In the cosmopolitan city of Barcelona, several of us, including my colleague Alan Behr, gathered for a private fashion industry meeting at the exquisite Hotel El Palace. While sipping tea and sampling fine pastries, we heard brief presentations on important legal developments from around the world.
Owen Tse, a partner at Vivien Chan & Co. in Hong Kong, presented on the New Balance case before the Intermediate Court in the People’s Republic of China. The court ruled in favor of the Chinese company New Barlun, which New Balance had accused of selling infringing footwear. The court relied on the fact that New Barlun had filed the Chinese mark before New Balance had made an attempt. To add insult to injury, the court awarded the equivalent of US $15.8 million to New Barlun, which was subsequently reduced to the equivalent of approximately US $700,000 by the Appeals Court. Owen also reported an interesting fact—“Ivanka Trump” in Chinese was the subject of more than 300 trademark applications in the PRC since 2016.
In addition, the practice of using “shadow companies” to infringe the Chinese translation of well-known brand owner’s trademarks is on the rise in Hong Kong. Infringers promote themselves by claiming they have authorization or license from the shadow companies. Example: Pearl Bay vs. Peony Bay in English and Chinese.
From Amsterdam, Herwin Roerdink of Vondst Advocaten gave a presentation regarding fashion brand owners and European Union data protection regulations. Herwin discussed the issue of smart products, such as socks that collect running data of their wearers and golf shirts that track swings, all in connection with EU privacy regulations. Specifically, a new EU privacy law, GDPR, EU 2016/679, which will become effective on May 25, 2018, imposes heavier regulation and more obligations on data controllers and data processors, whether or not the data is processed in the EU. GDPR also applies to the processing of data of those in the EU by non-EU entities that offer goods and services that monitor behavior in the EU. Non-EU fashion brand owners who target EU customers with monitoring products will therefore be subject to the regulation.
Herwin also explained the differences between the approach of the Dutch data protection authority and the United States Federal Trade Commission regarding the permissibility of WiFi tracking by retailers. Although the Dutch decision was based on Dutch implementation of the EU Privacy Directive, which focuses on whether the processing is necessary to achieve the desired purpose, the FTC decision was based on balancing the concern for customer harm and the legitimate interests of the retailer.
From London, Roland Mallinson of Taylor Wessing updated us on the implications of Brexit to fashion IP, on the assumption that the United Kingdom will not leave the EU before March 2019. Roland predicted that existing European Union Trade Mark (EUTM) registrations will likely continue to be recognized in the UK. He posited that parallel filing in the EU and UK is not imperative now, especially if you are not yet using your mark in the UK. He expressed confidence that there will be some arrangement by which current EUTM trademarks and those being filed now will result in protection in the UK, from the current priority date; however, because nothing is for certain, Roland recommended that strategically key brands continue to file UK applications in parallel with any new EUTM applications. For existing UK and EUTM registrations, it does not automatically follow that a new UK application should be filed now – even for strategically key brands.
The discussion also focused on the practical issue of transferring 900,000 EUTM registrations to the UK system, a process made more complex by the fact that a fair number of the registrations were not filed in English. Some issues, like parallel imports and European design rights, have political sensitivities.
Finally, I made a presentation regarding the important Star Athletica case, which was decided by the US Supreme Court in March 2017. We have previously reported on that development in our blogs on March 22, 2017 and May 5, 2017.
In short, we had a very enjoyable and productive meeting. And as anyone who attends the INTA annual meeting knows, half the pleasure for us was being able to sit down while we networked with friends and colleagues.
Credit: Monica P. McCabe
Thank you to Phillips Nizer law clerk Candace Arrington of our Corporate & Business Law and Intellectual Property Law Practices for providing assistance with the review and preparation of this blog post.
Whether you call it shoplifting or shrinkage and the people tasked with stopping it the house detectives or the asset protection department, and regardless of what new technology you put into place, if you are a retailer, stealing is a problem that will never go away. When I was in high school, back in New Orleans, I worked weekends and summers at the department store my family owned and operated (and long since shuttered). I got to see firsthand the extent of the problem—which was harder to track in those days before electronic inventory controls. The manager of my department was arrested for stealing a pair of Mickey Mouse suspenders from the warehouse. He had been collared by the four-man security team brought in to replace the aging and quite ineffective store detective. During a big three-day sale taking place over a long summer weekend, as the junior and surely least valuable member of our sales team, I was relegated to sitting in the men’s fitting room, watching for thieves. All I got for my trouble was the chance to alert security to the customer who thought that the fitting room stall belonged in the men’s bathroom and had used it accordingly. That incentivized me to petition for repatriation to the sales floor and, just to be sure my position did not revert, I became the top sales person of my department during the next three-day sale.
Jump some years ahead, and now I find myself working with clients in retail on the law of asset protection. There was the time I had to work with the manager and assistant manager of one department store branch that was being sued for assault and false imprisonment by an alleged shoplifter who claimed he had been injured in his apprehension. The plaintiff appeared at the first hearing on crutches, and justice being as slow as it is, by the time the second hearing came around, he was practically pole vaulting with the things, which his lawyer, who could now hardly catch up with him, obviously told him to keep using in an effort to garner sympathy and a favorable settlement.
It was frustrating to our client, but none of that has changed much. You still need to be sure that you work with counsel to know what you can and cannot do in pursuing, approaching and ultimately challenging a suspected shoplifter. There are rules about that, and they vary from state to state. Just as an example, in New York you need to show that the suspect took possession of the item with an intention to make off with it. If you are found purposefully trying to sneak out a T-shirt by wearing it, give your lawyer a call; but if you tuck the T-shirt under your arm while paying for something else and mistakenly head out with it, you are guilty only of absentmindedness.
As long as retailers work very hard to create demand for what they sell, and as long as objects of desire hang and lie in public view, shoplifting will be a problem. As with all other problems that are certain to occur, it is always best to have policies and procedures in place and to make sure that the individuals charged with being the first line of defense—the sales staff—are thoroughly briefed on what to do. It is prudent to have counsel and the security team conduct periodic joint seminars with sales and security personnel. As with everything else in the law, the proverbial ounce of prevention will alleviate the need for the more than typically expensive, when it comes to litigation, pound of cure.
Credit: Alan Behr
A young lawyer walked by while working late, waving the striped tie he had just removed, announcing that, after 9:00 p.m., business casual was mandatory. European-born, my colleague’s tie had blue, white and green stripes angled downward from left to right (as seen by the wearer), in the classic British (and predominantly European) tradition. In Britain, the convention developed that, just as each clan in Scotland has its own tartan, each regiment, club and school would likely have its own, distinctive, diagonally striped tie.
On not quite as classic but by now traditional American ties, however, diagonal stripes run in the opposite direction, from right to left. There are various stories about why that is so. As with anything you can find on the Internet, you can discover much that is of interest, some of which might even prove to be true. You may learn, for instance, that the reason the ties slant in different directions is that European infantrymen shouldered their weapons differently from Americans and that their rifles ejected spent casings in an opposite direction. Those explanations are not only fogged by inaccuracy but bear little evidence of good fashion sense.
More credible is the claim by Brooks Brothers that it invented the American right to left downward slide on what it calls a Repp tie (freely admitting that an early spelling error caused it to get wrong the name of the French Rep ribbed silk fabric it used to make the ties). The idea was to bring American “roguish charm” to British tradition–an act that, as is often the case when Americans reference British traditions–acts as both homage and gentle satire. The British officers and gentlemen men who earned the right to wear regimental colors around their necks sometimes being quite sensitive about having earned the exclusive right to that privilege, Brooks Brothers reversed the direction of the stripe in an effort to soothe warrior sensitivities.
American schools have their Repp variations. My American university’s thick-striped tie, in navy blue and burgundy, is guaranteed to dull down almost any suit that goes with it.
The striped tie having now been commonplace for over a century, uncountable combinations of alternating stripe widths and colors have been used. A designer looking to protect his or her intellectual property rights in the patterns of ties may theoretically create a novel combination of colors and widths running in either direction–just enough to warrant a claim for copyright protection. Given the multiplicity of existing designs, that protection, if granted, would likely be a “thin copyright,” but in theory it could happen. The larger question is: why bother? Individual styles rarely last more than one season, after all. Would you really sue to protect the design, hoping the defendant does not dig into neckwear history to find something similar warn by officers of a British regiment since before it fought in the Battle of the Somme?
Each of those regimental, school and club ties identifies a source of origin–raising the possibility that a particular pattern of stripes can be protected as a trademark. As a practical matter, unless a stripe acquires such distinctiveness that the market accepts that it designates a specific source and so is not merely decorative, it is probably not protectable as a trademark. It is possible, again in theory, that a particular pattern of stripes could gain “secondary meaning.” That is, they now serve, through usage, advertising and the passage of time, as branding and devices not merely as pleasing patterns. If that should happen, is it indeed enough of a difference to prevent a claim of infringement to run the same pattern in the opposite direction, just as Brooks Brothers and other American makers did in order to distinguish their patterns from those British ties from which they freely borrowed both conventions and patterns? Much could depend on survey evidence of consumer habits and consumer awareness of the differences. That is another way of saying: if you did not know about all that before reading this post, the difference in the direction of the stripes probably is of no consequence to you; your response to the survey would therefore likely aid the plaintiff in a claim that simply changing the direction of the stripes did not make the defendant’s pattern less likely to cause infringing confusion.
That would support the generally held view that, when it comes to neckties, diagonal stripes, in whatever direction they run, are, in nearly all situations, open territory for designers. Within the quite narrow sartorial conventions of male business attire, however, there is not really all that much new that can likely be done with diagonal stripes in neckties. So, let us all celebrate an ongoing tradition and try not to worry too much about all this. A good striped tie will not necessarily be the one that a lawyer attempts to protect as intellectual property. It will, however, always be one that will work for him just about anywhere.
We would like to thank Stephen Sidkin of Fox Williams LLP, London, UK, for providing the inspiration and background for this post.
Credit: Alan Behr
Because almost everybody wears glasses of some kind, part of the pathway of the ascent of a designer will quite often include an eyewear line. Personal optics is a field in which design must coexist with the demands of mechanics, durability and, for vision eyewear, medical requirements. With those few exceptions that inevitably come along, if what you find fits, does the job and, just maybe makes you look cool or at least not uncool–you will generally be content.
Of course, there are unique eyewear designs, but intellectual property law is tough on those who claim design rights for functional objects. Patent protection is reserved for the kind of innovation that rises to the level of the better mousetrap–meaning, by metaphor, that the new trap indeed should catch mice in a way not previously practiced or commonly anticipated. For the non-functional design elements of eyewear, protection can sometimes be obtained by design patent, copyright and either a trademark or trade dress. (Trade dress protection on the features of an object of any kind, rather than the packaging it came in, is a challenge for a different discussion.) There are particular requirements for each form of protection, meaning it is possible that one style of eyewear may qualify for one form of protection, for more than one form or for none at all.
By way of some exaggeration for a point, should you wish to protect a new eyewear design, you might have a credible chance of having the law support your claim if it were for sunglasses with not two but three lenses. That is to say, try designing frames on which a third, completely useless lens would be placed smack in the middle, over the bridge, to shade an imaginary third eye. To improve your chances, across the top of the frames place an original, melancholic relief illustrating a tragic moment from Longfellow’s “The Wreck of the Hesperus.” Along each temple add a declaratory statement such as: “Some People Will do Anything for Attention.” I am not going to speculate on your likely sales of that item during the fall-winter season, but some elements may prove to be protectable, as may a combination of elements.
This is not to suggest that you have to go quite that far to obtain rights for eyewear. All exaggeration aside, I have been quite successful doing so over the years for more mundane but far more elegant original variations on eyewear construction and design. And I have been able to defend those elements against infringement. The point is that, for something as common as glasses, whether for reading, vision or protection against the sun, you have to be inventive to come up with something strongly protectable. When you do, you would be well-advised to consult with your attorney about what elements, alone or in combination, can be protected by copyright, design patent, trademark or trade dress. You do not need to add the third lens to make that happen. You simply need to know enough to ask your lawyers whether what you have created is legally protectable, as well as being, of course, something both functional and beautiful.
Credit: Alan Behr
We have commented here before that the necktie is the surviving element of the male wardrobe that is purely decorative. If it is true that form follows function, there is no prescribed form for an accessory that, by definition, is completely without function. For that reason, you can make it a classic neck to waist cravat, go for a Pharrell bowtie, or go for a turquoise-clasped bolo — at least if you are from the West.
Cloth ties can come in any width, as long as you can close them and they do not rub into your face or flap into your arms. When I was young, my father was friends with George Goldman, a legendary New York necktie manufacturing impressario, back when most ties sold in the USA were made there. I remember when my father came home from a meeting with George, bearing a fistful of thin neckties –only to note, not long after, that they had slipped out of fashion. The Mad Men age was over, taking with it the thin tie and long-accepted business terms such as “career girl” and “make it a double.”
Ties next grew wide, to the point of obesity, during the following decade. And then, thanks to the temperate good taste of designers such as Giorgio Armani and Ralph Lauren, ties went to the gym and trimmed down. And then, wouldn’t you know it: the thin tie, now known by its workout-sanctioned name of the skinny tie, returned, along with thin lapels.
Because it has become tough to say what is “correct” in business wear of late, those of us who pay attention to these things keep two tie collections, one in the moderate ninety-centimeter width of the classic Kiton seven-fold and the other in the anorexic sixty centimeter width of the just-discontinued Brooks Brothers Black Fleece line designed by Thom Browne. And to think: all that fuss over something that most men working in offices and classrooms do not even make part of their daily wardrobes anymore.
This rolling in and out of necktie widths throughout the decades illustrates another key element of fashion law: it is of no matter if you were the first to bring back the skinny tie or even if you found a way to make them from thermal-insulated cloth for inclement winter days. You will not get intellectual property protection for the shape and other physical characteristics of any tie in any form that we know at this time that the market will accept. However, it is still possible to obtain protection on the pattern of the tie fabric, if it is truly unique. Considering the way that trends go and come and that, in the 1970s, chunky ties appeared with elaborate printed scenes to fill out their broad canvases, if your vision is of a complete Tahitian village or perhaps of a new interpretation of the Judgment of Paris, your day may soon be here. And if your designs are truly unique, you can register your copyrights. Those neckties will not have any more use than the ones you see today, but their designs will be exclusively yours.
Credit: Alan Behr
We have all seen Russian matryoshka (nesting) dolls: open one and out comes another, and open that and you get another, and so on. When a fashion brand incorporates components from another brand into its finished product, it is rather the same thing, with a difference: although the brand covering the finished product is the brand that in all likelihood is the primary branding driver of consumer demand and the primary branding influence for consumer purchasing, that brand will not exist in isolation. It will be helped or hurt by the quality, function and aesthetic appeal of the brands of the constituent parts.
Perhaps the easiest place to see that at work is watchmaking. There are many more well-known watch brands than there are watch movement makers. Although most watch brands design and make their own cases, they often rely on others to make the most important thing in the package: the actual movement. If the movement is not working properly—if the watch is not keeping time—good luck trying to convince the consumer that all he or she really wanted was a well-designed bracelet with a watch-face for decoration. Typically, the maker of the movement is not even mentioned in advertising, on the product or in the accompanying instructions. Clothing, however, is a bit different since there are some key fabric vendors whose brands are considered important enough to drive sales, which is why garment makers are willing, if not eager, to place the Gor-Tex and Loro Piana trademarks on clothes made with fabrics bearing those brands.
All well and good, but a couple of key points should be considered:
First, no matter how you, the manufacturer, market the finished piece, you are helping build good will (and therefore value) in the brand of your supplier. Your vendor is the legal owner of that goodwill, not you. Your advertising will promote and otherwise benefit the vendor, which at times might also participate directly by adding its trademarks to the ads. All of that should be considered when entering into the agreement by which the vendor’s trademarks will appear on your fashion products. In addition, your vendor will likely require an agreement permitting it to exercise quality control over the use of its marks—which is again what the law expects—so be prepared to have the vendor involved in production in a way you might not typically expect from a supplier of components not displaying B2C branding.
The other key point to consider is that, even if the consumer is aware of the vendor’s brand and the vendor’s contribution to your finished product, the consumer will most likely hold your brand accountable for the performance of your product. Going back to the watchmaking example: ETA SA Manufacture Horlogère Suisse (a subsidiary of Swatch Group Ltd.) makes movements that go into a number of watch models made by Breitling SA, which is an unrelated, privately held Swiss company. Even a consumer who is fully aware of that fact is not going to say, “Hey, my Swatch stopped working!” in the (highly unlikely) event that his Breitling should cease to function—even though, in a purely mechanical sense, that is exactly what happened.
Just a few things to keep in mind when entering into supply contracts with important vendors.
Credit: Alan Behr
The applied arts, including fashion, stand in service of utility. There is no l’art pour l’art (art for art’s sake) even if you are talented and even if you are French. A useful object made beautiful, fun or even compelling is still something you can use, and things that can be used are objets de commerce, first and foremost. That is one of the reasons, as we have discussed in these postings (and surely will again) that the law treats fashion, jewelry and accessory designs—and related objects such as perfume bottles and lipstick cases—differently from how it treats paintings, sculptures and photographs. All art follows commerce, and artists do not quit their day jobs if they are not commercially successful, but when it comes to fashion, commercial success remains rather the point. If you are a designer and do not believe that, ask your retailers and financial backers if they disagree.
The first and perhaps most personally compelling fact of that distinction between what the law considers design to be versus how it treats fine art is that, although the artist can never lose his name—there was only one artist who could paint a Pablo Picasso and only one artist who could chisel out a Michelangelo—it is possible for a designer to wake up one morning and find that, professionally, his name is no longer his. To his mother, he may always be, “My son, Martin, the designer,” but the clothes bearing his name might be designed by someone else—perhaps someone he does not know, or perhaps even someone whose work he finds indifferent or just plain terrible. Even worse, should he wish to continue designing clothes, he may have to do it under a different name.
The reason for that is because the name is not merely a name; it has become a brand. And brands can be sold, along with the trademarks that represent them, and the goodwill that those trademarks generate and perpetuate. (An artist’s name can also be his brand—but the art market has not yet accepted the idea that, say, Lucian Freud could have sold his name on retirement, for use in connection with fine art by Damien Hirst.) When designers sell their trademarks, therefore, they are, to the fashion world, effectively selling their names.
If the price is right, that may be a great idea. Sometimes, however, regrets follow. In posts to come, we will show what has happened and can yet happen when designers lose control of their own names.
Credit: Alan Behr