Warner Bros. Beats Louis Vuitton in 'Hangover 2' Knockoff Handbag Lawsuit

Courtesy of Warner Bros. Pictures

The R-rated sequel has already grossed $154 million overseas -- not that far behind the $186.9 million domestic cume. Despite being shot in Thailand the pic is tanking in that Southeast Asian market.

A judge has dismissed Louis Vuitton's lawsuit against Warner Bros. over knockoff handbags in a scene in The Hangover Part II.

In the film, the character played by Zach Galifianakis carries a bag marked LVM, and when it gets pushed, he admonishes another character, "Be careful, that is … that is a Lewis Vuitton."

Last year, the French fashion house sued the studio, alleging that the 25-second scene harmed its brand by infringing its marks and creating consumer confusion. Louis Vuitton says the bag featured in the film was actually made by the Chinese-American company Diophy and demanded millions of dollars from an alleged violation of the Lanham Act.

But the judge wasn't impressed with Louis Vuitton's allegations, saying the claims can't withstand a First Amendment review.

The key precedent in the use of trademarks in expressive works like films is Rogers v. Grimaldi, where Ginger Rogers sued the filmmakers of Ginger and Fred and unsuccessfully argued that the film's title falsely implied that she was endorsing or was featured in the film. In that decision, the defendant had shown that the use of a trademark was "not arbitrarily chosen just to exploit the publicity value of [the plaintiffs' mark] but instead ha[d] genuine relevance to the film's story."

U.S. District Court Judge Andrew Carter said Friday that the same thing applies in this case. "Warner Bros.' use of the Diophy bag meets this low threshold," he writes.

The judge offers a critique of the scene in question:

"Alan's terse remark to Teddy to '[be] [c]areful' because his bag 'is a Lewis Vuitton' comes across as snobbish only because the public signifies Louis Vuitton -- to which the Diophy bag looks confusingly similar -- with luxury and a high society lifestyle. His remark also comes across as funny because he mispronounces the French 'Louis' like the English 'Lewis,' and ironic because he cannot correctly pronounce the brand name of one of his expensive possessions, adding to the image of Alan as a socially inept and comically misinformed character. This scene also introduces the comedic tension between Alan and Teddy that appears throughout the Film."

Read the Document Here

The judge says that since the Diophy bag has some relevance to the film, Warners' use of it is unprotected only if it explicitly misleads as to the source.

Louis Vuitton argued that consumers would be confused into believing that the Diophy bag is really a genuine Louis Vuitton bag and that the company approved the use of the bag in the film.

Carter said that neither of these allegations involves confusion as to the film.

"Specifically, Louis Vuitton does not allege that Warner Bros. used the Diophy bag in order to mislead consumers into believing that Louis Vuitton produced or endorsed the film," he wrote. "Therefore, the complaint fails to even allege the type of confusion that could potentially overcome the Rogers protection."

The judge adds that when First Amendment values are involved, courts should narrowly construe the Lanham Act and weigh the public interest in free expression. He says it is unlikely that an appreciable number of people watching the film would even notice that the bag is a knock-off, that any likelihood of confusion is minimal and thus the interests in protecting free expression outweigh any harm.

"The court concludes that Louis Vuitton's allegations of confusion are not plausible, let alone 'particularly compelling,' " the judge wrote in summary.

In a statement, Warner Bros said, “We are very pleased with the court’s decision.”

Read the decision on the next page.

E-mail: eriq.gardner@thr.com

Twitter: @eriqgardner