California Apparel News

After a six-year tussle over competing trademarks, Quiksilver Inc. has won the latest and perhaps last legal round in its case against a small Los Angeles apparel manufacturer that had a similar label.

On April 15, U.S. District Judge Valerie Baker Fairbank gave Kymsta Corp. 18 more months to use its Roxywear label before retiring the 16-year-old name, which is considered similar to Quiksilver’s Roxy brand.

“We tried to settle with them many times,” said Bob McKnight, Quiksilver’s chairman, chief executive and president, who said the surfwear giant spent more than $2 million on legal fees. “We were left with no other choice but to go to court.”

This was the second time that Quiksilver, with $2.5 billion in annual revenues, and Kymsta, with about $4 million in revenues, were in federal court in Los Angeles.

Previously, a 2004 trial overseen by U.S. District Court Judge Dickran Tevrizian resulted in Kymsta being able to use its label in conjunction with Quiksilver’s brand. However there were some restrictions for Kymsta, such as not being able to license the name, use hangtags and being restricted to co-op advertising with retailers but no direct marketing.

Kymsta’s apparel is geared toward the young women’s and women’s contemporary market while Quiksilver’s Roxy merchandise, which accounts for about 30 percent of the company’s revenues, is designed for a younger, female client into surfwear.

Kymsta’s married owners, Art Pereira and Roxanne Heptner, appealed the first case to the U.S. 9th Circuit Court of Appeals, which in 2006 sent the legal complaint back to the U.S. District Court because the lower-court judge had dismissed the jury and made his own ruling.

Kymsta is now contemplating whether to appeal this latest decision. “Kymsta thinks the judgment is a miscarriage of justice,” said attorney James Nguyen of Foley & Lardner in Los Angeles, who represented Kymsta. “At this point, Kymsta is considering all of its options, including another appeal.”

Kymsta’s owners feel the trial was unfair because the jury issued a verdict in March allowing the two companies to coexist. However, the judge called back the jury with additional questions to consider, resulting in the last verdict that Roxywear be taken out of the marketplace in 18 months.

“We co-existed for eight or nine years. We knew of them. They knew of us. It was an unspoken agreement that we coexisted. We don’t understand why they sued us. We never harmed their label. We sell in the best stores,” Heptner said, noting her company also spent around $2 million in attorney fees to fight the case. “We really feel the system failed us.”

Even though the two companies had co-existed with these labels since the early 1990s, Quiksilver in 2002 filed a lawsuit against Kymsta over the right to use the word Roxy in its label. Quiksilver, based in Huntington Beach, Calif., said it filed the legal action after experiencing confusion at a 2002 trade show and after receiving mistaken returns from retailers for Roxywear.

“We knew about them in 1995, ’96, ’97. Our showrooms were door by door on the same floor in New York,” McKnight said. “Then [Roxywear] was an internal label, almost like a private label. It was a misses, contemporary label. We knew their customer list, stores like Nordstrom. There were no hangtags, nothing on the outside of the garment, no marketing. We thought at the time, ’We don’t need to put every person out of business.’”

Then, McKnight said, Kymsta started branching out to the juniors market in 2001 and 2002 and “came out of its shell,” selling to the juniors department of Nordstrom and riding on Roxy’s fame.

Kymsta’s attorney said that is not true. “They are the ones who picked the fight,” Nguyen said. “There is no truth to the assertion that Kymsta tried to trade on the fame of Roxy. One of [Quiksilver’s] executives, Randy Hill, saw Roxywear in the Brass Plum division of Nordstrom in 1994 and 1995, and as everyone knows, Brass Plum is for juniors. I think it is a reconstruction of history for Quiksilver to take the position that it only became a problem when Roxywear moved into juniors. It was always in juniors.”

Nguyen acknowledged that there were several negotiation talks between the two sides, but nothing was ever settled.

So Quiksilver filed a lawsuit. In the first court case, Tevrizian ruled that Quiksilver had waited too long to bring the brand dispute to trial and that the two labels could co-exist. However, the restrictions placed on Kymsta prompted the smaller company’s appeal.

The Roxywear label was developed by Kymsta designer Roxanne Heptner and hit the stores in January 1992. In court papers, Kymsta said that at the time of Roxywear’s launch, the smaller company didn’t know Quiksilver had a Roxy label, available to customers by 1991.

However, Kymsta never federally registered its trademark, whereas Quiksilver did.

Quiksilver later shortened its Quiksilver Roxy label to just Roxy. According to court papers, Quiksilver Roxy was registered as a trademark in 1996 and Roxy was registered in 1998.

Having federally registered trademarks helped Quiksilver’s cause. The jury determined that Quiksilver Roxy and Roxy were the senior user and owner of the brands while Kymsta’s Roxywear by Roxanne Heptner, Roxywear by Roxx and Roxywear were “false designations of origin.”

Six years of legal battles have left McKnight exhausted but pleased with the outcome. “I am glad we finally got this ruling,” he said. “The whole thing should never have been in court in the first place.”