Louis Vuitton loses lawsuit on "Hangover" handbag

* Judge finds little chance of confusion over knockoff bag

* Louis Vuitton claims harm from character's catchphrase

By Jonathan Stempel

June 15 (Reuters) - Louis Vuitton on Friday lost its lawsuit against the Warner Brothers studio for using a knock-off handbag in its popular 2011 comedy "The Hangover: Part II".

The case stemmed from a scene in which the character Alan Garner, played by Zach Galifianakis, is shown in an airport with a bag that looks a Louis Vuitton bag, but which the French company said is made by Diophy, which makes products with a design similar to Louis Vuitton's "toile" monogram.

Louis Vuitton, part of LVMG Moet Hennessy Louis Vuitton SA , claimed it was harmed by the misrepresentation and the resulting confusion to customers.

It also said it was harmed in particular by a statement by Garner to a friend, "Careful ... that is a Louis Vuitton," that became "an oft-repeated and hallmark quote from the movie." The "Louis" is mispronounced as "Lewis."

Louis Vuitton sought financial damages and a halt to further trademark infringement.

But U.S. District Judge Andrew Carter in Manhattan found that Warner Brothers, part of Time Warner Inc, should not be held liable.

He said it was unlikely that many filmgoers would have noticed that the bag, which was on screen for less than 30 seconds, was a knock-off, or that they would have thought Louis Vuitton approved of Warner Brothers' use of the Diophy bag.

"The likelihood of confusion is at best minimal," Carter wrote.

Theodore Max, a lawyer for Louis Vuitton, had no immediate comment.

According to the complaint, "The Hangover: Part II" had grossed about $580 million worldwide at the time the case was brought, becoming the highest-grossing "R" rated comedy ever.

The case is Louis Vuitton Mallatier SA v. Warner Brothers Entertainment Inc, U.S. District Court, Southern District of New York, No. 11-09436.