California Apparel News

Big-name apparel maker Quiksilver Inc. and small Los Angeles manufacturer Kymsta Corp. have headed to court again to discuss who has the rights to use the name “Roxy” on company labels.

The Kymsta Corp., whose juniors line is called Roxywear, has appealed a U.S. District Court ruling that lets Kymsta continue to use the Roxywear label but restricts the company’s marketing efforts, use of hangtags and incorporation of the Roxywear name on the fronts of T-shirts and in fabric.

According to the legal decision, Kymsta can continue to sell the label through sales representatives or other methods of distribution the company has been using. There is no limitation on the number or types of wholesale or retail customers to whom Kymsta can sell its Roxywear label, said Kymsta’s attorney, James D. Nguyen.

Quiksilver, which took Kymsta to court in Los Angeles over the name, is allowed to use “Roxy” on its labels without any limitations.

The appeal to the U.S. 9th Circuit Court of Appeals, headquartered in San Francisco, was filed July 20.

“The main problem, we felt, is that the court erred in not sending the case to the jury. The judge decided himself,” said James D. Nguyen, Kymsta’s attorney.

Quiksilver doesn’t agree.

“We felt the decision that [U.S. District Judge Dickran] Tevrizian made was the right decision,” said Michael Yoder, Quiksilver’s attorney. “It did meet our primary objective, and Quiksilver’s position has not changed.”

Yoder said that Quiksilver will file an opposing brief in September to Kymsta’s appeal. Kymsta will then have to file a response brief before the court of appeals schedules oral arguments to decide whether to send the case back to federal court.

Trial by jury

In the earlier trial, which started Jan. 27, a jury heard nearly two weeks of testimony. But U.S. District Judge Dickran Tevrizian decided, after a motion filed by Quiksilver, to dismiss the jury and issue a ruling himself as a matter of law.

Tevrizian ruled that both labels could coexist but put certain restrictions on Kymsta.

Kymsta cannot advertise the Roxywear line—sold at stores such as Nordstrom, The Buckle, Delia’s and Dillard’s— except through co-op ads with retailers. The company is prohibited from selling the label outside its current channels of distribution. It cannot use hangtags with the Roxywear name. It cannot use the name on T-shirts or in fabric. It cannot license its label to a third party.

“The ruling seemed totally unfair,” said Art Pereira, who started the company in late 1991 with his wife, designer Roxanne Heptner, who created Roxywear. “We need to expand our business to meet that $10 million in revenues range we have always been trying to achieve.”

Currently, Roxywear, which consists of mostly tees and knit tops, generates $1.5 million to $2 million a year in sales, about one-third of the company’s total revenues. Kymsta’s other labels include contemporary lines C.C. Law and Left of Center, which are sold at stores such as Lisa Kline, Barneys New York and Saks Fifth Avenue.

Tangled in trademarks

The row over the “Roxy” name is just one of several legal tiffs that have occurred recently in the garment industry over trademarks and labels.

As branding has become more important, the stakes have gotten higher.

“With so much consolidation in the retail industry, a trademark is critical to a manufacturer,” said attorney Gary Freedman, who handles many trademark and copyright cases involving apparel companies. “If you have a wellknown trademark, the stores need that product to distinguish themselves from other stores. The Robinsons-Mays and Federated [Department] Stores of the world have to be different from Kohl’s, JCPenney and Mervyn’s.”

Last year, a major squabble erupted in the blue jeans world over the name “Seven.” Soon after Seven for All Mankind blue jeans, made by Los Angeles manufacturer L’Koral Industries, became a hot item, veteran Los Angeles jeans maker Gerard Guez, founder of the Tarrant Apparel Group, went to Europe and acquired the U.S. rights to decades-old French jeans label Seven7.

When Seven7 started showing up in American stores, L’Koral filed a lawsuit against Guez in federal court.

An out-of-court settlement was reached, and Guez now sells Seven7 to hundreds of Express stores owned by Limited Brands Inc.

Big fish vs. little fish

The legal skirmish between Kymsta and Quiksilver is a true David vs. Goliath story.

Kymsta is a small manufacturer who does about 90 percent of its production in the United States. The company employs 25 people, from patternmakers to sewers, in a modest 28,000-square-foot brick building a few blocks away from the Los Angeles Convention Center in downtown Los Angeles. The Roxywear label started appearing in stores in early 1992.

Quiksilver, headquartered in a large complex in Huntington Beach, Calif., is an apparel giant that has ridden the youth wave by making surfwear, swimwear and sportswear under the labels Quiksilver, Raisins, Roxy and Radio Fiji. In 2003, Quiksilver had $975 million in revenues. The company employs about 3,400 people.

Quiksilver said it launched its Quiksilver Roxy brand in 1990. Danny Kwock, now president of Quiksilver Entertainment, said he came up with the name after seeing The Roxy Theatre in Los Angeles. Roxy is also the name of the daughters of Robert McKnight, Quiksilver’s chief executive, and Alan Green, the company’s Australian founder.

Both companies are prepared to go to court again to protect Their good names.