Kim and Khloe brand. A court in Los Angeles just granted a prior trademark owner a preliminary injunction, potentially knocking the brand off of shelves and providing a lesson to brand-holders: officially trademark your name.
What’s in a Name?
For two company owners, the name means everything. Around May 2012, Kim, Kourtney and Khloe Kardashian, along with their individual companies, and Boldface Licensing + Branding (Boldface), entered into a licensing agreement to use the Kardashian images and likenesses in connection with the promotion of beauty products. Under the terms of the contract, the line of beauty products would be sold under the mark “Khroma Beauty by Kourtney, Kim and Khloe” and would be marketed closely with their names, images and/or likenesses. Subsequently, Boldface filed two trademark applications for the marks “Khroma Beauty by Kourtney, Kim and Khloe” and “Kardashian Khroma.” The line was officially announced June 7, 2012.
In response to this new brand, two lawsuits commenced. The first, filed by Chroma Makeup Studio LLC (Chroma Makeup), a Beverly Hills-based makeup studio that also sells cosmetics under the line “Chroma.” Chroma Makeup asserted claims for trademark infringement and unfair competition. Chroma Makeup Studio LLC v. Boldface Group, Inc., No. CV 12-9893 (C.D. Cal. Jan. 23, 2013). The second, filed by Boldface against By Lee Tillett, Inc. (Tillett), the owner of the mark “Kroma” and www.kromamakeup.com, which features cosmetics marked as “Kroma by Lee Tillett.” Boldface sought a declaratory injunction that Boldface’s marks do not infringe on Tillett’s marks. Tillett then filed a counterclaim, alleging trademark infringement and unfair competition, just as Chroma Makeup did. Boldface Licensing + Branding v. By Lee Tillett, Inc., No. CV 12-10269 (C.D. Cal. Mar. 18, 2013).
In early 2013, both Chroma Makeup and Tillett sought a preliminary injunction to bar the sale of any Khroma Beauty by Kourtney, Kim and Khloe product. Interestingly, although the cases were heard by the same judge, only one preliminary injunction was granted. The court’s decision to grant the preliminary injunction has the strong potential to seriously injure the Kardashians’ makeup brand.
Drawing the Line
At first blush (pun intended), the cases appear quite similar. In fact, Boldface’s defense in each case is essentially the same. Boldface argues that the Boldface products prominently feature the Kardashian names so much so that there is no likelihood of confusion, and that the term “chrome” and its variations makes a weak mark because it simply means “color” in Greek and because there are widespread uses of the marks that are phonetically identical.
Chroma Makeup and Tillett’s arguments, though factually distinct, were also quite similar. To obtain a preliminary injunction, both argued that they were likely to succeed on the merits, that they were likely to suffer irreparable harm in the absence of relief, that the balance of hardships tipped in its favor, and that the requested injunction was in the public interest. They also both argued that the court could issue a preliminary injunction under the Ninth Circuit Court of Appeals’ “sliding scale” approach, allowing the court to issue a preliminary injunction when there are serious questions regarding the merits but the balance of hardships tips sharply in the plaintiff’s favor.
Because both cases were premised on a Lanham Act violation, Chroma Makeup and Tillett had to demonstrate that Boldface was “using a mark confusingly similar to a valid, protectable trademark” owned by each plaintiff.
Although Tillett’s marks were previously trademarked by the Patent and Trademark Office (and the later reason by Boldface was challenged in obtaining its own trademarks on the brand), Chroma Makeup did not have a registered trademark. For that reason, Boldface argued that Chroma Makeup could not even move over the preliminary hurdle of proving that it has a “valid, protectable trademark.” The court rejected Boldface's arguments and found that Chroma Makeup will likely demonstrate that the “Chroma” marks are valid and have not achieved a secondary meaning.
In each case, the court then moved onto whether the party moving for the injunction demonstrated a likelihood of confusion, to wit, whether a reasonably prudent consumer in the marketplace is likely to be confused as to the origin of the good of service bearing one of the marks. Since 1979, the Ninth Circuit has evaluated this likelihood under factors articulated in AMF Inc. v. Sleekcraft Boats, 599 F.2d 341, 348-49 (9th Cir. 1979).
The Sleekcraft factors are: (1) strength of the marks, (2) relatedness of the goods, (3) similarity of the marks, (4) evidence of actual confusion, (5) marketing channels, (6) degree of consumer care, (7) defendant’s intent in selecting the mark, and (8) likelihood of expansion of the product lines.
In opinions totaling almost 100 pages together, the court analyzed each of these factors, finding that, in both cases, the strength of Chroma Makeup and Tillett’s marks, though presumptively valid, were neutral in the balancing test. The court also found that the balance tipped in favor of Chroma and Tillett in the factors of relatedness of the goods (all are cosmetics), similarity of the marks (all are a version of the word “chroma”), overlapping marketing channels, and instances of actual confusion.
Chroma Makeup’s motion for a preliminary injunction was heard and decided almost two months before Tillett’s. Under the Sleekcraft factors, likelihood of irreparable harm, and public interest factors, the court appeared inclined to grant the injunction. But then the court assessed Chroma Makeup’s market penetration in light of its lack of registered trademark. Chroma Makeup still had to show that the market penetration is significant enough to pose the real likelihood of confusion among consumers in that area.
Based on the evidence, it appeared that Chroma Makeup established common law trademark rights in Beverly Hills and the surrounding area only. In stark contrast, Boldface demonstrated that enjoining the infringement would move far beyond Beverly Hills, and, instead, across the nation and potentially further. Boldface offered evidence that its business would be devastatingly harmed, as it would possibly lose financing and distribution if an injunction was ordered. And the Kardashians have a lot to lose. By the end of March 2013, according to their pleadings, Khroma beauty products will be on shelves in 5,321 stores in 48 states. On those grounds, the court denied Chroma Makeup’s request for a preliminary injunction.
Kroma Knocks Khroma Out
Fortunately for Tillett, although it also holds a smaller presence than Boldface seeks to establish, because it successfully registered its “Kroma” related trademarks, it did not have to endure the analysis of market penetration. Accordingly, the court found that, although Boldface could lose millions of dollars due to an injunction, the simple fact is that, by registering its trademarks, Tillett holds superior rights to Boldface. In light of this and the preliminary finding that the Sleekcraft factors fall in favor of Tillett, the court granted Tillet’s request for a preliminary injunction.
The Kardashians Keep on Fighting
Not surprisingly given the gravity of the how much Boldface would lose monetarily if the injunction was put into effect (the actual amount was filed under seal but we can assume that it was in at least the six-figure range), Boldface requested a stay of the injunction pending appeal. The court was clearly disinclined to grant the stay, but ultimately did, allowing Boldface a seven-day stay to file that appeal. If Boldface filed the appeal within the seven days, then the court would continue the stay until the Ninth Circuit rules on the request for a ruling upon appeal. Boldface timely appealed, and, to date, the Ninth Circuit has not ruled on the request, allowing Boldface and the Kardashians to continue to promote and sell their brand, at least for the moment.