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The infamous Lucky Brand 'Get Lucky' litigation has taken a turn for the even-more complicated, after 17 years of litigation between the fashion brand and its competitor Marcel Fashions.
The Second Circuit used the matter as a springboard to discuss the issue of claim preclusion. And unfortunately for Lucky Brand, the appellate court's significant discussion was anything but a stroke of luck.
The litigation between the two companies dates back to 2001 and involves Marcel's registered trademark of "Get Lucky" and "Lucky." The companies settled the original Get Lucky lawsuit in 2003, but Lucky Brand continued to use the mark due to an alleged confusion of the settlement agreement's terms. However, in 2005, the companies litigated the issue again, but the question of whether the 2003 release actually released Marcel from bringing future claims was not raised by Lucky Brand in the 2005 litigation.
In a recently filed action by Marcel against Lucky Brand, the district court dismissed the matter due to the 2003 settlement agreement. On appeal, Marcel argued, and the appellate court agreed, that because Lucky Brand failed to assert the settlement agreement in the 2005 litigation as a defense, it could not do so in the instant case.
The court reasoned that had Lucky Brand raised 2003 settlement agreement in 2005 litigation, it could have prevented the instant litigation. In short, the court explains "that under certain conditions parties may be barred by claim preclusion from litigating defenses that they could have asserted in an earlier action."
The court examined the proceedings carefully, as well as several relevant cases, to determine that Lucky Brand had met those certain conditions, where it had all the reason in the world, basically, to assert that argument in the prior litigation and failed.
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