Frivolous lawsuit costs Business Owner $300K in legal fees
According to Law.com, "Luxury handbag maker Louis Vuitton claimed a Las Vegas company infringed on its trademark with furry "Chewy Vuiton" dog toys, but a federal appeals court refused to bite. "
The Small Business owner, Haute Diggity Dog, eventually won the lawsuit, but she paid her attorneys over $300,000 to defend the company.
Before Haute Diggity Dog opened its doors, the owner should have consulted with an business attorney. Her attorneys could have developed a pre-emptive strategy to avoid a potential lawsuit involving trademark infringement, like this.
In this case, I would probably have recommended that Haute Diggity Dog enter into an agreement with Louis Vuitton. I would have clearly demonstrated to Vuitton, in our negotiations, that Haute has the legal authority to create these toys because they do not infringe. The agreement would specify that Vuitton would not sue Haute (and perhaps offer that Vuitton purchase a license from Haute to produce dog toys. Thus, it is better to do business with Haute, than against Haute.