## Facts

- Joseph Abboud, a fashion designer, entered a 2000 purchase and sale agreement to transfer specified intellectual-property assets to JA Apparel Corp. for $65.5 million.
- The agreement conveyed “the names, trademarks, trade names, service marks, logos, insignias, and designations” listed on an attached schedule.
- The schedule primarily identified registered trademarks for “JOSEPH ABBOUD.”
- After the sale and expiration of a non-compete period, Abboud planned to launch a new clothing line branded “jaz.”
- Abboud intended to refer to himself in advertising for “jaz” using phrases such as “by designer Joseph Abboud.”
- JA Apparel claimed the agreement transferred exclusive rights to use “Joseph Abboud” for all commercial purposes, barring any promotional use of the name for competing apparel.
- Abboud claimed the agreement transferred trademark/brand rights only, leaving him free to use his personal name descriptively to identify himself as the designer.
- Following a bench trial, the district court held the agreement unambiguous in JA Apparel’s favor, enjoined Abboud from using his name in connection with “jaz,” and declined to consider extrinsic evidence.
- Abboud appealed.

## Issues

1. Whether the asset-sale agreement unambiguously transferred to JA Apparel the exclusive right to use “Joseph Abboud” for all commercial purposes, or instead transferred only trademark/brand-name rights.
2. Whether, depending on the contract’s scope, Abboud’s proposed use of his name in “jaz” advertising could be permissible under trademark doctrines such as descriptive fair use.

## Decision

- The Second Circuit vacated the district court’s judgment and remanded.
- The court held the agreement was ambiguous as to whether Abboud sold the right to use his personal name for all commercial purposes.
- Because the contract was ambiguous, the district court erred by refusing to consider extrinsic evidence of the parties’ intent.
- The court directed the district court on remand to consider extrinsic evidence and then address remaining trademark and fair-use questions consistent with the contract’s properly determined meaning.

## Legal Principles

- Under New York law, a contract is ambiguous if, viewed objectively in the context of the entire integrated agreement, it is reasonably capable of more than one meaning.
- Courts must interpret contractual language in context and avoid isolating phrases from the agreement as a whole, including schedules and incorporated documents.
- If contractual language is ambiguous, the court may consider extrinsic evidence (e.g., negotiations, course of dealing, and post-agreement conduct) to determine the parties’ intent.
- A sale of trademark rights in a personal name does not, without clear contractual language, necessarily transfer all commercial uses of the individual’s personal name.
- After determining the contractual scope of transferred rights, courts must evaluate trademark infringement and any potential descriptive fair-use defenses based on the proposed use and likely consumer confusion.

## Conclusion

The Second Circuit ruled that the parties’ asset-sale agreement did not clearly resolve whether Abboud relinquished all commercial uses of his personal name, so the injunction could not stand without considering extrinsic evidence; the case was remanded to determine intent and then to assess any Lanham Act and fair-use limits on Abboud’s proposed advertising.


JA Apparel Corp. v. Joseph Abboud, 568 F.3d 390 (2d Cir. 2009)