Fashion Law : Fashion Lawyer & Attorney : Fox Rothschild Law Firm : Licensing, Intellectual Property

After the outpouring of opposition of the California Fashion Industry, Senator Feinstein tried to halt the progression of the Innovative Design Protection and Piracy Prevention Act ("IDPPPA") or the Destruction of Affordable Fashion Bill, as I call it.

Despite receiving unanimous approval from the Senate Judiciary Committee on December 1, 2010, Senator Feinstein reined the bill back into the Committee for further discussion.   

The Retail Industry Leaders Association (RILA) hailed this move, stating:

"Our members are concerned that if enacted, S. 3728 would result in increased, costly litigation that would cause uncertainty at all levels of the fashion industry and limit the ability of the vast majority of American families to enjoy fashionable apparel at affordable prices."

None of the suggested revisions were made, however, and on December 16, 2010, the bill once again moved into the Senate for a full vote.

But all is not lost! 

• First, Senator Feinstein has requested comments from her constituents and she still has the influence to squash this bill or its spawn; and
• Second, the lame duck congress has only a few days left. 

So, you can cross your fingers that our nations leaders have fruit cake pressing issues of national security on their mind  or email Senator Feinstein via her staff at neil_quinter@judiciary-dem.senate.gov or Trevor_Daley@feinstein.senate.gov and let her know your opinion. 

Otherwise, we'll all be walking around in ugly expensive clothes in 2011. Don't say I didn't warn you.

 p.s.  Just in case you need some talking points, check out the following from the CFA:

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Consumers beware.  The cost of clothing is about to rise.  Reasonably priced fashionable items will be non-existent and affordable clothing will be utilitarian and boring.  Why? 

The Innovative Design Protection and Piracy Prevention Act ("IDPPPA") was unanimously approved by the Senate Judiciary Committee yesterday and now moves into the Senate for a full vote.

Deceptively called the "fake fashion bill" by its supporters, this bill has nothing to do with Counterfeit goods or Knock-off goods, which are covered under trademark law and are illegal.

This bill, more appropriately called the Destruction of Affordable Fashion Bill, seeks to amend copyright law and will:

• put numerous small businesses that don't have $400,000 to spend on litigation out of business;
• cause 1.6 jobs to be lost in Los Angeles for every fashion job lost;
• severely disrupt the fashion manufacturing process;
• cause lenders to stop lending;
• increase expediently the work load of the federal judiciary -- the court that rules on copyright litigation;
• narrow your choice of clothes; and
• increase the cost of the few items you can buy by at least 30%.

Pretty scary right?

And legally, the Destruction of Affordable Fashion Bill will wreck havoc in the courts, tying up dockets (and your inventory) for years because: 

• it violates due process because designers are not required to file a copyright registration on their alleged "original design;" and  
• its has new, uninterpreted terms - like "substantially identical," "deliberate copies" and "independent creation."

just to name a few problems. 

And, yes, the trial lawyers i.e. the plaintiff's bar that work on contingency fees, support this bill.  Why wouldn't they?  There is no loser pays provision in the Destruction of Affordable Fashion Bill, so if a plaintiff files suit on a design they feel is original and they lose, they never have to deal with the economic consequences. 

So let's all give a big round of applause to the CFDA and Senators Charles Schumer, Orrin Hatch and our own Dianne Feinstein. 

When unemployment rises, your business collapses and the economy gets more depressed then it already is, you'll know where to send your thank you notes.

Related Fashion Law Blog Posts:

Why IDPPPA is going to KO the Business of Fashion

IDPPPA: How to SLAPP the Sting Out of Frivolous Litigation

IDPPPA will not prevent frivolous litigation

BREAKING NEWS: New Design Piracy Bill Introduced into Senate

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Apparel manufacturers.  I am worried about the Innovative Design Protection and Piracy Prevention Act ("IDPPPA") and so should you. 

Do you know that last week WWD predicted a 10-15% rise in the wholesale price of fashion products for spring 2011? Or home sales are down 27% this year and unemployment remains about 9.5%? Or that cotton costs are up 32.2% and analysts are predicting dim holiday sales?

The last thing our country, its fragile economy and the apparel industry needs is more legislation that is guaranteed to drive up the cost of fashion products.  IDPPPA would do just that. 

How?  By giving fashion houses with fat litigation budgets the opportunity to convince judges that their designs are uniquely different from anything that has ever been made before.  If you know your design history, or even have worked in the fashion business for awhile, you know how hard that standard is to meet. 

But this is America and everyone is "entitled" to their day in court.  Plaintiff's lawyers (working on a contingency) are creative and judges historically interpret copyright law expansively.  Companies all along the supply chain would pass off the cost of litigation to the retailer purchaser.  Just what the country needs right now, right?

And the harm of IDPPPA doesn't stop there.  Since IDPPPA requires a plaintiff show that a defendant had "access" to the alleged copied products, designers would have to stop:

• reading fashion magazines;
• shopping retail stores or attending trade shows;
• watching or subscribing to trend reports, or
• caring about the runway shows.

If they do, designers will be prohibited from claiming that their designs are the "result of independent creation."   Another hit our economy doesn't need.

So, if you want to influence the process, now is your chance!  Call your congressmen and senator today. 

Otherwise, you'll have no right to complain when it costs more for clothes for you and your family, or when an unscrupulous plaintiff (think of the ones we see making fabric claims) sues you.

Take action now!!!

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Well, we knew it was coming.  Today, Senator Charles Schumer introduced the Innovative Design Protection and Piracy Prevention Act, or Senate Bill S. 3728 (IDPPPA).

While it seems that NY academics, the Council of Fashion Designers of America (CFDA) and the American Apparel and Footwear Association (AAFA) have signed off on this bill, I cannot find any indication that the people involved in the business of fashion, or fashion litigators were consulted.

From a review of the bill, I only see some small improvements over the last version:

1. Home sewers are free to make copes of anything for personal use;
2. The increased damages that were proposed under DPPA were stricken, leaving section 1323 unchanged;
3. The Plaintiff will have to plead his or her case with particularity -- like a fraud cause of action now, for example.  This implies that the Plaintiff will have the burden of proof on those elements, but we'll have to see how the courts interpret that language; and
4. The drafters have tried to clarify what constitutes infringement.  The new standard is "substantially identical," which means "an article of apparel" (which includes clothes, handbags and eyeglass frames and hats, among other things) "which is so similar in appearance as to likely be mistaken for the protected designs, and contains only those differences in construction or designing which are merely trivial."  HUH?

Here are the confusing parts: 

First, fashion designs will automatically be protected so designers don't have to register the designs with the copyright office, saving the designer a $35 fee.  Interestingly, Counterfeit Chic is touting this point as a victory, but to me, how could one verify that a design is "new and unique" if there is no public database to search? 

Also, most federal circuits require copyright registration as a pre-requisite to filing suit.  In legal terms, this means a plaintiff does not have standing to file a claim unless they have a copyright registration.  Is this bill trying to change that federal requirement?

Second, so many designers mistakenly believe that their creation is new.  But almost all the design we see these days pull inspiration from the art of past designers.  A great example is Diane Von Furstenberg and the wrap dress.  She claims to have invented it, but fashion history students know that McCardell introduced a wrap dress in the 1940's.

Third, only an article that is "unique, distinguishable, non-trivial and non-utilitarian variation over prior designs for similar types of articles," qualify as a fashion design.  As a member of the fashion community, I shrudder to think how a judge is going to decide THAT question.

In sum this propossed legislation ignore the realities of the business of fashion including the financial ramifications of such a law and would make judges the arbitrator of fashion.

For example, I see:

• a ton of litigation as the courts sort this out.  Pleading with particularity is no game changer.  It only adds an extra round of litigation costs.  Added litigation costs will raise the price consumer pays for apparel, something definitely not needed right now because the cost of clothing will likely rise anyways due to increasing cotton and labor prices.  Do we really need the consumer to bear more cost increases when our economy finally seems to be rebounding?  OR 
• No one will be able to create a "fashion design" that qualifies under IDPPA as written, making it needless and irrelevant.

So, while I wait to see how the rest of the industry reacts, I see this as a big win for lawyers and big companies with the resources to sue. For now, I stick to my previous position:

As a practicing fashion lawyer, litigator, former COO of apparel companies and the fourth generation of my family to work in fashion, law professors and politicians with no hands-on fashion industry experience should not be allowed to "fix" something that they have no practical knowledge of. 

 photo credit: CFA

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I just saw this presentation tonight online that Johanna Blakley gave at the TED conference:

Not sure if I embedded it correctly, so you may have to click here for the PDF or click here for it on You Tube.  Johanna oversees USC's Ready to Share project.

Anyone interested in Design Piracy or whether Fashion Should be Copyrighted should watch it.

And if any of you out there can introduce me to Johanna, I would love to meet her!

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To end counterfeit week, I challenge each of you to examine your own attitude towards purchasing counterfeit fashion products, like purses, shoes or watches.

Earlier on this blog, guest author Biana Borukhovich, after recognizing views about the passage of the Design Piracy Prohibition Act ("DPPA") differ greatly from coast to coast, suggested that the difference could be caused by the annual amount of counterfeiting that each coast incurs.  Specifically, Biana wrote:

For example, in December 2009, New York City officials confiscated over $1 million in “knockoff” designer handbags, watches, and wallets in Chinatown.

In addition, roughly ten buildings along New York City's Canal Street housing over thirty counterfeit operators were shutdown for illegal sale of counterfeit items. On the other hand, this year, only four storefronts near Fisherman’s Wharf in San Francisco were closed down due to counterfeiting.

But after spending last week in NYC, I think Biana has it backwards.  Here's why: 

If you are accustom to seeing and buying fashion counterfeits, and you believe that doing so is ok, doesn't hurt your integrity, and doesn't really harm anyone, wouldn't that belief easily translate into your attitude towards using other designers products as inspiration?

Putting it another way, since copying or being inspired by other  fashion designs is common, accepted and is legal in the fashion industry, maybe this freedom informs consumers decisions to buy counterfeits? 

If consumers know that it it is ok to buy an ABS dress that is a "copy" of a couture gown, why is it wrong to buy the counterfeit Prada being offered by the street vendors?

And interestingly buying counterfeits is legal.  Selling them is not. 

So if attitudes towards copying and counterfeits are linked, wouldn't New Yorkers, like Diane Von Furstenberg and the other Council of Fashion Designers of America ("CFDA") members or Professor Susan Scafidi be more likely to think copying is ok?

What do you think?

photo credit: my blackberry so I apologize for the blurred images. 

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Since the dawn of fashion, there have been those that have made a living from creating goods that look like, pay homage to, or are inspired by the original.  In today's WSJ, Christina Binkley discuss the speed at which copies or "knock-offs" arrive in the marketplace.  Binkley's explanation of why, is spot-on:

The fashion world is ravenous for new jewelry, accessories and clothes to fill the shelves of retailers and Web sites, many of which seek to offer fresh inventory as often as every two weeks. Often, existing designs become the inspiration for new, mass-produced pieces.

As I discussed previously, that is exactly how trends start.  In her article, Binkley uses the "Shashi bracelet" by Yuvi Alpert and Danna Kobo as an example of a trend:

• The bracelet was introduced at retailers Henri Bendel and Intermix in May 2009;
• Influential stars including Ms. Lohan and Katy Perry were soon wearing them;
• By December 2009, Mr. Alpert and Ms. Kobo had sold 10,000 of the bracelets;
• By February 2010, the bracelets' retailers began complaining about less expensive versions; and
• Now, at the end of April 2010, orders are either no longer being written or are being canceled because cheaper versions are available.

I don't know about you, but any item that sells for over a year is pretty remarkable in an industry that requires fresh product every 6 weeks.  As Mr. Alpert and Ms. Kobo stated:

The Shashi helped fund the young designers' development of their more expensive Ruby Kobo jewelry line, for which they won a 2010 Council of Fashion Designers of America "Incubator" award.

That's pretty impressive. 

Despite this success, critics, like Professor Susan Scafidi of Counterfeit Chic, still implore the need for more legal protection for small designers because for "an emerging designer, cheap knockoffs can be a knockout blow.  Thus, "young and independent designers are exactly the ones who need a bit of legal protection."

I, on the other hand, think the proposed Design Piracy Prohibition Act (DPPA) or its spawn as proposed by Professor Jeannie Suk, ignore the realities of the business of fashion including the financial ramifications of such a law; would make judges the arbitrator of fashion; and as Binkley accurately states, "would benefit only big brands that have the resources to apply for and protect their copyrights, trademarks and patents."

I stand firm in my position:

As a practicing fashion lawyer, litigator, former COO of apparel companies and the fourth generation of my family to work in fashion, law professors and politicians with no hands-on fashion industry experience should not be allowed to "fix" something that they have no practical knowledge of. 

The solution?  Binkley provides us with one:  Designers need to do what they do best - provide a steady stream of "new" material.  Then, they will get known for being innovators and the leaders in their market.  (Binkley's sentiment is echoed by Janine Blain, Vice President, The Doneger Group here [video])

I will end with two quotes:

When you are talking about fashion, lose the word original. Ask the small designers where they got their inspiration. Ha! They pull it from others." 

…Marc Jacobs; and from Project Runway's Tim Gunn:

"fashion designers, it’s not as though you’re creating fire or inventing the wheel. These things already exist.”
 

photo credit: mijjo

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On Tuesday, April 20th, the California Fashion Association hosted a presentation and panel discussion on the Design Piracy Prohibition Act (DPPA), as part of the ‘Market Tuesday’ series for the California Market Center.  I was honored to have been asked to speak, and I am working on posting some video clips. 

I am still having some problems, but try these for now:

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I wanted to pause for a moment and express my gratitude to all of you who have subscribed to this blog, shared it with your friends and RT the posts.  I was so busy slaying dragons this week, I didn't notice that the Fashion Law Blog had its 10,000 unique visitor on Tuesday!!  YEAH!!!!

Please keep sending me emails and posting comments -- I read everything and try to respond as best I can.  And a BIG thank you those of you have attended some of the in-person networking events or my speaking engagements.  It is so much fun to meet you in person and learn your stories.

So, I hope you will decide to stay awhile and join me on the wild ride that is fashion and help this blog grow to 100,000 unique visitors.  If you have any story ideas or questions or positions you want shared, please let me know.

Best,

Staci

photo credit:  Douglas County Assessor

ps -- I am working on posting some video clips of yesterday's interactive panel discussion on the Design Piracy Prohibition Act (DPPA), but am having some technical difficulties.  So stay tuned and hopefully they will get up tomorrow.

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The Design Piracy Prohibition Act polarizes the fashion industry.  In an industry where many designers come out with similar looks each season and where inspiration is said to be "in the air," the question remains whether fashion design should be given intellectual property protection when currently it has none.

On Tuesday, April 20, 2010, from noon to one, the California Fashion Association (CFA) invites you to the California Market Center Annex (in the lobby) come join an interactive panel discussing:

• Difference between copyright, trademark and counterfeit
• Inspiration vs. knock-off?
• Legal Ramifications
• Effect on Retailers

Moderated by CFA President, Ilse Metchek, the panel includes:

• Janine Blain, Vice President, The Doneger Group
• Brian Weitman, President, STC-QST and TALA 
• ME, Staci Riordan!

The event is free, but you must register.  [click HERE to RVSP] or email jriggs@californiamarketcenter.com.

Please come by and introduce yourself.  Not only should it be fun and educational, but a good in-person networking opportunity as well.

Hope to see you there!

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Want to liven up a party?  Ask a room of fashion industry executives how they feel about design piracy and watch the melee that ensues.

Yesterday, we discussed that most readers are more bothered by imitation purses than imitation shoes.  

Coincidentally, Fashionista's "Adventure in Copyright" post from yesterday pointed out that NastyGal copied, or  "ripped off," Alexander Wang’s Rocco duffel. 

And recently, as reported by Counterfeit Chic, Marc Jacobs made news when he sued Ed Hardy for trade dress infringement, the latest in the trade dress trendlet.

So why is it that purse "snatching" (compared to counterfeiting) is so bothersome? 

Personally, I think it is because of the visibility of the imitation and the credibility the "toter" wants to achieve with it.

What do you think? 

Photo Credit: Fashionista and Counterfeit Chic

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The debate over Design Piracy continues in the blawgosphere this week.  Princess Dominique highlighted a Steve Madden shoe inspired by Christian Louboutin and asked her readers:

• Should there be limits to copying? and
• Would your view change if your living came from a business where knock-off's were ramped?

The commentators made an interesting point. 

After clearly distinguishing between the two types types of goods commonly referred to as "knock-offs" --  imitations, copies or inspirations compared to counterfeits, which violate trademark law -- to most, imitation shoes were not as disturbing as imitation purses.  

I wonder why?

Could it be the price tag, the visibility or the status each alleged gives the owner?  What do you think?

photo credit:  princess dominique

p.s. h/t The Manolo

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Today, we have a guest post from Biana Borukhovich, Law Student at Touro College Jacob D. Fuchsberg Law Center, Author of "Fashion Design: The Work of Art That is Still Unrecognized in the United States," Wake Forest L. Rev. (April 2009) and founder and President of the Touro Fashion Law Society. 

Biana has pointed out that in general, East Coasters favor the Design Piracy Prohibition Act ("DDPA"), while West Coasters are opposed (see Monday's Fashion Law Blog Post on DPPA here). 

While the DPPA proposes to govern copyright law related to fashion, Biana thinks that violations of Trademark law, specifically counterfeits, give rise to the differences in attitude:

In the U.S., views about whether the Design Piracy Prohibition Act should be passed differ greatly from coast to coast. On the West coast, attorneys in the fashion industry believe that the bill will run many companies out of business, which in result, will devastate our declining economy even more. Conversely, attorneys on the East coast think the passage of this bill is necessary to protect designers and to avoid loss of tax dollars.

Although both sides have legitimate arguments, what is the real reason behind these differing opinions?

Perhaps it’s the annual amount of counterfeiting that each coast incurs.   For example, in December 2009, New York City officials confiscated over $1 million in “knockoff” designer handbags, watches, and wallets in Chinatown.

In addition, roughly ten buildings along New York City's Canal Street housing over thirty counterfeit operators were shutdown for illegal sale of counterfeit items. On the other hand, this year, only four storefronts near Fisherman’s Wharf in San Francisco were closed down due to counterfeiting.

Statistics show that there is a huge difference in the amount of counterfeiting that occurs from coast to coast.   Therefore, I believe that it is a fair assumption that one community is more concerned over counterfeiting than the other, thereby giving rise to the major differences in opinion regarding the passage of the Design Piracy Prohibition Act.

Readers, what do you think?  I look forward to your comments. 

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The best part of the Oscars is the fashion.  While there were definitely some misses last night, and some boring entries, my favorite look was Sandra Bullock's metallic Marchesa gown.  And for the record, she is one of my favorite actress ~ I am SO glad she won (Best Actress for The Blind Side in case you turned if off after the red carpet)!

On an interesting side note, Fashionista has a story this morning, listing this dress as Five Oscars Dresses ABS by Allen Schwartz is Bound to Knock-Off.   

This time, Schumer is being aided by Jeannie Suk, Harvard Law professor and co-author of Standford Law Review article, "The Law, Culture and Economics of Fashion," in which a new fashion copyright infringement standard is proposed. (because substantial similarity wasn't difficult enough for judges or Nimmer, see section 13.03). 

Suk, and her co-author C. Scott Hemphill, propose that fashion designs will be "infringing" i.e. an illegal knock-off if they are a "close copy" or are not "substantially dissimilar." 

WHAT DOES THAT MEAN?!  And how in the world will judges figure that one out?  Is a "style guide" included in the Act?

As a practicing fashion lawyer, litigator, former COO of apparel companies and the fourth generation of my family to work in fashion, law professors and politicians with no hands-on fashion industry experience should not be allowed to "fix" something that they have no practical knowledge of. 

This proposed legislation will do nothing but hurt the $350 billion dollar United States Fashion Industry.  Doesn't Schumer know the rule, "three strikes, and you are out?"

Stay tune for more on why the DPPA is a VERY BAD IDEA and will only harm the fashion industry.

Photo Credit: Fashionista.com

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