While it’s been nearly five years since L.L. Bean replaced Bank of America with Barclays as the issuer of its co-branded credit card, that development would still be news to most consumers. And that, right there, is the problem.
You see, the popular outdoor clothing retailer originally inked a deal in 1996 with the now-defunct financial institution MBNA to offer and distribute its own “affinity” credit card. This allowed fans of the brand to earn L.L. Bean rewards with every swipe of their plastic, gave L.L. Bean an added source of revenue, and enabled MBNA to both associate itself with the company’s image and cross-sell its customer base. However, Bank of America purchased MBNA in 2006, leading to consumer complaints about the declining quality of customer service and, eventually, an acrimonious parting of the ways between L.L. Bean and BofA.
The thing is, while L.L. Bean wanted to shed its former partner like a sweater from the pages of its ubiquitous catalogue on an increasingly warm day, Bank of America wasn’t so quick to bring the party to a close. When customers’ original cards expired, BofA automatically replaced them – minus the words “L.L. Bean” but still bearing the image of a mountain-scene that looks strikingly similar to what appeared on the original MBNA card as well as what continues to serve as the clothing company’s logo (see image above).
For starters, many cardholders feel taken advantage of since the only reason they got the card in the first place was to earn free apparel from one of their favorite retailers. But there are also questions of legality involved too. And the answers to those questions, unfortunately, remain somewhat of a mystery. After a judge decided in 2009 not issue an injunction barring BofA from continuing to offer its mountain-themed card, the two companies ultimately settled their dispute in private arbitration.
Luckily for those of you who are still curious about how Lady Justice would view the dispute, L.L. Bean customers continue to misinterpret BofA’s card art, thereby keeping the story alive. As a result of its continued relevance, we reached out to experts in trademark and copyright law in order to garner a better understanding of the legal dynamics in play.
“The core question would be whether consumers are likely to be confused into believing that the replacement cards are affiliated with L.L. Bean,” Betsy Rosenblatt, the director of Whittier Law School’s Center for Intellectual Property Law, told CardHub via e-mail earlier this week. “So if consumers have come to associate the mountain scene with L.L. Bean … then they may believe that L.L. Bean is still affiliated with the card. On the other hand, BofA may have prevented some of that potential confusion by explaining in whatever correspondence it sent with the card that the relationship has been terminated.”
Indeed, the issue of “public confusion” is central to any alleged case of trademark infringement, along with the notion of “implied” association or affiliation. In other words, a party’s guilt or innocence in such a case is nebulous and therefore dependent on the relative strength of each side’s case.
“If [L.L. Bean’s] logo functions in a way that it’s recognizable by a significant portion of the public as being their logo, then even if their name – ‘L.L.Bean’ – is not used in a particular communication, it could still signal that they have sponsored or endorsed or are somehow affiliated with the sale of that product or service,” says David Franklyn, director of the University of San Francisco School of Law’s McCarthy Institute for Intellectual Property and Technology Law. “Under the federal trademark laws, it is illegal to imply an association or affiliation or sponsorship with a company if one is doing so in the context of one’s own commercial offering, if the implication of sponsorship or affiliation or association confuses the public – even a relatively small amount of the public – into thinking that there is some sort of endorsed relationship between the two. If that kind of public confusion exists, then there could be a legal claim for what we would call here either trademark or trade dress infringement.”
A trademark is a registered word or symbol used for commercial purposes, while trade dress refers to the combination of colors, textures, fonts, etc., that make up a trademark. You also have to think about copyright law, which protects the creators of an original work from improper reproduction.
Interestingly, L.L. Bean does have a registered trademark that would seem to be quite relevant to this case (see below).
“This registration is not for financial services, but since trademark rights stem from use, a registration is not imperative to have rights,” according to Deborah Gerhardt, who is an assistant professor of both trademark and copyright law at the University of North Carolina School of Law. “So if L.L. Bean owned the mountain design trademark, it likely licensed the brand for use in connection with the mark to each bank, with the understanding that L.L. Bean was in charge of monitoring quality. And if the bank’s conduct reflected poorly on the quality, LLBean would have a right to terminate the relationship.”
Ultimately, what a case like this could come down to is just how BofA’s mountain scene was created. “The critical point is how they came to make this credit card, how this outdoorsy feel or whatever they’ve done to it [came to be],” Kenneth Port, director of the William Mitchell College of Law Intellectual Property Institute, said. “Number one is they just took ‘L.L. Bean’ off and they kept the rest of it. In that case, we call that willful trade dress infringement and they would be responsible for treble damages and L.L. Bean’s case is a lot easier to prove. … If they can prove that by happenstance they just landed on the same – they didn’t tell the design team where they were coming from, it just turned out to have a similar look and feel to the original outdoorsy thing – well you know, outdoorsy stuff could be represented in a lot of different ways.”
So, at the end of the day, it’s clear that the lines between illegal trademark/copyright infringement and honest coincidence are often blurry at best. It comes down to what each side can prove, and perhaps one day we’ll know who made the better case in this instance. In the meantime, however, there’s one thing we can say with a fair amount of confidence: It’s unlikely that consumers duped by the similar mountain scenes will recoup their lost L.L. Bean rewards, let alone be awarded damages. That would take a class-action suit and depend on individual state law. It’s a shame too because I’ve really had my eye on this new jacket!