A federal judge in New York granted the fashion brand Goat Fashion LTD. (“Goat Fashion”) its motion for preliminary injunction. As a result, the court barred 1661, INC. (“1661”), from using GOAT in connection with its e-commerce business for clothing.
The History Between the Parties
The series of events that eventually lead up to Goat Fashion filing its Complaint are not uncommon. Goat Fashion owns a series of federally registered trademarks protecting its GOAT mark. Each of its GOAT applications revolves around the brand’s clothing and online retail store that sells Goat Fashion’s clothing. The luxury fashion brand, Goat Fashion dates back to 2003.
After Goat Fashion received its registered trademarks, 1661 began filing a series of trademark applications for its own GOAT mark. However, when 1661 sought to register its GOAT mark for “online marketplace for athletic and sporting footwear,” an issue appeared. In particular, the trademark examiner at the United States Patent and Trademark Office (USPTO) issues a likelihood of confusion rejection. The trademark examiner cited Goat Fashions registered trademark GOAT for its online marketplace for clothing against 1661’s application. A standard and expected refusal that any trademark attorney should have warned its client about, given the similarities of the marks and recitations. To overcome this refusal by the trademark examiner, 1661 entered into a consent agreement with Goat Fashion.
What is a Consent Agreement?
A consent agreement is a contract between two parties. The first party “consents” to the registration and use of a mark by the second party. Typically, consent agreements overcome a likelihood of confusion refusal of the second party. In the case of Goat Fashion and 1661, the parties entered into a consent agreement in which Goat Fashion permitted 1661 to use its registered GOAT trademark for 1661’s online marketplace as long as 1661 did not provide for the sale and purchase of clothing and fashion accessories.
In return, Goat Fashion agreed not to use its GOAT trademark for athletic or sporting footwear. The same goods that 1661 is seeking trademark registration on. The consent agreement also included an additional stipulation that if 1661 wished to apply for another GOAT mark that it would contact Goat Fashion. Goat Fashion would then determine whether another consent agreement is needed. The consent agreement was then executed and agreed to by the parties.
So Where is the Dispute?
Issues between the parties began to arise when 1661 sought registration of another trademark. This time for “casual, athletic and sporting footwear, clothing/apparel, and related accessories.” Recognizing that 1661 proposed services would begin to encroach on its market share, Goat Fashion proposed a license agreement instead of a consent agreement—a smart move on the part of Goat Fashion. However, the parties eventually failed to reach an agreement.
Despite not reaching an agreement, 1661 nevertheless began selling clothing through its mobile application. This move by 1661 likely violated the terms of the consent agreement previously entered into by the parties. As a result, Goat Fashion rightly sent a cease and desist letter to 1661. In response to the cease and desist letter, 1661 offered a settlement proposal, but Goat Fashion ultimately rejected the proposal. To add fuel to the fire, 1661 began selling clothing and clothing accessories on its website under the GOAT trademark.
As a result, Goat Fashion filed its Complaint in U.S. District Court and requested a preliminary injection. The preliminary injunction prevents 1661 from selling its clothing and clothing accessories on its website and mobile application. However, they are free to use the GOAT mark per their trademarks and the executed consent agreement.
When 1661 decided to press forward selling its clothing and clothing accessories under its GOAT trademark, it was inviting trouble. By ignoring the cease and desist letter sent by Goat Fashion, Goat Fashion had no choice to file a complaint and protect its brand. If Goat Fashion were to let 1661 continue and infringe its trademark, it would dilute the strength of its trademark. While having to rely on Goat Fashion for a license agreement to sell clothing and clothing accessories under its brand is not ideal, it is better than not being able to sell its clothing at all.