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

In the past year, the $350 billion fashion industry has not only captured a share of your income, but has also seized the attention of the nation's courts. Controversial decisions have been issued in a variety of cases — from Christian Louboutin and Yves Saint Laurent's epic battle over red soles, to Marilyn Monroe and the right to use the image of arguably the most famous American "blonde." 2012 even saw Apple and Samsung square off over whether a rounded corner design can be copied.

I bet you are sitting there asking yourself - Staci, what in the world smartphones and stilettos have in common?!

Well, I will tell you.....but just not just yet!  You'll need to join me at the American Bar Association's 28th Annual Intellectual Property Law Conference in Arlington, Virginia.

I am honored to be invited to join a team of IP professionals and practitioners who are coming together from around the world to share and discuss the most critical issues in IP law.

During our panel discussion, "The Blonde, the Red Shoe, the Round-Cornered Rectangles: Debating the Frontiers of Trade Dress Law," we'll share insight and ideas into these issues through a series of lively debates that will explore these pivotal cases.

Please join me and my fellow panelists (listed below) analyze whether trade dress protection was properly granted by the courts, and whether as a nation, we have the proper policies in place to protect designs, prevent copying and encourage competition.

Click here for more information about the 28th Annual Intellectual Property Law Conference.

Moderator:
Hon. Linda Kuczma, U.S. Trademark Trial and Appeal Board

Speakers:
Staci Jennifer Riordan, Partner and Chair, Fashion Law Practice Group, Fox Rothschild LLP

Michael J. Allan, Partner, Steptoe & Johnson LLP

Christine Haight Farley, Professor of Law, American University, Washington College of Law

Belinda J. Scrimenti, Partner, Pattishall McAuliffe

Welcome Remarks:
Robert O. Lindefjeld, General Counsel and Chief Intellectual Property Counsel, Nantero, Inc.
Chair-Elect, ABA Section of Intellectual Property Law

Crystal Gateway Marriott Hotel
1700 Jefferson Davis Hwy
Arlington, VA, 22202

Click here to register!


 

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Guest post by Tom Chan, Esq.

The entire fashion community is talking about Lululemon's recent design patent infringement suit against Calvin Klein, wherein Lululemon claimed Klein violating its rights in its iconic "cross-over waistband."

The recent settlement between Lululemon and Calvin Klein is stirring up renewed interest in design patent protection for apparel brands.

Contrary to common misconceptions, design patents should be an arrow  in every fashion designer's quivers because they are:

·  inexpensive to obtain, about $2,000-2,500, including fees and costs, around the cost of a trademark registration.

·  easy to get: almost 90% are allowed and around 80% do not even receive an office action,

·  often granted in 6-8 months, faster than trademark applications and comparable to copyright applications.

Oh, and the best part? Recently, we have successfully avoided the cost of technical drawings by using a digital picture instead.  

And there is more good news:  protecting your design patent in court posses less challenges than protecting other types of IP your brand may own.  For example:

·  unlike in a trademark  infringement case, a costly survey to show confusing similarity is not needed; and

·  unlike in a copyright infringement case, the designer does not have to prove access and the USPTO will not reject the application because it is an utilitarian article.

 Now, to give you the full picture, you need to know there are some disadvantages, which include: most garment employers/principals do not have the proper pre-employment agreement to vest the title of the fashion design patent in the employer/principle, since unlike the work for hire concept in copyright law, the employer only has a “shop right” in the design patent, which amounts to an implied nontransferable paid-up license from the creative employee; only registered patent lawyers can apply for design patents, even though a design course is not  a prerequisite for qualifying to be a registered patent lawyer, instead science/engineering lab courses are required; and styles change so quickly in fashion, so you need to have "staple" or iconic pieces in your collection.

Other brands besides Lululemon are successfully using design patents to protect their items.  For example, Nike aggressively protects its shoe designs using design patents and files many design patents.  This Nike's Design Patent No. D659,988 was issued after less than three-months.  

Yet, many fashion lawyers are not familiar with design patent law, giving design patent plaintiffs a leg up, and many fashion designers do not have an ongoing relationship with a patent litigator who the designer can call on to show up in federal court on 24 hour notice to defend a TRO.   

So don't be stuck in down-dog; instead try a sun salute, center your third eye and remember to consider design patent protection to keep your brand in top shape.

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Hi Y'all!

Well, YSL and Louboutin are in the news again. Just in case you missed it, here is what happened:

1. Harley Lewin appeared on Bloomberg Law with Spencer Mazyck [see video below]. During the interview, Lewin claimed victory and predicted YSL and Louboutin would settle the action.
2. His prediction came true, because today, YSL dismissed its counterclaims against Louboutin, which effectively ends the parties red sole battle (at least for now - again see Lewin Video, below).

Interestingly, in theBloombergLawpiece, which is totally Louboutin spin by the way, we learn two important things:

First, Lewin claimed that Louboutin's loss, was a win. Why? Because the Court of Appeal limited Louboutin's trademark. This is a win you ask? Lewin can claim so, yes, because the District Court was prepared to invalidate the mark completely. So which is preferred -- no trademark or a limited trademark? Clearly a limited trademark, hence Lewin's claimed win.

Yet this overlooks the obvious, while Louboutin may have exited this battled with its (limited) trademark, he still lost. Why? Because, as we said before, before Louboutin sued, his trademark was not limited to a red sole with a contrasting upper. If you end up with less then you started with, you definitely lost (at least how I keep score!)

Good job wagging the dog Harley !!!

Oh, and the second thing we learned in the Bloomberg Video? Lewin was referred to ChristianLouboutinby his good friend, and CFDA chairperson, Diane Von Furstenberg. Maybe that explains why Louboutin choose to challenge YSL's monochromatic shoe that looks nothing like a Louboutin pump.

Check out the Bloomberg Video here:

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So Congress was back in session for 5 days in September, which was just enough time to enact a temporary budget to avoid a government shut-down, and for the Senate Judiciary Committee to act on the Design Piracy Bill, or as it is known here at the Fashion Law Blog, the Destruction of Affordable Fashion Act.

Renamed the Innovative Design Protection Act of 2012 (S. 3523) (IDPA) when it was introduced into the Senate on September 10, 2012 by CFDA darling Senator Schumer, the IDPA was reported favorably out of the Senate Judiciary Committee on September 20, 2012.  IDPA now sits on the Senate's Legislative calander, waiting for the senators to come back to the "lame duck" session of Congress.  

Having reviewed the bill, we wanted to point out two changes:

• First, a person/company is required to give notice to a potential infringer and then wait 21 days before filing suit.  Us fashion lawyer typically call this a "safe harbor provision."

• Second, damages don't begin to accrue until notice of potential infringement is sent.  This should mean that the amount at issue is only sales made AFTER that date.  Right now, in fabric copyright cases for example, once a potentially infringing item is found, the plaintiff generally claims all profits for the sale of that style or statutory damages.  Most sales are made PRIOR to the sending the cease and deist and/or filing of the action. 

Not much has been said about this radical change in the potential damages, but I think this is a step in the right direction.  The only problem is when you have de minimis damage awards, the case becomes all about attorneys fees.  For example, have you gotten a class action settlement where you get $.25 off your next cable bill, but the attorneys get over 6 figures?  Yeah, that's what will happen here.  As a fashion lawyer who defends copyright infringment cases, I guess I shouldn't complain, but a bill where only the attorneys wins is not good for the fashion industry or you the consumer.

In sum, we maintain our previous position:

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September is turning out to be a hot fashion law month, and we are only into week two!

Today, WWD reports Senator Charles Schumer (D., N.Y.) has once again introduced the Design Piracy Bill into the Senate. It is no secret that we here at the Fashion Law Blog are not fans of this legislation, and have dubbed previous incarnations of the bill, the Destruction of Affordable Fashion Bill. 

This time, we reserve judgment (kinda) as the exact text of what was introduced toady is not yet available, but we have no expectation that it will be any better than Schumer and crew's last five attempts.  But, we'll share it once we can get our hands on it and then we can all decide together.

In the meantime, one has to wonder WHY Schumer introduced this bill now?!  With elections rapidly approaching, Congress will only be in session about another two weeks.

Maybe Schumer is being passive aggressive - submitting the bill to please his generous contributing constituents, but knowing nothing will ever happen on it.  Win-Win, for him right?

Sigh.  Well, here's to hoping that Congress spends its Fall dealing with our economy, expiring tax cuts, fixing the deficit and avoiding a government shut down.  Otherwise, this will really be a September to Remember.

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Where's the beef? In Philadelphia of all places!

We all know that Philly is famous for its cheese steak, but last week, Louis Vuitton apparently had a cow and decided to send a cease and desist letter to the University of Pennsylvania Law School's Penn Intellectual Property Group ("PIPG") trying to stop PIPG from using the following parody on its flier announcing its annual symposium:

The symposium will address current hot issues in fashion law, such as trademark use in fast fashion as well as a personal favorite, the Innovative Design Protection and Piracy Prohibition Act ("IDPPPA"), or the destruction of affordable fashion act, as I like to call it.

Given that I am not chopped liver - I am one of the speakers, and my firm is a sponsor - I will hold the tongue for now. 

Read LV's cease and desist letter here, and U Penn's response here so you can decide who is the big cheese.

All puns aside, I hope you'll join me and some of the top names in Fashion Law at U Penn on March 20, 2012 at 4:30 pm for fashion, fun and food.

Better get those buns moving and RSVP to pipgsymposium@gmail.com today!  Check out complete event information below.

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Fashion is all about appealing to the senses of your customer.  A color that is visually attractive to one may not be to another - that's why most companies offer designs in array of colors or patterns.

But, sight is only one of the human senses.  Don't forget that as humans, we have multiple senses and your brand should strive to engage your followers on multiple levels by using touch, scent and sound.   

Studies show that as you connect with your customer across multiple sensory planes, the strength of the bond you create with your customer grows stronger, which results in a deeper brand loyalty.  

For example, I often post about the connection between music and fashion [as an aside, have you made your MAGIC playlist yet?].  Did you know that there is a 65% chance of a mood change when exposed to a positive sound?

Which brings us to the point of this post: did you know you can trademark scents, sounds, and tactile touch?

Yes, you can.  Famous examples include the NBC "chimes," the Harlem Globetrotters "Sweet Georgia Brown," and Club Med's "Hey Baby," "Hand's Up" and "Paraiso."

These songs are not necessarily owned nor created by the sensory trademark holders, but the sound is so closely connected with the brand it is considered a source identifier and thus entitles the applicant to trademark protection in the audible component only.

So you have an opportunity here -- what can your fashion brand do to connect with your customers across multiple senses? 

What can you do to deepen your bond with your followeres and turn them into raving fans?

So turn on your speakers and watch this clip for inspiration:

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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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Anyone in favor of the Innovative Design Protection and Piracy Prevention Act needs to read the recent ruling in Express v. Forever 21.  In that case, Express claimed that Forever 21 infringed on both its copyright in a plaid print and its tradedress in 4 pairs of shorts and a jacket.

Express lost, as it should have, as its copyrights were improperly filed and more importantly, it's tradedress claim failed because Express could not prove secondary meaning, a very high standard as we have often discussed. 

Sitting here today, I wonder if this case foreshadows what awaits us if IDPPPA passes?

In this matter, we have one large company suing another, because it thought its plaid jacket and shorts were so distinctive that consumers associate the item (ie the jacket or shorts) with the supplier (ie Express).

Here the Court note that if it were to accept Express' arguments:

"virtually every garment Express sells has secondary meaning.  Unfortunately for Express, secondary meaning is not so lightly bestowed."

What about "originality" under the new IDPPPA??  Will Court's look, like this one did, to the designer's testimony about the creation process and look for documentation supporting that process?

If your designers use trend reports, magazines, look books or runway shows as inspiration, will you be liable for copying?  Likely.

Will large company's sue because they think their non-distinctive design is original?  Probably.

And could they win?  Maybe -- we'll have to see which way the fashionable judiciary's gavel rolls.

photo credit: shoppingblog.com

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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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by: Cassidy Saitow

On Friday, the California Apparel News reported that a major shipment of fake True Religion jeans was discovered in a random search of incoming cargo. Authorities unveiled over 21,000 pairs of jeans that were disguised under Tuff Made USA labels and false metal button covers. Underneath were counterfeit True Religion brand labels and True Religion embossed button heads. The street value of the contraband is $1.5 million dollars, and if sold at full price, the jeans would be worth $6.2 million dollars!

While it was a random search, this huge stop does show the Port of LA means business, and is going to keep a watchful eye out for counterfeit goods.

Here are a few other things you can do to help out the ICE and Border Patrol officers:

1. Centrally ship your product from the same location so that authorities know the chances its genuine are better when it comes from one place;
2. Keep authorities up to date on what your product looks like and how counterfeiters are trying to fake your genuine product. For example, True Religion knows that counterfeiters actually cover up the fake True Religion "made in the USA" labels with other brand labels, as they did here. Their brand enforcement people train the authorities at the Ports to look extra closely at goods to determine authenticity; and
3. Trademark and copyright the aspects of your product that you can, as the more protection you have, the more chance you can enforce your rights. There's a reason why True Religion jeans have T's and R's on the rivets and the Buddha all over the pocket bags: they are marketed as design features, but are actually critical components of the jeans that are protected which helps give some recourse when they are full on counterfeited!

While this was just a random check, the scary thing is that True Religion spokespeople pointed out that an average consumer who didn't already have a pair of True Religion jeans could be deceived into thinking these were real.  I have True Religion jeans, and I'd hope I could distinguish the quality, but for the company to point that out shows just how valuable this seizure was.

Go Port of Los Angeles!!!

photo credit: CAN

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Post contributed by Jaysen Chung, Summer Associate

What could be more attention-grabbing than the Dutch national soccer team’s bright orange jerseys?  Bright orange mini-dresses.

Businessweek.com reports that at last week’s Holland vs. Denmark World Cup match, a large group of women showed up wearing bright orange mini-dresses supplied by a Dutch brewing company in an attempted (and successful) “ambush marketing” campaign.  

As mentioned in a previous post, “ambush marketers” are companies that are not official (i.e., paid) sponsors of an event, but nevertheless engage in marketing campaigns that create the impression that they are associated with the event.

The two women who were alleged to have organized the group were arrested in violation of South Africa’s Merchandise Marks Act, but have since been released on bail.

What do you think? 

Is this Dutch brewery engaging in creative marketing like Lululemon’s “Cool Sporting Event That Takes Place in British Columbia Between 2009 & 2011” clothing line released during the Winter Olympics earlier this year?

Or, should the official sponsors of the World Cup, who pay big bucks for their rights to advertise and sell their products in conjunction with the event, be protected?

Either way, I cannot imagine a world where fans are restricted from wearing what they want to a sporting event. 

So don't worry -- all of you who paint your body or wear cheese on your head don't need to worry about the fashion police any time soon.

Photo Credit: The Guardian

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With the World Cup in full swing, street vendors hawking counterfeit products are out in full force. [Video]  Allegedly, the official FIFA suppliers are losing millions of dollars and South Africans are losing jobs because the official products are suppose to be manufactured in South Africa. 

According to the Dawn Media Group, South Africa's Counterfeit Goods Act makes possession of fake goods a crime which can result in a three-year jail term or a 5,000 rand (approximately 650 US dollars) fine per item found in possession.  This is in direct contrast to US law.  Here, only the sale of counterfeit products is a crime. 

I wonder if this difference will impact a potential buyer's decision?  Or will cost, $85 for an official jersey compared to $15 for a knock-off, a substantial difference given the standard of living in South Africa compared to the U.S, drive choice? 

As we have previously discussed, in fashion, unlike many other industries, the purchasers of counterfeit products usually know that they are buying a fake.  Even more interesting is a recent study that  show that 46% of all people who buy counterfeits end up buying the real thing.

It will be interesting to see how this one plays out.

photo credit: FIFA

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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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We are well into this weeks series on counterfeits and the fashion industry.  You understand that fashion counterfeits are harmful - socially and to your business -- and you need to fight them.  You have also taken preliminary steps such as registered your marks, done your homework on your contractors and supply chain and made the government your closest ally. 

But I received some emails yesterday from some of you wondering just what a fashion anti-counterfeit battle plan should look.  How do you fight the forces of evil?

The answer: Identify, Seek and Destroy.  [click here to listen to the Star Wars theme song while reading the rest of this]

Here is how:

Identify the scope of your plan by answering these preliminary questions:

1. What is your tolerance level?
2. What is your tolerance level?
3. What is your budget?

Seek out counterfeits:  [For Yoda's wisdom, click here]

1. Field investigators.  There are companies you can hire that will go into the stores, factories and marketplaces looking for your brand's items.  They will either  buy and/or photograph the offending item, so you and you team can respond appropriately.
2. Low cost Internet monitoring.  As discussed the past few days, you can have your staff monitor the Internet at low cost.  Be sure to follow-up with the offenders with either a cease and desist letter or take down letter or both.
3. Proprietary software.  There are soft wear companies out there, like Site Staydown, a service from online brand security firm MarkMonitor, that attempts to not only shut down knock-offs selling websites, but keep them closed.

Finally, destroy the counterfeiter's ability to manufacturer and sell:   [For Darth Vader's Theme, click here]

1. Take down notices.  As discussed yesterday, you can issue take down notices under the Digital Millennium Copyright Act, use eBay’s VERO (Verified Rights Owners) policy or other social media sites polices.
2. Writing campaigns. A simple cease and desist letter is effective, quick, and inexpensive.  For example, McCarter & English LLP partner Harley Lewin was able to reduce Diane von Furstenberg online postings of fake goods from "18,000 posts to about 1,000 in 120 days.”
3. If all else fails, litigation.  While the most costly option, you should be able get monetary damages, an injunciton and some times attorneys fees.  Your willingness to litigate signals your commitment to this battle and will likely deter future or repeat offenders.

In sum, while battling counterfeits may seem like an impossible, insurmountable task, like plugging a dam with your finger, small, purposeful, consistent steps, as shown by some of the success stories above, make a big difference. 

Remember, as yoda says:  "Try Not.  Do or Do not.  There is no try" [Video]

 photo credit:  ebay

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As you might have guessed, this week's theme is counterfeiting.  So far, you know what it is, and understand the economic and social harm caused by fakes.  

Counterfeits may also diminish your company's profits, injury your brand's image, negate customer satisfaction and loyalty and decrease your company's  "goodwill."

But you can fight back.  Here are five easy steps on how to start the battle:

1.  Register.

Trademark your brand, both domestically and aboard .  This should include all places you manufacture or sell.  Then, record your trademarks with US Customs and foreign customs authorities so the government can be your partner in enforcing your rights.

2.  Research.

Know who your manufacturers are and make sure you trust them. One of the most important things a company can do is to carry out its due diligence on manufactures and suppliers and to vigilantly monitor their operations, especially if they are outside the U.S.  How secure is the building? How many brands are being manufactured there? Who are their partners? Have they been sued? What happens to irregulars? Are they destroyed or sold?

In close quarters with minimal security, it might be easy for someone to walk off with your samples or copy them in the same factory.  As I have said before, it is very important to keep a very tight lid on your supply chain.  More times than not, counterfeits are made by the very factories that manufacture the original goods.

2.  Geographic Consistency

You should aim to distribute through a central location.  If you consistently ship your product from one address, customs agents will have an easier time identifying a fake if it comes from a different address. The same holds true for shipments you receive, especially if you are receiving shipments from Asia.

According to the recent Millward Brown release studying the most valuable global brands, Hermes® increased its overall brand value by 8% this year.   As a recent article posted on Fashionista.com pointed out, Hermes® only distributes to its retail boutiques. This helps consumers and enforcement authorities distinguish between authentic products and counterfeits, which helps preserve the overall value of the brand.

4.  Use Technology

Incorporate anti-counterfeiting technology into your product design. Holograms, special fibers, RFID and nanotechnology can be hidden in your garment to help authorities determine whether they are looking at an authentic product or a counterfeit.  If your brand is one of the hot ones targeted for counterfeiting, work with your design team and legal team to ensure you have maximized the identifying marks on your product which will help customs authorities determine whether the cargo they are inspecting is authentic or not.

5.  Have An Anti-Counterfeit Strategic Plan 

Your company, no matter what size it is, must have a plan for dealing with counterfeits.  It can be complex, like hiring an international team of field investigators or implementing special monitoring softwear, or utilizing the take down procedures under the Digital Millennium Copyright Act. 

Or your plan can be simple.  Set google alerts to monitor your brand and marks online and then take action to have the infringe goods removed.  eBay’s VERO (Verified Rights Owners) policy is free of charge and takes only a short application to remove the counterfeit item from auction.  Facebook has a similar policy.

My recommendation is to have a zero tolerance policy.  The more your company is known to fight back, the less likely your brand will be counterfeited.  Even a young company with limited resources can fight back -  smart, constant and creative action will lower the availability of counterfeit goods.

photo credit: Film Theory & Criticism [click here for video]

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The answer is: it depends.  (yes annoying answer, I know, but even a Fashion Lawyer sound like a regular lawyer at times)

It is undisputed that counterfeits are illegal.  But no one really knows what economic or social effect fakes have on the U.S. economy.  An MIT study has shown that almost half the buyers of counterfeit fashion products subsequently purchased the authentic version.

In the rest of today's post, Cassidy Saitow, my fabulous intern and FIDM student, takes a look at the costs of counterfeits:

Fakes are bad. But just how bad are they?

The US Government Accountability Office ("GAO") can’t put a number on it, but estimates counterfeit goods affect the economy in the order of $200 billion.  Apparel, footwear and handbags comprise just over 50% of this figure. 

The World Customs Organization estimates that counterfeit goods steal $600 billion annually from brand owners, or 7% of global trade. Whether it’s $200 or $600 billion, it is clear that counterfeiting is putting a dent in the global economy.

Buying a fake is not harmless.

Profits from counterfeit sales have been linked to human trafficking, drug crimes, and terrorism. The worst part is that while much counterfeiting occurs in factories in other countries, it also occurs under the radar at "purse parties" which are much harder for law enforcement agencies to track.

How can you stop it?

Don't buy counterfeits!  If you are a brand owner you can take some affirmative steps to protect your brand as well as educate your customer so they understand the importance of buying the real thing.

Put the government to work

You and you company pay taxes so take advantage of government programs designed to combat counterfeiting.   For example, US Customs can help stop the importation of counterfeits and local law enforcement also takes an active role in prosecuting trafficking and smuggling counterfeit goods. Often they view it as the tip of the iceberg into cracking a larger crime ring.

Remember, in her days before serving on the United States Supreme Court, Justice Sonia Sotomayor wore a bulletproof vest while conducting warehouse and alley raids in New York’s Chinatown to crackdown on Fendi counterfeits.

As we have discussed on this blog previously, people buy fakes for appearances (also called signaling), self-esteem and because they just cannot afford the originals.  Some you have commented that it could be a sizing issue also, which I also find credible.

But in the end, they why doesn't matter -- it is illegal,   The GAO or the powers that be need to figure out just how big of a problem fashion counterfeiting really is as compared to drugs or auto parts -- counterfeit products that directly endanger human safety.  That would calm the hysterics and allows us to fight Cannel street (and its ilk) with the appropriate amount of government resources.

photo credit: the Fashion Bomb

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What exactly is a counterfeit anyway? You have likely heard the term and if you have been to Canal Street, Sante Alley, High Street, the Silk Market or a Turkish bazaar, you don't need a fashion lawyer to tell you, as you have surely seen them.

A counterfeit product is one that is made without permission of the brand owner, that the seller is trying to pass of as an original product.  In fashion, the seller will generally incorporate a brand's logo or name, which is illegal.  By doing so, the seller violates trademark law as well as federal, anti-counterfeiting law.

Interestingly, in fashion, unlike many other industries, the purchasers of counterfeit products usually know that they are buying a fake.  Even more interesting is a recent study that  show that 46% of all people who buy counterfeits end up buying the real thing.

Finally, you must know that there is a distinction between counterfeits and knock-offs.  In fashion, clothing designs do not have any sort of legal protection.  Hence the prevalence of designers paying homage to, gathering inspiration from or copying the products of another.  The fashion industry refers to these imitations as "Knock-Offs."

photo credit: For The Love Of Lily

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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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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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Fashionista posted a story last week alerting the world that Urban Outfitters in London are selling Anna Wintour tote bags during London's fashion week:

"with the words “FAN CLUB ANNA WINTOUR” scribbled on the front. It’s £50, which is about $77."

An internet search revealed that the item was also available on Urban Outfitters' Website, but is out of stock. 

Here's the unanswered question: does Urban have Anna Wintour's permission to use her name in connection with the sale of these items?  It appears that way. 

If not, it would create a legal issue (right of publicity) in some states here in the United States. 

The bags don't seem to match Wintour's taste level, but she could risk the “Streisand Effect” if she made an issue out of it.

What do you think?

photo credit: Fashionista

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By: Jaysen Chung, USC Law and future Fox Rothschild summer associate, Summer 2010

With the 2010 Winter Olympic competitions already in full swing, the International Olympic Committee and the Vancouver Organizing Committee for the Olympic and Paralympic Games for 2010 ("VANOC") are giving the evil eye to alleged “ambush marketers” or companies who are not official (i.e. paid) sponsors of the Games, but are nevertheless engaging in marketing campaigns that create the impression that they are associated with the Games.

Lululemon Athletica Inc., the Canadian athletic clothing brand, has made Global Language Monitor's list of top 2010 Ambush Marketers.

Lululemon puts out a line called “Cool Sporting Event That Takes Place in British Columbia Between 2009 & 2011.”   This line includes t-shirts, sweatshirts, and mittens in colors that just so happen to be the national colors of countries such as Canada, the United States, and Germany. 

Under the Olympic Committee’s bylaws, it does not appear that Lululemon’s products constitute trademark infringement (certainly, the Olympic Committee cannot go about claiming trademarks on a country’s colors or national athletic pride), though it may be walking a fine line.

Should clothing companies like Lululemon be able to profit from the Olympic brand without paying substantial licensing fees like other official sponsors?  Are companies like Lululemon confusing customers, or "simply pursuing marketing ‘best practices’."  We think they are creative marketers and here is why:

• The Olympic Committee’s bylaws have strict guidelines, prohibiting non-official sponsors from using particular trademarks, such as almost all forms of the word “Olympic” or the logo of the Olympic rings, and had even tried to prohibit the use of words like “Winter,” “Gold,” and “Medals”.  If consumers want to purchase gear that bears these trademarks, they will need to purchase clothing made by the official sponsors.
• Consumers may simply prefer the style or look of the Lululemon line over those of the official sponsors, even though Lululemon’s line is bereft of any Olympic trademark. In that case, the official sponsors would be losing business due to their own lack of creativity or clever marketing.
• Consumers may not know, or could care less, whether the clothing they purchase is made by an official sponsor of the Games. In addition, given Lululemon’s line of t-shirts and sweatshirts that run for $50 and $100, respectively, consumers are probably not purchasing them because they are cheaper or more affordable alternatives to clothing made by official sponsors.

This problem will not likely be solved in the near future, because companies will always want to find some sort of fun and creative angle to sell to consumers during this event [Subway Ad - Video]. 

I guess we will have to wait and see what kind of clothing lines will be making an appearance for the “Non-Winter Global Sporting Event That Takes Place Somewhere in the United Kingdom Between 2011 & 2013.”
 

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Last month, in Get Your Hands Off My Bag, we alerted you to the potential legal action between Bird Handbags, designed by Liz Carey and  Juicy Couture, now owned by Liz Claiborne.  I was finally able to get a copy of the complaint, filed on January 29, 2010.  As predicted, it is for trademark infringement and some NY State common law causes of action, including unfair competitive and deceptive practices.

Basically, Bird Handbags wants Juicy to stop using the name "Bird" to sell apparel and accessories, including bags.  As we told you last month:

A  company name can be protected under Trademark law.  In September 2008, Juicy Couture, Inc., filed three intent to use applications for the mark "BIRD BY JUICY" for classes 25, 18 and 14 (these classes include clothing, handbags and jewelry among other things).  In October 2009, Bird Handbags filed a trademark application for the mark "BIRD" for class 18 (bags), on a combination use and intent to use basis.  Bird Handbags claimed a first use date of July 2007. 

This will be an interesting case, because in the U.S., the first to file usually wins.  But here, Juicy has not yet filed a statement of use and Bird may be able to show that Juicy knew about them when the registered for its marks. 

In the worst case scenario, a judge may allow both companies to use the mark and just may prevent federal registration by either company.  While seemingly fair, this would be a disaster for future growth of either company, because a company's name is usually its most valuable asset.  If it is not federally registered, you cannot sell it or license it.

In sum, registering your name with the trademark office should be one of the very first steps a new company takes.  Otherwise, you risk a bird fight. 

photo credit: Stylelist

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Most everyone in fashion knows that clothing does not have Copyright or Trademark protection.  Hence the prevalence of designers paying homage to, gathering inspiration from or copying the products of another.

What most people don't know is that it is almost the 10th anniversary of the seminal case that set the standard of whether clothing has Trade Dress protection.  Fashionlawyerblog.com posted an interesting article today, by fellow fashion lawyer Joseph Gioconda, recounting the battle between Walmart and Samara Brothers, where the Supreme Court decide that clothing design can only be protected when it is "distinctive" or:

"only upon the designer’s proof of 'secondary meaning;' that is, once enough consumers have come to identify the design as emanating from a single source."  

Gioconda concludes "[f]or better or worse, the Samara ruling forced designers and their copiers to compete in the marketplace."

Whether such competition helps or hurts fashion is fiercely debated within the industry today.  Recent studies have shown that copying may just help the industry.

To make things more fun, there is a recent trend of increased filings of Trade Dress lawsuits by designers, such as Alexander McQueen and Balenciaga, that are apparently sick and tired of their best selling items being"knock-off."

With the amount of pressure and attention the current regime is getting, this may be the decade the rules governing copying in fashion change, especially with the rise of the internet and social media. 

But for now, recognize that you may be copied and use that information to create your own game. Don't try to beat the competition, be different than the competition.

photo credit: apparelnews.net

ps -- please remember that FABRIC can have copyright protection and that there is no such thing as the "30%" rule.

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This past weekend, the Stylist reported that Bird Handbags has sued Juicy Couture, now owned by Liz Claiborne, for Copyright Infringement.  Despite a thorough search, I haven't located the complaint.  So, perhaps Bird Handbags is merely contemplating suit, as report by Fashion Week Daily. 

Regardless, the report of an alleged copyright infringement action odd; as a fashion lawyer, I have not seen a handbag that is protectable by copyright law, but it could be possible to protect the fabric it is made out. 

The Fashion Week Daily article seems to imply that Liz Carey, the owner of Bird Handbags, former model and ex-wife of Oasis drummer Alan White, is upset that Juicy is calling its handbag line, Bird by Juicy.   

A  company name can be protected under Trademark law.  In September 2008, Juicy Couture, Inc., filed three intent to use applications for the mark "BIRD BY JUICY" for classes 25, 18 and 14 (these classes include clothing, handbags and jewelry among other things).  In October 2009, Bird Handbags filed a trademark application for the mark "BIRD" for class 18 (bags), on a combination use and intent to use basis.  Bird Handbags claimed a first use date of July 2007. 

Usually, the first to file wins.  But this is an interesting situation because Juicy has not yet filed a statement of use, Bird has the earlier use date and Bird will likely rely on a combination of common law and federal law trademark claims.  So, for now, the answer is up in the air.

 photo credit: TinyZippers.com

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Design Patents are a rare form of intellectual property in the fashion industry.  A few companies like, Not Your Daughters Jeans, Under Armour and even Gwyneth Shoes (which recently sued Paris Hilton) has one, but these are the exceptions and not the rule.  What is a Design Patent and why are the so uncommon in fashion?

The U.S. Patent Office states, "Design patents may be granted to anyone who invents a new, original, and ornamental design for an article of manufacture."  If successfully filed and prosecuted, a process which averages 18-30 months, you will have ownership of the design for 14 years.  To succeed in registering a patent, you must show that the proposed design is novel (i.e., no one else has previously designed a product like this). 

Design Patents are uncommon in the fashion industry for two main reasons:

1. A Design Patent can be expensive for a Fashion Company.  The cost of a Design Patent averages $2500-5000, depending on the challenges raised by the patent office, not including maintenance fees.  Fashion Designers make many items a season, and it is next to impossible to predict which will be your best seller.  To protect your entire line, every season, can get costly, especially for an emerging designer.
2. A Design Patent takes a long time to get.   Fashion cycles move quickly.  So, by the time your patent issues, the item you protected is likely obsolete.  Thus, you spent a whole bunch of money for nothing.

In my experience, there are only a few instances where Design Patents make sense, mainly in shoe accessories.  If money is not an obstacle, you could always try and register, if a search reveals that your idea is new and novel.  That way, you could list "patent pending" on your invention, deterring knock-offs while the patent office examines your idea.  That extra jump in the market may be enough to brand you as the innovator and translate into extra sales.  That's not bad bang for your buck. 

photo credit: Cychanglaw.com

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These days, Trade Dress lawsuits are a hot topic in fashion law, causing one leading fashion blogger to wonder whether we are seeing a "trade dress trendlet."  For example,  Alexander McQueen and Balenciaga both sued Steven Madden; Danner sued Rag & Bone.  Even Paris Hilton wasn't spared.  But what exactly is Trade Dress and does it protect fashion designs?

The answer to the first question is easier than the second.

Nolo's Plain-English Law Dictionary defines Trade Dress as:

"Various design elements used to promote a product or service. For example, trade dress includes the unique shape of a bottle, the color of a pill, or the decorative elements within a chain restaurant. Trade dress can be protected under trademark law if it is distinctive and a showing can be made that the average consumer would likely be confused as to product origin if another product had a similar appearance."

A company can file for Trade Dress protection under the Lanham Act (section 43(a)) with the United States Patent and Trademark Office.  The procedures for filing an application are similar to filing trademark application.

A few things bear mentioning.  Utilitarian aspects of your products, that serve a function such as zipper, snaps or buttons, are not considered when determining if your design qualifies for Trade Dress protection.  So, taking away all the useful stuff, would an average customer (think three people at a bus stop) recognize your brand merely from seeing one of your products?  If the answer is yes, you may have a viable claim for Trade Dress.

One fashion expert opined that this "secondary meaning" test is virtually un-meetable for fashion items.  The only two things that she could think of that qualified were a members only jacket and a burberry trench coat.

So, unfortunately, it will be an uphill battle for fashion designers to rely on Trade Dress protection, especially new and emerging one, unless this recent round of "shoets" kicks up the heels of existing law.

photo credit: ManagingIntellectualProperty.com

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Another "Shoet."  This time Brooke Hollow Inc., which does business as Gwyneth Shoes, hopes to knock the socks off Paris Hilton and her shoe company, Paris Hilton Footwear Line Collection made by Antebi Footwear Group of New York. 

Gwyneth claims that Paris Hilton knocked-off its design patent, Patent Number D579,642, for a heart-shaped "shoe sock," and further alleges that Hilton's use infringes on its Trademark rights because its "pink heart" has become a source and brand identifier for Gwyneth shoes.

The Cut reports that:

"Paris said on her website, 'I personally chose the styling, design, materials and colors for the line and also wanted to make sure it was super-comfortable! Each shoe has a heart-shaped comfort pad sewn in ... so you can dance all night long!'"
 

Even without reviewing the complaint, I have to disagree with The Cut taking Paris' side, apparently because other companies make and sell heart-shaped shoe pads.  I wouldn't want to be walking in Paris' shoes.  Here's why:

Yes, Gwyneth's Trademark claim seem a bit of a stretch, for the same reasons Alexander McQueen, Balenciaga and Danner will have a hard time prevailing on similar claims: secondary meaning is very hard to prove, especially in the realm of shoes and clothing.

BUT, if Gwyneth has a valid design patent, overcoming its presumption of validity is very difficult and costly.   

Cross my heart.

Photo credit: TMZ

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Its raining cats and dogs, or at least combat boots, this season. 

Last week, Danner Inc., sued Rag & Bone for selling the "Danner Combat Boot by Rag & Bone" to Saks and Barneys, joining in on the trademark infringement trend started by Alexander McQueen and Balenciaga.

Left: Danner Boots. Right: Danner Combat Boots by rag & bone.

Without yet reading the complaint, two things strike me as very odd:

1. In this case, the knock-offs, priced at $525.00, are more expensive then the original, priced at $265.00; and
2. Rag & Bone actually seems to be using the DANNER trademark in commerce i.e. by naming, selling and promoting its shoe under the name "Danner Combat Boot by Rag & Bone."  As Ron Coleman discussed in his excellent analysis of the Balenciaga LEGO complaint, use of someone else's trademark in selling your product implies that the trademark holder, here Danner, granted Rag & Bone permission or a license to use its name.  I am guessing that is not the case in this matter, because Danner's lawsuit is for trademark infringement and unfair competition, not breach of contract.

So it seems that Rag & Bone was dumb enough to violate the first rule of Fight Club --  if you are knocking off someone, don't talk about it in the name of your "inspired" product. 

photo credit: @PerezHilton or cocoperez.com

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These days everyone seems to be enthralled with Fashion Licensing.  What is it?

Licensing is the process of "renting" your fashion company's intellectual property, generally its trademark, but sometimes its copyright, to another entity for a sum of money called royalties, for a certain period of time, for a certain product or category of products, for an agreed upon period of time within a certain territory.

If you answer yes to both the questions below, your fashion company is probably ready to start liscening: 

1. Does your company own its intellectual property (this will generally be your company' name and/or logo)? and
2. Is your company doing more than $30 Million in sales?

Why consider licensing?  Because every dollar earned goes directly to your company's bottom line.  Done right, licensing gives your company an opportunity for massive growth in a short amount of time, for minimal investment.

On the flip side, if you chose the wrong licensing deal or licensing partner, you will lose customers and all the goodwill you have built up your brand name. 

Is it worth the risk?  Yes.  If you do your homework, spend some time "dating" and make sure you have a good prenup.  Then, utilize the know-how of "specialists" to diversify your most valuable asset and create a revenue stream where one did not previously exist.  Liscensing will turn your fashion company into a lifestyle brand.

Photo Credit: A Reason to Write - India

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 Copyright protects original, non-useful works of authorship fixed in a tangible medium of expression.  Currently, you can not copyright fashion because clothing is a "useful article."

But, if aspects of a piece of clothing can be "physically separable" from the underlying garment, you may be able to protect it.  Examples include:

• A t-shirt graphic (think Ed Hardy);
• printed fabric; and
• removable lace or applique

Registering a copyright is relatively simple.  All you need to do is submit a completed application, copies of the work to be registered (referred to as deposit materials) and a nonrefundable filing fee, which varies depending on how you file.  It is $35 if you register electronically, $50 if you register using Form CO (paper filing with 2-D barcode-generated form) or $65 to file the old-fashion way -- on paper.  

In general, if the work was created after Jan.1, 1978, the copyright lasts for 70 years after the author’s death.  When there are joint authors, it is 70 years after the last author’s death. For works for hire, the copyright lasts 95 years from publication, or 120 years from creation, whichever is shorter.

You do not need to register your work to obtain rights, but unlike under trademark law, your work must be federally registered in order to bring a suit for infringement.  There are other benefits as well.

Please remember, that there is no such thing as the 30% rule (or any percent rule).  If you copy someones protected work, even if you think the company is out of business or the print is in the public domain, you might just end up being sued.

photo credit: the Copyright Symbol Webpage

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In April 2008, several fashion bloggers noted that Steve Madden "knocked-off" French Couture House Balenciaga's "Lego" shoes, which were part of its Fall 2007 collection.

. 

Last Monday, December 15, 2009, perhaps inspired by Alexander McQueen's recent suit against Steve Madden for similar copying, Balenciaga filed suit against Steve Madden for Copyright Infringement, False Designation of Origin, Unfair Competition and Deceptive Business Practices in New York federal court.

Interestingly, the complaint barely mentions Trade Dress, and does not include it as a cause of action, maybe because secondary meaning is so difficult to prove. 

Or maybe Balenciaga's complaint is just poorly drafted.  In the copyright infringement claim, Balenciaga fails to allege that it holds a federal copyright registration, a prerequisite for bringing a copyright action in federal court.  In the Deceptive Trade Practices claim, the company alleges that Madden is "in direct competition with Balenciaga," which at the prices listed above, seems very hard to believe.

Under existing US laws, it is permissible to copy shoes and clothing because those items are useful articles.  But, I think Balenciaga has a leg to stand on.  Here's why:

Balenciaga argues that Steve Madden is engaged in a pattern of willful and deliberate copying, constantly stealing the most successful styles from other shoe designers, thus profiting from their research, development, and successful track record. 

By not having to spend money for design and development, and focusing only best-sellers of others, Steve Madden skips the risky part of the fashion business. 

So, Balenciaga just might have colorable argument that Steve Madden is engaged in unfair competition by copying its colorful shoes.

Photo credit: City File

p.s. While I like crazy shoes, thank goodness these Legos are not under our tree.

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In fashion, your company’s name or logo is generally its most valuable asset.   In order to profit from your fashion brand name or logo  (via sale or licensing), you must own it by “trademarking” it with the United States Trademark and Patent Office. 

A trademark (or servicemark) is a word or slogan that distinguish the source, origin a sponsorship of a good (trademark) or service (servicemark).

Unfortunately, many young fashion companies fail to trademark their name or logo. Then, after substantial money has been invested in promotions, public relations and collateral such as hangtags, business cards, invoices and signage, the company learns an expensive lesson: their “name” is already taken or blocked.

So what should your Fashion Company do? 

1.  Conduct a search to see if your desired mark is taken.

2.  If the mark is available, file a trademark application with the Trademark Office.

3.  Respond to any "Office Actions," or questions from the examining trademark attorney.

4.  Assuming there are no objections from the trademark office or another trademark holder, your mark will register.  Currently, this takes 9 to 14 months, but can vary greatly application to application.

You are required to maintain your mark and also may want to consider protecting it in other countries, both where you manufacturer and sell goods.

Don't forget, any time you claim rights in a mark, you can use a "TM" (trademark) or "SM" (service mark) designation to alert the public to your claim, regardless of whether you have filed an application with the USPTO.  This will give you some protection against infringement by putting others on notice of your rights, hopefully deterring counterfeits. 

Once you receive a federal registration number, change the "TM" to an "®" and register your mark with proper government agencies to minimize exposure to counterfeiting.  

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Under current Copyright law, it is legal to “knock-off”, or be inspired by, another designer’s products.  Proponents of the current state of the law argue that this design piracy actual spurs sales by inducing obsolescence.

Counterfeiting, the practice of passing of imitation goods as the real things, however, is illegal in the United States. According to the International AntiCouterfeiting Coalition, counterfeiting costs U.S. businesses $200 billion to $250 billion annually. 

What if they are wrong and the sale of counterfeit products, like the sale of knock-offs, actually increases sales of the authentic product? 

A new study “The Real Value of Fakes,” by MIT Professor Renee Richardson Gosline has shown just that. MIT News reports:

Gosline interviewed hundreds of consumers who knowingly bought fake luxury apparel, many at “purse parties” where such goods are sold. Gosline found that within two years, 46 percent of these buyers subsequently purchased the authentic version of the same.

Now that’s more "faux" for your bottom line.

photo credit: ReplicaEstore.com

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Lately, there has been much talk about trends - how they are started and when they reach a critical mass called the trend tipping point.  I think the next trend will be Alexander McQueen's "alien shoes," shown during his Spring 2010 runway show that included a performance by Lady Gaga (maybe because they remind me of the toe shoes of my youth). 

I am not alone.  Grazia Daily reports that a McQueen spokesperson stated:

"We've had lots of people showing great interest in the show shoes. . some of the callers are also looking 'to buy them as art pieces'. . .[and] the process used to create the Alien shoes is very innovative and protected by copyright."

I have two questions: (1) how can the "process" to create shoes be copyrighted?  And (2) when will this trend trickle down to my price range so I can get a pair?   

As for the first question, copyright protects the original expression of an idea, whether literary, artistic, commercial or otherwise; it does not protect the actual process of assembly or outward appearance.  Clothing and shoes are not currently protected under copyright law because they are useful articles.  Fabric designs, however, generally have copyright protection.  So I wonder how McQueen can claim a copyright in the process of developing his new shoes.  More likely, he is trying to protect the process under patent theory.  Any thoughts?

As to the second, it might be a awhile because Alexander McQueen recently sued Steve Madden for "copying" his "Faithful" booties on a trade dress theory.  As a result, a company may think twice before using McQueen's shoes as inspiration. 

When commenting on McQueen vs. Madden, I doubted McQueen would succeed because he wouldn't be able to prove secondary meaning.  Maybe with the "Alien Shoes" shoes, McQueen takes one (wobbly) step closer to victory.

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Project Runway ended season six with a two part finale and an even bigger controversy. 

First, Tim Gunn counsels contestant Irina that using images of Coney Island on her t-shirt, intended as a layering piece in her collection, would be trademark infringement.

Tim advises Irina that she needs to rework the T-shirt "with images that are your own."  In part two, Irina shows Tim her revised T-shirt, which is "decorated" with reasons she allegedly loves New York.  Tim even quotes one:" 'Reasons to love NY'...is that Madonna is back?"
 

Here's the Controversy:  Bloggers Tom and Lorenzo quickly discover that Irina's reasons to love NY were not her own, but from a 2008 New York Magazine Article, "Reasons To Love New York."  A few days later, New York Magazine confirmed that Irina used their words without their permission.

Tim didn't stop her from showing her collection and Lifetime still aired the show, so Irina's conduct is okay, right?  UNLIKELY.

The lifted words were printed by New York Magazine and it owns the copyright. This means that no matter how creatively Irina arranged them on a T-shirt, only New York Magazine has the right to use this phrasing.  From the post cited above, it does not seem that Irina had New York Magazine's permission.

So why air the finale?  Due to the war between Bravo and Lifetime over who had the right to release season six of Project Runway, they certainly had enough time to re-shoot or pull the episode.

Perhaps because the producers and network were unaware of the origins.  These seems questionable because in a subsequent interview with Tom and Lorenzo, Irina admits she copied New York Magazine's article, insinuating that the producers of Project Runway were aware of the source.  Or perhaps because Irina hasn't actually sold any of her T-shirts, there is no money to recover in a lawsuit and thus no motivation.  Or maybe even the PR benefit to New York Magazine outweighs any harm. 

But, as a fashion lawyer, I couldn't let this very public copyright controversy pass by without comment.  I don't want any of you to become embroiled in a similar controversy.

In sum, taking the work of another without permission will normally get you sued.  (and remember there is no such thing as the 30% rule.)

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You have may heard the term direct to retail or DTR, but ever wonder what it is? It is a licensing relationship where retailer effectively becomes the licensee as well as the seller of the product. This means that the retailer pays a royalty to the licensor and sources licensed merchandise itself. The royalty to be paid can be based on the retail price or vendors' sales price (i.e., the retailer's cost). DTR deals often do not include a guarantee, but the marketing commitment is one of the key terms. Importantly, retailers make better margins on DTR products than the traditionally licensed goods.

Many well known companies such as Disney and Icoxic have been in the DTR game for awhile now. Disney was one of the first. In 2008, Iconix reported that 50% of its approximately 250 million in revenues in came from direct-to-retail arrangements. In 2009, the company projects that those numbers will increase, with 60% of its revenue coming form DTR.

So how do you get a DTR deal?

• Your company must have proven capabilities as a potential supplier or vendor to get in the door;
• Once in, make your pitch to fill an existing gap that you have identified in retailer’s portfolio and why you are perfect to fill it; and
• If you get the deal, remember that establishing a good relationship is the key to long term direct-to-retail success. With the DTR model, retailers generally want to establish long-term relationships on select brands, and once a partnership is formed, it's likely to sustain itself over time.

If the match is a good one, everyone wins. Why? Because when retailers work with their own suppliers, they can get product on the shelves more quickly, and it can be on trend. The minute a property is successful or a movie turns out to be a big hit, retailers can turn something around and have it in store in no time. And for the licensor, that means more money directly to your bottom line.

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There is legislation pending before Congress, the Design Piracy Prohibition Act (DPPA), or H.R. 2196, that would allow designers to obtain copyright protection for their fashion designs for three years.

Steven Kolb, Council of Fashion Designers of American (CFDA), one of the supporters of the bill claims that it is needed because:

[p]irates steal American fashion designs, make low quality copies in Asian factories with cheap labor and import them back to into the U.S. to compete with the original designs.

Others, such as Jason Wu and Narciso Rodriguez rally against the injustice of lower priced companies profiting from the sales of virtual identify copies to gowns worn by celebrities or those in the public eye.

My question is this: isn’t inspiration, homage or “knocking-off” the force that creates a trend, thus causing customers across the country to desire and purchase the design?

Remember Meryl Strep in the Devil Wears Prada?

The ironic part of this new law is that copyright registration would not be allowed it if the design “merely reflects a trend.” According to the bill, a trend is:

a newly popular concept, idea, or principle expressed in, or as part of, a wide variety of designs of articles of apparel that create an immediate amplified demand for articles of apparel embodying that concept, idea, or principle.

The trend “safe-harbor” prevents protection for any “hot” or fast-checking item. Now that is the true paradox of fashion.

Photo credit: Getty Images/Mark Wilson

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There are two business mantras that every fashion company should follow:

1. Always take the meeting, and
2. Get it in writing

Recently, due to the drastic increase in the numbers of copyright infringement cases being filed, I have added a third: there is no such thing as a 30% rule or whatever “rule” your designer may tell you.

Buying a copyrighted print, then changing it a certain percentage is not permitted and can get you into expensive litigation quickly. In October, the California Apparel News reported that one recent trial over a paisley print ended in a six figure judgment.

Why are more lawsuits being filed? Two reasons:

1. Due to the current state of Copyright Law, an unscrupulous plaintiff can easily obtain a substantial windfall based on an invalid Copyright Registration.
2. Most designers still think it is okay to take a print of another, change it a certain percentage and then have it produced by their own supplier.

Once a potential plaintiff has a Copyright Registration, Courts presume that it is valid. Trying to argue that you were unaware of the copyright or you believed the design was in the public domain generally does not work. In plain English, if a average person, imagine two guys at a bus stop, think the two items look alike, you will likely be held liable for copyright infringement.

So, what should you do? Find out after the jump...

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Here’s what happened: After seeing a recent Ralph Lauren advertisement featuring Filippa Hamilton, several bloggers questioned whether the image was real or photoshopped. One blogger at BoingBoing posted the advertisement with the caption, “Dude, her head's bigger than her pelvis.”

This comment so displeased Ralph Lauren that it had its attorneys take action pursuant to the Digital Millennium Copyright Act (PDF) (“DMCA”) and issue a DMCA Infringement Notification (PDF) to the Blogger’s ISP.

Instead of taking down the image, BoingBoing claimed that reprinting the photo along with criticism of the way the company chose to portray the model is legally permissible fair use under copyright law. And, so incensed over the threat, BoingBoing posted Ralph Lauren’s DMCA Take Down letter, which causing even more negative commentary for Ralph Lauren, also known as the “Streisand Effect.”

For example, the controversy was reported by ABC news, Extra and even the ABA Journal.

In the end, it appears that Ralph Lauren pulled the advertisement and a company spokesperson issued the following apology:

For over 42 years, we have built a brand based on quality and integrity. After further investigation, we have learned that we are responsible for the poor imaging and retouching that resulted in a very distorted image of a woman’s body. We have addressed the problem and going forward will take every precaution to ensure that the caliber of our artwork represents our brand appropriately.

Even though the Daily Mail reported that Ralph Lauren claimed the retouching of Fillipa “was an isolated incident," photos of second airbrushed model, Valentina Zelyaeva, became widely publicized this week.

And, if this was not enough negative PR for Ralph Lauren, Filappa recently appeared on The Today Show. Even though Fillipa wears a size 4, is 5-foot-10-inch, and weighs 120-pound, Filippa reported that Ralph Lauren actually fired her over 6 months ago for being “too fat.”

As Dana Shultz notes, the issue here is not that Ralph Lauren likes its models to look more like Bratz Dolls than human beings. But, that fashion companies should think twice before taking action against “negative” online commentary. You may, as Ralph Lauren learned, get more that you bargained for.

Photo credit: High-touch Legal Services Blog

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In a recent blog post, law professor, lawyer, and fashion blogger Susan Scafidi discusses the recent lawsuit filed by Alexander McQueen against Steve Madden.

In her post, Susan writes:

U.S. law doesn't protect clothing designs against copying. Hence Steve Madden's apparent business strategy: copy everything from sole to shoelace, but avoid the legally secured trademark...While the complaint isn't yet available online, lawyers for Alexander McQueen are part of an emerging trendlet, namely a return to trade dress claims...From a big picture perspective, if this trickle of trade dress claims continues, will it have a significant effect on the frequent copying of creative clothing?

I think that it won't, and here's why:

A trade dress claim will only succeed if your brand is famous, has design elements that have been around for years, and the item at issue has secondary meaning. This means that an average consumer (think the two men at a bus stop in Detroit) must be able to recognize you, the fashion manufacturer, from the outward appearance of the items. Most manufacturers will be hard pressed to met this standard.

“Inspiration,” copying and piracy is what drives trends and economic studies show that it is actually good for the fashion industry.  So for now, despite the "trade dress trendlet," it is business as usual in the fashion industry, even if McQueen has faith in its ability to change.

Photo attribution: CounterfeitChic.com

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