Personal names, when used as a trademark can become entwined with the goodwill associated with the brands they represent. Personal names become the means by which consumers identify the source and the quality of the service or good being offered. When that occurs, a person who has used their name as a trademark, and then sold the rights to that trademark may, lose the right to use their name in a related business, Recently, a federal judge found that fashion designer Joseph Abboud lost all rights to use his name for commercial purposes when he sold his “Joseph Abboud” trademark and rights in other similar names to JA Apparel in 2000. JA Apparel Corp. v. Abboud, No. 07 Civ. 7787 (THK), 2008 WL 2329533 (SDNY, June 5, 2008).

Joseph Abboud, a well-known designer of men’s clothing, first registered his name as a trademark in 1987.  For many years, Abboud licensed the trademark to and designed for JA Apparel Corporation, a company that manufactured, marketed and sold menswear under the Abboud name. In 2000, Abboud and JA Apparel entered into a contract in which the designer agreed to sell all trademarks, and other intellectual property associated with his Abboud clothing line to the company. Abboud also agreed to sell all licenses to use those trademarks as well as all rights to use and apply for the registration of new trademarks containing the words “Joseph Abboud,” “designed by Joseph Abboud,” “by Joseph Abboud,” or anything similar to those phrases. In return, Abboud received a $65.5 million payment from the company, but continued to work as a designer for JA Apparel.

After feuding with company executives, Abboud left JA Apparel in 2005.  Two years later, in August 2007, several media sources announced that Abboud was planning a new menswear collection, called “jaz,” to debut in 2008. News coverage noted that Abboud planned to use his name in marketing and advertising materials for the “jaz” line. For instance, one planned tagline stated that the line was “a new composition by designer Joseph Abboud.”  

In response to the development of this line, JA Apparel sued Abboud for breach of contract and trademark infringement arguing that the designer had sold the company the exclusive rights to use the name “Joseph Abboud” for all commercial purposes. Abboud asserted that he did not sell that exclusive right and made counterclaims of false advertising and unfair competition, among other state and federal claims.

After analyzing the language of the sale contract, Judge Theodore Katz of the US District Court for the Southern District of New York determined that Abboud expressly sold to JA Apparel all rights to use his name, all rights to trademarks and trade names incorporating the name, and all rights to the designations ‘Joseph Abboud,’ ‘by Joseph Abboud,’ and ‘designed by Joseph Abboud,’ or similar designations for any and all products and services. Judge Katz relied on several Second Circuit cases to determine that a person may sell off the exclusive right to use his name for commercial purposes. Because Abboud had sold the exclusive rights to use his name for commercial purposes, the court found that the designer’s use of phrases such as “a new composition by designer Joseph Abboud” would constitute a breach of contract. The court also held that use of Abboud’s name in connection with the “jaz” line would constitute trademark infringement since such use would be likely to cause confusion between the “jaz” line and JA Apparel’s products.  Judge Katz further held that the designer’s use of his name was not a fair use of JA Apparel’s trademark since such use would indicate the source and quality of the “jaz” line.  Thus, such use would infringe on the company-owned trademark “Joseph Abboud.”

Judge Katz’s opinion expressed particular concern that Abboud’s proposed use of his name was an attempt by the designer to have his proverbial cake and eat it, too. That is, the judge found it improper for Abboud to sell his trademarked name for $65 million, only to continue to use that name – and the goodwill associated with it – to promote other products.

The court permanently enjoined the designer and any affiliated businesses from using the Joseph Abboud name to sell, market, or otherwise promote any goods or services, including the “jaz” clothing line, to the consuming public. Abboud may still use his name when identifying himself to buyers, and when making personal appearances that do not relate to the sale, marketing, or promotion of goods, products and services. All of Abboud’s counterclaims were dismissed.

This case illustrates the complex issues that may arise when a business person labels a brand of goods with his or her personal name. People who sell the rights to their trademarked name run the risk of being barred from using that name in connection with future commercial endeavors. Because of the complex issues involved in the sale of intellectual property rights, it is prudent to seek legal counsel before agreeing to sell the trademark rights to one’s name.

Arent Fox continues to monitor this case, pending appeal. For further information, please contact:

Anthony V. Lupo
lupo.anthony@arentfox.com
202.857.6353

Sarah L. Bruno
bruno.sarah@arentfox.com
202.775.5760

Matthew R. Mills
mills.matthew@arentfox.com
202.715.8582