SW Legal studies in Business

Canít Go Back on a Promise to Not Sue for Trademark Infringement
Description

Appeals court held that a party claiming trademark infringement lost because there was evidence that in settlement negotiations from prior litigation, the plaintiff told the defendant the plaintiff would not object to use of a particular trademark. When plaintiff later sued for infringement when the mark was used, the court allowed evidence of the discussions.

Topic Intellectual Property
Key Words

Infringement; Estoppel; Logo

C A S E   S U M M A R Y
Facts

PRL owns the Ralph Lauren trademark for clothing. It has used the polo player logo trademark since 1972. The U.S. Polo Association (USPA) was founded in 1890. In 1984, PRL won an injunction blocking USPA from using marks that infringed on PRL’s marks. However, the court ruled that USPA could have a licensing agreement that used “a mounted polo player or equestrian or equine symbol which is distinctive” from the Ralph Lauren logo. PRL and USPA completed settlement negotiations in 1996. USPA signed an agreement with the clothing company Jordache in 1998 and invested significant sums in developing a clothing line with various polo symbols. PRL later sued USPA for infringement, contending the trademarks it used on the clothing were infringing. The jury found that only one USPA mark, a solid double horseman silhouette without lettering, was infringing. Based on that decision, and testimony from a USPA official that PRL had said, in the 1996 negotiations, that PRL would not object to the double horseman logo, the trial judge held for USPA. PRL appealed.

Decision

Affirmed. PRL argues that discussions from the settlement negotiations, that included discussions about the solid double horseman silhouette, were inadmissible as evidence in court. It is true that statements made during settlement discussions are not admissible. However, here, PRL is estopped from claiming infringement because it led USPA to believe no infringement claim about the solid double horseman silhouette would be forthcoming. PRL cannot have it both ways—tell USPA it does not object to using the logo in question, and then sue for infringement when the logo is used. The testimony about that issue in the settlement negotiations in 1996 can be used in evidence.

Citation PRL USA Holdings, Inc. v. United States Polo Association, Inc., 520 F.3rd 109 (2nd Cir., 2008)

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