Judge Alper Grants Limited Discovery to Lacoste in Counterfeiting Case

Lacoste Alligator, S.A., which sells tennis shirts and other apparel with the distinctive green crocodile logo in high-end stores like Nordstrom and Saks Fifth Avenue, will get a chance to find out, through discovery in a lawsuit, which of its distributors (if any) have been selling its products to Costco and other warehouse stores without its express permission, in violation of its trademark rights and in breach of contract.

Lacoste, a Swiss company, is attempting to prevent its clothing from being sold in big-box and other unauthorized retail locations. The first problem facing Lacoste, however, was that although it believed that some distributor was making sales to those stores, it didn’t know who it was. Accordingly, it filed a “John Doe” complaint in Arlington County Circuit Court on trademark-infringement, breach of contract, and other grounds, hoping to use discovery in the case to ferret out the identity of the distributor responsible for the unauthorized sales. After filing the “John Doe” suit, Lacoste promptly served a subpoena on Costco Wholesale Corp., trying to ascertain the source from which it was receiving Lacoste products for resale in its stores. Costco objected to handing over any documents, and Lacoste filed a motion to compel compliance with the subpoena.

Judge Joanne F. Alper overruled most of Costco’s objections and held that Lacoste was entitled to the discovery subject to the entry of an appropriate protective order to prevent misuse of the information.

Costco had raised three objections to turning over the requested documents to Lacoste. First, Costco contended that the court lacked jurisdiction because it was pursuing a “John Doe” action without naming the defendant, a type of case that it asserted is permitted in Virginia only in uninsured motorist or “cybersmear” cases. Judge Alper, supplier.jpghowever, found nothing in Virginia law to bar the use of a “John Doe” suit in a commercial case like this one. Lawyers frequently use the “John Doe” lawsuit mechanism, in fact, when a defendant’s identity is unknown.

Second, Costco contended that the identity of its suppliers is a protectable trade secret. The court agreed, but noted that trade secrets are not automatically insulated from discovery. Rather, courts should examine whether the desired information is relevant to the lawsuit and must consider whether the information can be disclosed while minimizing the risk of disclosure to third parties. Judge Alper found that the information was unquestionably relevant and that it could be disclosed within the confines of a protective order preserving its confidentiality.

The protective order also disposed of Costco’s third argument: that the subpoena was overly broad and burdensome. The protective order limited Costco’s obligation to comply with the subpoena to documents relevant only to the determination of John Doe’s identity. Therefore, subject to the limitations provided in the protective order, the court ordered Costco to comply with the subpoena.

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