Archive for the ‘Fashion Licenses’ Category

Fashion Licensing Corner: Legal Protection for Fashion Designs

Tuesday, June 15th, 2010

Fashion Pirate

This is truly the age of Fast Fashion.

Within days of an innovative new design appearing on a fashion runway in a global metropolis, that design is tweaked, manufactured in China, and loaded on the racks of Forever 21, H&M, Uniqlo, and other fast fashion retailers for under $50 in suburban malls around the world.

Can designers do anything to stop knockoffs? Under existing US intellectual property law, not much, but that could change.

Below is a thumbnail guide to US and European law protecting fashion designs.

The two most relevant forms of intellectual property protection for fashion designers are copyright and trademark law.

Current US Copyright Law

US copyright law protects “original expressions,” such as text or graphics, but not functional elements. Fashion accessories such as belt buckles or jewelry are considered decorative non-functional items that are eligible for copyright protection, while the shape and silhouette of apparel are considered to be “utilitarian” and therefore not eligible for copyright protection. Accordingly, copyright normally protects only the completely decorative elements of apparel, such as graphic images or patterns (including stitching) on fabric. Even then it is often easy to design around any potential copyright infringement claim. The standard of copyright infringement is substantial similarity between the original and the knockoff, specifically whether the knockoff has the same aesthetic appeal as the original to an ordinary observer. But if the knockoff has a distinguishable variation from the original, and is not merely a slavish copy, it will not infringe the original.

Proposed Amendment to US Copyright Law

The above state of affairs would change under the proposed Design Piracy Prohibition Act (HR Bill No. 2196), which would grant copyright protection for a term of three years to most varieties of apparel, handbag, and eyeglass frame designs (defined to include “the appearance as a whole” of an article of apparel) registered with the Register of Copyrights, and impose liability on designs that copy them, except if the accused design: 1) is original and not closely and substantially similar in overall visual appearance to a protected design; 2) merely reflects a trend; or 3) is the result of independent creation. The penalty for copying would be the greater of $250,000 in the aggregate or $5 per copy, and secondary liability could be imposed on parties that benefit from the infringements, including sellers and distributors.

The arguments for and against the bill echo the usual open source versus closed source IP arguments. Supporters of the bill, including many high-end fashion designers, argue that the ability of designers to profit from their designs is the greatest driver of fashion innovation, while opponents argue that the free exchange of ideas has always been the greatest driver of fashion innovation, and in any case, it is unlikely that a purchaser of a $100 Diane von Furstenberg knockoff would pay 10 times that amount for an original if the bill were enacted.

The debate may be moot. Similar bills have been introduced in the previous two sessions of Congress without passage, and no companion bill to HR 2196 has been introduced in the Senate during this session of Congress, so it has slight prospect for enactment in the near future. Update, 8/11/10: Senator Charles Schumer has introduced a fashion design copyright bill in the Senate (Senate Bill No. 3728), that he hopes to have enacted during the current session of Congress.

European Copyright Law

The European Community has already enacted an even higher level of IP protection for designers under the Community Design System than that proposed by the Design Piracy Prohibition Act. The Community Design System gives exclusive rights to the creator of a design (including but not limited to fashion designs) for three years in the case of unregistered designs and five years in the case of registered designs (renewable every five years to a maximum of 25 years). Some individual EC countries such as France have even more stringent laws. However, while they may disagree about the reasons, many analysts agree that the Community Design System has done little to deter knockoffs. In fact, three of the world’s biggest “fast fashion” retailers — H&M, Topshop, and Zara — are all headquartered in Europe.

US Trademark Law

While the purpose of copyright law is to protect original creations, the purpose of trademark law is to prevent consumer confusion as to the source or quality of goods and services. Thus, trademark law primarily protects the integrity of a designer’s name. Trademark law can also protect a design element of apparel, but not a single season design innovation, rather a design element that has become associated with a particular designer over time such that it is the designer’s “trademark.” Think for example of the Burberry beige, black, and red tartan pattern, or the Louis Vuitton gold “LV” initials and geometric shapes against a dark brown background. But in the case of Wal-Mart Stores v. Samarra Bros. Inc., the US Supreme Court ruled that there is a higher evidentiary hurdle to establish trademark protection for an apparel design element compared to a word or a packaging design trademarks. Conversely, it is comparatively easy to secure trademark protection for the words or logo on a fashion label. Which explains why many famous fashion designers often use their “label” as a prominent design feature of their fashions. They are fully aware that copyright law is unlikely to prevent knockoffs of the cut or silhouette of their designs, but that trademark law is likely to punish pirates of their names. The standard of trademark infringement is whether the challenged trademark (label, packaging, design element) is likely to confuse consumers that the product or service was produced by or originated with the owner of the accusing trademark.

Takeaway: unless copyright law changes, it will be difficult for fashion designers to knock out knockoffs, but trademark law gives them plenty of ammunition to sink label pirates.

Fashion Licensing Corner: Japanese Designers Need to Protect, Monetize Their Ideas

Sunday, January 31st, 2010

日本語訳:日本の時代を先取りする創作性の高いファッションデサインは世界の注目を集めても、海外でコピーされ、販売されるせいで、日本のファッション業界は多くの利益とビジネスチャンスを失っているということです。ビジネス戦略には知的財産の保護と海外で展開を含めるべきです。

In the United States, we tend to think of Japan as a high-tech, exporting powerhouse.

That is certainly true in the automotive and consumer electronics industries, where company size and manufacturing prowess are indispensable.

It is not as true for small and medium sized companies, where ideas and creativity, not industrial manufacturing, are the predominant ingredients in the value added mix.

Exhibit A: an interesting New York Times article, which notes that Japan is home to some of the most creative, cutting edge fashion brands in the world, but those small companies do not have the know-how or infrastructure to export.  Rather, Western retail chains “buy up bagfuls of the latest hits. The designs are then whisked overseas to be reworked, resized, stitched together and sold under Western labels.”

Japan earned a mere $416 million from clothing and apparel related exports in 2008, compared to $3.68 billion for US apparel companies, and a staggering $113 billion for Chinese clothing exports.

According to experts quoted in the Times article, in order to turn the situation around, “Japan’s fashion industry needs…more concrete help in marketing and setting up shop overseas….The government could also play a larger role helping Japanese labels protect their intellectual property rights, they say.”

In my opinion, the most effective means for Japanese fashion labels to protect their IP would be to negotiate license and/or distribution agreements with partners in foreign countries.  Copyright law is usually not an effective means to protect against copying fashion designs, and trademark law would not help unless the labels were already selling in the foreign markets.

Exhibit B: a failure to protect intellectual property rights has had a severe economic impact on another field where Japan is a global creative leader—animation or “anime” (アニメ in Japanese).  Anime enjoys growing worldwide popularity for its complex, creative art and storytelling, but a combination of absurdly high prices for legitimate DVDs and a failure to challenge massive Internet piracy has had a devastating economic impact not only on foreign distributors of authorized anime, but on the Japanese anime studios as well.

Japan’s automotive and consumer electronics industries have thrived in part because they learned how to export and how to protect their intellectual property in foreign markets. (Japanese companies are the largest foreign filers of US patent applications.)  Small and medium Japanese IP companies can follow their example and prosper.

Coming soon: an article explaining how small and medium foreign businesses can start doing business in the United States.