Orange 21 has received a cease-and-desist letter from Oakley with respect to patent and trademark issues involving three of its product styles. These three product styles accounted, in the aggregate, for less than 4% of Orange 21’s sales for the 2004 fiscal year.
Orange 21 has reviewed the claims made by Oakley and believes them to be without merit. The originality and authenticity of its product designs has firmly positioned Orange 21 in the action sports and youth lifestyle markets. Orange 21 believes the letter and threatened litigation is far less about any confusion or common features between the companies products and more about the growing appeal of Orange 21’s products, under the brand Spy Optic, to an audience which is important to Oakley.
Orange 21 will seek coverage under its insurance policies with respect to any claims made against it, although there can be no guarantee as to the extent that such coverage will be available, if at all.