If you saw one of those Building 19 circulars advertising the sale of some salvaged Swarovski crystal, would you assume Swarovski was going downmarket?
A federal appeals court ruled today that the maker of expensive crystal is going to have to do a better job proving such an ad would confuse consumers if it wants to win a lawsuit seeking to bar Building 19 from mentioning its name at all as it tries to unload $500,000 worth of Swarovski goods salvaged from a warehouse hit by a tornado.
The Court of Appeals for the First Circuit in Boston said Swarovski to date has failed to prove such confusion would exist and that without that, it can't claim its reputation has been "irreparably" damaged. Confusion in trademark cases usually comes when one company tries to pass its own goods off as a better known competitor's wares, but in this case, Building 19 wasn't trying to foist one on an unsuspecting public - it really would sell Swarovski crystal, just to a clientele not known for frequenting the hoity-toity upscale malls in which Swarovski normally plies its wares.
Swarovski also highlights evidence presented in the hearing that its luxury brand reputation would suffer as a result of its association with Building #19. But, there was no formal finding of irreparable harm, and that is consonant with the lack of any finding of confusion. Without an explanation by the district court, there is no indication in the record that the court concluded that Swarovski would suffer irreparable harm if it allowed the advertisement to run as proposed.
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