A long, drawn-out fight over the “Roxy” name between Quiksilver Inc. and a small Los Angeles clothing maker has ended pretty much where it was six years ago, with both sides claiming a qualified victory.
A federal appeals court recently reversed a 2008 ban that prevented Kymsta Corp. from selling clothes under its Roxywear line because it conflicted with Huntington Beach-based Quiksilver’s Roxy clothes for teen girls and young women.
In lifting the ban, a three-judge panel of the U.S. 9th Circuit Court of Appeals reinstated more limited restrictions on Kymsta’s use of Roxywear, similar to a 2004 injunction.
Both sides appear set to let the case rest with the appeals court decision. Resentment still lingers in both camps after an eight-year battle. But Quiksilver and Kymsta said they are happy with the outcome.
Quiksilver lost a complete ban on Kymsta’s use of Roxywear but said it still came out ahead.
While the company had welcomed the ban, it said it never sought to completely bar Kymsta from using the name. Instead, it wanted limited restrictions on Kymsta.
“This case has always been about establishing and protecting Quiksilver’s rights to Roxy,” said Mike Yoder, partner at the Newport Beach office of O’Melveny & Myers LLP and who represented Quiksilver. “For Quiksilver, this was never about money. They’ve never sought damages from Kymsta.”
The ruling also has plusses and minuses for Kymsta. It got a potentially crippling ban lifted but now has to live with curbs on its brand.
Kymsta “wanted the right to use the Roxywear name,” said Arthur Pereira, who started the company with wife Roxanne Heptner. “We’re happy to have our name back.”
The duo started up another company, Parc & Pearl, after the 2008 injunction banning Roxywear labeled clothes and calling for a phaseout of the brand within 18 months.
The new limitations allow or require Kymsta to:
• Sell clothes under the Roxywear by Roxanne Heptner and Roxywear by Roxx labels to current retail customers.
n Display “Roxywear” on labels inside clothes as one word, with all letters in the same font, size, color and format.
• Use the Roxywear name followed “by Roxanne Heptner,” “by Roxx,” or “by Kymsta.”
The limitations prevent Kymsta from using the Roxywear names and taglines in logos, as part of graphics on clothing or in any other way that could be seen on the outside of clothes.
They also bar the company from advertising or promoting the names and taglines to consumers but allow retailers to cite them in their marketing.
Kymsta also can’t license the brand or sell it, other than to Quiksilver.
Back to 2004
None of that is a problem, Pereira said. Kymsta had operated under those guidelines since 2004, when Quiksilver won an early round in court.
“We’re truly a fashion house,” Pereira said. “We are never going to put our name on a T-shirt. We sell to Barney’s, Fred Segal, the finer stores in the country and some outside the country. Not being able to put our name on a T-shirt is not that big of a deal for us. We’re able to do what we do best, which is make great, timely product that sells. And our product sells.”
Roxywear had made up about a third of Kymsta’s roughly $5 million in yearly sales before the 2008 ban.
Parc & Pearl now does about $4 million in yearly sales, according to Pereira.
The operation is tiny compared to Quiksilver, which has $2 billion in annual sales, with Roxy making up a third.
Quiksilver has spent an estimated $2.5 million in legal fees in the case. The company declined to give a figure for its legal fees, other than to say it was significant.
Kymsta is estimated to have spent $2 million on legal fees.
“We’re fine to live with the (current) ruling,” said James Nguyen, who represented Kymsta and practices at the Beverly Hills office of Chicago-based Wildman, Harrold, Allen & Dixon LLP. “Were we hoping for better? Sure. But we’re very pleased because Art and Roxanne get to use the Roxywear name again and there’s no more legal battle.”
For Quiksilver, the limitations imposed on Kymsta are what it had sought all along, according to Yoder.
Quiksilver considers itself to have prevailed as the court established it as the senior user of “Roxy” with full rights, preventing others from using the name in a confusing manner, he said.
“Quiksilver simply wanted to establish it was the senior brand, to ensure that Kymsta couldn’t expand Roxywear to create damage to its Roxy brand by trying to make Roxywear a brand or create brand recognition or sell or license the name,” he said.
The company was concerned about Kymsta licensing the brand to a big retailer such as Wal-Mart Stores Inc., Yoder said.
2002
The fight started in 2002 when Quiksilver sued Kymsta, citing trademark infringement. Kymsta followed by counter suing, arguing its Roxywear name was used before Quiksilver made Roxy a distinct brand.
The two since have gone back and forth. In 2004, a judge sided with Quiksilver by ruling there weren’t enough conflicting facts for a jury to weigh in on. That’s when the judge issued limitations on how Kymsta could use Roxywear—the same limitations the federal appeals court upheld in December.
Kymsta appealed the 2004 ruling and won a round when the U.S Court of Appeals for the 9th Circuit said some issues should go before a jury, such as the matter of who first used the Roxy name and if Quiksilver used Roxy as a stand-alone brand before Kymsta.
The two wound up back in court in early 2008, with a jury ruling in Quiksilver’s favor. U.S. District Court Judge Valerie Baker Fairbank entered a final judgment in the case in April 2008, validating and protecting Quiksilver’s “Quiksilver Roxy” and “Roxy” trademarks.
That’s when Kymsta was given a deadline to phase out use of Roxywear, Roxywear by Roxx and Roxywear by Roxanne Heptner.
Kymsta again appealed, leading to the recent ruling from the 9th Circuit.
Pereira said he and his wife are formulating a plan to bring back their Roxywear line.
Quiksilver said it will be watching to make sure they follow the limitations placed on the brand.
Gomez is former Business Journal editor and freelance writer based in Long Beach.
