Arcadia Group Brands Ltd. v. Studio Moderna SA, No. 10 C 7790, Slip Op. (N.D. Ill. Aug. 15, 2011) (Der-Yeghiayan, J.).
Judge Der-Yeghiayan granted plaintiffs’ (collectively "Arcadia") motion to dismiss defendants’ (collectively "Moderna") counterclaims and denied Moderna’s motion to dismiss Arcadia’s claims in this Lanham Act case involving Arcadia’s TOPSHOP and Moderna’s TOP SHOP TV marks. In 2004, the parties entered a settlement agreement (the "Agreement") pursuant to which Moderna agreed not to use TOPSHOP to sell women’s clothing in any country. Arcadia alleged that Moderna violated the Agreement beginning in 2010 when it began selling women’s clothing in the US on Moderna’s topshoptv.com website.
Moderna argued that Arcadia did not plausibly plead a protectable mark because Moderna was the first user of the mark. But a motion to dismiss must assume the truth of Arcadia’s allegations and Arcadia plausibly pled that it was the first user of the mark. Additionally, Moderna’s arguments ignored that Arcadia’s complaint challenged the validity of Moderna’s TOPSHELF TV registration.
Arcadia sufficiently pled fame as part of its trademark dilution claim. While Arcadia did not parrot the language of the statute, it pled its TOPSHOP brands were "world famous", that the brand is one of the most successful in the world, that there have been millions of dollars in US sales and that the brand is regularly featured in US and international fashion and celebrity magazines and other media.
The Court dismissed Moderna’s counterclaim for a declaratory judgment that it was the senior user of its TOP SHOP TV mark. Arcadia, however, had never challenged Moderna’s TOP SHOP TV mark. Arcadia’s only claims, in the suit or otherwise, were with respect to its TOPSHOP mark. As a result, any decision regarding the mark would be an impermissible advisory opinion.
The Court dismissed Moderna’s trademark misuse counterclaim because Moderna did not show that trademark misuse was an affirmative cause of action. Moderna was, however, allowed to amend its answer to add an affirmative defense of trademark misuse.