Parigi Group Ltd. filed a lawsuit Wednesday against Puma North America Inc., United Legwear Co., United Legwear & Apparel Co., and Puma Kids Apparel North America in the U.S. District Court for the Southern District of New York.
According to the suit, Parigi seeks damages for Puma’s breach of its contractual obligations, fraudulent conduct and misrepresentation regarding its intentions to renew its children’s license agreement, and the defendants’ misappropriation of Parigi’s trade secrets and proprietary information, among other things.
The suit alleges that the dispute arose from “a calculated scheme” by Puma to misappropriate Parigi’s trade secrets and proprietary business information “to further their own nefarious agenda of covertly forming a secret joint venture for the purpose of unfairly competing, and tortiously interfering, with Parigi and its business relationships.”
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Parigi has had a business relationship with Puma North America for children’s wear for more than 10 years. Parigi claims that it grew Puma’s children’s apparel business from a $3 million to a $75 million a year business.
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The filing contends that Puma “fraudulently and intentionally misrepresented its intentions to renew the parties’ license agreement for the years 2015 to 2018” for the purpose of obtaining from Parigi its confidential trade secrets and proprietary business information, which, Parigi claims, it appropriately disclosed to the defendants. The lawsuit states that without Parigi’s confidential trade secrets, the defendants wouldn’t have been able to launch “a secret joint venture” and unfairly compete with Parigi, and “instead, Puma would have renewed its license agreement with Parigi in order to maintain its children’s business.”
As reported in WWD this month, Puma signed a venture with United Legwear & Apparel Co. for children’s clothes. The North America-based agreement will include the production, sales, marketing and distribution of Puma-branded children’s apparel, infant sizes through boys’ size 20 and girls’ size 16.
The suit alleges that over an eight-month period in 2013, Puma misrepresented to Parigi that it intended to renew its 10-year licensing agreement, when in reality, Parigi claims, the defendants were “plotting and taking actions to improperly divert the Puma children’s apparel business away from Parigi and to themselves.”
The suit further states that the defendants contacted Parigi’s key customers — retailers such as Bloomingdale’s, Macy’s, Costco, Ross and Belk, and told them that Parigi’s Puma products were “not approved Puma product” and were “not authentic.” The suit also claims that the defendants launched a “reputational attack” and falsely stated that Parigi was going out of business, was going bankrupt and had legal concerns, and encouraged its major customers not to do business with them.
Buchanan Ingersoll & Rooney PC are the attorneys for Parigi.
On Thursday, a Puma spokeswoman said, “Yesterday we were made aware of the allegations against PUMA in the US District Court of New York. We deny all allegations and we look forward to presenting our case.”