I once insisted to my colleagues that it really is nothing to write a blog post: you can do it while waiting in the checkout line at Whole Foods.* Although that has proven overly ambitious, I was indeed standing in that very line the other day when a customer laboriously explained to a cashier about how another market had developed biodegradable non-paper bags, how her cooperative apartment building simply disposed of the Whole Foods bags without recycling, and in general how unrealistic it was for Whole Foods to expect anything good to come out of its use of paper shopping bags. The cashier, a very young woman, clearly had not been expecting, on punching in that morning, to debate sustainability with a stranger; she took the woman’s payment and gently encouraged her to move on.
Why did the loquacious customer decide that a cashier was the right person to address shopping bag policy at a company with 91,000 employees? I reflect on that because I am sometimes approached by people in the fashion business in the hope that I will introduce them to others who can help them in their careers. Young designers want me to introduce them to retailers. Entrepreneurs at start-ups want help in meeting financiers, and financiers want me to introduce them to the owners of thriving businesses and distressed businesses. Sometimes, I can accommodate them, but because lawyers tend to rub elbows with other lawyers and with executives who need (I did not say want) to speak with lawyers, doing so is not commonplace for use. My contacts are therefore what you would expect from a fashion lawyer: people who have devoted at least part of their work lives to dealing with contracts, governmental filings and lawsuits.
There are many different areas of expertise and specialties in the fashion and luxury goods businesses. And there are also many layers of responsibility. We all know that, but when you want something enough, it is easy to forget—and to hope that whoever you can easily get hold of is the right person to meet. Before approaching an organization, it is always a good idea to learn as much about it as possible, first to know about what it wishes to reveal about itself, second to know what it expects next to achieve, and third, and perhaps most important, to know who is the gatekeeper for the topic you are hoping to bring to the fore. Your lawyer can sometimes indeed be a resource. We have access to databases and we do know useful people. So we may have the right contacts for you—or we may not; it all depends on what you want and on those old but eternally important variables: good timing and good luck.
We have come a long way in gaining quick access to information from the days when, at the insurance company where I once worked, the people in charge of investments made sure to own one share of every corporation listed on the New York Stock Exchange, just to be able to receive the annual report. But that information and so much more is now readily available online—which of course means you do not need anyone else to look for you, as long as you know where to look. It is when the devil arrives with his proverbial details that lawyers can sometimes help—as can accountants, consultants and all the other professionals who absorb the time and money of business people everywhere. It is just part of the game, but it is a game we should all know how to play.
* Because I know I will be asked, as was the case with this post, the best time to catch up with your blogging is while waiting for your eight-year-old to soak himself and everyone nearby in a water-gun fight at a very wet playground.
Credit: Alan Behr
My partner Helene Freeman has offered her reflections on these pages about the recent Supreme Court opinion in Star Athletica, L. L. C. v. Varsity Brands, Inc., commonly known as the cheerleader uniform case. Our Fashion Practice held a seminar recently for the industry where Helene provided further thoughts based on her posts, and I provided some practical considerations based on the court’s ruling. Here is a brief summary.
The key point to remember is that the Supreme Court has greatly simplified how you look at cases of apparel and accessory copyrights and claimed infringement. Because the case involved fabric patterns, I will limit my discussion to them, but there are broader implications, from belt buckles to furniture. The bottom line is this: from now on, we will not examine the garment itself, just the surface design. It no longer matters that, if you take stripes, chevrons and other familiar cheerleader-uniform patterns off the uniform, all you have left is a tennis dress–that is, something with a different function from a cheerleader uniform. All we need do is look at the pattern on the fabric used to make the dress, as if it were unrolled from a bolt of cloth and laid flat. In fact, it does not even matter if a cutter snips pieces from the bolt into a recognizable shape of a dress. It’s the design of the fabric, and just that design, that matters from now on.
That possibly makes even more important the question that the Supreme Court sent back for consideration by the trial court: whether the design that was allegedly copied embodied enough original expression to warrant protection by copyright. The rule is that even modest creativity, when fixed in a creative work, is protectable by copyright. (All you haiku writers, take heart.) Using neckties from several makers and nations as an example, I showed our conference attendees that original variations to familiar patterns (such as bees and starbursts) could be protectable. Even if what results is a “thin” copyright, it is still enforceable.
That leads to a follow-on reflection: There being no central database of protected designs, and with fabric designs now being viewed as if standing alone, as some kind of sartorial Ding an sich (a “thing in itself” in Kantian philosophy), if you have a pattern that looks like it might be original, and if you intend to spend time and money using it to make clothing (or other products), now, more than ever, it is important that you seek copyright registration–and that you discuss your options with counsel. Because the cut of the cloth and claimed usefulness (as in, “Those look like the kind of stripes I would find on a cheerleader uniform.”) are now irrelevant for copyright purposes, you will have to undertake your analysis in a field of potential risk beyond that formed by the goods you are making. Using cheerleader uniforms as an example once more: stripes and chevrons on those uniforms, if upheld as protectable by copyright, could, in theory, be infringed upon not merely by designs on competing uniforms but also by fabric designs on anything that is nonfunctional (such as a purely decorative wall hanging) or functional (such as neckties, carpets and sofas).
That brings us again to our favorite money-saving advice: discuss these issues with knowledgeable counsel before you invest your time and money. In the law, that ounce of prevention is worth at least a ton of cure.
Credit: Alan Behr
The Supreme Court decision in Star Athletica L. L. C. v. Varsity Brands, Inc., No. 15-866 was announced today and the fashion industry can breathe a huge sigh of relief. In fact, the industry, especially accessory businesses, would be justified in popping open the Champagne. Not only did the Court uphold the Sixth Circuit’s judgment that the designs of the cheerleading uniforms were separable, it greatly simplified and expanded the two- and three-dimensional features of useful articles that can qualify for copyright protection.
The opinion holds that the design of a useful article is eligible for copyright protection if the feature can be perceived as a copyrightable two or three-dimensional pictorial, graphic or sculptural design separate from the useful article, on its own or in some other tangible medium, if it can be “imagined” separately from the useful article. Physical separability is not required. The analysis of separability under the statute is a purely conceptual undertaking. Conceptual separability does not require that the remaining part of the useful article, apart from the two and three dimensional design, be either fully functional or even equally useful. The focus of the separability analysis under the copyright statute is on the extracted two- and three-dimensional design and, according to the Court, one need not “imagine a fully functioning useful article without the artistic features.” Nor does it matter, the Court holds, that the artistic feature plays a role in the function of the useful article.
All of the other glosses on conceptual separability that the various appeals courts had previously articulated are swept away. It does not matter that the artistic feature of the design would be marketable separately, so long as it can be imagined as existing. It doesn’t matter that it was conceived originally for the useful purpose to which it was put.
Left for another day is whether the specific designs at issue are copyrightable. That will be the task of the trial court on remand. However, Justice Ginsberg notes in a footnote that the requisite creativity for copyright is extremely low.
Credit: Helene M. Freeman
It had to happen, and it did in, of all places, The Wall Street Journal. Late in February, Jacob Gallagher contributed an article persuasively advocating for a new appreciation of baggy pants. Even as The New York Times obsessively writes about President Trump (Not long after the inauguration, I counted twenty-six pieces revisited to him on The Times‘ home page.), here comes the more conservatively leaning Journal to bring us news we can use: the ins and outs of wearing slouchy trousers.
Menswear runs in somewhat erratic cycles, with lean and trim tailoring having been the look in (roughly speaking) the years following WWI and the 1960s and much of this century, with looser cuts, often led by trousers with pleats, having been in vogue in the decades in between. Risking a generalization, when youth dominates fashion and popular culture, slim is in. Consider The Beatles and all those earnest young and lesser bands of our present era. Giorgio Armani rose to fame when he helped end that earlier cycle with his looser cut suits that draped, rather than seemingly adhered to, Richard Gere in American Gigolo (1980). In his Journal story, Jacob Gallagher quoted Patrick Grant, the designer for E. Tautz (London): “A lot of people are just not built for skinny trousers, particularly those of us who have a few years under our belt.”
All well and true, except when it isn’t. As Mr. Gallagher just barely hinted, baggy is hard to pull off if you are what he politely termed “vertically challenged”—which is to say, you can all too easily end up looking like a bar mitzvah boy forced to wear one of his father’s suits. I am not short but not anywhere near tall and not in my first youth. Having slimmed down to my high school weight and buffed up in the gym, however, I slide into the trim, Italian-inspired Brooks Brothers Milano cut like a cartridge into a revolver breech. My London tailor, Henry Poole & Co., had to snip my pattern down to comply with the requirements of my new physique. I trimmed the trousers of the Henry Poole suits already in my wardrobe and have gone down two waist sizes, even as I only buy slim cuts in casual wear. A leading fashion stylist who had worked hard in the svelte-deprived ’90s to get me to puff out now says I look great while deflated back to slim. Who wants to upset that?
And so: a thank you to The Journal for letting me know that slouchy has again gone mainstream. This time, I am having none of it. As I said in these pages before, I realized late in life (as a Uniqlo customer), that I have the taste and build of a Japanese teenager. Every other guy can and, if it strikes him as correct, go baggier than Bozo. This fit but not so tall guy is sticking with the trim cut that suits him best.
As my partner Helene Freeman has blogged, we await word from the Supreme Court about what standard will be used to determine what designs on cheerleader uniforms are properly protectable by copyright. (Star Athletica, LLC v. Varsity Brands, Inc., et al.). That case could have wide implications for anyone whose after-school activities include jumping up and down in decorated tennis dresses in front of football bleachers—and potentially for many others as well. The debate on the cut of trousers, shirts and jackets will, happily, be unaffected. In the USA, despite sincere efforts to change the law, the pattern (outline) of a garment is unprotected as long as it is a functional element—which it nearly always is. Designers and their customers have free reign to go baggy or keep it lean, without interference by lawyers or judges. The question, I am happy to report, is one of taste, not of jurisprudence, at least under American law. Apply your own style sense or consult your own personal stylist, and best wishes with that.
Credit: Alan Behr
Pose! Click! Flash! Those are just a few of the sights and sounds of Fashion Week, an exciting time here in New York City. I had the privilege of attending one of the week’s first events–PH5’s Presentation at Bortolami Gallery in Chelsea.
I was awed by the entire experience–stark white walls adorned with giant white balloons set against a row of willowy models in unique and colorful knits and clear plastic above-the-knee boots. As the models stood in mannequin-like pose on small white pedestals, cameras went off at lightning speed and reporters surrounded designer Mijia Zhang and owner Wei Lin. Others, many of them dressed to perfection, crowded into the gallery to see the looks–and look over each other. The energy was high and fast.
After some gawking and conversation over maple water, the onlookers drifted out and the room cleared just as quickly as it had filled up. It was then that I was struck how much the show reminded me of Christmas morning when the kids tear through numerous well-wrapped gifts in literally minutes. After all of the time-consuming preparations in browsing, choosing and wrapping gifts and placing them under the trimmed tree, the excitement is over in a matter of minutes. The same is true of a fashion show.
I thought of all of the hard work Wei, Mijia and their team put into making the excitement of the show. From choosing a brand, to designing the clothes, selecting eye-catching fabrics, obtaining quality manufacturers and selecting the “right” models, space and décor, the coordination is overwhelming.
As a lawyer, my mind, of course, then jumped to the “dark side.” The months of planning to over-in-minutes analogy made me think of how quickly PH5’s designs could be ripped off. We do not have copyright protection for clothing designs in the United States so copying is not only inevitable but also permitted. I have heard many a designer tell me about the frustration they experience when all of the time, effort and money they expend to create a line of clothes can be out the door in minutes when photos of fresh clothing are sent overseas and copied instantly. A few years ago, bills were introduced in Congress to give limited protection to clothing designs but they never made it anywhere. As a result, the copying continues, at least in the U.S., at the same frantic pace as Fashion Week. Some countries like France guard their famous designers by protecting clothing designs.
Some designers with novel fabrics may be luckier than others. For example, PH5 has what the Daily Beast calls “technically sophisticated knits” which can be protected by copyright. Original fabric designs are protected by copyright in the U.S., which does help alleviate the created today, knocked off tomorrow syndrome. Whether a design qualifies for protection is a question to raise with counsel—well enough before the fashion show starts—in order to help gain a measure of legal (and therefore business) advantage over makers of knock-offs.
Credit: Monica P. McCabe
When Presidential Security Interferes with Revenue
and the Customer Service Experience
In the words of a troupe of Britons, first heard long ago, “And now for something completely different.” This post is a transatlantic collaboration, co-authored by members of the fashion and real estate law practices of Phillips Nizer LLP, of New York City, and Fox Williams LLP, of London. The firms address the same legal question from the perspective of New York law, in the segment authored by the Phillips Nizer, and English law, in the segment authored by Fox Williams.
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The secondary residence of U.S. President Donald Trump is located in the eponymous skyscraper that bears his name located in an area of Upper Fifth Avenue in New York City, at the apex of the most important and most expensive shopping district in the Western Hemisphere. Prized retail space can be found in the building and in surrounding properties. This is not the typical environment for establishing a security cordon for the protection of the President of the United States.
If President Trump continues to maintain Trump Tower as a secondary residence and working office (as he had done while President-elect), we can surmise that protective and preventative measures that have been in effect for weeks, will continue. Anyone brave enough to attempt to enter the still-cocooned retail spaces will receive a quick course in world-class security. You have to talk your way past federal and local law enforcement officers to get into Gucci, which is in Trump Tower but accessible by the street, to say nothing of what you need to do to get into the building’s atrium for the chance to score a latte at Starbucks. In short, the conversion of Trump Tower into “White House North” has not been good for business for any tenant who is not named Trump.
New York City and State Law
The retail tenants may seek ways to mitigate their losses. The law and most leases, however, are not particularly sympathetic to this type of economic collateral damage, which typically falls under the category of “consequential damages.”
As a general rule, a tenant’s choice of remedies when things go wrong in a lease is to seek an abatement of rent, or to seek to cancel the lease. Lost profits are considered speculative by the courts and are almost never awarded in cases involving commercial leases. Most commercial leases have specific prohibitions against the award of lost profits.
One possible alternate claim would be for what is known as “constructive eviction.” That happens whenever something within a landlord’s control substantially interferes with the use and enjoyment of the leased premises. The catch here is that it has to be something the landlord does or fails to do; in the case of the President, however, the security is not his own but that of the United States government, working closely with the New York City Police Department.
Many leases provide that, if access to the premises is thwarted or impeded by fire or other damage, rent will be abated. For those leases, there could be support for the claim that the extraordinary event of government restraint on access forms the basis for an abatement of rent.
New York courts have held that a party may be relieved from its duty to perform whenever an unforeseen event has occurred that destroys the underlying reasons for performing the contract. The argument that the United States Secret Service and the local police have turned your block into the Maginot Line is not a familiar one, but it could, at least in theory, gain traction if damage is shown to be acute enough.
Finally, there is always a claim against the government—but that is probably pushing it a bit. Whenever property is taken from a private individual by the government under “eminent domain,” there must be payment of just compensation. There is an exception to the rule that provides that there is no compensation when a taking is due to the exercise of “police power.” An example of police power is the right to damage or destroy private property (without compensation to the owner) when such an act is necessary to protect the public interest. If you want to know what that means, watch the next time someone parks an expensive car in front of a fire hydrant when a blaze has started and fire fighters arrive with their axes.
In short, there is no clear way, through the use of litigation, for retailers caught within the security cordon or even just outside it to seek redress. However, the President is nothing if not a deal maker, and as a sage old lawyer once suggested, “If you don’t ask, you don’t get.” It cannot hurt to contact the landlord and practice your take on “the art of the deal.”
The position under English law has differing aspects (and certainly uses a different legal language) but is similar. It is true that this could be an issue that is unique to the circumstances in which these retail tenants find themselves, but it raises issues pertinent to landlords and tenants in both jurisdictions. One can easily envisage similar circumstances in London, for example, affecting footfall to tenants’ retail stores and outlets, be that at the instigation of the state, or from other sources. What if a prominent politician or other VIP took offices in Regent Street or Bond Street? What if state security demanded establishing a similar cordon for some other reason, one that interfered with the tenants of prime retail space in the capital?
In English law, the concept of a tenant (as opposed to a landlord) seeking to “cancel” or “determine” a lease is almost unheard of without the agreement of the landlord (for example, a surrender or a break clause). Whilst English contract law has well-established principles of breach of a contract leading to its termination, this does not translate well to the realm of landlord and tenant law, where a tenant is seeking to terminate the lease (this is not the case with the landlord, who can usually seek to forfeit the lease in the event of a tenant’s breach).
So, with this avenue all but closed to tenants, they would usually need to focus on the terms of the lease itself to seek damages or a court order that the interference must stop.
Like our U.S. colleagues, English lawyers would express doubt as to whether the concept of rent abatement can apply to these facts. For the reasons given above, where an English lease contains a rent abatement – or “rent cesser” – clause, that clause normally relates to circumstances in which the property in question is damaged or destroyed (usually due to circumstances for which the landlord is insured) only to the extent that it is uninhabitable. If that is the case, the rent will not be payable whilst the property cannot be occupied. It might be stretching matters too far (without specific wording in the lease) to extend this well-established concept to fit these facts. Trump Tower (or the hypothetical English equivalent) is not a property that is damaged; it is the access to it that has been compromised.
If this offers little comfort to tenants, there are two further (and largely overlapping) English law concepts that might assist. English law has long recognized that landlords must not “derogate from their grant” and the obligation to allow the tenant “quiet enjoyment” of the property. If proved, they entitle a tenant to sue the landlord for damages.
The former principle states that, in granting the lease, the landlord has agreed to confer certain benefits on a tenant, and should not do anything that substantially deprives the tenant of those benefits. The latter requires the landlord to ensure that there is no interference with the tenant’s possession and enjoyment of the property itself.
English cases on the above where tenants have succeeded, have included erecting advertising billboards obscuring the tenant’s premises, alterations by a landlord that discourage passers-by, and causing noise and disruption by way of building works adjacent to the tenant’s property.
So, it would appear that English tenants might be better placed in these circumstances than their U.S. counterparts. However, as in America, tenants are likely to run into the same problem they would encounter had they set up shop on Fifth Avenue instead of Regent Street: is the presence of such high security something instigated (or even sanctioned) by the landlord, or is it a matter of national security, out of the hands of whatever corporate vehicle happens to own the freehold of a given retail unit? The unfortunate truth is likely to be that the security presence is not the ‘fault’ of the landlord, and thus, the landlord cannot be said to have violated either legal principle.
Tenants may therefore find themselves, as in America, caught between a rock and a hard place: a landlord who is ‘not at fault’ and a rent abatement clause that does not do enough to protect their interests. Perhaps one for English tenants’ lawyers to think about too when drafting leases of high-end retail and fashion outlets in the busiest and most desirable of the U.K.’s shopping districts.
Credits: Steven J. Rabinowitz
Steve is counsel in Phillips Nizer’s Real Estate Law practice.
At Fox Williams, Liz advises on a broad range of commercial property transactions, both freehold and leasehold, including property management, investment acquisitions and disposals, secured lending, property finance, general landlord and tenant issues. Tom is a property litigator, and heads up the firm’s Real Estate dispute resolution practice.
Visit the Fox Williams Fashion Law Group website at www.fashionlaw.co.uk.
Phillips Nizer would like to thank Liz and Tom for providing a non-U.S. perspective on this very interesting, and in this instance, extremely unique and unusual circumstance in real estate law affecting the landlord-tenant relationship.
The new year had arrived and ski season was approaching, so on a rainy morning, I brought my graphically red Bogner ski pants to Jeeves (the dry cleaner, not the P. G. Wodehouse character) for cleaning and repair. Carrying, as I nearly always do, a Leica film camera under my suit jacket, I stopped on Madison Avenue to take a photo when my Noctilux lens slipped free from its bayonet mount (a first for me), and tumbled toward the sidewalk of East 65th Street. It gained momentum, plunging downward until it landed safely atop a damp Hefty bag full fluffy, uncollected New York trash. That was a good omen for the start of the year.
Back to Jeeves: those ski pants, too Euro for Vermont but spot on for Courchevel 1850, where I had last been, and St. Moritz, where I was next heading, had been soiled due to the consequences of poor form (crash!) and, for good measure, had been sliced just above the ankles like red apples for my son’s school lunch box (due to over-zealous ski edge sharpening). The solution of Jeeves, following the cleaning, was to armor plate the inside bottom part of the legs with leather overlays that coordinated with the pants. The next time a sharp edge hit them, little or no damage should be done, all without loss to Euro styling.
The moral of the story, and not just for photographers and skiers, is that you need to be ready for when things go wrong. Sometimes, good luck will deliver a solution (a beneficent pile of garbage) and sometimes, you will just have to absorb what happens and make the best of it later (with a little bit of leatherwork). In law, luck can happen as well. The adversary who has a winnable case against you decides, just the same, that it is not worth the trouble to sue you back to the stone age. The respectable couple who own the classic six coop within the best school district falls behind on payments and is obliged to sell under market to a family sure to pass muster with the socially and financially conservative board. (Just trust me on that one.)
Good luck is lovely. It cannot, however, take the place of sound legal and business planning. Transactional lawyers, the ones who draft contracts, are the bringers of good luck. If they do what they should, you might well not need litigators, who, as was Jeeves for a pair of ski pants, are there to try to make things right when contracts go wrong. The problem is that, all too often in the fashion business, people think that luck will come without the help of lawyers and so they simply sign a long, attorney-drafted agreement handed to them by the other party, hoping everything in it really says what it is expected to say. Sometimes it does, just as it is theoretically possible that, the next time you drop something quite valuable, it will fall safely onto a stuffed Hefty bag. For small matters, going without an attorney often carries a low enough risk to be worthwhile, but when the stakes increase, so does the risk and so does the likelihood that bad luck will have bad consequences. So here is a refreshed old tip for a nice new year: feel lucky, but when the stakes in a deal are high, lawyer up. Good luck comes most often to those who plan ahead.
Credit: Alan Behr