On Monday, Judge Rakoff held that a discovery error—uncovered after the parties went to trial—did not merit a redo or sanctions. In June 2021, Adidas brought a trademark action against Thom Browne, alleging that Thom Browne’s four-bar and grosgrain design on its activewear infringed Adidas’s trademarked three-stripe design. The case went to trial in January 2023, where the jury decided that Thom Browne was not liable; the decision was affirmed by the Second Circuit in May 2024.
While the appeal was pending, Adidas learned through a related action in the U.K. that Thom Browne had failed to produce four relevant emails in the course of discovery. Adidas moved for a new trial, and the Court re-opened discovery on this limited issue. The Court determined that the failure stemmed from a miscommunication between the e-discovery vendor and Thom Browne’s paralegals regarding the categorization of certain documents being reviewed for production. In assessing the mistake, Judge Rakoff determined that neither a new trial or sanctions would be appropriate because Adidas “failed to show either that the four emails probably would have changed the outcome of trial . . . or that Thom Brown engaged in ‘misconduct’ in failing to produce the emails.”
With regard to the impact on the verdict of the four emails, each of which referenced similarities to Adidas’s classic design, Judge Rakoff reasoned that “the four emails, while not irrelevant, hardly seem material to the central issues in this case as they actually played out at trial.” As he explained:
Furthermore, the essence of Thom Browne’s defense in this case was simply that Adidas’s claims amounted to a contention that they owned all stripe designs and that this was a masked attempted to monopolized the sportswear market. In his closing statement, Thom Browne’s counsel summarized this argument by declaring “this case isn’t about confusion. It isn’t about competition. It’s about whether adidas can own all stripes.” Indeed, the Court’s perception of the jury “body language” suggests that it was this argument that most likely influenced the jury in Thom Browne’s favor. The four emails now at issue say nothing about this argument.
With regard to whether the failure to produce the four emails constituted misconduct, or should result in sanctions, Judge Rakoff held that both standards required at least negligence, which was not present here. He explained that Thom Browne’s error was not negligent because it was caused by an “inadvertent but understandable mix-up,” Thom Browne’s legal team otherwise undertook reasonable quality checks, and there was no evidence of nefarious intent.
Judge Rakoff further cautioned that “courts do not demand perfection in responding to discovery requests” because to hold otherwise would place too great a burden on litigants:
If the innocent non-production of such documents were in every case sufficient to void the results of a trial, the balance of economy and thoroughness struck by the discovery rules would be shattered, as parties would be incentivized to go to inordinate lengths to ensure all conceivably significant material is produced. . . . Thus, an overly expansive interpretation [of this standard] will have the perverse effect of incentivizing inordinate levels of care in a large proportion of cases, for fear that any trial win may be no win at all. This result cannot be correct.