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Reflexion juridique

An article by Kamilla Boussouf – supervised by Pr. Eric Engle

 

 

« Copying is a natural consequence of fashion » Léon Bendel, 1947.

Legal Protection of designs : Fashion’s latest trend

For centuries, artworks have been the subject of copying.  From music, to literature to paintings, none of the art fields have been spared by this  fraudulent practice. However, one field in particular remains more vulnerable than ever : the fashion industry. Indeed, there is no specific regulation protecting fashion designs in the United States. With the rise of the internet, fashion trends are spread almost instantly throughout the international market. This is both profitable and dangerous for the fashion industry. Indeed,  to a certain extent brands can benefit from the overexposure to achieve international recognition. Nonetheless, when looking at the bigger picture, the counterfeiting of luxury goods does more harm than good.  To understand  the challenges faced by fashion designers in their quest to obtain protection of fashion designs, the subject will be studied in three parts.

The first theme will provide clear understanding to what is meant by «  fashion designs » and how they may be protected under US legislation.

We will then move on to the second theme, which will dive deeper in US legislation and the attempts to protect fashion designs more effectively. Furthermore, we will briefly look at how the European Union ensures maximum protection of its fashion industry.

Finally, in the last theme, we will review counterfeiting and analyse the booming of this market, and study brand strategies to fight against it. 

 Theme I :  What is  fashion design and how is it protected ?

When we think of fashion, we usually think of expensive designer bags and supermodels with superficial attitudes. However, looking deeper into the meaning of the word, or should we say concept of Fashion, one can only realize it is a wider field. Fashion is an imitative, trend based industry, meaning that for an item to be considered fashionable, there has to be a number of similar items produced by competitors. It is also an art as some products require a certain «  savoir-faire », rare materials and time to be produced.  The fashion industry is also a key element in economic growth, providing jobs and stimulating consumerism.

  • An overview of what the concept of « fashion » really embodies.

The industry has been expanding over the past few years, with new challenges arising and an increasing need to protect fashion designs and designers.  Indeed, the lack of legal protection in this field, encourages the counterfeiting of high-end items and knockoffs by smaller brands. As an example we can cite the famous Yeezy «  Pirate Black » Boost sneaker, produced in collaboration with rapper Kanye West and streetwear brand Adidas. The long awaited sneaker, quickly sold out and its online sales price went up to 1,200 $. As it became more and more difficult, even nearly impossible for consumers and fans to get a pair, many of them opted for a high end copycat, costing between 80$ to 150$. For fashion designers, the danger of such  practice, is that counterfeited product sometimes look nearly identical to the original one. Moreover another issue is faced by design

 

ers : knockoffs. Although they are existential to keep the fashion industry on its feet, some manufacturers specialize in the making of « knockoffs » of luxury items and sell them at a much lower price.

Naturally, one can wonder what tools exists to protect fashion designs ?

  1. PROTECTION OF FASHION DESIGNS
  1. Copyrights

In the United States, copyright is a right protecting « original works of authorship including literary, dramatic, musical, and artistic works, such as poetry, novels, movies, songs, computer software, and architecture ». The first Copyright Act ever was passed in 1970 and provided protection for 14 years. Over the years, Congress has worked to expand the field of copyrights  – first  by extending its subject matter. Indeed copyrights now apply to «  (1) literary works, (2) musical works, including any accompanying words,(3) dramatic works, including any accompanying music,(4) pantomimes and choreographic works,(5) pictorial, graphic, and sculptural works,(6) motion pictures and other audiovisual works,(7) sound recordings and (8) architectural works ». Although, the considerable evolution of copyright protection, fashion designs remain largely out of its scope.

Strictly speaking, fashion designs, – unlike drawings, photographs, jewelry and even design software – are not protectable by copyright. Therefore, under copyright law, an image on a T-shirt or a fabric pattern can be protected. This is easily explained by looking at the Copyright Act 1970 . Indeed the act excludes protection of useful articles :  « shall be considered a pictorial, graphic, or sculptural work only if, and only to the extent that, such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article ». Under US law, Courts have ruled that clothing are « useful articles not protected under Copyright » .

Therefore, one might ask what fashion designs are protected under US copyright law ? 

Copyrights protects original fabrics and prints providing that they have a minimal level of originality and creativity. Moreover, ornaments and embellishments may be copyrightable if they are conceptually or physically detachable from the apparel. Courts have established the separability test is met when :

– it can be removed from an item of clothing and sold on its own. For instance, Hermès has a silver belt buckle for its leather belts. The infamous «  H » buckle is sold separately and can therefore be copyrightable. This is what is known as physical separability.                                                      – when clothing have an artistic features independent from the utilitarian side of the apparel. This feature should have a separate meaning from the apparel’s function. This is known as conceptually separable.Therefore,  in the Swatch v Siu Wong Wholesale, it was held by the court that artwork on watches were indeed protectable by copyrights.

To briefly sum up, in order for fashion designs to be copyrightable they must not have a useful purpose – apparels as a whole are not copyrightable. However, any fabric, pattern, embellishment providing a minimum of originality and novelty and following the separability test can be granted copyright.


  • Design Patents

Design patents or « picture patents » are used to protect the aesthetics of an apparel or accessory.  This kind of protection is usually sought after when copyright is not granted or when it does not provide enough protection.  According to The United States Patent and Trademark Office ( USPTO ) , design patents are available to any person who invents  « any new, original and ornamental design for an article of manufacture ». Commonly, items benefiting from such protection are shoes, purses and bags, eyewear frames, perfume bottles and jewelry.  Patents are granted by the USPTO, which is the federal agency for granting US patents and registering for trademarks. They are approximately delivered within a period of 10 to 12 months. Once such protection is granted, they prevent competitors and third parties from using designs for at least 14 years, if not perpetually, should said designs acquire «  distinctiveness during the design patent protection period ».

How can fashion designers obtain such protection ?

Design patents are obtained by filing an application at the USPTO. It must contain clear and complete drawings showing all views of the item. Drawings are key, because they define the appearance of the product, which is what is at stake when seeking patent protection. It must satisfy three requirements :  the design must be new (i ), non-obvious (ii)- meaning that it should not resemble anterior design already existing on the market, and  finally it must be solely ornamental (iii) and not functional.

Only « inventors » of a design patent – individuals who materially contributed  to the design- can file the design patent application.
When considering the question of infringement, the Supreme Court established the observer test. The test is set out in a way that, in order to be infringement of a pre-existing design patent, « the resemblance deceives the ordinary observer giving such attention as a purchaser usually gives and induces him to purchase one supposing it to be the other». The Court further assessed that the product need not to be identical when evaluation the «  resemblance » criteria.


  • Trademark and Trade dress

Trademarks are probably the most well known form of intellectual property in the fashion world. They are used to distinguish a product’s brand from another. A wide variety of distinctive signs can be trademarked such as brands name, logos, designs and even slogans. In the fashion industry, designers often use their own names as trademarks for their brands. e.g Diane Von Furstenberg, Sergio Rossi,  Louis Vuitton, Yves Saint Laurent and countless others. However, using its own name as a trademark is only possible if the designer can prove he has established public recognition. This is only achievable through years of advertising and well operated communication strategies. It is of great importance to warn designers who wish to trademark their names, that once they have affiliated their personal name with a brand and have trademarked it, they will not be able to start another brand with the same name. For instance, French designer Marc Jacobs, trademarked his name. Several years later, he started a new brand named M.by Marc Jacobs. This is a  great way to kickstart the new brand and make it benefit from the success of his first brand known as ‘Marc Jacobs’. Also, it allows customer to make a link between the brands easily.

In the United States, Trade dress is a form of trademark protecting an item’s appearance, including its shape and size, color combination, texture and graphic designs, packaging and labelling or any element of its external aesthetic. In other words, it protects the « total image of a product ». For it to be protected, the trade dress must be « inherently distinctive or have achieved secondary meaning ».  Trade dress functions like a distinctive sign enabling individuals to recognize the item’s origin e.g for instance Hermès’ Birkin bag is highly distinguishable by its appearance  same goes for Chanel’s now infamous « BOY » bag, and Louboutin’s red sole heels.

One of the biggest restriction of trade dress is that it only protects nonfunctional elements or  one that are purely aesthetic. It is to be noted, that an element is considered to be functional when «  essential to the use or purpose of the article of if it affects the cost or quality of the article ». In other words, when the product wouldn’t function properly without it. In order to determine wether an element is functional or not, Courts have to look if the  requirement set out in the Re Becton, Dickinson & Co case, also called the « Morton Norwich » factors are met : «  (i) existence of a utility patent disclosing the utilitarian advantages of the design (i) the existence of a utility patent disclosing the utilitarian advantages of the design; (ii) advertising materials in which the originator of the design touts the design’s utilitarian advantages; (iii) the availability to competitors of functionally equivalent designs; and(iv) facts indicating that the design results in a comparatively simple or cheap method of manufacturing the product »

Trade dress can be registered as a trademark with the USPTO.To do so, the right owner has to prove that consumers link the product with its brand.

Theme II :  Protecting Fashion Designs  : US legislations’ failure and the European System

Over the past century, the United States have attempted to pass appropriate legislation providing enough protection for fashion designs. However, none of the approximately 100 attempts  were fully  carried out. As a result, there is no existing legislation protecting fashion designs as a whole.  On the other hand, European legislation provides high  protection for fashion designs. Fashion designers support a shift towards a more European approach concerning fashion design protection. In regards to the many trials to pass adequate legislation, Congress is most likely going to pursue its way towards a more extensive protection for fashion designs.

  1. US proposed legislation to protect fashion designs
  • Design Piracy Legislations


The Design Piracy Prohibition Act, was introduced on April 4th, 2009. The aim of the act is to extend copyright protection to fashion designs found in useful articles. It grants  a 3 year protection to designs made public by the owner « more than three months before the registration of copyright application ».  This Act was proposed to amend chapter 13 of the Copyright Act and provide further protection to clothing designs. The proposed amendment consisted of replacing «  useful article » by «or an article of apparel ». However due to high criticism from opponents, the bill never passed and is still pending today.

On July 13, 2011 , Congress introduced  the Innovative Design Protection and Piracy Prevention Act.  A little more than a year later,  the Design Protection Act 2012 was introduced to congress. This time it contained slight alteration concerning the retail sector. These bills set a higher standard when considering infringements. Indeed  the test  would not be for copies to be « substantially similar » but rather «  substantially identical ». This would allow manufacturers to inspire from protected designs on the condition that their designs would slightly differ.

Despite softer dispositions, these bills received much criticism. Opponents stood by their positions, providing that copying is a necessary process for the well being of the fashion industry.  Another argument against these policies, is that knocking off actually democratizes fashion, rending them available to everyone.

To this day, the only protection for fashion designs are the following : copyright, trademark and trade dress, design patent. As we saw in the first part, these intellectual property rights do not provide enough protection for fashion designers.

How does European legislation compares to the United States when it comes to fashion designs ?

II. Fashion Designs protection in the European Union

European Community Design Protection Regulation 2006

The Council regulation N°06/2002, more commonly known as the European Community Design protection Regulation was passed and enforced throughout all 27 Member States. It provides designers with rights to dispose of their designs – meaning they can act against infringers and claim eventual damages. Designs are defined as « appearance of the whole or part of the product resulting from its features and in, particular, the lines, contours, colors, shape, texture and/or materials of the product itself and/or its ornementation ».  Furthermore, the regulation provides a need for novelty : « a design shall be considered to be new if no identical design has been made available to the public »:.  Registered designs – designs registered with the Office for Harmonization in the International Market – are protected for five years across the European Union. This period is renewable up to 25 years. 

Concerning Unregistered designs, they are automatically protected once disclosed to the public. This protection is short-termed as is only last for 3 years.

In conclusion, while the European Union offers a tailored protection for fashion designs, while the United States ,despite its many attempts still fails to provide such protection.

As stated previously, fashion is a trend based economy. This means, that if an apparel is considered to be fashionable, it will be copied by numerous brands, seen on many celebrities, and more importantly sell fast. The other side of this cycle, is the quicker an item reaches it fashion climax, the quicker the need to provide consumers with a new trendier piece. Under this logic, the constant will for something brand new, is what fuels designer’s creativity and keeps the fashion industry buzzing. Indeed, as new trends emerge, the same products are then sold everywhere, consumers will invest in them in order to be fashionable and the cycle goes on.

It is only natural to ask ourselves to what extent is the « knockoff economy »  beneficial to the fashion industry ?


Theme III  :  Rise of knockoffs and  high quality counterfeited goods:  Danger or fuel for the fashion industry ?

  1. Counterfeiting and knocking off culture : booming of the copycat market

What is Counterfeiting of trademarks ?

The Trademark Act 1946 is more commonly referred to as the Lanham Statute. The Act provides regulations of trademark activity throughout the United States. Moreover, the statute also provides protection of service marks and unfair competition.  The act defines counterfeiting as «  a spurious mark that is identical with, or substantially indistinguishable from, a registered mark ». In other words, counterfeiting is the malicious practice of stealing high value intellectual property.  These products are replicas of luxury goods sold under the company’s label, and sold at a fraction of the price.With the rise of high quality counterfeits, brands have developed new ways to identify copies. For instance, brands like Chanel and Yves Saint Laurent, have labeled their products, especially bags, with a serial number. This  guarantees customers the origin of their product and also offers protection in case of theft.

The CBP,  US Custom and Border Protection, is the federal law agency in charge of  regulating intentional trade and preventing importation of counterfeits. In 2012,  the agency seized more than 20.000 pairs of fake Louboutin shoes exported from China.The estimated retail price of the seizure was amounted to $18 million.

Moreover, an increasing number of intellectual property right owners are allying with the US International Trade Commission to fight piracy.  Under the the Tariff Act 1930, are prohibited «  unfair acts in the importation of articles into the United States » and importation of goods infringements protected rights. For instance, renowned luxury brand Louis Vuitton, recently filed a complaint to the ITC. The brand claims numerous Chinese manufacturers were violating its property rights by providing counterfeited goods, with its infamous Toile Monogram trademark.  On that matter, the ruling was in favor of the French luxury brand, the ITC issued an exclusion order banning the entry of such counterfeited goods from China, on the US soil. 

Counterfeits and knockoffs market

In April 2017, the Organization for Economic Co-operation and Development (OECD) and the European Union Intellectual Property Office (EUIPO) issued its annual report on global trade concerning counterfeited and pirated products.  The report shows alarming numbers as trade in counterfeit goods increased by more than 80% in five years. Indeed it increased from US$250 billion annually in 2008 to over US$461 billion in 2013. The numbers show that most of counterfeited products originate from the Asian continent, especially China ( 63,2 % ) and Hong- Kong ( 21.3 % ). Countries most affected by the trade of fake goods are the United States, Italy and equally France and Switzerland.

According to the OECD report « as long as a given product is protected with a trademark, patent, design right or copyright that adds economic value to its right holder, it is likely that this product suffers from counterfeiting and piracy ».  According to the International Chamber of commerce, previsions show that by 2022, « piracy are projected to drain US$4.2 trillion from the global economy and put 5.4 million legitimate jobs at risk ». With such negative previsions, it is necessary for governments everywhere to reinforce their anti-counterfeiting policies as well as extend protection of intellectual property rights.

Where some would agree on the danger of counterfeiting and knockoffs’ rise, others would see it as advantageous for the industry. Indeed,  Law Professor Christopher Springman ( University of Virginia ) , established a theory called the « Piracy Paradox ». Indeed, Springman believes that copying is «  the engine driving the fashion industry ».  Consumers buy fashion pieces out of desire and not because they necessarily need them. Therefore, when an item first makes its appearance on the runway, it has high economic value and is hard to obtain : only a handful privileged people can afford it.

However, when apparels are knocked off  by fast fashion brands ( e.g Zara, H&M and Forever 21), they become affordable to a larger public. They become trendy items and are copied even more by manufacturers.  A concrete example of that would be what is commonly called among fashion enthusiasts, «  the ugly dad sneaker » trend. The first brand to have started the «

« ugly »  sneaker trend was Chanel back in 2015.  However,  a few could afford the high priced sneaker, and lack of affordable copies made these a flop. A few years later, in 2017, Balenciaga took a spin on this trend. With many celebrities and social media influencers sporting the brand’s sneakers, copies were quick to hit the market. Consequently,  similar looking items are now found on many retailers and fast fashion brands’ shelves, and high end

replicas are sold online for at least $450. As a result, the brand gained attention from fashion experts worldwide, increased its reputation and visibility and sales have boomed for the Spanish brand.

Another great example of the « Piracy Paradox » would be Gucci items. From t-shirts, to handbags, belts to sneakers, the colorful and vintage inspired designs of the brand have shaped 2017’s fashion trends and have been copied countless times. Luckily, such exposure have considerably impacted the brand, with sales growth increasing up to 50%.

Are all brands really benefiting from copying to the same extent ? 

Copying can be both an advantage and a curse for fashion designers. Either it will lead them to be known worldwide or it will kill any chances for them to actually breakthrough the fashion industry. Indeed, one must make a difference between internationally recognized companies such as Versace, Gucci and Chanel, worth billions of dollars, and emerging fashion designers.  As stated above, world renowned brands, can indeed benefit from copying to a certain extent. However for small fashion designer the situation is very different. Indeed if a designer’s items are copied before even reaching a large public, then said designer loses its edge and power. If not protected by intellectual property rights,  the designs are lost to knockoffs and counterfeited goods.  As a result, a breakthrough in the industry is very unlikely, even nearly impossible. In today’s modern day and age, the Internet plays a key role into the growth of the counterfeiting market. This goes as far as sellers providing « exclusive items » such as collaborations between two luxury brands, that actually never existed in the first place. In its documentary named «  Counterfeit Culture : Korea », online website Highsnobiety, uncovers

« the country’s market for fake streetwear » . By watching this fifteen minute long documentary, one can only realize the extent of infringement of the biggest provider of counterfeited fashion items.  Consequently, it’ll appear how so evident that fashion designs need further protection from such infringements.

II. How are brands fighting back

As copying is as old as fashion, brands have build their own strategies to fight against it. While some designers see copying as a form of flattery, others are using all their powers to prevent copycats. Indeed, Coco Chanel used to say «  being copied is the ransom of success » and didn’t mind her fabric leftovers being stolen. Same goes for French designer and Balmain’s creative director, Olivier Rousteing, who confessed in an interview «  I love seeing a Zara window with my clothes mixed with Céline and Proenza! I think that’s genius. It’s even better than what I do! ».

However, brands like Louis Vuitton and Gucci are known to be very protective of their  Intellectual Property rights. We will focus on the latter and its strategies.

Gucci against Forever 21 : the battle of stripes

In 2016,  Italian giant Gucci sent numerous cease and desist letter, to top retailer Forever 21. The issue at stake was that Gucci required Forever 21 to stop using its trademarked pattern of blue-red-blue as well as green-blue-green striped items. Indeed, this color scheme  associated with the striped pattern is well known by the public as part  of Gucci’s brand feature.  However, the retailer issued a legal claim first. Its goal : have a judgement providing there was no infringement of  Gucci’s trademarks.Law professor and founder of the fashion Law  Institues at Fordham provided that  «trademarks are legally protected because they

communicate to consumers the origin of goods or services — in other words, they serve as source indicators, and protect consumers against confusion » .

As a result, Gucci took legal action against forever 21 and filed a motion to « dismiss Forever 21’s earlier complaint against a threat of trademark litigation from Gucci and counterclaims of its own for trademark infringement, trademark dilution and unfair competition » .  In order to prove infringement, the Italian luxury brand has to prove that items sold by the American Retailer, may cause confusion about origin of the apparel. To this day, US district Judges have remained «  skeptical » about Forever 21’s claim that Gucci ’s stripes trademark  are to be cancelled.

  • Copying the copycats

The Italian brand has developed a creative way to prevent knockoffs, with a twist. Indeed, the brand actually created shirts and bags, inspired by knockoffs of their own design and made them runway official.Oftentimes, counterfeited replicas, especially low quality ones, will use a brand’s name and will purposely change a letter or slightly alter the logo. Well the brand’s strategy consist of doing the exact same thing. Therefore, it is taking back its designs and copying knockoffs to trademark them under their name. As a result, it limits the scope of counterfeiters trying to circumvent trademarks. At the moment, no other brand has adopted such a system. However, these real « fakes » have caused a stir among fans of the brand. Indeed, it is the first time the Italian brands is altering its name and purposely manufacturing fake looking apparels. Surprisingly enough, the designs seem to have gained huge popularity, especially with the young influencers.

CONCLUSION :

In regards to all the information provided by this article,  one can only understand the crucial challenges faced by fashion designers.As fashion law is becoming a prominent and independent field of law of its own, it should provide the necessary tools to protect fashion designs. Indeed, intellectual property rights are key elements as they protect creativity and artists. Therefore, as a form of art, fashion should benefit from equal protection against counterfeiting, as much as other art forms. In Conclusion, protection  of fashion designs granted today by US legislation is not effective enough, and is not adequate for fashion designers to fight against the booming counterfeiting industry.

 

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