When Names become Brand Names

And whatever the man called a living creature, that was its name.

Genesis 2:19

Naming things is a fundamentally personal, human act that sometimes – in a profession all about brand names – we take for granted. It’s easy to forget when we are clearing, registering, and protecting names, that at a basic level we are engaging with an essential part of human existence not so far removed from the story of Adam’s naming of living creatures in Genesis. True, Adam may not have had to concern himself with trademarks and intellectual property rights, but we trademark lawyers do.

Lately, I’ve been thinking a lot about this act of naming and names – not brand names, but specifically, baby names. My wife and I are expecting a baby on December 1, and among many of the things to do, naming the baby is perhaps the most important. So while my wife and I work on that, I thought I’d use the opportunity to take a closer look at a case that reminds us of how a personal name can become something else – a brand name – and what happens next.

Ten years ago, while I was in law school taking my first trademark law course, the famous fashion designer Joseph Abboud was learning about trademark law the hard way: in court. The lawsuit (about suits) against Joseph Abboud claimed that his marketing and promotional activities as Joseph Abboud for a new clothing line called “jaz” infringed trademark rights to the name – you guessed it – “Joseph Abboud.” So how did it come to pass that the real person named Joseph Abboud was being sued for using his own name?

Well, it turns out that in his rise to the top of the fashion industry through the 1980s and 1990s, Joseph Abboud registered his personal name and variations as trademarks in connection with his clothing. Then, in 2000, Joseph Abboud sold his company JA Apparel and its trademarks, including the trademarks “Abboud” and “Joseph Abboud,” for approximately $65 million. As part of the transaction, Joseph Abboud transferred all of his rights to the following:

[T]he names, trademarks, trade names, service marks, logos, insignias and designations [of Joseph Aboud]. . . . and [a]ll rights to use and apply for the registration of new trade names, trademarks, service marks, logos, insignias and designations containing the words “Joseph Abboud,” “designed by Joseph Abboud,” “by Joseph Abboud,” “JOE” or “JA,” or anything similar to or derivative thereof, either alone or in conjunction with other words or symbols . . . for any and all products and services. . . .

In addition, the designer Joseph Abboud further agreed not to compete with the JA Apparel for a period of time.

But wouldn’t you know, the designer Joseph Abboud couldn’t sit idle and, despite his agreement, he began to engage certain third parties in preparation for the launch of a new line called “jaz” and began promoting it as Joseph Abboud, the fashion designer. When JA Apparel found out, it sued to stop Joseph Abboud on the grounds that it had acquired the exclusive rights to use the name Joseph Abboud, not just the trademarks. In other words, while perhaps “jaz” didn’t infringe the trademarks, Joseph Abboud’s use of his own name to promote it did, and furthermore it breached the contract. In a page right out of Mad Men, the attorneys for JA Apparel even published a full-page ad announcing that “The Finest Trademark Attorneys in the World Wear Joseph Abboud®.”

After a bench trial, the district court agreed with these finest trademark attorneys in the world and concluded that the agreement made by Joseph Abboud transferred not just certain trademarks to JA Apparel, but also the right to use his own personal name for commercial purposes, including in the phrases “a new composition by designer Joseph Abboud” or “by the award-winning designer Joseph Abboud.” Nevertheless, although providing “sweeping injunctive relief” was necessary to ensure that JA Apparel received the full benefit of its bargain, the court determined Joseph Abboud could make media appearances as himself or as a fashion expert, but not to promote clothing in competition with JA Apparel.

On appeal, the Court of Appeals for the Second Circuit found the word “name” as used in the agreement ambiguous and vacated the decision of the district court, remanding returning it for a full refund. Additionally, the court of appeals held that if the contract was not breached, then the district court would need to determine whether Joseph Abboud’s use of his own name constituted trademark infringement by examining specific proposed advertisements. For example, one advertisement featured the “jaz” mark prominently with an image of Joseph Abboud and the disclaimer “Designer Joseph Abboud is no Longer Associated or Affiliated with JA Apparel Corp., the owner of the Trademark ‘Joseph Abboud’TM.” Such advertisements presented the “jaz” mark and Joseph Abboud’s name in ways which might not be infringing or could reasonably be fair use.

On remand, the district court examined additional extrinsic evidence and discovered that the word “names” appeared only in the final draft of the agreement and that nothing in the discussions between the parties explained the reason for its inclusion. Instead, the word “names” was part “laundry list of words” under the “more general penumbra of ‘trademarks’” – essentially a substitute for “brand names” not “personal names.”   Reversing its prior conclusion, the court concluded that Joseph Abboud had not sold his personal name. Unfortunately, for Josheph Abboud, the inquiry did not end there.

The problem, the court explained, was that while Joseph Abboud may not have sold all rights to commercially use his personal name to JA Apparel, Joseph Abboud did register his name as a trademark and he did sell that trademark to JA Apparel. And in such circumstances, Joseph Abboud would be permitted to use his name to advertise his affiliation with other businesses, so long as such use was not in an “overly intrusive manner:”

This is a case in which an individual elected to use his name for many years as a trademark, building up substantial goodwill; he then sold the same, but intends to continue to commercially exploit his name by designing clothes in competition with the purchaser of the trademark. This case therefore presents an inherently difficult scenario, because Abboud’s use of his name in the sale of clothing will inevitably lead to consumer confusion.

The court’s solution was to allow the following ad and similar ads, with the addition of a conspicuous disclaimer making clear that Joseph Abboud, the designer, was no longer affiliated with Joseph Abboud, the apparel brand:

The court was even stronger in its approval of the following possible ad, proposed by JA Apparel, noting that the placement, size, and useage of Abboud’s name, together with the disclaimer (unreadable in the image below), arguably would remove the likelihood of any confusion:

The court was not so enthusiastic about the following ad, which it called “utterly confusing” because Joseph Abboud’s personal name would be used in a virtually identical way as the Joseph Abboud trademark, suggesting “jaz” is merely a sub-line of clothing:

The review of the ads above helped the court craft the following permanent injunction against Joseph Abboud, showing just what happens when a name becomes a brand name:

Abboud may not use his name in any manner on “jaz” clothes, labels, hang-tags, or product packaging.

Should Abboud choose to use his name in promotional and advertising materials, he must do so in a way that is not inconsistent with this Court’s fair use analysis.

Abboud’s name must be used descriptively, in the context of a complete sentence or descriptive phrase, and must be no larger or more distinct than the surrounding words in that sentence or phrase.

Abboud is to prominently display his trademark “jaz” (or any other trademark) elsewhere in the advertisement, both to alert consumers that “jaz” is the source—in the trademark sense—of the new clothing line, and to minimize any resulting confusion.

Finally, should Abboud use his name as proposed in [the ads] or anything similar, he must include a disclaimer of any affiliation with JA Apparel and products sold under the Joseph Abboud trademarks. The disclaimer must be displayed in a font that is no smaller than the accompanying text in which Abboud uses his name.

The lesson for all of us is that a personal name, when it becomes a brand name, becomes something that can be bought and sold just like any other trademark. And after that sale, while some personal uses of a name will be fair use, any use of the name as a brand name will likely result in confusion (if the goods are the same or related).  Sometimes the use of a personal name is inevitable, but business owners and celebrities should take care when they decide to use their personal name as the brand name for their business, especially if they are not exactly ready to retire from what made them famous and successful when they sell their business.  Otherwise, they may find themselves with a name that’s become something they can’t use.

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