Cki's Lawsuit Summary

The Case started with the CKI, Calvin Klein brand, filing a lawsuit on May 30, 2000 against the Warnaco Group in their wrong doings in their license agreement. The suit was made because of the Warnaco Group breaching its jeanswear licensing and distribution contract, resulting in diluting the equity of CKI’s brand. Having caught hold to CKI’s allegations that didn’t represent Warnaco morals and company values, they soon filed a countersuit against CKI. The Warnaco company lawsuit denied all trademark dilution and wrongfully distributing their products to warehouse clubs. The case between Calvin Klein and Warnaco opened up the publics eyes to the ins and outs of a partnership and what makes and breaks a licensing agreement from 3 main topics of licensing: trademark infringement, trademark dilution, and misrepresentation of the brand (Boer).
As stated on page one, CKI’s reason for filing the lawsuit was because Warnaco was producing large volumes of goods for sale to unauthorized retailers and improper distribution channels such as Costco, Sam’s club, and BJ’s club stores (Boer). However, on page 19-20 it states that with the one-time authorized sale to Costco’s in 1998, the Warnaco Group was able to generate $46 million in sales for the CKI company. Proved by Exhibit 14 on page 28, the sales of Calvin Klein Jeans in warehouse clubs reached a 15.2% increase from 1997 to 1999. Strategically it was a smart business move for Warnaco to sell the CK jeans to wholesale retailers because it helped push the Calvin Klein company forward in