Yurman suit against Sam’s Club cleared to proceed

Houston--A federal judge in Texas has denied Sam’s Club’s request to throw out the trademark infringement suit David Yurman filed against it last fall.

David Yurman Enterprises LLC and David Yurman IP LLC filed suit against Sam’s Club East Inc. and Sam’s Club West Inc. in September after receiving complaints from retailers who spotted its pieces on Sam’s Club shelves.

Yurman alleges that the retailer purchased David Yurman jewelry from one or more Houston-area retailers and then resold that jewelry in its stores using the brand’s point-of-sale materials, despite the fact that it is not an authorized Yurman retailer.

The well-known jewelry brand leveled four claims against Sam’s Club: trademark infringement, false designation of origin, unfair competition and tortious interference with a contract, meaning that Sam’s Club knew David Yurman had non-resale agreements in place with its authorized retailers but sought them out to get the jewelry anyway. 

Sam’s Club filed a motion to dismiss all four of these claims in October, with much of its argument hinging on the “first sale rule” defense--the rule that a distributor that resells trademarked goods that are genuine and haven’t been altered cannot be held liable for trademark infringement.

In an order filed Thursday in federal court in Houston, U.S. District Judge Gray H. Miller denied Sam’s Club motions, noting that the first sale rule defense doesn’t apply in cases where one party is giving off the false impression that it is officially affiliated with the other.

David Yurman’s “contention of aggressive and prominent displays and advertising in stores and on the website, in an effort to bring more people into the stores, is sufficient for now to claim that customers are being misled into thinking Sam’s Club is part of Yurman’s authorized sales network,” the ruling states.

Sam’s Club, a “wholesale club” owned by Walmart that sells merchandise in warehouse-style stores, did not respond to request for comment on the case. 

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When David Yurman originally filed its lawsuit against Sam’s Club in the fall, its attorneys indicated to National Jeweler that it might take action against the retailers that sold the jewelry to Sam’s Club as well, but noted in court papers that Sam’s Club has refused to identify them.