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North Face, South Butt|and the Butt Face

ST. LOUIS (CN) - The ongoing battle between The North Face and a company that parodies the clothing line is escalating once again in federal court.

North Face originally sued South Butt and its founders James Winkelmann Sr. and James Winkelman Jr., claiming South Butt used confusingly similar logos to North Face's patented marks. The two sides came to a confidential settlement in April 2010 that prohibited the Winkelmans from using any of the South Butt marks, while North Face paid the defendants an undetermined amount for compliance.

But North Face filed a motion for contempt against South Butt and the Winkelmans in August. North Face claimed that the Winkelmans violated that settlement order just two days later. The elder Winkelman allegedly formed a new company, Why Climb Mountains, that promoted and sold a new clothing line under the mark The Butt Face.

The Winkelmans say North Face waived any right to relief when it issued a settlement payment to The South Butt in May 2011, according to its September opposition filing. The defendants have asserted a claim of laches, meaning North Face waited to assert its claim, and that the delay was inexcusable and caused the defendants to suffered undue prejudice.

"Here, there was a delay of at approximately sixteen (16) months between the time plaintiff notified defendants of their awareness of THE BUTT FACE and the time plaintiff filed their motion for contempt," the Winkelmans wrote. "Plaintiff has expressed no excuse for such a significant delay, particularly in the context involved herein. Not only did the plaintiff raise the issue with defendants, but defendants responded to the plaintiff's concern and plaintiff subsequently issued payment to defendants to resolve the issues between them. Defendants genuinely, and reasonably, believed that this issue was resolved following the April 2011 discussion of same and May 2011 payment from plaintiff.

"As a result and in reliance upon this perceived resolution, defendants proceeded with the next step of their business plan to generate physical THE BUTT FACE inventory and expand their marketing of same. The product arrived in the marketplace in June 2011. Defendants have expended significant time and resources during this incubation phase of their startup company that they would not have expended had they known that TNF still took issue with THE BUTT FACE after the parties had discussed these issues. The prejudice that resulted to defendants from plaintiff's lulling is undue and was unnecessary. Plaintiff should not now be permitted to come into this court seeking a finding of contempt to undue all of the actions defendants took in reliance on plaintiff's actions and inactions from April 2011 through August 2012.

"In essence, TNF was represented throughout the underlying proceedings giving rise to the consent injunction and the settlement agreement by two of the nation's largest law firms. Moreover, TNF's in-house general counsel was a party to the detailed and protracted negotiations corresponding to the terms and text of the dispositive documentation. The negotiation process involved multiple iterations of the terms, the removal of proposed terms and the inclusion of added terms. If TNF so desired, it was certainly within the purview, expertise and capacity of its representatives to seek and procure a term which would effectively obviate the ability of the individual defendants herein from prospectively employing parody in any respect within the context of apparel in general and TNF specifically. However, such was not the case. The attempt of TNF to retroactively broaden the scope of the terms of the dispositive documentation and the applicable restrictions to be imposed on the defendants clearly falls within the scope of negotiator's remorse but outside of the scope of legal entitlement.

"In short, The Butt Face was open and notorious prior to the settlement agreement, its presence was acknowledged prior to the payment by TNF to the defendants per the settlement agreement, and has been well within the public domain for in excess of one-year and ten months prior to the filing of the present motion for contempt. At some point, the oft-deployed but infrequently adopted doctrine of laches finds a suitable residence. Welcome home."

South Butt attorneys also claim that North Face has failed to show infringement and that South Butt has not diluted North Face's trademarks.

In its response filed Tuesday, North Face counters that the defendants' laches argument is a thinly veiled attempt to taunt and extort more money from the clothing giant.

"The North Face Apparel Corp. ("The North Face") did not unreasonably delay in bringing its contempt motion because: (1) its early, nonjudicial efforts to obtain compliance were sufficiently successful; (2) after respondents extracted payment from The North Face under the terms of the settlement agreement, escalated their conduct - disregarding this court's order and taunting The North Face - in anticipation that any action taken by The North Face would bring publicity to fuel

sales or that The North Face's need to protect its marks would enable respondents to extort an even larger pay-off; and (3) The North Face, without involving the court, consistently tried to get respondents to comply with the injunction before bring its timely motion," North Face wrote.

"Respondents should not even be given an opportunity to assert laches because their 'unclean hands' - established by infringing and diluting conduct intended to bring them unjust enrichment - bars that affirmative defense.

"Respondents' misrepresentation of the law regarding the 'safe distance' rule -- without citation to any authority -- attempts to obscure the admittedly specific and definite language of the injunction that they negotiated through their attorney.

"Respondents cannot avail themselves of parody to absolve their willful violation of this court's order so that they can unfairly trade upon and profit from the fame of The North Face's marks ... Parody is not a defense to dilution where, as here, the diluting party uses its marks 'as a designation of source for the person's own goods or services,' most notable in this case from respondents' efforts to register with the United States Patent and Trademark Office."

No further proceedings in this case have been scheduled as of press time.

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