(CN) - The 9th Circuit on Tuesday rekindled Levi Strauss' claim that Abercrombie & Fitch diluted the famous stitched-arches trademark that has been on the back pocket of Levi's jeans since 1873.
The federal appeals panel in San Francisco reversed a District Court's ruling that a stitching design Abercrombie added to its jeans in 2006 was not "identical or nearly identical" to Levi Strauss's distinctive back-pocket stitching. Tuesday's 34-page ruling states that the lower court had asked the wrong question.
Levi Strauss sued Abercrombie in 2007, seeking injunctive relief under the Trademark Dilution Revision Act of 2006 (TDRA). It claimed that its well-known Arcuate design was being diluted by Abercrombie's newer Ruel design - "two less-pronounced arches that are connected by a 'dipsy doodle,'" according to the ruling.
At trial Levi Strauss cited a "confusion survey" showing that about 30 percent of respondents identified Abercrombie's Ruehl design as a Levi product. Abercrombie argued that the study was seriously flawed and that, based on years of case law, the two marks had to be identical to prove dilution. A jury sided with Abercrombie and decided that the Arcuate trademark was not diluted by the Ruehl design because the two were not similar enough.
But the appellate panel concluded that this was the wrong standard under which to judge the marks. The ruling states that U.S. District Judge Jeffrey White misread the act when he specifically asked the jury to determine whether the two marks were "identical or nearly identical."
"The plain language of [the act] does not require that a plaintiff establish that the junior mark is identical or nearly identical or substantially similar to the senior mark in order to obtain injunctive relief," wrote Judge Kenneth Ripple, sitting by designation from the 7th Circuit. "Rather, a plaintiff must show, based on the factors set forth in [the act], including the degree of similarity, that a junior mark is likely to impair the distinctiveness of the famous mark."
The "identical or nearly identical" standard may have been the rule prior to the passage of the TDRA, but it is no longer, the panel found.
Abercrombie argued that even if the lower court had used the wrong standard, the error was harmless. The panel did not agree.
"Our review of the District Court's balancing of the relevant factors convinces us that application of the incorrect standard affected its dilution determination," Ripple wrote. "The degree of similarity between the Ruehl and Arcuate marks may be insufficient to support a likelihood of dilution, but that conclusion can come only after consideration of the degree of similarity in light of all other relevant factors and cannot be determined conclusively by application of an 'essentially the same' threshold."
The panel reversed and remanded the case back to the Northern District of California for another round.