Quiksilver Dispute to Go Before Jury
A federal judge determined that a jury would have to settle a dispute between Huntington Beach, Calif.–based surfwear giant Quiksilver Inc. and Kymsta Corp., a small Los Angeles apparel manufacturer, over who has the right to use the “Roxy” trademark. A trial date has been set for Nov. 4.
On July 14 in the Royball Federal Building in downtown Los Angeles, U.S. District Judge Dickran Tevrizian denied each company’s request to be recognized as the first user of the Roxy trademark. Tevrizian said it was “highly likely” that Quiksilver would prevail on the issue of first-usage rights based on pending evidence—including promotional materials, news articles and sales receipts for its Roxy label dating back to early 1991—but added that Kymsta should be allowed to do some additional investigation.
Proof of who used the Roxy trademark first will be the determining factor in the case. But at the hearing, Tevrizian also pointed out the David-and-Goliath difference between the two companies by comparing their sales revenues.
“It’s not a question of who sells more but a question of who sold first,” remarked Kymsta’s attorney, James Nguyen.
The dispute began in May 2002, when Quiksilver filed a lawsuit against Kymsta for trademark infringement. Quiksilver claimed Kymsta’s Roxywear junior apparel line was riding on the success of its Roxy label.
Nguyen said Kymsta has produced junior sportswear under the Roxywear label since 1991 and the trademark only became a problem when Quiksilver dropped its name from Roxy’s hangtags, leaving only the Roxy name and logo.
Quiksilver’s attorney, Michael Yoder, said the company has been aware of Kymsta’s Roxywear line since 1994 but postponed contacting the company until last year, when several apparel orders for Kymsta’s Roxywear were returned to Quiksilver’s headquarters.
“We didn’t have evidence of brand confusion until recently,” Yoder said. Under the law, a company is required to take action to protect its trademarks when there is evidence of actual confusion in the marketplace, he noted.
Currently, neither party has filed claims for damages.
Last year Kymsta told Quiksilver it would be willing to negotiate a settlement amount but did not get a response, Nguyen said. Yoder stated that any possible settlement was between the two parties and not for public discussion.
According to Nguyen, Quiksilver representatives alluded to the idea of Kymsta signing a licensing agreement with the company to produce apparel under the Roxywear label. Such an agreement, he said, is not an option for Kymsta, which is not willing to give up the battle yet.
“Going head to head with a large company would deter a lot of small companies who would have rolled over by now,” Nguyen said.
The jury in the November trial will also decide whether or not the court should apply a doctrine of laches—a doctrine stating that a party has waited too long to assert its legal right—to both Quiksilver and Kymsta. If two companies have had similar trademarks coexisting in the same market for a number of years and have not filed claims against one another, a judge may rule that neither party can claim sole rights to the trademark or recover damages.
Quiksilver uses the Roxy label in its lineup of clothing for toddlers, girls and juniors. The Roxy label accounted for more than $200 million of the $705 million in revenues the company earned last year.
Kymsta produces junior sportswear under the Roxywear label. The Roxywear label accounted for $2 million of the company’s $8 million in sales last year.
Several retailers, including Nordstrom stores, carry both apparel collections. —Claudia Figueroa
