Supreme Court Addresses “Defense Preclusion” as a Component of Res Judicata in New Trademark Decision

May 19, 2020 | Insights

By Lionel Schooler

In Lucky Brand Dungarees, Inc. v. Marcel Fashions Group, Inc., the United States Supreme Court recently considered for the first time whether and the extent to which it should recognize “defense preclusion” as a valid component of res judicata.

The Preclusion Brothers

The sibling descendants of the venerable doctrine of res judicata are “issue preclusion” and “claim preclusion.” “Issue preclusion” (a/k/a “collateral estoppel”) thwarts a party’s attempt to relitigate an issue actually decided in a prior action that is necessary to the prior judgment. “Claim preclusion” thwarts a party’s attempt to raise issues in a new lawsuit that could have been raised and decided in a prior action.

Interpreting this second form of preclusion for purposes of evaluating the application of “defense preclusion” in the Lucky Brand case, the Court emphasized that two lawsuits involve the same claim when they arise from the same transaction, or arise from “a common nucleus of operative facts.” The Court further stressed that the application of this form of preclusion is premised upon the logic that the entire claim covered by a prior action, once resolved, prohibits both a second action by the same plaintiff, and the second effort to present defenses by the same defendant.

The Court thus emphasized the constricted character of each of these sibling preclusion doctrines, and the fact that “defense preclusion” was not unmoored from the guideposts of these doctrines. Accordingly, the Court stated that the preclusion of a defense could only occur if the same strictures applicable to these siblings governed the application of “defense preclusion.”

Having accordingly mapped the attributes of “defense preclusion,” the Court guardedly invoked it in Lucky Brand, and found that the preclusion proponent failed to satisfy those strictures.

Factual Background

Introduction. As might be anticipated in a case premised upon limiting or barring a defense by measuring a party’s actions in a current lawsuit with those it took in a prior action, the trademark litigation underlying this issue had an extensive history, which the Court branded as “protracted.”

The combatants both sold jeans and both included the word “lucky” in their trademarks. Marcel Fashion registered its “Get Lucky” mark in 1986; Lucky Brands registered its “Lucky Brand” trademark in 1990, but also used “Get Lucky” to promote its brand. This heavyweight bout over the infringement of the marks was litigated in three rounds.

Round One. Marcel Fashion sued Lucky Brands in 2001, alleging infringement. This litigation concluded with a settlement in 2003 whereby Lucky Brands agreed to stop using “Get Lucky,” and Marcel Fashion agreed to drop its infringement claims concerning Lucky Brand’s use of its own trademarks.

Round Two. Another lawsuit flared in 2005. In that case, Lucky Brand sued, alleging infringement of its designs and logos in a new clothing line. Marcel Fashion filed several counterclaims, focused principally upon Lucky Brand’s alleged continued use of “Get Lucky.” These claims included Marcel Fashion’s contention that Lucky Brand had breached the 2003 settlement agreement, together with the contention that Lucky Brand’s use of certain trade names infringed upon Marcel Fashion’s trademark as “confusingly similar.” However, as the Court noted, Marcel Fashion did not claim that Lucky Brand’s use of its own trademarks alone infringed Marcel Fashion’s trademark.

Lucky Brand unsuccessfully sought dismissal of the counterclaims as having been released pursuant to the terms of the 2003 Agreement, and then answered the counterclaims by again invoking the defense of release. However, according to the Court, it never again invoked that defense during Round Two.

The ultimate result of Round Two was victory for Marcel Fashion, in the form of findings of infringement by Lucky Brand’s use of “Get Lucky” or by its copying or imitating the “Get Lucky” mark.

Round Three. In 2011, Marcel Fashion initiated Round Three, the case which eventually made its way to the Supreme Court. It sued Lucky Brand for infringing the “Get Lucky” mark in contravention of the judgment issued in Round Two, focusing upon Lucky Brand’s continued, post-2010 use of Lucky Brand’s own marks, some of which included the word “Lucky.” Marcel Fashion contended that this usage had previously been found to have infringed its marks.

In Round Three, the District Court granted summary judgment to Lucky Brand on the basis that Marcel Fashion’s 2011 claims were essentially the same as its counterclaims from the 2005 lawsuit. However, the United States Court of Appeals for the Second Circuit disagreed, holding that Marcel Fashion’s new claims were distinct from those asserted in 2005, such that Marcel Fashion’s Round Two judgment did not deprive it of the right to sue for subsequent similar actions. Even so, the Court of Appeals also rejected Marcel Fashion’s request for sanctions for violation of the injunction issued in Round Two because Lucky Brand’s conduct at issue in Round Three was its use of its own brands, not the use of the phrase “Get Lucky.”

On remand, Lucky Brand moved the District Court to dismiss all claims, contending for the first time since its Round Two motion to dismiss that Marcel Fashion had released its claims in the 2003 Agreement. The District Court granted the motion, ruling that the release clause in this Agreement barred Marcel Fashion’s claims.

Returning to the Second Circuit, Marcel Fashion contended that Lucky Brand was precluded from raising this release defense in Round Three. The Second Circuit agreed, given that the same parties litigating in Round Three had litigated Round Two, that Round Two had resulted in an adjudication of the merits, and that Lucky Brand therefore could not invoke an unlitigated defense it should have raised earlier.

Supreme Court Evaluation of Defense Preclusion


The Supreme Court unanimously reversed the Second Circuit’s ruling.

The Court commenced its evaluation of the parties’ claims by pointing out that they had agreed in their briefing that this case did not involve appropriate invocation of the doctrine of “issue preclusion.”

Claim Preclusion

The Court therefore focused its attention upon Marcel Fashion’s contention that Lucky Brand should have been precluded from invoking the defense of release in Round Three because of the claims made in Round Two.

Scrutinizing the claims in these two lawsuit, the Court determined that they were grounded upon different conduct, involving different marks, occurring at different times. The Court acknowledged that claims (or defenses) in a subsequent lawsuit did not have to be identical to those in a prior lawsuit to merit preclusion. It noted that preclusion could be premised upon whether a different judgment in a second action would impair or destroy rights or interests established by the first judgment.

Nevertheless, in this case, the Court determined that the differences between the two sets of claims disqualified consideration of defense preclusion because of an absence of a “common nucleus of operative facts.” The Court found that the claims in Round Three did not imperil the judgment emanating from Round Two, because Round Three involved different conduct and different trademarks. To the Court, Marcel Fashion conceded by its pleadings that the focal point of Round Two had been Lucky Brand’s use of the “Get Lucky” phrase; whereas the claims in Round Three did not involve any alleged use of that phrase. Therefore, to the Court, Marcel Fashion conceded that there was no legitimate claim that Lucky Brand had violated the Round Two injunction.

The Court further noted that the claims underlying Round Three had not even occurred until after the conclusion of Round Two. The Court found this phenomenon to be emblematic of trademark litigation in particular, given its dependence upon intrinsic facts that change over time. It therefore endorsed one ruling by the Court of Appeals, that Marcel Fashion’s Round Three claims were not barred by its Round Two claims.

The Court nonetheless concluded that given the different factual scenarios, Lucky Brand was not precluded from invoking the defense of release pursuant to the 2003 Agreement in Round Three. The Court particularly noted that Lucky Brand’s defense did not threaten the judgment issued in Round Two, and emphasized the stark difference between Round Two’s judgment enjoining Lucky Brand’s use of “Get Lucky,” and Marcel Fashion’s Round Three avowal that Lucky Brand’s use of its own marks was the foundation for Marcel Fashion’s claim of infringement.


The Supreme Court in Lucky Brand v. Marcel Fashions Group has provided much needed guidance to proper use and limits of defense preclusion. Its opinion highlights, among other things, the critical role for practitioners in carefully drafting settlement documents and court pleadings. In the wake of this decision, practitioners seeking to advocate defense preclusion are well-advised to ensure that the structure of and claims resolved in an initial litigation are sufficiently described in resolving that proceeding to preclude re-litigation of those issues, directly or indirectly, in a subsequent litigation. Practitioners invoking preclusion as a defense against subsequent claims should ensure that distinct differences exist between claims and operative facts in each of the two litigations, safeguarding the preclusion defense’s potency.

Meet Lonnie

Lionel M. Schooler is a management-side employment lawyer and recognized authority on employment law, federal appellate practice, and arbitration. Lonnie’s employment practice focuses on counseling clients and litigating, on a nationwide basis, claims under all employment laws, wage and hour claims, and investigations by the Equal Employment Opportunity Commission, the U.S. Department of Labor, and the Texas Workforce Commission. Lonnie is also experienced as an arbitrator on the Commercial and Employment Panels of the American Arbitration Association and as an advocate. He was selected for inclusion by the National Association of Distinguished Neutrals and is certified as a Fellow of the Chartered Institute of Arbitrators for international arbitration matters. Since 2017, Lonnie has served on the Board of Directors of the Houston Bar Association. His previous editorial experience includes serving as editor-in-chief of The Houston Lawyer, a bimonthly publication of the Houston Bar Association.

The opinions expressed are those of the author and do not necessarily reflect the views of the firm, its clients, or any of its or their respective affiliates. This article is for informational purposes only and does not constitute legal advice.