Fashion Copyright Bill moves to the Full Senate

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:

September to Remember? Schumer Introduces the Design Piracy Bill into the Senate (Again)

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.

 

 

Why IDPPPA is going to KO the Business of Fashion

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!!!

 

BREAKING NEWS: New Design Piracy Bill Introduced into Senate

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

Johanna Blakley: Lessons from fashion's free culture

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!

Does the lack of Protection for Fashion Designs Increase Sales of Fashion Counterfeits?

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. 

 

 

Fashion Loves Innovators: Destroying the Myth that Emerging Designers "need" the DPPA

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,

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

 

10,000 visitors and counting

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.

Click here to view and play.
Length: 00:57

A Glimmer of Light: An Intro and a Recap

Guest Post by Jackie Lechtholz-Zey.* 

For those that missed out on the Glimmer of Light Panel, Jackie has written a fantastic recap for you all:

First off, I have to admit, Thursday didn't start off as the best day. It was hectic in itself, and the stress of impending deadlines and finals was starting to get to me. I was getting into that over-worked zone where you start to feel like you don't have time for anything. I wasn't sure if I could make it to the panel, but once I saw that Arlene Battishill was speaking, it was no longer a question. I would MAKE the time to be there.

For those of you following Staci's blog, you should be well familiar with the theme of Going Hard or Going Home.  And it's not about luck, it's about good old fashioned hard workArlene is the human embodiment of these principles. I heard her speak at a panel a few weeks ago, and she made a tremendous impression on me. You truly have to hear her in person in order to understand her incredible energy, drive, warmth, and savviness.

Knowing that Arlene would be there turned my mood around completely. I realized that the only way to nip my funk in the bud was to surround myself with people like her, people that I could be inspired by and learn something from. I made time in what seemed like an impossibly busy schedule for something I knew would serve me well. There are days that you feel overwhelmed, over-worked, and over-tired, but you can't let that stop you. Sometimes you don't actually feel "tougher than a lion," but to get yourself back on track you have to seek mentors and role models. You get in touch with your perseverance and determination when you seek the company of those that will elevate you to that place. I'm delighted to say that a little over two hours spent in such fine company, and I was beyond being back on top of my game, I was strategizing bigger and better ways to make my goals a reality.

The venue, Blue Velvet, was sleek yet welcoming, the perfect setting for the crowd within. After appetizers and conversation, I had the pleasure of sitting next to John Arguelles, President of Lloyd Klein and Foundation Co-Chair of Fashion Group International LA during the panel. I also introduced myself afterward, as I was so impressed with what he contributed to the discussion. And it truly was a discussion, robust with audience questions (and advice!) to one another and the panelists. I learned a lot about the business just by listening to these fashion industry players exchange ideas and recommendations.

Arlene Battishill, of course, inspired me all over again. She shared her experience as President and CEO of GoGo Gear, the line she developed in order to give bike and scooter riding women a chic alternative to the traditional gear, "so that they don't have to look like men." Her collection is the first of its kind, offering feminine design coupled with serious armor engineering. Her company has seen incredible success, the line was selected as a finalist for the Top 10 Products of 2010. I'd really recommend reading her blog to get a greater sense of how hard she's worked and her resulting accomplishments. Staci is Arlene's number one fan, but I promise, I come in at a close second! It was wonderful to hear her speak again and share her insight. I also had the opportunity to meet her beforehand, and spent some time after the panel talking with her and her intern. I can't tell you how exciting that was!

Gary Fineman shared his expertise as co-managing partner of Fineman West & Company LLP, one of the largest CPA and business advisory firms in LA specializing in apparel and manufacturing. He offered financial advice and practical guidance for managing a fashion business.

Sharooz Kohan, CTO of Aims Technology Solutions, Inc., had a lot of insight about one of the evening's major themes--social networking and branding on the internet. He's an expert on generating website business and he explained his theories.

Ilse Metchek, President of the California Fashion Association, moderated the discussion, asking the panelists some very probing questions that led to some truly informative answers.

All in all, I must say that it was one of the best panels I've ever attended, a real success. For someone like myself, who is just starting to enter the fashion world from a business and legal perspective, I couldn't have asked for a better taste of the industry. It was inspiring, energizing, and enlightening to be a part of.

Staci is always reminding us of the importance of in-person networking, and I'm going to echo her advice. Nothing compares to saying hello, shaking hands, and exchanging business cards. You learn a lot in the mean time, and you never know how things will turn out. Keep hustling and working hard, and you'll see the payoff (Arlene and Staci are living proof!). It's also just plain exciting to be in the midst of a fashion business discussion.

And with that, I hope to see you all at the upcoming panel on the Design Piracy Prohibition Act, Tuesday at 12 at the California Market Center.  I actually wrote my paper on the bill, and because I argue for copyright protection for fashion designs, I end up recommending a modified version of the DPPA. The panel should be pretty interesting, as I know that there is quite a bit of opposition in the industry as well. I'm looking forward to getting a better understanding of the issues, and I hope you all will join me in learning more about the industry!


Until next time,
Jackie Lechtholz-Zey.

*Jackie is a 2nd year student at Loyola Law School, and in addition to being Chief Articles Editor of the Entertainment Law review, she is the school's resident Fashionista. Jackie contacted me after writing her soon-to-be published article about extending copyright protection to fashion designs, looking to learn more about the business of fashion.

Fashion Design Piracy. . .A Reality Check

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:

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

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!

 

Los Angeles is Not a Fashion Congressional Caucus Priority

Stop the (t-shirt printing) Presses! (I have always wanted to say that).   Los Angeles is once again (unjustly) relegated as the red-headed step-child of the United States' Fashion Industry.

WWD reports that the fashion industry now has its own "Caucus."  A bit of digging shows that the Congressional Apparel Manufacturing and Fashion Business Caucus was officially approved on February 2, 2010, apparently as most of us prepared for NY Fashion Week.   (and for the record, isn't "apparel" part of "fashion?"  Who came up the funky name for this group anyway?  Dad, will you please hurry up and get to congress already??)

Christine Brooks-Cropper, president of the Greater Washington Fashion Chamber of Commerce, apparently was the driving force behind the creation of this Caucus.  According to WWD, she asked that the Caucus prioritize:

funding to help generate a fashion incubator and provide scholarships to fashion students, job creation initiatives, “revisiting” stalled legislation known as the Design Piracy Prohibition Act that would provide copyright protection for fashion designers and supporting efforts to save the New York City Garment District. 

The Chairs & Co-Chairs of the Caucus are Rep. Diane Watson (D. Calif., 33rd Dist.), Rep. Jerrold Nadler (D., N.Y., 8th Dist.) , and Rep. Carolyn Maloney (D., N.Y., 14th Dist.)

Two things:

  1. It is remarkable that this Caucus is so New York-centric, especially when Los Angeles is the fashion capital of the United States, surpassing NY in volume of sales, units sold and jobs every year since 1998; and
  2. Why does Brooks-Cropper get to set the agenda?

And before we flip out too much, you must know that there are a gazillion other "Caucuses" such as the textile caucus, the Invisible Wounds Caucus, and my two favorites: the Bourbon Caucus and the Caucus on Long Range Strike (whatever that is).

But all humor aside, why is LA left out?  And what are you going to do about it?

photo credit: greenpeace USA

"LOOK:" Oscar Night Fashion and DPPA is Rising from the Dead

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.   
 
Companies like ABS and designers like Allen Schwartz are part of the reason New York Senator Charles Schumer is preparing to re-introduce the Design Piracy Prohibition Act, reports the Boston Globe yesterday in a story titled, "If the shoe fits, they’ll copy it."
 
This is Schumer's FOURTH attempt at getting new fashion copyright legislation into congress, which some believe is due to pressure from campaign contributor Barry Diller and his wife, Diane Von Furstenberg, who is president of Council of Fashion Designers of America ("CFDA").

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

Design Piracy Protection Act Will Not Protect Trends

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