On January 8, 2019, the U.S. Supreme Court heard oral arguments in, Fourth Estate Public Benefit Corp. v. Wall-Street.com LLC. The court is expected to resolve a decades-old split of opinion among the federal Circuit Courts on whether the Copyright Act permits a lawsuit to be filed upon submission of a copyright application or not until the copyright registration certificate has been issued or refused.
The language in the statute is simple. 17 U.S.C. § 411 reads: “no civil action shall be instituted until … registration of the copyright claim has been made in accordance with this title.” The statute also provides that, “[i]n any case … where the deposit, application, and fee required for registration have been delivered to the Copyright Office in proper form and registration has been refused, the applicant is entitled to institute a civil action for infringement if notice thereof, with a copy of the complaint, is served on the Register of Copyrights.”
In this case, Fourth Estate sued Wall-Street.com when the website continued to publish Fourth Estate’s work after the expiration of the limited license that had been granted to the website. Fourth Estate filed copyright applications for the misappropriated online publications and then asserted a claim for copyright infringement; however, its claim was dismissed by the Eleventh Circuit because the Copyright Office had not yet issued registration certificates. As have the Courts of Appeal for the Third and Seventh Circuits, the Eleventh Circuit follows the Tenth Circuit’s “registration approach,” which requires the Copyright Office to have acted on an application for registration by approving or denying it prior to initiating a lawsuit. The Fifth and the Ninth Circuits, however, follow the “application approach,” which allows for the commencement of an action upon filing a copyright application.
The split among those courts has large implications for photographers, writers, musicians, and fashion designers. For instance, the Copyright Office application processing time is notoriously slow: it can range from six months to more than a year to issue a registration. Creators are forced to endure an unpredictable wait time – or avoid that delay by paying an additional $800 special handling fee for expedited processing. In a seasonal industry such as fashion, where trends evolve so quickly and styles head to market within just a few months from creation, a small company cannot afford to sit back and wait for its copyright applications to be processed if infringement appears to be a credible threat, but it may also find that filing multiple applications with very significant expedited processing fees imposes an unacceptably great financial burden.
The fashion industry is a multi-billion dollar international industry. It has been argued that requiring the issuance of a registration certificate (or a refusal to register from the Copyright Office) for American authors and domestic works before litigation can commence conflicts with the de-emphasis on copyright formalities established by the Berne Convention, which governs copyrights across the globe. For now, this is all in the hands of the Supreme Court. We will provide a follow-up post when its decision is rendered.
Credit: Candace R. Arrington
If you were hoping that following the Supreme Court’s decision in Star Athletica you might learn whether common stripes, chevrons, color blocks and zig zags are sufficiently original to be copyrightable—a question expressly reserved by the Supreme Court and the Sixth Circuit– you will be disappointed. On August 10, 2017, the district court permitted Varsity Brands to voluntarily dismiss its copyright infringement action against Star Athletica with prejudice, over the objection of Star Athletica, which wished to pursue its counter-claims seeking to invalidate the Varsity Brands copyrights.
You might well ask, as we did, why after seven years of largely successful litigation, Varsity Brands would be permitted to walk away. Or you might ask, as we also did, why Star Athletica would object to having the suit end with no apparent injunctive or other relief awarded against it. Both are fair questions and the answer to each is unusual: The insurance company that was defending Star Athletica reached a settlement agreement with Varsity Brands, without the participation or approval of Star Athletica. The terms of the settlement are confidential. The only clue is the court’s reservation to Varsity Brands of the right to return to court if it does not receive the payment from the insurer required by the settlement. As far as Varsity Brands is concerned, not only does it get money, but it also avoids the potential for invalidation of its copyrights, having made its point that the two dimensional designs reflected in its uniforms are separable from their utilitarian features and theoretically capable of copyright protection. It now has a stronger threat to hurl at potential competitors.
But what of Star Athletica and its interest in settling its rights to compete with Varsity Brands in the cheerleading uniform market? In the view of the court, Star Athletica receives what is in effect immunity from future claims of copyright infringement related to the copyrights and uniforms at issue in the action. And also in the court’s view, Star Athletica’s counter-claims to invalidate the copyrights were only defenses to the copyright infringement claims and not independent bases for legal action once the threat of copyright liability was removed. And that is the rub: Varsity Brands has many other copyright registrations for which similar challenges to their validity might (or might not) have merit. Because the court did not provide guidance on that fundamental point, competing uniform makers remain exposed to similar infringement claims.
One can’t help feeling that the broader fashion public had an interest in the resolution of the question of whether stripes and chevrons are original when applied to garments. But it is an axiom of federal court litigation that the courts do not decide hypothetical cases or controversies for the edification of the public.
For now, if you are interested in whether stripes can be protected in fashion, you will have to focus on trademarks and not copyrights. There is always Gucci’s suit against Forever 21 for knocking off what it claims is its stripes trademark. And then, too, there is Adidas’ pending suit against Skechers for knocking off its three stripe trademark. The district court in Oregon just decided that Adidas’ trademark infringement suit can proceed.
Credit: Helene M. Freeman
The beaches of summer remind us that it is no disrespect for any of us to confess that most people do not look their best in swimwear and that those who do probably would look great in just about anything. Simply, the more the body is revealed, the more the aesthetic duties that are commonly undertaken by fashion are left to uncovered skin. Call it a triumph of artifice over nature, but for most of us, more clothing, rather than less clothing, even on the beach, is often a good thing. Fashion may make the great-looking come across even greater, but it is often a turning point, in the direction of great, for the rest of us in how we present ourselves to the world.
My colleagues and I have been writing and speaking quite a bit this year about the Star Athletica case—the Supreme Court decision that turned cheerleader uniforms into the biggest issue in fashion law in years. (Law is made by the cases actually brought, and this one just happened to be about uniforms worn by cheerleaders, but by its potential impact, you might well imagine the clothes were couture evening wear.) If nothing else, the case reaffirmed (that is, it did not change) the fact that, in the USA, anything functional in fashion cannot be protected by copyright registration (or with a design patent). When applied to swimwear, which typically represents about the minimum that the law allows any of us to wear in public, whatever precious square inches of cloth are involved almost always serve some kind of function. Finding something protectable in what is there can involve examining decorative clasps, closures and add-ons—but minimalism is the essence of swimsuit design, and such design elaborations are quite rare. That leaves for examination whatever small amount of fabric is actually in use.
As we have noted in these pages before, fabric patterns are protectable, and here, Star Athletica may be helpful in providing guidance. The Supreme Court has now told us that we need only look at a fabric pattern laid flat (in reality or imagination) to view it as we would any two-dimensional artwork to determine if it is original enough to be protectable by copyright. The shape into which it is cut—as swim trunks or a bikini, for example—is irrelevant. That is good news for fabric designers. It confirms that it does not matter how little of the design is there to see: if it is original and visible, it is theoretically protectable.
During the 4th of July weekend, I heard a young man compliment another, his tennis partner, on baggy swim trunks and a matching baseball hat—both made of blue cloth filled with an exaggerated white pattern that looked like multiple slash marks. At a pool the day before, a woman was similarly complimented for a black bikini that had small but intricate white designs only on the cloth that just about covered her right hip and left breast. If any of that is original, it may well be protectable.
Does that mean it is getting harder for a fashion company to know if a fabric being offered to it for use in garments is potentially infringing on the rights of others? Does it mean you have to worry about some design that would not fill the space that could be occupied by a chocolate-chip cookie? Unfortunately, that is likely the case. Where that next takes us is for the courts to decide—but not for now. Summer is here and many of those people you will see on the beach are copyright lawyers and judges, putting much of this behind them until fall.
Credit: Alan Behr
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.
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
One of the hot topics du jour in the fashion press is the copyright battle in the Supreme Court involving cheerleader uniforms. It poses the question of when a two-dimensional design that is part of a useful article is copyrightable—in this case, designs consisting of color blocks, chevrons, and lines in uniforms for cheerleaders. The Copyright Act provides that a “useful article” is not copyrightable, but it allows for copyright in the “pictorial, graphic and sculptural” features of useful objects as long as those features are “separable” from and can exist independently of the object itself.
Under the statutory definition, you can secure a copyright for a fabric or lace design, but you cannot secure a copyright in a dress made with the fabric or lace. An artist who draws a dress can secure a copyright in the drawing and can prevent someone from using it on greeting cards or wastebaskets, but the artist cannot use the copyright to prevent anyone from actually making the dress depicted in the drawing.
Although the concept of separability is easy to state in the abstract, at times it has been hard to apply in practice. Cheerleader uniforms present a particularly difficult problem. The designs here are not printed on the fabrics used in the uniforms. They are part of the garment’s construction. The placement of the design features—color piping around the neckline and arm holes, lines down the sides in color blocks, chevrons in the center, lines marking the boundaries between blocks of color—results from the contours of the garments. The placement also serves the functional purposes of hiding seams that are sewn on the outside (instead of the inside) of the garments to prevent chafing, strengthening parts of the garments so that they hold their shape, and creating optical illusions that lengthen the torso and slim the waist. The designs also help make the garments recognizable as uniforms and not street clothing.
The challenger, Star Athletica, focuses on those functional considerations and argues that the designs are inherent in the useful objects and do not exist independently. It argues that, if the designs have any function, they are not separable from the uniforms.
The United States and Varsity Brands, the copyright owner, argue that, because the graphic designs can be applied to products other than dresses, they are separable, can exist independently and are therefore copyrightable. The government further argues that the Copyright Office cannot be in the business of determining how any particular two-dimensional design functions in any given context when called upon to determine whether it can indeed exist independently. Under that argument, any two-dimensional design could potentially be deemed independent and separable from the three-dimensional objects to which it is applied.
In a great irony, the case was argued before the Supreme Court on Halloween. Halloween costumes frequently have been the subject of litigation under the particular provisions of the Copyright Act at issue in the case. (In case you are wondering, under current precedent, costumes are generally not copyrightable, but masks generally are.)
Reading the oral argument before the Supreme Court and the briefs, I was struck by the fact that the case is not unlike the famous figure ground optical illusion in which you can simultaneously see either a goblet or the profile of two faces. Star Athletica sees the goblet. If the lines define the goblet, it is the design of a useful object, and Varsity Brands cannot prevent Star from making the goblet. But Varsity Brands and the government see the profile pictures, which are separable, and it would be irrelevant whether they also define a goblet from the perspective of another viewer.
Stanford Law School Professor Mark Lemley, as the lead author of a brief submitted by a number of law professors in support of Star Athletica, attempts to separate the figure from the ground. He argues that copyright could protect the designs, but not the coordination and arrangement (i.e. placement) of the elements of the designs that result from the shape or construction of the garments. In effect, this proposed test would exclude from the protection of copyright those elements of the designs dictated by the needs of making the useful article truly useful.
There are other relevant questions that none of the lower courts in the case considered and which none of the briefs submitted to the Supreme Court addressed: What are the two-dimensional designs that are protected and are those designs copyrightable under more general principles of copyright law? Are they original or are they in the public domain? Is there a merger of the general idea with its expression so that there is nothing that is copyrightable? Are the decorative aspects what copyright law refers to as “scènes à faire” (stock representations implicit in the subject matter, in this case cheerleader uniforms)? Both the trial court and the appellate court expressly said they were not addressing whether the two-dimensional designs were copyrightable and were reserving that question. And the Supreme Court, in accepting the case, refused to consider this question, because it was not ruled on below.
Justice Elena Kagan inquired at argument: What is your design; can someone just add another stripe to avoid infringement? Varsity Brands’ counsel did not address the first part of the question and, in response to the second part, said that merely adding something to a copyrightable design “usually” does not avoid infringement. The response did little to address the Court’s expressed concern for the anti-competitive effect on the market for cheerleader uniforms and markets for other products for which the design has a functional purpose, such as camouflage fabric for military use. Indeed, it is worth noting that Star Athletica made a point of informing the Court that Varsity Brands controls 80% of the U.S. market for cheerleader uniforms.
That may help explain why all of the Supreme Court Justices who asked questions were troubled by the idea of handing Varsity Brands a monopoly over cheerleader uniform designs through the use of its copyright registrations. How they might avoid that result is an open question. Star Athletica offered one alternative that might have a major impact on the fashion industry, particularly on the accessories market, where protection of three-dimensional designs is an on-going concern: Any aspect of the design that is functional in part is not conceptually separable. (Say goodbye to the Kieselstein-Cord belt buckle decision, a ground-breaking case won by this firm and which a number of briefs argued was wrongly decided.) Another alternative, endorsed by the American Intellectual Property Association, is to vacate the decision and instruct the court below to determine first the validity of the copyright in the designs under more general copyright law concepts that would factor into the analysis the use of routine design features in uniforms. Either way, one suspects that Star Athletica’s use of its copyrights to prevent competition in the cheerleader uniform market may be short lived.
Credit: Helene M. Freeman