Law School Case Brief
ZAZU Designs v. L'Oreal S.A. - 979 F.2d 499 (7th Cir. 1992)
Corrective advertising is a method of repair. Defendant diminishes the value of plaintiff's trademark, and advertising restores that mark to its original value. Expenses for repair cannot be justified when they exceed the value of the asset. To justify damages to pay for corrective advertising a plaintiff must show that the confusion caused by the defendant's mark injured the plaintiff and that repair of the old trademark, rather than adoption of a new one, is the least expensive way to proceed.
Plaintiff-appellee Zazu Hair Designs ("ZHD") sued defendant-appellant L'Oreal, S.A. (“L'Oreal”) alleging trademark infringement under the Lanham Act, 15 U.S.C.S. § 1051 et seq. The district court held that ZHD's priority sales gave it an exclusive right to use the "Zazu" name nationally for hair product, enjoined L'Oreal from using the mark, and awarded ZHD $ 100,000 in damages on account of lost profits and $ 1 million for corrective advertising. L'Oreal appealed, arguing that the district court erred in its judgment and award.
In an action alleging trademark infringement under the Lanham Act, did the district court err in holding that the trademark of plaintiff Zazu Hair Designs had priority, and in enjoining defendant L'Oreal from using the mark, and awarding damages for lost profits, corrective advertising, and attorney misconduct?
The United States Court of Appeals found that the district court judge erred in equating a "use" sufficient to support registration with a "use" sufficient to generate nationwide rights in the absence of registration. Therefore, the Court concluded that plaintiff ZHD's sales of hair products were insufficient as a matter of law to establish national trademark rights at the time defendant-appellant L'Oreal put its product on the market. Further, the Court found that ZHD did not establish that L'Oreal's sales injured it in the slightest; therefore, none of the awards rested on adequate foundation. Accordingly, the judgment was reversed.
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