Lessons in Trademark Use from The Hangover: Part II

by / ⠀Startup Advice / April 18, 2012

When luxury handbag maker Louis Vuitton sued Warner Bros. in late 2011 seeking possession of each and every copy of The Hangover: Part II, there no doubt were several commentators who dismissed the lawsuit out of hand, and probably accused Louis Vuitton of going too far in trying to police use of its famous “LV” logo.

However, when you dig a little deeper, and really understand the reasoning behind Louis Vuitton’s claim, it actually provides some important and instructive lessons both for companies needing to enforce their trademark rights, and for companies considering making use of third-party trademarks.

Louis Vuitton’s trademark enforcement efforts typically center around a few different theories, and the Warner Bros. case (which is still ongoing) is no different. Fundamentally, as the owner of a “famous” trademark, Louis Vuitton’s arguments are based on allegations that unauthorized uses of its trademark “dilute” the value of its brand, and “blur” the recognizability and goodwill that it has spent millions upon millions to develop and protect. In short, the more unauthorized uses that are out there, (i) the less exclusivity the brand is able to maintain, and (ii) the more likely it is that other unauthorized users will follow—and this develops a cycle that works against the “LV” trademark’s distinctive value. Presumably Louis Vuitton makes a good bit of money off of licensing its trademarks as well, and if would-be licensees get the idea that they don’t need to pay for a license, then this harms Louis Vuitton even further.

Of course, it is important to keep in mind that trademark law focuses on the issue of “confusion,” and as a result there are certain “fair uses” of third-party trademarks that do not require express authorization. However, even assuming that a “fair use” defense might be available, the Louis Vuitton/Warner Bros. case involves an interesting wrinkle that provides additional support for the bad maker’s position.

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Louis Vuitton asserts that the bag that Zach Galifianakis carries in The Hangover: Part II is a knockoff. Apparently, this is evident (at least to Louis Vuitton’s people) from the short clip in the film itself. As a result, Louis Vuitton is claiming that, even if use of its trademark in the movie were otherwise proper, Warner Bros.’ decision to use a knockoff in the movie misleads the public about the source of the counterfeit product (Galifianakis refers to the bag as a “Louis Vuitton”), and works against Louis Vuitton’s efforts to combat counterfeiters.

From this perspective, a casual observer still might say, “there’s no way people are going to know the bag is a knockoff.” But, the point is, at least some people know, and given this acknowledgement, what is Louis Vuitton supposed to do? Sit idly by? Or, take action to protect its multi-million dollar investment that hinges on its control over placement and distribution of its trademarks?

So, for the average business owner or entrepreneur, the takeaways from this case are twofold: (i) that, subject to certain limitations, you have every right and reason to take the steps you think are necessary to maintain control over your brands, and (ii) that you might want to think twice (for one reason or another) before making use of someone else’s trademark. If you think it might be a “fair use,” make sure before taking action that leads to legal costs and time commitments that far outweigh the benefits of making use of the trademark.

Jeff Fabian helps business owners protect their intellectual property so that they can stay focused on running their businesses.

This article is provided for informational purposes only, and does not constitute legal advice.

About The Author

Matt Wilson

Matt Wilson is Co-Founder of Under30Experiences, a travel company for young people ages 21-35. He is the original Co-founder of Under30CEO (Acquired 2016). Matt is the Host of the Live Different Podcast and has 50+ Five Star iTunes Ratings on Health, Fitness, Business and Travel. He brings a unique, uncensored approach to his interviews and writing. His work is published on Under30CEO.com, Forbes, Inc. Magazine, Huffington Post, Reuters, and many others. Matt hosts yoga and fitness retreats in his free time and buys all his food from an organic farm in the jungle of Costa Rica where he lives. He is a shareholder of the Green Bay Packers.


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