‘HANGOVER’ IN COURT AGAIN: Much Ado about a Handbag

Enter The Hangover Part 11 movie and there we go again, back in the courtroom: As the litigation rain here continues to pour, this comedy movie has literally become the gift that keeps on giving. The 2011 sequel has been a hit both at the box office and with trouble makers, and its latest trouble is all about a fancy handbag.

Last December in a New York federal court, the French handbag maker Louis Vuitton sued the movie’s producers Warner Bros. Studios for trademark infringement, claiming that the use of a knockoff Louis Vuitton handbag in the movie created confusion among its customers, weakened the Louis Vuitton brand name and damaged the company’s business. In the movie, Zach Galifianakis’ character carried a handbag marked LVM and warned his sidekick in the movie not to mess with the bag. “Careful, that is,…that is a Louis Vuitton.” The scene that Louis Vuitton is pissed off about lasted only about 25 seconds in the 102-minute movie. As it turns out, the knockoff handbag was made by a Chinese company named Diophy which Louis Vuitton is already suing for trademark infringement in a separate action altogether.

Before Louis Vuitton made its move, three other parties had already sued Warner Bros over the movie: First, Warner Bros. was sued about a ‘tattoo’ used in the movie; then they were sued by an injured stuntman who worked on the set of the movie; and then they were sued by a guy claiming that the producers stole the movie’s entire storyline from him. In its own lawsuit, Louis Vuitton is seeking a court order to force Warner Bros. to cut out the entire handbag scene prior to any further distribution of the movie, say in DVDs and other formats. Louis Vuitton also wants a slice of the profits made so far in the movie’s box office run. On a closer look, one will notice that this case is a few steps removed from the typical trademark case, where the person who gets sued is often the same person who violated the trademark in question. Here, Louis Vuitton is not suing the company (Diophy) which made the offending handbag; rather they are suing the producers of a movie which makes a joke about the fake handbag. So, the movie is really getting knocked for allegedly aiding and abetting the company that had violated Louis Vuitton’s trademark.

So, it turns out there is a little twist here. But can Louis Vuitton still pull things off in this case regardless? Well, maybe. For starters, the whole point of a trademark action is stop somebody else from creating “confusion” in the market place between that person’s products and those of the person bringing the suit. In the marketplace an established or popular brand carries a huge advantage in terms of customer loyalty and repeat business; therefore, for someone else to “pass off” their goods as being the popular brand itself is sort of like stealing that business. So, the concern about consumer confusion is a very big deal in a trademark action. But sometimes things can get a bit tricky, for example, where the people being sued are not the same people that put the offending product in the market and who therefore may well have had other goals in mind than simply trying to pass off somebody else’s products as their own.

In this case, for example, Warner Bros. has claimed that what they did with the handbag in the movie was a form of “artistic expression” which is protected by the First Amendment, rather than an infringement of Louis Vuitton’s trademark. Since the First Amendment concerns itself with protecting free speech and communication of ideas in a democracy, it follows that any speech whose main goal is to promote somebody’s business interest will not be protected. So, Warner Bros. will lose the free speech debate in this case if its main goal in using the handbag scene was to promote its own commercial interest. And by the way, just because Warner Bros stands to benefit financially from the movie by way of box office receipts does not necessarily mean that its use of the handbag scene in the movie could not be regarded as artistic expression. It all comes down to drawing the line between what is “artistic expression” and what is just an attempt to promote its business interest.

If it turns out that using the handbag scene in the movie was a business move rather than an artistic expression, then Warner Bros. should have obtained the permission of the trademark owner Louis Vuitton prior to adding the handbag scene in the movie. In such a case, Warner Bros’ failure to obtain permission from Louis Vuitton will put it in danger of creating confusion in the minds of consumers – meaning that these folks may come to believe that Louis Vuiton in fact had something to do with the use of the handbag scene in the movie. That kind of consumer confusion is the classic situation that the trademark laws have the job of preventing.

So, long story short, if the court finds that the use of the scene in the movie was a form of artistic expression and does not indicate that Louis Vuitton had anything to do with the use of the handbag in the movie, then Warner Bros. wins. In that case, the court will excuse the fact that Warner Bros. did not obtain permission from Louis Vuitton before it added the handbag scene.

Yet, just because the use of the scene in the movie could be seen as artistic expression doesn’t mean that Warner Bros is home free. Since the concern about confusing consumers in the market place is the meat and bone of a trademark case, if the way the handbag scene appeared in the movie could still leave consumers with the impression that Louis Vuitton was behind its placement in the movie, then Warner Bros. will still have a trademark problem even though what it did can be regarded as a form of artistic expression. Of course, if the likelihood of confusion of consumers is rather small, then the artistic expression will be protected. So, just bringing in the First Amendment in a trademark case won’t necessarily cut it for the filmmaker.

But Warner Bros. is not the only party with the all the heavy lifting: If Warner Bros. can show that the handbag scene in the movie was a form of artistic expression, it may not be so easy for Louis Vuitton to show that a mere 25-second scene in the 102-minute movie was the sort of thing that would likely confuse its consumers and make them think that the company had something to do with the handbag scene in the movie. But then again, that same 25-second spot in the movie could also play into Louis Vuitton’s hands and allow it to claim that because the scene was so fleeting, consumers would not have had the chance to spot the difference between its own product and the offending knockoff.

Thanks to the First Amendment, suing a movie maker for trademark infringement in a place like America is not as easy as simply suing a manufacturer of a product, which is the typical situation where trademark actions arise. A movie maker can more easily complicate matters by throwing up a protected First Amendment claim of “artistic expression” than any ordinary product manufacturer can ever do. And it is not that unusual for filmmakers to succeed in making that sort of [defensive] line actually stick: for example, owing to free speech concerns, a movie about fictional characters whose actions closely resembled those of real-life persons has been upheld by the courts as a form of artistic expression; the court in that case also refused to find that the movie created any confusion that the real life persons who were offended by the movie had anything to do with the movie.

In the end, the Louis Vuitton lawsuit against Warner Bros. is a tricky one that will involve juggling a bunch of balls. But from the look of things, Louis Vuitton may well have a taller mountain to climb than Warner Bros. When the chips are down, we’re talking about a trademark case between two companies who are not serving the same market (one makes movies and the other makes handbags). This is also the kind of case that would have been easier to win against Diophy (the manufacturer of the knockoff handbags) than the producers of a full-length comedy flick which talks about the fake handbag for only 25 seconds. Plus, the whole First Amendment talk in an American courtroom doesn’t help matters one bit for Louis Vuitton which would rather just be talking about trademarks than the minutiae of “artistic expression”.

More to come next month….

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