Wednesday, June 07, 2017

Depressed sales and asserted loss of prestige aren't irreparable harm

Puma SE v. Forever 21, Inc., No. 17-cv-02523 (C.D. Cal. Jun. 2, 2017)

H/T Sarah Burstein.  Puma sued Forever 21 for allegedly counterfeiting its Fenty line of shoes.  (Puma asserted copyright infringement and design patent infringement as well as trademark infringement.) Here, the court denies a preliminary injunction for want of a showing of irreparable harm.

Puma focused on the argument that Forever 21’s knock-offs diminished the Fenty line’s prestige, supported by the declaration of its Global Director of Brand and Marketing, Adam Petrick. Petrick’s declaration said that Forever 21’s “fast fashion” knock-offs diminish the excitement following a Fenty shoe release because consumers can purchase the “same-looking product” at a lower cost. Some Forever 21 customers may believe they’ve bought the real, hyped shoe, and others may be discouraged from buying the Fenty shoes because of the ready availability of the cheaper copycat.  Petrick claimed that knock-off shoes drive consumers away not only from Fenty shoes but also from other Puma shoes that they would otherwise buy. As a result, Puma has already seen “lower-than-expected conversion of sales of other Puma shoes” as a result of the knock-off shoes, and the Fenty “Bow Slide” shoe, released in March 2017, allegedly took longer than expected to sell out.

The court was not impressed.  The evidence of harm was limited to a single declaration, plus some “exhibits containing website printouts and news articles concerning Forever 21.”  But more importantly, “unsupported and conclusory statements regarding harm [plaintiff] might suffer” are insufficient. The claims that knock-offs “diminish[] the brand value for Puma’s consumers,” and that “the prestige of the Puma brand is diminished,” these claims weren’t tied to actual evidence; the court here found them little more than platitudes.  No facts in Petrick’s declaration about actual consumer perception, or evidence of Puma’s actual reputation, supported Puma’s claims about likely loss of prestige. “Puma must do more than simply submit a declaration insisting that its brand image and prestige have or will be harmed.”  Petrick’s statement that some Forever 21 consumers might believe they’d bought the real shoe was just speculative, and regardless, under Herb Reed, evidence that “simply underscores customer confusion” is not enough to prove irreparable harm.  The other statements were equally speculative, and no better than that present in Herb Reed.

Additionally, Puma needed to show that money damages would be inadequate.  Even accepting Petrick’s statements that knock-off shoes “drive[] consumers away” from Puma shoes, that “sales of Fenty Puma shoes have been slower,” that the “Bow Slide has seen decreased sales compared to Puma’s projected sales,” and that although the Bow Slide has been sold out, “it took longer than expected,” Puma didn’t submit any evidence to show how such sales or market share losses cannot be compensated with money damages. The court wasn’t convinced that the alleged harm here was “so unquantifiable that money damages would be insufficient.” 

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