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
Registering copyrightable designs as “unpublished” collections can be an efficient and cost effective way to register multiple two dimensional print patterns in a single registration. But to derive the benefits of registration, you need to be able to identify the designs included. Standard Fabrics International, Inc. (“Standard Fabrics”) learned that lesson the hard way, when it sued Louise Paris, Ltd. and its retail customer for copyright infringement of one of the fabric designs it claimed was part of its “Spring Summer, Collection 1”.
To succeed in a suit for copyright infringement, you must prove that the design in issue was registered with the Copyright Office. To register, you must submit a copy of the design with an application for registration.
Standard Fabrics’ registration identified its work only as “Spring Summer, Collection 1”. Nothing in the title referred specifically to the particular design number that was the subject of the suit. Therefore, Standard Fabrics was required to prove that the design was actually included in the collection registered. Because Standard Fabrics could not prove the design infringed was part of the collection registered, it was denied judgment on its infringement claim.
The problem Standard Fabrics faced can be avoided. In an application to register a collection of designs, be sure to set forth the design number for each design covered by the application. Each individual design in the collection can be uploaded separately on the Copyright Office’s electronic website and appropriate records of the upload can be printed and maintained.
The Copyright Office generally maintains deposit copies of unpublished works. It will provide copies of these for use by the lawyers for parties to litigation, but it requires a written application in its proscribed form and time to search for, reproduce and certify its records. The fee charged for this service can be hundreds of dollars, as the Copyright Office will charge for its time as well as imposing copying and certification fees.
But beware, the Copyright Office does not undertake to retain deposit copies of published works. Full term retention must be arranged for a fee.
Credit: Helene M. Freeman
As we have discussed here, fashion is about nothing if not intellectual property, and most fashion intellectual property is comparatively easy to copy or emulate without great expense. If you have any success at what you do, the odds are fairly good that someone, somewhere on the planet will come out with what you believe to be a brand or product that infringes on your proprietary rights.
You will then have come to a fork in the road. The failure to take action to protect your rights may be used against you later. In the case of trade dress, for example, your silence may be used as evidence of everything from a showing that you suffered no lasting harm to the de facto abandonment of the right to the exclusive use of the trade dress. On the other hand, if you send out a strong cease and desist letter with a clear threat to sue for non-compliance but do not follow up in a reasonable time with a lawsuit should the recipient not comply, you may be deemed estopped (barred) from filing your lawsuit at a later date. That is why cease and desist letters typically threaten the “possibility” or the “potential” of the initiation of litigation—to avoid being estopped by the failure to carry out an explicit, promised remedial act.
Perhaps even worse, if you send a cease and desist letter that is strong enough to make the recipient fear an imminent lawsuit, and if the recipient believes it was within its rights to use the intellectual property that you claim infringes, it may make a preemptory strike. It would do that by filing a declaratory judgment action, asking a court to declare that what it has done was in fact lawful. To use jargon, when you have been so “d.j.’ed,” you have lost the “race to the courthouse door,” possibly to a “forum shopper.” For example, having been ready to sue in New York, where you are located or where you believe the law is favorable to your position, you may find yourself defending an action on the other coast in a court chosen by the plaintiff because it is near to its home base or in the belief that the law there is more favorable to it.
So there is an art in knowing when to send a cease and desist letter and what the tone and the content of the letter should be. As you may remember from your days on the playground, consider the advice you got never to make a threat you are not prepared to carry out and, of course, never to play the bully—because you just do not know what may come back at you.
Credit: Alan Behr
Tips To Help Avoid Adverse Claims and Protect Your Company
In the Event of a Lawsuit
It is axiomatic that a successful business in the fashion industry requires close attention to detail and countless hours of work. While the threat of potential litigation should not be at the forefront of management’s thoughts, here are some tips to bear in mind to reduce your potential future exposure and to place your company in a better position to defend itself in the event it is faced with a lawsuit or a potential lawsuit:
- Notify your Insurance Carrier. If you are served with a Summons and Complaint, or are threatened with a lawsuit, notify your insurance carrier. If you fail to timely notify your insurance carrier it may deny coverage, and the company could be stuck with otherwise avoidable out-of-pocket defense and indemnification costs.
- Implement and Enforce an Anti-Harassment Policy. An affirmative defense may exist to protect the company from vicarious liability for certain sexual harassment/discrimination claims based upon actions by supervisors and co-employees if the company implements and enforces an anti-harassment/discrimination policy; exercises reasonable care to prevent and correct promptly any sexually harassing discriminatory behavior; and the employee unreasonably fails to take advantage of any preventative or corrective opportunities provided by the employer or to avoid harm otherwise.
- Two Company Representatives Should Participate in Disciplinary, Evaluation and Exit Interview Meetings With Employees. Many employment claims (or issues that may give rise to employment claims) can stem from a disciplinary meeting, employee evaluation or exit interview, when a company representative (whether the H.R. director or an immediate supervisor) informs an employee of job concerns, performance issues or that employment is being terminated. It is advisable for the company to have two company representatives at those meetings to be better able to confirm or deny what transpired (to avoid a “he said she said” scenario) in the event of a subsequent claim by the employee.
- Careful! Emails Are Not Private. Once a lawsuit is underway, the company will likely be required to turn over emails (or entire accounts) that may be relevant to the subject-matter of the lawsuit. So, the next time you send a personal email from your work account, be mindful of its content, especially if you don’t want some lawyer, like myself, reading about your personal life. Conversely, lawyers either prosecuting or defending a case are always looking for the “smoking gun.” So, before you click “Send”, make sure you are comfortable that, if a lawsuit arises, your email will not be the “smoking gun” that an opposing lawyer may be seeking.
- Keep Accurate Time Records of Non-Exempt Employees. It is not only statutorily required for employers to do so, but is critical to the defense of a Fair Labor Standards Act claim for unpaid (or underpaid) wages, to accurately keep and maintain time records of all non-exempt employees. If the company maintains accurate and orderly time records on a daily basis, you will not be in the position of having to scramble (or spend countless hours) compiling these crucial documents for your defense or trying to defend against an employee’s claim without potentially crucial documentary evidence.
- Avoid Spoliation Claims Arising From Destruction of Surveillance Videos. Sometimes a claim for spoliation will be made if relevant evidence has been intentionally or negligently destroyed. This can arise not only from the destruction of documents, but also when video surveillance captures relevant footage which is not retained. A possible defense here would be to ensure the company has thoroughly documented and enforced a recycling and retention procedure relating to the company’s surveillance.
The list above is generally focused in my practice areas of litigation. It is not intended to be, and in fact is far from, a comprehensive list. Each point merits its own blog post, which will likely follow in the near future.
Credit: Kathryn T. Lundy
Kathryn is an associate in Phillips Nizer’s Litigation Department and Labor & Employment Law Practice.