Lawsuit seeks to thwart James Dean trademark violations

Consider James Dean a rebel without a trademark. At least that’s how the late actor is viewed in some corners of the internet.

Dozens of foreign companies are selling counterfeit James Dean products online in the United States, according to a federal lawsuit.

The complaint filed Dec. 16 in the Western District of Texas argues that the practice hurts sales for Fairmont, Indiana-based trademark holder James Dean Inc., confuses customers and can damage the brand.

But a resolution won’t be easy in the shadowy, fast-paced world of e-commerce, experts say. The defendants, some of whom can’t even be identified, probably will never respond or appear in court. They may disappear from online marketplaces only to reemerge later with a new alias until they get sued again.

Success ultimately may not mean a court win or even a settlement. It might just involve making life tough enough for counterfeiters that they move on to an easier mark.

“It becomes a game of Whac-A-Mole,” said Holly Banta, a partner in the intellectual property group at Ice Miller. “They change their business name, they show back up again with the same merchandise, and the plaintiff has to keep chasing them again.”

A big target

In James Dean, counterfeiters have singled out a well-known icon of teenage rebellion who quickly rose to fame in the 1950s before dying at age 24 in a car accident.

The Indiana native appeared in only three films: East of Eden, Rebel Without A Cause and Giant, according to the Academy of Motion Picture Arts and Sciences. He was nominated for Oscars for his work in two of them.

“Despite his short career, his performances left a lasting impact, and he became a symbol of youthful nonconformity,” said the federal court complaint filed over his trademark.

Dean left a legacy that is “one of the most iconic in American film history,” according to Liz Van Denburg Cohen, a parter with Renaissance Licensing, which represents James Dean Inc. and manages rights to the name, image and likeness.

“As stewards of that legacy, we are responsible for protecting the integrity of his name and likeness across all markets,” Van Denburg Cohen said in an email. “While we always prefer collaborative solutions, we will take necessary steps to prevent unauthorized uses that may mislead the public or dilute the brand.”

In 2014, James Dean Inc. sued Twitter over trademark infringement and violation of publicity rights over the handle “@JamesDean.” The trademark holder dropped the lawsuit later that year after the account was removed from Twitter and the owner of the account couldn’t be located.

Van Denburg Cohen declined to say how much revenue is generated every year by authorized uses of the actor’s trademark.

Subjects that are already popular with consumers draw attention from counterfeiters because they represent easy money, noted Banta, who is not involved in the Dean litigation.

CMG Worldwide, which has an office in Indianapolis, also lists James Dean Inc. as a longtime client. But representatives of CMG did not respond to requests for comment on this story.

A complicated case

The federal lawsuit over Dean’s trademarks lists 87 defendants, but it can’t say for certain who some of the business owners are behind some of the sites selling unauthorized merchandise. The plaintiffs admit in their lawsuit that the defendants have made it “virtually impossible” to learn their true identities and the scope of their counterfeit network.

The complaint says the counterfeiters operate under aliases and create e-commerce stores that look like they’re selling authorized merchandise, which creates confusion among shoppers. The legal document doesn’t detail the products sold.

But it does say that the defendants sell their products at prices well below the value of authorized merchandise.

It says many defendants operate out of China or “other foreign jurisdictions with lax intellectual property enforcement systems.”

James Dean Inc. launched what lawyers call a “Schedule A” case in the U.S. District Court for the Western District of Texas, where judges have experience with these cases and juries have a reputation for being plaintiff friendly.

The court complaint is filed with a list of defendants labeled Schedule A that is initially sealed by a judge.

That approach can allow revenue from potentially improper sales to be frozen while the case plays out and before counterfeiters realize they are being sued and then move the money to offshore accounts.

Then the list is unsealed, and the defendants are identified.

Sofia Quezada Hastings, an attorney representing James Dean Inc., declined to comment when reached by The Indiana Lawyer.

Lawyers not tied to the case say companies that sue in these situations usually don’t take the case to trial or even get a response from the defendants. And this approach doesn’t stop counterfeiting.

But it can halt sales in the short term.

“The more you can kind of staunch the bleeding, the better off you’re going to be in the long run,” said Lou Perry, an intellectual property lawyer and partner with Faegre Drinker.

Eventually, aggressive litigation may persuade counterfeiters to seek new targets. They also have profit margins they need to protect, and they talk online with other counterfeiters about who presents challenges, Perry said.

“It just makes it harder, riskier and less profitable for the bad actors,” he said. “At some point they will make the business decision to move on and go counterfeit something else.”

‘The cost of doing business’

The scale and speed of counterfeiting is increasing, Perry said. He noted that Schedule A cases are a powerful tool to deal with it.

“It really reflects how trademark enforcement is evolving from kind of storefront policing to coordinated digital platform disruption,” he said.

Schedule A cases can represent a more effective option for dealing with trademark infringement than suing companies individually or taking a case to the International Trade Commission, said law professor Mark Janis, director of the Center for Intellectual Property Research at Indiana University Bloomington’s Maurer School of Law.

Lawyers say they have seen a spike in these cases over the past few years, especially coming from a federal court in the Northern District of Illinois. But the strategy faces challenges.

Last summer, a federal judge in that court raised procedural questions about the approach. Janis said that might limit the number of Schedule A cases filed in the future, especially if judges in other courts raise the same questions.

And he worries that could leave trademark owners without a practical solution for dealing with counterfeiters.

“There might be a gap that the law is going to have to figure out how to fill,” he said.

While future legal strategies may shift, the need for them in e-commerce won’t fade. Perry said trademark enforcement never really ends, even if litigation makes counterfeiters disappear online.

“The sellers are going to reappear under new names, or at least some of them will,” he said. “New platforms are going to emerge. Enforcement becomes just ongoing maintenance of your brand.

“This is almost part of the cost of doing business at this point.”

The case is James Dean, Inc., v. the Partnerships and Unincorporated Associations Identified on Schedule A, 1:25-cv-02058. James Dean Inc. is represented by Sofia Quezada Hastings at Aronberg Goldgehn Davis & Garmisa. An attorney has not filed an appearance on behalf of the defendants.•