When Coachella announced that it would be suing Urban Outfitters for "capitalizing on the event's image" in March, it was really suing the parent company for pieces being marketed with the word "Coachella" by UO subsidiary Free People — despite those items having no official connection to the annual music festival. Now, Urban Outfitters is striking back by requesting that it be dismissed from the case, claiming that it doesn't have close enough ties to Free People to be a defendant.
Coachella had issued a cease and desist letter to Urban Outfitters that the company ignored last year before the festival filed suit, according to WWD. While plenty of retailers market a "festival collection" around the months leading up to Coachella, the festival went after Free People in particular because it was using the name — a right Coachella wants reserved for its official licensing partners, which currently include H&M and Pandora.
The motion to dismiss, filed by Urban on June 22, argues that the plaintiffs "do not set forth sufficient factual matter to plausibly allege that Urban Outfitters and Free People are, in fact, alter egos." Rather, it says the two parties should be recognized as separate legal entities.
The move seems to be less about distancing Urban Outfitters from the case — there would be repercussions for the company regardless, as it is the sole owner and operator of Free People — and more an attempt to invalidate part of Coachella's claim in order to get the whole case dismissed.
While Urban Outfitters may not have used Coachella in its own marketing, the company admits that, "The only allegedly unlawful conduct of which Urban is accused of engaging in directly is its alleged purchase of the word 'Coachella' as a search engine keyword such that a Google search of 'Coachella clothing' triggers, in addition to objective search results, a paid advertisement for Urban Outfitters."
Urban seems to be banking on the fact that recent changes around Internet keyword advertising governance mean that this practice is no longer legally problematic, even though it would have been in the past.
"Under the now established standards governing internet keyword advertising, the text and surrounding context of Urban's resulting advertisement... repudiates any plausible allegation that this non-trademark use of "Coachella" is likely to result in consumer confusion or assumptions as to the source of Urban's advertised goods," Urban stated in its legal motion to dismiss. "Accordingly, Plaintiffs' direct infringement and dilution claims against Urban also fail as a matter of law and should be dismissed."
Beyond the statements made in legal documents, Urban declined to comment on the ongoing case.
The motion to dismiss will be reviewed by a judge in October.
UPDATE, Sept. 22, 5:30 p.m.: Urban Outfitters and Coachella have reached a settlement, reports WWD, that will resolve the lawsuit "in its entirety." Details of the settlement haven't been disclosed but are expected to be resolved in the next four weeks.