The cosmetics maker asked the court to award treble damages in a lawsuit with a potential price tag of $11.4 million for Anastasia Beverly Hills.
By Samantha Joseph
Mark A. Romance jokes he had a secret weapon — his teenage daughter — who helped him understand fierce consumer loyalty to a California makeup brand and win a defense verdict in an eight-figure trademark infringement and unfair competition case.
Romance was part of a defense team of two Miami attorneys and a Texas lawyer, who beat back a lawsuit seeking to disgorge $3.8 million in profits from California-based cosmetics boutique Anastasia Beverly Hills.
Newport Beach, California-based Hard Candy LLC asked the court to award treble damages in a suit that potentially might have cost Anastasia $11.4 million in Miami federal court.
Their client, Anastasia Beverly Hills, is a prestige cosmetics brand marketed with help from Kim Kardashian and other celebrities. It sells in high-end stores, including Sephora and Nordstrom, and has a social media following of 16.1 million on Instagram.
One of its customers is a high school senior, who on drives to school helped her lawyer-father understand how highlighter could multitask as blush and that Anastasia Beverly Hills cosmetics were unlike all others when it came to style and quality.
“She was my secret-weapon research assistant,” Romance quipped. “We felt confident in our position because the whole issue was whether there was likely to be confusion.”
The case turned on the name of a makeup shade in a 2015 Anastasia product, the Gleam Glow Kit. The kit is a $40 compact with four highlighter shades called Mimosa, Crushed Pearl, Starburst and — the color at the center of the dispute — Hard Candy.
Hard Candy LLC, which holds the rights to 14 federally registered marks, sued Anastasia, alleging the rival makeup company infringed on its trademark by using the Hard Candy name and engaged in unfair competition under the Lanham Act and common law.
To prevail in court, Hard Candy had to prove Anastasia’s product name would cause confusion among consumers.
For the defense team, victory hinged on showing otherwise.
Hard Candy and its predecessors have used the name since 1995 and licenses the mark to a third-party for lipstick, nail polish, eye shadow, bronzer, other cosmetics and eyewear sold exclusively through Walmart retail stores and website. The company had retail sales of $59.9 million in 2015, according to court documents.
“It seems so simple, like a simple makeup case, but the legal issues are not so simple,” said Romance, whose team succeeded on a motion to strike Anastasia’s demand for a jury trial, then shifted attention to a more nuanced discussion. “The real issue is not whether or not you own the trademark rights. That’s important, but the real issue is whether the use of the trademark creates confusion.”
Anastasia Beverly Hills sold about 250,000 Gleam makeup kits in nine months beginning in September 2016 for a profit of about $3.8 million.
Plaintiffs in trademark infringement suits often seek two remedies: damages for lost revenue and an injunction against the party misusing their property. Hard Candy sought neither but argued it should be the one to reap the Gleam kit profits and sought to triple that amount under the Lanham Act.
Its strategy proved to be a misstep. By not seeking damages, the defense argued the company presented a case in equity as opposed to a case at law and was therefore no longer legally entitled to a jury trial.
U.S. District Judge Kathleen M. Williams agreed and presided over a three-day bench trial before ruling for the defense.
“Our theory was that they really weren’t harmed, and that the sale of this kit didn’t cause them any harm,” Romance said. “If it was causing harm, they would have tried to stop the sale through an injunction or sought damages. Neither one of those two things occurred.”
Coffey Burlington president Kevin Kaplan, partner Gabriel Groisman and associate Frances Blake represented Hard Candy.
The judge praised the work of both legal teams before finding no likelihood of confusion and no intention by Anastasia Beverly Hills to confuse consumers.
“I appreciated the professionalism and the caliber of the advocacy that was engaged in by both parties,” Williams said at a Feb. 2 hearing. “I have to say throughout the case, the record, and when I had you before me, the presentations by the lawyers, written and oral, were excellent. And I commend both sides and thank you for engaging in the quality of lawyering that makes my job not always easier, but more of a pleasure.”
Case: Hard Candy v. Anastasia Beverly Hills
Case No.: 16-CV-21203
Description: Trademark infringement
Filing date: April 5, 2016
Verdict date: Feb. 6, 2018
Judge: U.S. District Judge Kathleen Williams
Plaintiffs attorneys: Kevin Kaplan, Gabriel Groisman and Frances Blake, Coffey Burlington, Miami
Defense attorneys: Mark A. Romance and Nathaniel M. Edenfield, Richman Greer, Miami, and Travis Wimberly, Pirkey Barber, Austin,Texas
Verdict: For the defense