Martha Stewart, Macy’s, and J.C. Penney ordered to Mediation

On March 7, 2013, Judge Oing of the New York County Supreme Court ordered Martha Stewart, Macy’s, and J.C. Penney to mediate their ongoing dispute.  If the parties cannot reach an agreement by April 8, 2013, Judge Oing will continue to hear the case.

Macy’s filed suit in February 2012 against both Martha Stewart Living Omnimedia (MSLO) and J.C. Penney, claiming that MSLO was violating a 2006 agreement allowing Macy’s to exclusively sell MSLO bedding, bath, and kitchen products.

In December 2011 J.C. Penney and MSLO had come to agreement on a 10-year partnership, which soon provoked Macy’s ire.  J.C. Penney paid $38.5 million for a 16.6% stake in MSLO and a seat on the board of directors.  In Macy’s view, the J.C. Penney – MSLO partnership no long made Macy’s the exclusive retailer of MSLO products, an exclusivity to which Macy’s felt entitled by their 2006 Agreement with MSLO.

In a now-legendary phone call which took place late in February 2013, Stewart had called Macy’s CEO Terry Lundgren to tell him about the J.C. Penney deal (the night before J.C. Penney announced it).  Reportedly, Lundgren was so appalled he hung up on Stewart.

According to NBC, Lundgren said:

“I was completely shocked and blown away…literally sick to my stomach.”

Apparently, Stewart was attempting to exploit a contractual loophole: the contract between Macy’s and MSLO contained a “carve out provision” which allowed MSLO to sell Martha Stewart’s own products in her own “stores”.  MSLO and J.C. Penney argued that the J.C. Penney/MSLO agreement did not violate the Macy’s/MSLO contract because the products would be sold in a “store within a store”. However, the “store within a store” would be located inside a J.C. Penney, one of Macy’s key competitors.  It seems that Stewart and J.C. Penney believed that the prior Macy’s contract did not explicitly exclude “shop in shops”.

On July 13, 2012, Macy’s obtained an injunction preventing J.C. Penney from selling MSLO goods until the conclusion of the case. A hearing to determine whether J.C. Penney could sell the MSLO products was cancelled because J.C. Penney will hold off selling the products until at least April 8, 2013.

This will be the first mediation between the parties. Before the trial, MSLO was willing to go to mediation but J.C. Penney and Macy’s were not.

As reported by CNN on March 8, 2013, a spokeswoman for Martha Stewart Living Omnimedia viewed the mediation as a positive development, stating that:

“In advance of the judge’s order that the parties enter into mediation, Martha Stewart and [Macy's CEO] Terry Lundgren had a productive conversation regarding the ongoing contract dispute between MSLO and Macy’s.”

Mediation may turn out to be a prudent first step for the parties, especially if they can find grounds for an amicable compromise or settlement.  However, if the parties do not reach an agreement, the case will return to Judge Oing’s courtroom for proceedings which are likely to be somewhat less amicable.

-Amelia Wong

Fashion Law News Update

In fashion law news this week…

Justice Oing orders Mediation in Martha Stewart-Macy’s – J.C. Penney Case. Macy’s is suing Martha Stewart for a breach of contract.  The contract in question was one that gave Macy’s exclusive rights to sell Martha Stewart’s products in bedding, bath, and kitchen.  Macy’s sued after learnign that J.C. Penney would sell the products as well. J.C. Penney and Martha Stewart are claiming that they have not violated the Macy’s agreement because that contract allowed Stewart the option to sell  products in her own stores and she claims that her arrangement with J.C. Penney is for “a store within a store”.  After 3 weeks of testimony, Judge Jeffery Oing sent the parties to mediation. For more detail, please see the New York Times article here.

Christian Louboutin’s Motion to Amend Trademark Denied. In September 2012, the 2nd Circuit Court limited Christian Louboutin’s trademark protection to footwear with red soles that contrasted from the upper. In January 2013, Louboutin sought permission to modify the mandate with wording that he felt would reflect his trademark more accurately. The 2nd Circuit denied Louboutin’s motion arguing that Louboutin made no showing of any factor sufficient to amend. For more detail, see the Courthouse News article here.

Costco has asked a federal judge to rule on whether “Tiffany  setting” is a generic term.  In February 2013, Tiffany claimed that Costco had been selling counterfeit Tiffany goods. However, Costco fired back, asking a federal judge to rule on whether the phrase “Tiffany setting” is a generic term.  When usage of a given term, even one including a registered trademark, has become so widespread that it becomes the most common descriptor for a particular product, the law considers it “generic”, and the trademark owner can no longer prevent other parties from using that term to describe similar products.  Famous trademarks which have become generic in the U.S. include Aspirin, Cellophane and Kleenex.  For more detail, please see the Lexis Nexis article here.

$14.1 million worth of counterfeits were seized in Los Angeles in February.  In Los Angeles last month, 1500 counterfeit Hermes bags were seized, with a total value of $14.1 million. Approximately $511 million worth of fake designer bags were seized last year – mostly from China. Shipments were searched but no arrests were made. For more detail, see the WWD article here.

-Amelia Wong

The Uphill Battle: Fashion Designs and Separability

Image

By Erica Gould

On Monday, October 15, in a non-precedential opinion, the Court of Appeals for the Second Circuit affirmed the July 2011 decision of the District Court to dismiss Jovani Fashion Ltd.’s copyright infringement claims against Fiesta Fashions. (Jovani Fashion Ltd. v. Fiesta Fashions, 2d Cir., No. 12-598-cv, 10/15/12) At issue were the design features of a prom dress, which included the sequin and crystal covered bodice, ruched satin at the waist, and layers of tulle in the skirt. The Appeals Court held that these aesthetic features were inseparable from the functional purposes of the dress, and therefore the decorations did not warrant copyright protection.

Under the doctrine of functionality, copyright protection does not extend to the functional elements of a useful article. Useful articles are defined under 17 U.S.C. § 101 of the Copyright Act as “an article having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information.” This limitation has created the largest obstacle for Fashion Designers because Courts have established that all clothing is considered a useful article under the Copyright Act. In arguing that the decoration of the dress at issue warranted copyright protection, Jovani alleged that it was not a useful article because it necessarily portrayed the appearance of the dress. The Court disagreed and held that copyright protection did not extend to these design features under the doctrine of separability. Continue reading

Fashion Law Roundup! (Post Hurricane Sandy)

Dear Readers! While us downtowner’s had a rough week with flooding and power outages, there are many in the surrounding area that are still power, heat or potential homes. During this time of need, please consider donating!  NYCLA Young Lawyer’s Section is one of many organizations collecting goods; please see the suggested donations here.

Thank you for your anticipated generosity! Meanwhile, the show must go on, and so  . . .

In Fashion Law news…

Tory Burch Files Counterclaim Against Chris Burch Suit.  In early October, Chris Burch filed suit alleged Tory Burch obstructed him from seeking other ventures, breach of contract, and tortious interference with the sale process and business relationships.  As a counterclaim, Tory Burch argued Chris Bruch asked for sensitive competitive information and copied the Tory Burch “brand image” which resulted in a breach of fiduciary duty, breach of contract, equitable relief, unfair competition, misappropriation of trade secrets and deceptive trade practices. For further detail please see the WWD Article here from November 6, 2012. (Subscription Required).

Objection to Proposed Swipe Fee Settlement.  A $7.25 million settlement was proposed as an attempt to settle an antitrust lawsuit filed against credit card companies and major banks in 2005. Upon the announcement of this proposed settlement, several major stores and associations, including Target, Macy’s, Gap, Neiman Marcus and Saks, arguing that the settlement fails to address the underlying problems, including soaring swipe fees.  For further detail please see the WWD Article here from November 2, 2012. (Subscription Required).

Coach Victorious in Counterfeit Case.  Courts are taking cyber-squatting seriously these days. In one of the largest rulings regarding internet counterfeiting to date, an Illinois court awarded $257 million in damages and the ability to seize 537 domain names linked to counterfeit sales. For further detail please see the WWD Article here from November 2, 2012. (Subscription Required).

The letter “K” in Dispute with Kardashian Make Up Line.  The Kardashian’s are behind the make up line “Khroma,” launching this winter at Ulta. However, the owners of “Chroma,” a make up studio in Beverly Hills, have suggested that the Kardashian brand creates a likelihood of confusion with its brand.  While Chroma has yet to pursue legal action, they have posted a letter on their website stating that the brand is not endorsed by or supportive of the Kardashian Khroma line. For further detail please see the WWD Article here from November 1, 2012.

 

 

 

RED ALERT / LEGAL UPDATE: YSL Drops Red Sole Case

Red Soles Trademark - YSL Drops Case

Red Soles Trademark “safe”;
YSL Drops Case v. Christian Louboutin

Yves Saint Laurent SA announced today that it will dismiss its lawsuit against Christian Louboutin SA.  The announcement comes after more than a year of legal battles between the two design houses over Louboutin’s Red Sole Mark.  The Court of Appeals remanded the case last month to address YSL’s counterclaims, after narrowing Louboutin’s trademark to red outsoles only when they contrast with the color of the remainder of the shoe.  The Court of Appeals affirmed in part the order of the District Court insofar as it declined to enjoin use of red lacquered outsoles in all situations, but reversed it insofar as it purported to deny trademark protection to contrasting soles.  More on last month’s ruling can be found here.

YSL attorney David Bernstein issued the following statement today, as reported by WWD:

Now that the Court of Appeals has definitively ruled for Yves Saint Laurent and has dismissed Christian Louboutin’s claims, Yves Saint Laurent has decided to end what was left of the litigation and refocus its energies on its business and its creative designs.  By dismissing the case now, Yves Saint Laurent also wishes to ensure that the Court will not make any further rulings that put at risk the ability of fashion designers to trademark color in appropriate cases.

YSL’s decision seems like a wise choice to make; After all, bad facts make for bad law, and arguably nobody in the industry wants a repeat of the District Court’s per se rule that a single color can never serve as a trademark in the fashion industry.

IDPA passes hurdle; IDPA (f.k.a. IDPPPA) Update

FashionLawCenter.com has received information that the Innovative Design Protection Act (IDPA) Bill markup was completed, and the Bill passed, at this morning’s Executive Session (Closed to Public) meeting of the Senate Judiciary Committee.  No further information is available at this time.  However, as background, readers are encouraged to see the remarks Senator Schumer made, as posted at the website for the Council of Fashion Designers of America (CFDA): http://cfda.com/the-latest/innovative-design-protection-act-reintroduced

More information will be provided as it becomes available.  Please check back for updates.  Thank you.

“The Innovative Design Protection Act of 2012″

Att: FLC Readers: Here is the text of the ‘new IDPPA’

“The Innovative Design Protection Act of 2012″

A BILL

To amend title 17, United States Code, to extend protection to fashion design, and for other purposes.

 

  • Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

 

SECTION 1. SHORT TITLE.

 

  • This Act may be cited as the `Innovative Design Protection Act of 2012′.

 

SEC. 2. AMENDMENTS TO TITLE 17, UNITED STATES CODE.

 

  • (a) Designs Protected- Section 1301 of title 17, United States Code, is amended–

 

◦                     (1) in subsection (a), by adding at the end the following:

 

◦                     `(4) FASHION DESIGN- A fashion design is subject to protection under this chapter.’;

 

◦                     (2) in subsection (b)–

 

▪                                       (A) in paragraph (2), by inserting `, or an article of apparel,’ after `plug or mold’; and

 

▪                                       (B) by adding at the end the following:

 

◦                     `(8) A `fashion design’–

 

▪                                       `(A) is the appearance as a whole of an article of apparel, including its ornamentation; and

 

▪                                       `(B) includes original elements of the article of apparel or the original arrangement or placement of original or non-original elements as incorporated in the overall appearance of the article of apparel that–

 

▪                                                         `(i) are the result of a designer’s own creative endeavor; and

 

▪                                                         `(ii) provide a unique, distinguishable, non-trivial and non-utilitarian variation over prior designs for similar types of articles.

 

◦                     `(9) The term `design’ includes fashion design, except to the extent expressly limited to the design of a vessel.

 

◦                     `(10) The term `apparel’ means–

 

▪                                       `(A) an article of men’s, women’s, or children’s clothing, including undergarments, outerwear, gloves, footwear, and headgear;

 

▪                                       `(B) handbags, purses, wallets, tote bags, and belts; and

 

▪                                       `(C) eyeglass frames.

 

◦                     `(11) In the case of a fashion design, the term `substantially identical’ means an article of apparel which is so similar in appearance as to be likely to be mistaken for the protected design, and contains only those differences in construction or design which are merely trivial.’; and

 

◦                     (3) by adding at the end the following:

 

  • `(c) Rule of Construction- In the case of a fashion design under this chapter, those differences or variations which are considered non-trivial for the purposes of establishing that a design is subject to protection under subsection (b)(8) shall be considered non-trivial for the purposes of establishing that a defendant’s design is not substantially identical under subsection (b)(11) and section 1309(e).’.

 

  • (b) Designs Not Subject to Protection- Section 1302(5) of title 17, United States Code, is amended–

 

◦                     (1) by striking `(5)’ and inserting `(5)(A) in the case of a design of a vessel hull,’;

 

◦                     (2) by striking the period and inserting `; or’; and

 

◦                     (3) by adding at the end the following:

 

▪                                       `(B) in the case of a fashion design, embodied in a useful article that was made public by the designer or owner in the United States or a foreign country before the date of enactment of this chapter or more than 3 years before the date upon which protection of the design is asserted under this chapter.’.

 

  • (c) Revisions, Adaptations, and Rearrangements- Section 1303 of title 17, United States Code, is amended by adding at the end the following: `The presence or absence of a particular color or colors or of a pictorial or graphic work imprinted on fabric shall not be considered in determining the protection of a fashion design under section 1301 or 1302 or in determining infringement under section 1309.’.

 

  • (d) Term of Protection- Section 1305(a) of title 17, United States Code, is amended to read as follows:

 

  • `(a) In General- Subject to subsection (b), the protection provided under this chapter–

 

◦                     `(1) for a design of a vessel hull, shall continue for a term of 10 years beginning on the date of the commencement of protection under section 1304; and

 

◦                     `(2) for a fashion design, shall continue for a term of 3 years beginning on the date of the commencement of protection under section 1304.’.

 

  • (e) Notice- Section 1306 of title 17, United States Code, is amended by adding at the end the following:

 

  • `(d) Fashion Design-

 

◦                     `(1) IN GENERAL- In the case of a fashion design, the owner of the design shall provide written notice of the design protection to any person the design owner has reason to believe has violated or will violate this chapter.

 

◦                     `(2) CONTENTS- The written notice required under paragraph (1) shall contain, at a minimum–

 

▪                                       `(A) the date on which protection for the design commenced;

 

▪                                       `(B) a description of the protected design which specifies how the protected design falls within the meaning of section 1301(b)(8);

 

▪                                       `(C) a description of the allegedly infringing design which specifies how the allegedly infringing design infringed upon the protected design as described under section 1309(e); and

 

▪                                       `(D) the date on which the protected design or an image thereof was available such that it could be reasonably inferred from the totality of the surrounding facts and circumstances that the owner of the allegedly infringing design saw or otherwise had knowledge of the protected design.

 

◦                     `(3) COMMENCEMENT OF ACTION- An action for infringement of a fashion design under this chapter shall not commence until the date that is 21 days after the date on which written notice required under this subsection was provided to the defendant.

 

◦                     `(4) LIMITATION ON DAMAGES- A person alleged to be undertaking action leading to infringement under this chapter shall be held liable only for damages and profits accrued after the date on which the action for infringement is commenced against such person under paragraph (3).’.

 

  • (f) Infringement- Section 1309 of title 17, United States Code, is amended–

 

◦                     (1) in subsection (b)–

 

▪                                       (A) by amending the matter preceding paragraph (1) to read as follows:

 

  • `(b) Acts of Sellers, Importers and Distributors- A retailer, seller, importer or distributor of an infringing article who did not make the article shall be deemed to have infringed on a design protected under this chapter only if that person–’; and

 

▪                                       (B) in paragraph (1), by striking `, or an importer to import’;

 

◦                     (2) in subsection (c)–

 

▪                                       (A) by inserting `offer for sale’ after `sell,’; and

 

▪                                       (B) by inserting `either actual or reasonably inferred from the totality of the circumstances,’ after `created without knowledge’;

 

◦                     (3) by redesignating subsections (e), (f), and (g) as subsections (f), (g), and (h), respectively;

 

◦                     (4) by inserting after subsection (d) the following:

 

  • `(e) Acts of Third Parties- Acts that do not constitute acts of infringement under subsections (a) or (b) do not otherwise constitute acts of infringement under this chapter. It shall not be infringement under this section to be engaged in–

 

◦                     `(1) the provision of a telecommunications service, or of an Internet access service or Internet information location tool (as those terms are defined in section 231 the Communications Act of 1934 (47 U.S.C. 231)); or

 

◦                     `(2) the transmission, storage, retrieval, hosting, formatting, or translation (or any combination thereof) of a communication, without selection or alteration of the content of the communication, except that deletion of a particular communication or material made by another person in a manner consistent with section 230(c) of the Communications Act of 1934 (47 U.S.C. 230(c)).’;

 

◦                     (5) by amending subsection (f), as so redesignated, to read as follows:

 

  • `(f) Infringing Article Defined-

 

◦                     `(1) IN GENERAL- As used in this section, an `infringing article’ is any article the design of which has been copied from a design protected under this chapter, or from an image thereof, without the consent of the owner of the protected design. An infringing article is not an illustration or picture of a protected design in an advertisement, book, periodical, newspaper, photograph, broadcast, motion picture, or similar medium.

 

◦                     `(2) VESSEL HULL DESIGN- In the case of a design of a vessel hull, a design shall not be deemed to have been copied from a protected design if it is original and not substantially similar in appearance to a protected design.

 

◦                     `(3) FASHION DESIGN- In the case of a fashion design, a design shall not be deemed to have been copied from a protected design if that design–

 

▪                                       `(A) is not substantially identical in overall visual appearance to and as to the original elements of a protected design; or

 

▪                                       `(B) is the result of independent creation.’; and

 

◦                     (6) by adding at the end the following:

 

  • `(i) Home Sewing Exception-

 

◦                     `(1) IN GENERAL- It is not an infringement of the exclusive rights of a design owner for a person to produce a single copy of a protected design for personal use or for the use of an immediate family member, if that copy is not offered for sale or use in trade during the period of protection.

 

◦                     `(2) RULE OF CONSTRUCTION- Nothing in this subsection shall be construed to permit the publication or distribution of instructions or patterns for the copying of a protected design.’.

 

  • (g) Application for Registration- Section 1310(a) of title 17, United States Code, is amended–

 

◦                     (1) by striking `Protection under this chapter’ and inserting `In the case of a design of a vessel hull, protection under this chapter’; and

 

◦                     (2) by adding `Registration shall not apply to fashion designs.’ after `first made public.’.

 

  • (h) Remedy for Infringement- Section 1321 of title 17, United States Code, is amended–

 

◦                     (1) by striking subsection (a) and inserting the following:

 

  • `(a) In General-

 

◦                     `(1) VESSEL HULL- In the case of a vessel hull, the owner of a design is entitled, after issuance of a certificate of registration of the design under this chapter, to institute an action for any infringement of the design.

 

◦                     `(2) FASHION DESIGN- In the case of a fashion design, the owner of a design is entitled to institute an action for any infringement of the design after–

 

▪                                       `(A) the design is made public under the terms of section 1310(b) of this chapter; and

 

▪                                       `(B) the 21-day period described in section 1306(d).’; and

 

◦                     (2) by adding at the end the following:

 

  • `(e) Pleading Requirement for Fashion Designs-

 

◦                     `(1) IN GENERAL- In the case of a fashion design, a claimant in an action for infringement shall plead with particularity facts establishing that–

 

▪                                       `(A) the design of the claimant is a fashion design within the meaning of section 1301(b)(8) of this title and thus entitled to protection under this chapter;

 

▪                                       `(B) the design of the defendant infringes upon the protected design as described under section 1309(e); and

 

▪                                       `(C) the protected design or an image thereof was available in such location or locations, in such a manner, and for such duration that it can be reasonably inferred from the totality of the surrounding facts and circumstances that the defendant saw or otherwise had knowledge of the protected design.

 

◦                     `(2) CONSIDERATIONS- In considering whether a claim for infringement has been adequately pleaded, the court shall consider the totality of the circumstances.’.

 

  • (i) Penalty for False Representation- Section 1327 of title 17, United States Code, is amended–

 

◦                     (1) by inserting `or for purposes of obtaining recovery based on a claim of infringement under this chapter’ after `registration of a design under this chapter’;

 

◦                     (2) by striking `$500′ and inserting `5,000′; and

 

◦                     (3) by striking `$1,000′ and inserting `$10,000′.

 

  • (j) Nonapplicability of Enforcement by Treasury and Postal Service- Section 1328 of title 17, United States Code, is amended–

 

◦                     (1) in subsection (a), in the first sentence, by striking `The Secretary’ and inserting `In the case of designs of vessel hulls protected under this chapter, the Secretary’;

 

◦                     (2) in subsection (b), in the first sentence, by striking `Articles’ and inserting `In the case of designs of vessel hulls protected under this chapter, articles’; and

 

◦                     (3) by adding at the end the following:

 

  • `(c) Nonapplicability- This section shall not apply to fashion designs protected under this chapter.’.

 

  • (k) Common Law and Other Rights Unaffected- Section 1330 of title 17, United States Code, is amended–

 

◦                     (1) in paragraph (1), by striking `or’ after the semicolon;

 

◦                     (2) in paragraph (2), by striking the period and inserting `; or’; and

 

◦                     (3) by adding at the end the following:

 

◦                     `(3) any rights that may exist under provisions of this title other than this chapter.’.

 

SEC. 3. EFFECTIVE DATE.

 

  • This Act and the amendments made by this Act shall take effect on the date of enactment of this Act.

 

 

To amend title 17, United States Code, to extend protection to fashion design, and for other purposes.

 

  • Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

 

SECTION 1. SHORT TITLE.

 

  • This Act may be cited as the `Innovative Design Protection and Piracy Prevention Act’.

 

SEC. 2. AMENDMENTS TO TITLE 17, UNITED STATES CODE.

 

  • (a) Designs Protected- Section 1301 of title 17, United States Code, is amended–

 

◦                     (1) in subsection (a), by adding at the end the following:

 

◦                     `(4) FASHION DESIGN- A fashion design is subject to protection under this chapter.’;

 

◦                     (2) in subsection (b)–

 

▪                                       (A) in paragraph (2), by inserting `, or an article of apparel,’ after `plug or mold’; and

 

▪                                       (B) by adding at the end the following:

 

◦                     `(7) A `fashion design’–

 

▪                                       `(A) is the appearance as a whole of an article of apparel, including its ornamentation; and

 

▪                                       `(B) includes original elements of the article of apparel or the original arrangement or placement of original or non-original elements as incorporated in the overall appearance of the article of apparel that–

 

▪                                                         `(i) are the result of a designer’s own creative endeavor; and

 

▪                                                         `(ii) provide a unique, distinguishable, non-trivial and non-utilitarian variation over prior designs for similar types of articles.

 

◦                     `(8) The term `design’ includes fashion design, except to the extent expressly limited to the design of a vessel.

 

◦                     `(9) The term `apparel’ means–

 

▪                                       `(A) an article of men’s, women’s, or children’s clothing, including undergarments, outerwear, gloves, footwear, and headgear;

 

▪                                       `(B) handbags, purses, wallets, tote bags, and belts; and

 

▪                                       `(C) eyeglass frames.

 

◦                     `(10) In the case of a fashion design, the term `substantially identical’ means an article of apparel which is so similar in appearance as to be likely to be mistaken for the protected design, and contains only those differences in construction or design which are merely trivial.’; and

 

◦                     (3) by adding at the end the following:

 

  • `(c) Rule of Construction- In the case of a fashion design under this chapter, those differences or variations which are considered non-trivial for the purposes of establishing that a design is subject to protection under subsection (b)(7) shall be considered non-trivial for the purposes of establishing that a defendant’s design is not substantially identical under subsection (b)(10) and section 1309(e).’.

 

  • (b) Designs Not Subject to Protection- Section 1302(5) of title 17, United States Code, is amended–

 

◦                     (1) by striking `(5)’ and inserting `(5)(A) in the case of a design of a vessel hull,’;

 

◦                     (2) by striking the period and inserting `; or’; and

 

◦                     (3) by adding at the end the following:

 

◦                     `(B) in the case of a fashion design, embodied in a useful article that was made public by the designer or owner in the United States or a foreign country before the date of enactment of this chapter or more than 3 years before the date upon which protection of the design is asserted under this chapter.’.

 

  • (c) Revisions, Adaptations, and Rearrangements- Section 1303 of title 17, United States Code, is amended by adding at the end the following: `The presence or absence of a particular color or colors or of a pictorial or graphic work imprinted on fabric shall not be considered in determining the protection of a fashion design under section 1301 or 1302 or in determining infringement under section 1309.’.

 

  • (d) Term of Protection- Section 1305(a) of title 17, United States Code, is amended to read as follows:

 

  • `(a) In General- Subject to subsection (b), the protection provided under this chapter–

 

◦                     `(1) for a design of a vessel hull, shall continue for a term of 10 years beginning on the date of the commencement of protection under section 1304; and

 

◦                     `(2) for a fashion design, shall continue for a term of 3 years beginning on the date of the commencement of protection under section 1304.’.

 

  • (e) Infringement- Section 1309 of title 17, United States Code, is amended–

 

(1) in subsection (c)–

 

(A) by inserting `offer for sale, advertise,’ after `sell,’; and

 

(B) by inserting `either actual or reasonably inferred from the totality of the circumstances,’ after `created without knowledge’;

 

◦                     (2) by amending subsection (e) to read as follows:

 

  • `(e) Infringing Article Defined-

 

◦                     `(1) IN GENERAL- As used in this section, an `infringing article’ is any article the design of which has been copied from a design protected under this chapter, or from an image thereof, without the consent of the owner of the protected design. An infringing article is not an illustration or picture of a protected design in an advertisement, book, periodical, newspaper, photograph, broadcast, motion picture, or similar medium.

 

◦                     `(2) VESSEL HULL DESIGN- In the case of a design of a vessel hull, a design shall not be deemed to have been copied from a protected design if it is original and not substantially similar in appearance to a protected design.

 

◦                     `(3) FASHION DESIGN- In the case of a fashion design, a design shall not be deemed to have been copied from a protected design if that design–

 

`(A) is not substantially identical in overall visual appearance to and as to the original elements of a protected design; or

 

`(B) is the result of independent creation.’; and

 

◦                     (3) by adding at the end the following:

 

  • `(h) Home Sewing Exception-

 

`(1) IN GENERAL- It is not an infringement of the exclusive rights of a design owner for a person to produce a single copy of a protected design for personal use or for the use of an immediate family member, if that copy is not offered for sale or use in trade during the period of protection.

 

◦                     `(2) RULE OF CONSTRUCTION- Nothing in this subsection shall be construed to permit the publication or distribution of instructions or patterns for the copying of a protected design.’.

 

  • (f) Application for Registration- Section 1310(a) of title 17, United States Code, is amended–

 

◦                     (1) by striking `Protection under this chapter’ and inserting `In the case of a design of a vessel hull, protection under this chapter’; and

 

◦                     (2) by adding `Registration shall not apply to fashion designs.’ after `first made public.’.

 

  • (g) Remedy for Infringement- Section 1321 of title 17, United States Code, is amended–

 

◦                     (1) by striking subsection (a) and inserting the following:

 

  • `(a) In General-

 

◦                     `(1) VESSEL HULL- In the case of a vessel hull, the owner of a design is entitled, after issuance of a certificate of registration of the design under this chapter, to institute an action for any infringement of the design.

 

◦                     `(2) FASHION DESIGN- In the case of a fashion design, the owner of a design is entitled to institute an action for any infringement of the design after the design is made public under the terms of section 1310(b) of this chapter.’; and

 

◦                     (2) by adding at the end the following:

 

  • `(e) Pleading Requirement for Fashion Designs-

 

◦                     `(1) IN GENERAL- In the case of a fashion design, a claimant in an action for infringement shall plead with particularity facts establishing that–

 

`(A) the design of the claimant is a fashion design within the meaning of section 1301(a)(7) of this title and thus entitled to protection under this chapter;

 

`(B) the design of the defendant infringes upon the protected design as described under section 1309(e); and

 

▪                                       `(C) the protected design or an image thereof was available in such location or locations, in such a manner, and for such duration that it can be reasonably inferred from the totality of the surrounding facts and circumstances that the defendant saw or otherwise had knowledge of the protected design.

 

◦                     `(2) CONSIDERATIONS- In considering whether a claim for infringement has been adequately pleaded, the court shall consider the totality of the circumstances.’.

 

  • (h) Penalty for False Representation- Section 1327 of title 17, United States Code, is amended–

 

(1) by inserting `or for purposes of obtaining recovery based on a claim of infringement under this chapter’ after `registration of a design under this chapter’;

 

◦                     (2) by striking `$500′ and inserting `$5,000′; and

 

◦                     (3) by striking `$1,000′ and inserting `$10,000′.

 

  • (i) Nonapplicability of Enforcement by Treasury and Postal Service- Section 1328 of title 17, United States Code, is amended–

 

◦                     (1) in subsection (a), in the first sentence, by striking `The Secretary’ and inserting `In the case of designs of vessel hulls protected under this chapter, the Secretary’;

 

◦                     (2) in subsection (b), in the first sentence, by striking `Articles’ and inserting `In the case of designs of vessel hulls protected under this chapter, articles’; and

 

(3) by adding at the end the following:

 

  • `(c) Nonapplicability- This section shall not apply to fashion designs protected under this chapter.’.

 

  • (j) Common Law and Other Rights Unaffected- Section 1330 of title 17, United States Code, is amended–

 

◦                     (1) in paragraph (1), by striking `or’ after the semicolon;

 

◦                     (2) in paragraph (2), by striking the period and inserting `; or’; and

 

◦                     (3) by adding at the end the following:

 

◦                     `(3) any rights that may exist under provisions of this title other than this chapter.’.

 

SEC. 3. EFFECTIVE DATE.

 

  • This Act and the amendments made by this Act shall take effect on the date of enactment of this Act.

 

 

Fashion Law Editorial: Let’s Pass the New Design Piracy Bill

by Prof. Guillermo C. Jimenez (Fashion Institute of Technology) – Editor in Chief, Fashion Law Center

On September 10, 2012 Senator Charles Schumer of New York quietly re-introduced legislation to protect fashion designs with copyright law in America.

I have gone on the record many times calling on the US Congress to pass this sorely-needed legislation, which would finally put American fashion designers on a par with European designers.  In supporting  this bill, I am joining ranks with the Council of Fashion Designers of America (CFDA), the American Association of Footwear and Apparel (AAFA), and such noted Fashion Law scholars as Susan Scafidi of Fordham Law School and Jeannie Suk of Harvard Law School.

Though I admire Senator Schumer’s persistence, I must be frank in expressing my disappointment with the way this bill has been introduced and its current prospects for passage, which are regrettably quite slim.

This muted and untimely submission is no way to get such an important bill passed.  With a Presidential election looming and a ridiculously-crowded Congressional calendar blocking the way, it is hard to see how this bill will even get to the floor, much less passed.   I fear that the good Senator is merely reaffirming his loyal support for the New York fashion industry, laudable enough, but this effort – at least so far – is just too half-hearted.

As Steven Kolb of the CFDA has pointed out realistically, passing a copyright bill through Congress is more of a marathon than a sprint.  However, even marathons have a clear finish line and it is difficult to see one here.

I am therefore urging Senator Schumer and his allies in the Congress, the CFDA, and the AAFA, to raise the intensity of their campaign to another level.  Most importantly, I believe it is time to involve the Fashion Design and Merchandising schools around the country, and to reach out to all the design students and young designers struggling to make it in this challenging global economy.  To get this bill past the finish line, we need grassroots support from the entire American creative community.  Great fashion designers like Diane Von Furstenberg and Lazaro Hernandez are sometimes perceived as members of a rarefied elite  – and it is therefore not always easy to get broad support, especially in the face of strong opposition from sectors of the retail industry (especially in California).  We need to point out that passage of this bill will mean more money for the design community – and just as importantly, more jobs for young designers.

Moreover, proponents of this bill need to challenge and confront the misguided intellectual framework of the opposition.  In particular, it is time to challenge the widely-circulated but specious arguments put forward by a few influential opponents, such as those of law professors Kal Raustiala (UCLA) and Christoper Sprigman (University of Virginia).

In a noted law review article which the authors have reprised in a number of formats, from NPR interviews to NY Times articles, Raustiala and Sprigman have marketed a contrarian theory – that weak intellectual property protection is actually good for fashion.  This illogical and unsubstantiated argument has been naively eaten up by the press and taken for unassailable truth by members of the legal and retail communities.  But it is just plain wrong.

Raustiala and Sprigman’s argument (which they call the Piracy Paradox) is principally an economic  one:  the fashion industry is more vibrant without strong legal protection.

This argument is naïve both economically and practically.   Where is the evidence?

The first challenge I make to Raustiala/Sprigman is this one: how do they explain Europe? The EU has extremely strong fashion design protection, much stronger than anything we are proposing in the US.  Yet, has fashion disappeared from Europe?  Not last time I checked.  Have European fashion companies been deluged with frivolous litigation? Quite the contrary, as Jeannie Suk pointed out cogently, European fast-fashion “copycats” like H&M and Zara are rarely sued, while American copycat Forever 21 is permanently in court, having been sued dozens and dozens of times. Why is that?  It is because the true state of affairs is exactly the opposite of what is described in the Piracy Paradox.  Actually, it is America’s extremely lax protection of fashion designs that has encouraged copycats to perpetually skirt the limits of legal imitation – and very often, they go too far, and end up in court.

Why is Zara (a Spanish company) able to avoid the legal skirmishes that plague Forever 21 (an American one)?  The answer is simple and powerful: jobs for young designers.  Zara employs designers to make sure that when they imitate a trending design they also vary it enough so that they escape running afoul of another designer’s intellectual property.  The result is that Zara’s apparel looks trendy and reminds one of leading designers, but unlike Forever 21, they don’t produce products that are virtually indistinguishable from those of the fashion leaders.  When Forever 21 copies a DVF dress, it can be almost impossible for the casual viewer to detect a difference.   Forever 21’s “designers” are not really doing much design, so Forever 21 doesn’t have to hire many young designers.  That means fewer jobs for young designers in our depressed job market for young people.

Furthermore, Raustiala/Sprigman never square their argument with the fact that in America we actually have very strong legal protection for some aspects of fashion – trademarks , fabric prints and jewelry, for example.  So where is the evidence that the fabric print and jewelry sectors are being harmed by their strong protection?  There is none.

Another argument frequently bruited by the nay-sayers is that Design Piracy legislation would lead to massive price increases (this argument is vigorously advanced by Fashion Law blogger Staci Riordan of the Fox Rothschild law firm).  Riordan mocked the previous bill as the “Destruction of Affordable Fashion Bill.”

But again, where is the evidence?  Zara has lower price points in Europe than in the USA.  H&M is one of the lowest-cost retailers in America, but they are selling designs that not only respect US law, but also stringent European law.   As anyone knows who has ever shopped in an H&M, the price points are very low.

Presumably, Raustiala/Sprigman and Riordan are expecting a deluge of frivolous litigation if the bill is passed.  However, the bill (at least in its most recent incarnations) has been so narrowly-crafted that it is hard to see why that would happen.  First of all, it would only protect truly original designs, which as every fashionista knows, are  rare.  The vast preponderance of fashion products would never be affected.   The American bill only proposes to protect designs for three short years, while European protection can last up to 25 years.

Finally, the U.S. should adopt Design Piracy legislation because fashion is a creative industry and fashion designs deserve the same respect from the law as other creative works, such as books, films and sound recordings.  Our copyright law is absurdly inconsistent if it does not protect fashion designs. Our legislators have seen fit to extend copyright protection to architectural works, software programs, silicon chip designs, and even….vessel hulls. I would submit that the striking creations of Karl Lagerfeld, Marc Jacobs and Jason Wu can compete with the creativity of even the loveliest of vessel hulls, or the most elegant of silicon chips.

I will concede that fashion titans like LVMH might be tempted to use the new law to “beat up” on small designers (no disrespect to Vuitton and company, but they are quite well-known in the industry for their aggressive protection of legal rights). But then, LVMH already does that anyway, even with the existing state of the law (see the very funny Chewy Vuitton case or LVMH’s silly cease and desist letter to a Fashion Law seminar at the University of Pennsylvania). With the passage of design piracy legislation, however, the plucky young designer would have something to fight back with. It can indeed be expensive and difficult to enforce legal rights, but that is still better than having no legal rights at all, which is the current sad state of affairs for creative American fashion designers.

Professor Jimenez’s views are his alone and do not in any way officially represent those of the Fashion Institute of Technology or any other group.

“New” IDPPPA Back In Action:

Just when we thought it was (seemingly) gone for good, the IDPPPA is back!

Senator Charles Schumer reintroduced a modified version of the Innovative Design Protection and Piracy Prevention Act (a.k.a. the IDPPPA) in the Senate on September 10th, 2012, according to that date’s issue of WWD The WWD report, which has not been updated online since it was first published, offered no news as to what modifications had been made in the bill.  And, in a departure from normal procedure, Senator Schumer’s own website made no mention of the new bill – not even so much as a press release – as of noon on Sept 11th, 2012.  (Indeed, the number or the name of the bill were not yet known to WWD; FLC has learned that the number designating the bill is S.3523 (112th Congress, 2011-2012)  However, the text of the bill was not available as of 4:00 p.m. on Sept. 11th, 2012.

What *is* known is that the bill, S. 3523, is currently titled: “A bill to amend title 17, United States Code, to extend protection to fashion design, and for other purposes.”

The current bill, S. 3523, has nine (9) co-sponsors, i.e.: Sen Blumenthal, Richard [CT]; Sen Boxer, Barbara [CA],; Sen Cardin, Benjamin L. [MD]; Sen Gillibrand, Kirsten E. [NY];  Sen Graham, Lindsey [SC];  Sen Hatch, Orrin G. [UT];  Sen Kohl, Herb [WI];  Sen Snowe, Olympia J. [ME];  Sen Whitehouse, Sheldon [RI]

Earlier versions of the bill, which would have extended to fashion designs, for the first time, a form copyright protection, have had some big name backers, but had at times also met with quite a bit of resistance.  However, the American Apparel and Footwear Association (AAFA) and the Council for Fashion Designers of America (CFDA) had both eventually thrown their support behind the previous bill.  Regarding a previous version of the bill, Fordham Law Professor Susan Scafidi, Director of the Fashion Law Institute, had said the IDPPPA “is a significant step forward for both U.S. intellectual property law and for the fashion industry.”

Of the bill’s earlier version, Intellectual property attorney Layne Randolph had explained in her blog post “IDPPPA” that proponents  focus on the deterrent factor behind the bill and stress that “the rampant copying of fashion designs hurts the industry.  The IDPPPA proponents also assert that copyright protection may strengthen the American fashion brands.”

On the other side, opponents pointed out that the IDPPPA will put numerous of small businesses out of business and may actually deter innovation in the fashion world.  Randolph explains that opponents cite a potential chilling effect of such a law on the US industry.  It has been said that “a low IP environment is beneficial to the US fashion industry, and that copyright protection would curb creativity and innovation in fashion design.”[attribution, citation needed]  Further, some opponents assert “that copying in the fashion industry does not stifle innovation, but rather that copying is beneficial to the fashion industry.”[attribution, citation needed]  This concept, popularized in a paper by Professors Kal Raustiala & Christopher Sprigman, is referred to as ‘The Piracy Paradox.’”  Fashion Lawyer Staci Riordan of Fox Rothschild LLP, who has nicknamed the previous bill as the “Destruction of Affordable Fashion Bill,” had also vehemently spoken out against it.  She warned that the previous bill would, “put numerous small businesses… severely disrupt the fashion manufacturing process… cause lenders to stop lending… increase expediently the work load of the federal judiciary… narrow your choice of clothes… and increase the cost of the few items you can buy by at least 30%… When unemployment rises, your business collapses and the economy gets more depressed than it already is, you’ll know where to send your thank you notes.”

The debate over design protection, and its feasibility, is seemingly never ending.  Be sure to check back here for updates on what modifications Senator Schumer made to the new version of the IDPPPA and whether or not those modifications ultimately change opinions in the debate.

 

WELCOME TO NEW YORK FASHION WEEK!

DESIGNER ALERT: Get and Keep Rights to Use Your Own Name!

With New York Fashion Week just beginning, FLC would like to remind all of our designer friends of the importance of trademarks.  Many designers name their label after themselves; this should come as no surprise.  It is very important that the designer has a trademark on the label name, and that the designer maintains ownership and/or control of that trademark, to prevent the designer from losing his/her name.

Sigerson Morrison

If you haven’t heard of Sigerson Morrison’s trademark dilemma, take a look at this New York Times article.  In the meantime, here is the gist of what they are facing.  Designers Kari Sigerson and Miranda Morrison graduated from FIT with the goal of designing shoes for real women.  Even though Sigerson Morrison was extremely successful, the design duo wanted to expand their brand to other accessories.  The pair turned to Marc Fisher who had the money to back them.  Fisher paid $2.6 million for the company and the intellectual property rights (apparently including the Sigerson Morrison trademark).  The relationship between Fisher and the design duo soon fell apart; Sigerson and Morrison were then let go from their positions as co-heads of design and sued for $2 million.  Sigerson and Morrison found themselves completely cut off from the empire they had started and without the right to use their own names in future designs.  Both women are still designing, but are forced to use a different name on their shoes.

Sigerson and Morrison are still in a legal battle with Fisher, but judging by their statements in the Times, the chance of them regaining the right to their name is not a likely outcome.  The Sigerson Morrison brand lives on, but without its namesake designers behind it.

Sigerson and Morrison are not the only designers who have found themselves in this difficult situation.  Check out this list of designers who have lost the right to use their name, some of them might surprise you.

Decision Reached In Louboutin-YSL “Red Sole” Case

Hot off the presses:
“We hold that the District Court’s conclusion that a single color can never serve as a trademark in the fashion industry was based on an incorrect understanding of the doctrine of aesthetic functionality and was therefore error.  We further hold that the District Court’s holding, that Louboutin’s trademark has developed “secondary meaning” in the public eye, was firmly rooted in the evidence of record and was not clearly erroneous, and that the Red Sole Mark is therefore a valid and enforceable trademark.  We limit the Red Sole Mark pursuant to section 37 of the Lanham Act, 15 U.S.C. § 1119, to a red lacquered outsole that contrasts with the color of the adjoining ‘upper.’”

“Accordingly we (1) affirm in part the order of the District Court, insofar as it declined to enjoin the use of a red lacquered outsole as applied to a monochrome red shoe; (2) reverse in part the order of the District Court insofar as it purported to deny trademark protection to Louboutin’s use of contrasting red lacquered outsoles; and (3) enter judgment accordingly.”

“We remand for further proceedings with regard to YSL’s counterclaims.  In the interest of judicial economy, either party may restore jurisdiction to this Court to consider whatever arguments remain or arise relating to this case by sending a letter to the Clerk of this Court within 14 days of the District Court’s final judgment.  Any such proceedings will be assigned to this panel.”

“The Clerk of the Court is hereby directed to notify the Director of the United States Patent and Trade Office of this Judgment, which concerns U.S. Trademark Registration No. 3,361,597 held by Christian Louboutin and dated January 1, 2008.”

A fashionable decision just in time for New York Fashion Week.  Check back here for more on the decision this week.

UPDATE: “Hangover” persists! . . .Louis Vuitton Suit Dismissed on Motion of Warner Brothers

Image via Gawker

[EDITOR'S NOTE: Developing story - UPDATE: Today FLC read a report that previously-dismissed Plaintiff  Louis Vuitton Mallatier S.A. has filed an APPEAL of its suit's dismissal . . . the report comes from the highly esteemed "The Cut" / NEW YORK magazine. Please click on the preceding, and keep watching www.FashionLawCenter.com for our own updates on this, this . . .'hangover that won't go away'!]   [Original story follows]

U.S. District Court Judge Andrew L. Carter recently granted defendant’s Motion to Dismiss in the highly-publicized Louis Vuitton Mallatier S.A. v. Warner Brothers Entertainment Inc. case (a.k.a one of the many lawsuits stemming from The Hangover: Part II) – so Warner Brothers has come out on top!

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TODAY is FIT Expo: Fashion Manufacturing in NYC

FIT is hosting a FREE fashion manufacturer’s expo with 65 companies ready to field your questions and take your orders!

This free expo will put you in contact with New York-based companies specializing in accessories, sportswear, knits and offering services such as pleating, sample and pattern making and grading. Over 60 companies will be in attendance to take orders and answer questions at this one-day expo that will show you just how important these local resources are to making the New York fashion industry thrive.

Specializations include:    Accessories, Sportswear, Tailored, Knits, Pattern and Sample Making, Embroidery,  Printing, and Trims.

When: Tuesday, July 17 10:00am to 6:00pm (TODAY!)
Where: FIT’s John E. Reeves Great Hall
How: Register here: http://form.jotform.us/form/21864970082155
From: Enterprise Center @ Fashion Institute of Technology, Room D130, 227 W. 27th St, New York, NY 10001
Phone: 212-217-7250
Email:  enterprise@fitnyc.edu

U.S. Lawmakers Outrage Over Olympics Uniforms – More Political Diversion than Call to Action

This past week Ralph Lauren released the designs for the United States Olympic Athletes to wear at the opening ceremonies in London. Many voiced opinions of them . . . Unfortunately, most of the chatter from Capitol Hill was about the fact that the garments were made in China and not about the sleek cut of the jackets or the stylish addition of a navy beret.  One Congressional leader went so far as to call for the uniforms to be burned in a bonfire!

However, there was either quiet, or no, mention on Capitol Hill of the fact that Congress does not contribute to the US Olympic team uniform costs, nor even contribute to the US Olympic Team, which is privately financed – in part by royalties Ralph Lauren pays on selling the public ‘civilian’ versions of the uniforms.  (In contrast to the U.S. Team, many other Olympic Teams enjoy the financial support of their respective governments).

To quell the chattering and grumbling, by the end of the week Ralph Lauren announced that the 2014 uniforms would be made in the USA.  (Ralph Lauren has the contract to make the US Olympic uniforms through 2018.)