On February 25, 2015, in Marcel Fashions Group, Inc. v. Lucky Brand Dungarees, Inc., the US Court of Appeals for the Second Circuit held that a prior judgment in plaintiff’s favor did not bar the plaintiff on res judicata grounds from filing a second suit seeking relief for alleged further infringements that occurred subsequent to the earlier judgment (No. 12-4341-cv, (2d Cir. Feb. 25, 2015)).

Marcel Fashions Group, Inc. had a trademark for "Get Lucky" and sold jeans under this mark. In 2001, it filed an unfair competition and trademark infringement suit against Lucky Brand Dungarees, Inc., who sold jeans and other apparel under the mark "Lucky Brand" as well as other marks with the word "Lucky." The parties settled this action and provided that Lucky Brand would stop using "Get Lucky" while acknowledging its rights to use the "Lucky Brand" mark.

In 2005, Lucky Brand filed an action alleging that Marcel (and its licensees) engaged in unfair business practices and that the "Get Lucky" mark infringed on Lucky Brand’s trademarks. Marcel counterclaimed, asserting infringement and the breach of its previous settlement. At trial, the jury found that Lucky Brand infringed on Marcel’s "Get Lucky" mark and awarded Marcel (and its licensees) compensatory and punitive damages. The final order and judgment enjoined Lucky Brand from using the "Get Lucky" mark and other trademarks including the word "Lucky" after May 2003.

In 2011, however, Marcel initiated an action seeking damages and injunctive relief prohibiting Lucky Brand from using the "Lucky Brand" trademark. The complaint alleged that Lucky Brand continued to infringe Marcel’s trademark in the same manner in which it was found liable in the 2005 action. The district court found that Marcel’s claims were precluded on res judicata grounds and granted Lucky Brand’s motion for summary judgment. Marcel appealed.

The Second Circuit reversed, finding that winning the 2005 action did not deprive Marcel from suing again for further subsequent violations. Claim preclusion does not bar a claim from arising subsequent to a prior action even if the new claim is premised on the same course of conduct as the previous action. In this case, the claims could not have been contemplated and brought in the previous action because they did not exist yet. As a result, the district court erred in ruling Marcel’s suit was precluded on res judicata grounds. Marcel was therefore permitted to seek relief for alleged further infringements by Lucky Brand subsequent to the earlier judgment.

Counsel should be aware that claims of infringement beyond an earlier judgment based on the same conduct are not precluded on res judicata grounds.