Kymsta Corp. announced today that it is appealing the February 2004 ruling from its trial against Quiksilver, Inc. over the “Roxy” trademark. It filed its notice of appeal on March 18.
Quiksilver is the Huntington Beach, California company best known for its surf and swimwear. “Roxy” is the name of Quiksilver's line of juniors clothing (targeted to teenage girls) and other products; it is Quiksilver's second largest brand.
Kymsta is a small, Los Angeles manufacturer of women's clothing. It makes a juniors line of clothing called “Roxywear,” named after its co-owner Roxanne Heptner. “Quiksilver knew about the 'Roxywear' line for many years, since at least 1994 or 1995, but never raised any complaint, so the parties co-existed in the marketplace for years,” said James D. Nguyen, an intellectual property litigation partner at national law firm Foley & Lardner LLP and attorney for Kymsta.
But in 2002, Quiksilver decided to file a lawsuit in federal court in Los Angeles, seeking to stop Kymsta's use of the “Roxywear” name. Kymsta countersued Quiksilver for trademark infringement due to Kymsta's use of “Roxywear” prior to Quiksilver's use of “Roxy.”
The trial began January 27 in Los Angeles. After a two-week jury trial, federal judge Dickran Tevrizian decided the matter himself. According to James D. Nguyen, “The Court ruled that Quiksilver waited too long before suing, and was barred by 'laches' or unreasonable delay from getting broad injunctive relief against Kymsta.”
The Court then crafted an order that affirmatively allows Kymsta to sell clothing with its “Roxywear” brand to whomever it wishes and to continue its co-operative advertising with retailers. Judgment was entered on February 19.
Kymsta defeated Quiksilver's attempt to enjoin use of the “Roxywear” name. In another significant victory, Kymsta retained the right to sell “Roxywear” clothing to any customer. “Afraid that Kymsta would sell 'Roxywear' clothing to budget retailers such as Walmart, K-Mart or Target, Quiksilver sought to limit Kymsta's customer base. Quiksilver failed in its effort to impose such onerous restrictions,” Nguyen said.
Nguyen added, “However, the judgment imposed various restrictions on Kymsta. Among other things, it prevents Kymsta from licensing 'Roxywear' and from using the name on hangtags affixed to garments.”
“At first, we were pleased with the trial result because we were allowed to sell Roxywear clothing to any retailer,” said Arthur Pereira, chief financial officer for Kymsta. “However, upon further reflection, we believe some of the court's decisions were erroneous and that some of the restrictions imposed upon our business are unreasonable.”
“At trial, Quiksilver's witnesses testified that they considered the ROXY brand highly significant to their company and important to protect. Despite the importance of the ROXY brand, Quiksilver's General Counsel, Charles Exon, and its CEO, Robert McKnight, admitted at trial that Quiksilver had not reported the existence of its lawsuit with Kymsta to its shareholders (in annual reports) or to the SEC (in 10-K filings),” according to Nguyen.
Kymsta continues to seek cancellation of Quiksilver's federal trademark registration for ROXY.
“We sought cancellation of the ROXY registration in two ways: first, in the civil lawsuit with Quiksliver, and second, in a separation petition before the Patent & Trademark Office,” Nguyen said. “The proceeding before the Patent & Trademark Office is still pending. As for the civil lawsuit, we are confident in our appeal. Depending on how that appeal turns out, we will evaluate whether to continue seeking cancellation of the ROXY mark in the civil lawsuit.”
