By Jack Newsham
Law360, New York (June 14, 2016, 9:14 PM ET) — A Canadian woman who sold her own line of “chalk paint” after ducking out of a contract with a U.S. distributor of similar products was ordered by a Louisiana federal judge Tuesday to pay costs and comply with an arbitration award that prevents her from using the trademarked term.
Kathy van Gogh, who sold chalk paint and other craft products by the British designer Annie Sloan before breaking off her deal with Sloan licensee Jolie Design & Decor Inc. and launching her own product line in 2012, agreed in April to let a judge weigh in on the validity of a $67,000 arbitral award and injunction on describing her own products as “chalk paint.” The case had been stayed for months because van Gogh lodged a losing challenge to the trademark with the Trademark Trial and Appeal Board.
Van Gogh argued that she didn’t consent to restrictions on the use of the term “chalk paint” and that arbitrator Anthony M. DiLeo of the International Centre for Dispute Resolution exceeded his authority by enjoining her from using it. But U.S. District Judge Mary Ann Vial Lemmon said the dispute actually wasn’t about the validity of the trademark. Jolie was simply trying to enforce its contract, she wrote, and the arbitrator ruled on the issues before him.
“Van Gogh clearly understood that she could argue that the arbitration clause was invalid,” Lemmon wrote. “However, van Gogh did not refuse to arbitrate on the ground that a valid contract was never formed due to a lack of consent. Instead, she submitted that issue to the arbitrator for consideration.”
Louisiana-based Jolie and Vancouver resident van Gogh struck a retail distribution agreement in June 2011 that was amended a few months later. The agreement fell apart in April 2012 when Jolie tried to add terms that van Gogh didn’t like, leading the Canadian seller to terminate the contract and launch the “Kathy van Gogh Chalk Paint Collection,” a term she sought to trademark.
Although van Gogh argued the parties’ lack of agreement on what qualified as intellectual property made the contract invalid under state law, she agreed to let Judge Lemmon take up the case after Jolie threatened to take the matter to the Fifth Circuit.
Tim Kappel, a lawyer for Jolie, said in an email to Law360 that while he was pleased with the ruling, he had hoped for one “that more soundly rejected” van Gogh’s so-called “meeting of the minds” argument. Her contention that the contract was invalid relied on the argument that the parties didn’t have the same understanding of what “intellectual property” encompassed, meaning she didn’t truly consent to it, which Kappel said he disagreed with.
“However, the court was able to avoid this larger issue … by determining that Ms. van Gogh, having submitted this ‘meeting of the minds’ argument during the arbitration process, was precluded from again seeking relief on that issue before the court,” similar to the way the Fifth Circuit ruled in the 2015 case OMG LP v. Heritage Auctions Inc., he wrote.
The award also required van Gogh to pay Jolie’s costs for confirming the award and directed the parties to duke it out before a magistrate judge.
A lawyer for van Gogh didn’t reply to a request for comment. Van Gogh still sells paint with chalk in it, but uses the term “fossil paint,” according to her company’s website.
Van Gogh is represented by Brad E. Harrigan of Lugenbuhl Wheaton Peck Rankin & Hubbard.
Jolie Design is represented by Timothy Kappel of Farmer Purcell White & Lassiter PLLC.
The case is Jolie Design & Decor, Inc. v. van Gogh, case number 2:15-cv-00740, in the U.S. District Court for the Eastern District of Louisiana.
–Editing by Jill Coffey.