Keds kicks Hanes' claims over 'Champion' trademarks

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The exterior of John Jospeh Moakley U.S. Courthouse in Boston REUTERS/Katherine Taylor

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  • Hanes, Keds agreed to license of Keds 'Champion' footwear mark
  • Hanes alleged Keds wrongly expanded TM use abroad
  • Court says no jurisdiction over Hanes' foreign TM claims

(Reuters) - Lexington, Mass.-based shoemaker Keds LLC escaped Hanesbrands Inc's trademark and breach-of-contract claims Friday in Boston federal court in a dispute over its use of the "Champion" name.

U.S. District Judge Indira Talwani said the court lackedjurisdiction over Hanes' trademark claims, which solely related to its alleged rights in "Champion" outside of the U.S.

Keds, which was represented by Zack Kleinsasser of Greenberg Traurig, said in a statement that it was pleased with the court's decision.

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Hanes and its attorney Bryan Parr of Paul Hastings didn't immediately respond to a request for comment.

Champion Products Inc began using its name on clothing in the 1930s. Keds owns the "Champion" trademark for casual footwear in the U.S. and Canada.

Before Winston-Salem, N.C.-based Hanes bought it in 1989, Champion had entered a licensing agreement with Keds that allowed Champion to use Keds' footwear mark on athletic shoes in the U.S., Canada, and any other country where Keds "may have acquired rights" in the "Champion" mark for shoes.

The agreement automatically renews every five years, and was last renewed between Keds and Hanes in 2017. The parties amended the agreement later that year to include a temporary moratorium on Hanes challenges to Keds' "historic" use of "Champion" outside of the U.S. and Canada.

Hanes said Keds has wrongly expanded its use of the "Champion" name in Taiwan, Austria, and South Korea -- where it hadn't historically used the name and either lacks rights or has inferior rights to the mark -- since the moratorium went into effect. After negotiations broke down, Hanes sued Keds in July 2020 for trademark infringement and breach of contract.

Hanes argued that Keds' foreign use of "Champion" infringes and dilutes its trademarks. Keds responded that the moratorium bars Hanes from asserting the trademark claims, and that the court lacked jurisdiction over them.

Talwani found that the moratorium didn't bar claims related to Keds' alleged "expanded" -- not "historic" -- foreign use of the mark. But Talwani said the court lacked subject-matter jurisdiction because Hanes' claims only related to its foreign trademark rights, despite its assertion that the alleged infringement affects it in the U.S.

"Keds, not Hanes, owns the federal CHAMPION wordmark for shoes," Talwani said.

And "to the extent that Hanes is attempting to enforce its foreign trademark rights against Keds in foreign jurisdictions, the courts of those jurisdictions have the interest and expertise to adjudicate those disputes," Talwani said.

Hanes also argued that Keds broke a contractual promise to renegotiate the agreement, and that it breached their contract by conditioning renegotiation on Hanes' agreement not to end the moratorium.

Talwani said that Hanes' breach claims hinge on the idea that the agreement requires Keds to renegotiate.

But the relevant part of the agreement "imposes no such obligation on Keds," Talwani said. Although it mentions renegotiation as one way to calculate the length of the moratorium, it doesn't require the parties to renegotiate.

The case is Hanesbrands Inc. v. Keds LLC, U.S. District Court for the District of Massachusetts, No. 1:20-cv-11354.

For Hanes: Bryan Parr of Paul Hastings

For Keds: Zack Kleinsasser of Greenberg Traurig

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