As reported here last June, Levi Strauss & Company sued Memolink in December 2005 for trademark infringement, unfair competition, false advertising, and violating CAN-SPAM. Memolink had been promoting a “Free Levi’s 501 Jeans” offer (without Levi’s approval, of course), one of those Free* offers similar to the Free iPod offers, et al, that require you to jump through a bunch of hoops in order to receive something for free.
Levi’s complained that not only were they not a partner in this offer, the difficulty (if not impossibility) of someone actually receiving their product for free from Memolink created poor good will and a bad reputation for Levi’s.
So, Levi’s asked for something like $1 million per incident, court costs, three times Memolink’s gains (or Levi’s losses), yada yada yada.
Memolink responded in February of last year, denying specific complaints of Levi’s or saying they had no idea what Levi’s was talking about, and further saying Levi’s complaint was a subjective characterization of Memolink’s offer… kind of a “Says you” mixed with a “I don’t know what you’re talking about.”
The parties agreed to mediation last May, and I’ve just learned that in September, they agreed to settle out of court.
The details of the Memolink/Levi’s settlement include the following: Memolink had to pay Levi’s $75,000, Memolink is forbidden from mentioning Levi’s in any of their promotions (except in a situation where one of ML’s merchants, an authorized Levi’s retailer, contracts with ML for advertising), and Memolink had to give 5,000 points (worth about $25) to everyone who attempted the Levi’s offer — unless they have already opted out of future communication with Memolink (which, think about it, is probably 99% of the people…because the suit was filed in 12/05, and the settlement was issued in 9/06). The wording of the Memolink email (see the above link; it’s on page 3 of the document) stated that ML neither admitted nor denied Levi’s claims.
Do innocent parties agree to pay $75,000 plus $25 per person? I don’t know…I’m just floating the question. You tell me.
I think this case has been interesting on a lot of different levels.
First and foremost — I think Memolink has done an OUTSTANDING job of keeping this out of the media. The average Memolink member has no idea what their rewards program has been getting into and which major corporations they’ve been ticking off.
People considering joining Memolink are equally in the dark. Bravo to Memolink’s PR department, for keeping this under wraps while issuing a succession of press releases touting the company’s support of well-known and respected organizations such as the Susan G. Komen Breast Cancer Foundation, Toys for Tots, and others. This December Memolink press release, in which Memolink founder and CEO David Asseoff asks, “What better way to celebrate the spirit of the season than sharing our success with another well-respected program?” [italics mine] is a perfect illustration of Memolink’s marketing strategy — try to associate yourself with WELL-RESPECTED organizations in order to garner good will from the public… while keeping them in the dark about what other WELL-RESPECTED organizations like Levi Strauss & Company really think about Memolink.
The second angle that I think makes this case interesting is that it opens the door for other companies whose products are featured in those Free* offers to stop other marketing companies from tarnishing their reputation by association. Why hasn’t Apple stepped in to stop the incessant promotion of free iPod offers? Maybe they’ll be next.
As always, I welcome your comments.
For a recap of Memolink’s past dirty deeds, please view the Related Articles here.