The week in fashion law (volume 1 of 2): IP, advertising, and free speech (Gucci, Guess, Skechers, F21, chocolate rabbits, etc.)

Posted by Charles Colman

There's so much fashion law news this week that your beloved editor here at LAW OF FASHION has to break up the stories into two installments. 

Today's post looks at recent fashion-related developments in intellectual property, advertising, and free speech.  Tune in tomorrow for the breathtaking conclusion, where LOF will curate the best of, well, everything else, for your edification and amusement.


As always, a reminder to join the LAW OF FASHION ® LinkedIn group for weekly, daily, or up-to-the-minute -- it's up to you -- updates on fashion law news.  And, of course, follow LOF's Twitter feed.  And "like" LOF on Facebook.  And "encircle" LOF on Google+.  And so on...






“SDNY's Judge Shira Scheindlin rules in favor of Gucci in Guess case, but awards only $4.66 mil of $120 mil sought (+ injunction)” (LAW OF FASHION ®)


“Gucci has (sort of) prevailed in its three-year lawsuit against Guess over allegedly infringing efforts to "Gucci-fy" the latter's products. Below, and in larger text at this link, you can read Judge Shira Scheindlin's 104-page decision, in which she awards just $4.66 mil of the $120 mil requested by Gucci (along with an injunction, which is often the primary objective in trademark litigation, anyway) and concludes by stating that ‘with Gucci's entitlement to the relief noted above, it is [her] hope that this ugliness will be limited to the runway and shopping floor, rather than spilling over into the courts.’”


“Burberry wins $180 million [judgment] in knock-off suit” (NY Daily News)


“Burberry won $180 million in Manhattan Federal Court against China-based counterfeiters who used a sophisticated and ever-expanding online store network…. Burberry also won custody of 236 domain names the counterfeiters were using to sell knockoffs. Burberry now has permission to move to shut down new websites the counterfeiting network tries to establish in the future….”


"Runway To Racks: How Fashion Gets Knocked Off" (Refinery29)


"There's that infamous cerulean speech from The Devil Wears Prada that introduced a lot of the world to fashion's domino-line of production. But, in reality, the process that puts a look on the runway, debuts it in stores, and then gets that exact look replicated for a fraction of the original cost is much more complicated.... Hold onto your blue sweaters, ladies [and gentlemen!] — we've got the full story on how fashion get knocked off, all the way from the runway to the bargain bin...."

Speaking of which...

"Mara Hoffman’s 'Chief' Fabric Design Prompts Copyright Lawsuit against Forever 21" (LexisNexis)


“On Monday, Mara Hoffman, Inc. sued Forever 21 in the Southern District of New York, accusing the retailer of copyright infringement. Mara Hoffman owns a copyright in and to a fabric entitled ‘Chief.’…”


The full complaint is posted here.  For the record, I am shocked, shocked, by this turn of events.


"Prada’s CEO Says Counterfeit Goods 'Aren’t Totally Bad'" (Fashionista)

"While doing an interview yesterday on Bloomberg Television, Prada‘s CEO (and Miuccia’s husband) Patrizio Bertelli said 'Fake goods aren’t totally bad, at least it created jobs at some counterfeit factories. We don’t want to be a brand that nobody wants to copy.'... [A] Prada spokesperson [commented on the] CEO’s controversial statement: 'The quote is part of an extended conversation that underscored how the market of counterfeits is an objective reality for successful brands and how this phenomenon has its own reality, also in terms of manufacturing, that is very structured.'"


"Brands Finding New Ways to Fight Fakes" (WWD; sub. required)

"Trademark owners are developing deeper partnerships and resorting to new tools to combat the proliferation of counterfeit products on the Internet.... The U.S. government is utilizing new strategies, such as seizing assets in U.S. bank accounts, as well as from service provider accounts, such as PayPal, linked to counterfeiters’ operations.... One of the newest strategies employed by [oft-counterfeited brand Louis Vuitton] was an unfair trade case it brought and wcon before the U.S. International Trade Commission…. [Meanwhile,] Lacoste [has] been stepping up its involvement with law enforcement authorities around the world to crack down on counterfeits [working] with other brands and China’s Customs authorities to urge China’s Taobao online marketplace to take more preventive measures against counterfeiters...."

EU high court issues mixed rulings on trademark distinctiveness on the same day (Bloomberg News / BBC News)

BLOOMBERG NEWS: "Formula One Wins Court Challenge Overturning ‘F 1’ Trademark"


"Formula One Licensing BV won a challenge that sought to overturn another company’s European Union-wide trademark for the term 'F 1.' The European Court of Justice, the 27-nation EU’s highest tribunal, rejected earlier decisions to award the EU trademark to Racing-Live, a motor sports website based in Montpellier, France.


The EU’s trademark office and an EU appeals court 'failed to acknowledge, in relation to trademarks, the distinctive character of the ‘F1’ sign” and shouldn’t challenge the validity of trademarks awarded by the EU’s member states, the Luxembourg-based tribunal said in a statement today...."


BBC NEWS: "No EU trademark for chocolate rabbit, says court"


"Lindt and Spruengli have made [a chocolate bunny, wrapped in gold foil and with a red ribbon around its neck] since 1952 and applied for an EU trademark in 2004. But other firms make Easter chocolate bunnies too and an Austrian company has even wrapped them in gold foil.


Now the European Court has confirmed an earlier ruling that Lindt's rabbit is devoid of any distinctive character. Lindt appealed against the initial ruling, arguing that it had built a trademark over a long period and wanted to protect what had become a strong brand....


[T]he European Court of Justice, in its judgement on Thursday, decided that the Swiss chocolate maker had 'failed to establish that the mark has inherent distinctive character and that that was the case throughout the European Union.'"


"Way Too Many Co-Owners [or, A tortuous tale of the potential pitfalls of trademark co-ownership]" (Property, Intangible)

Ron Coleman (great respect, no relation) recently posted on his blog, LIKELIHOOD OF CONFUSION®, about this thicket of a case, generously parsed by Pamela Chestek on her "Property, intangible" blog:

"International Importers sued International Spirits & Wines, LLC and 'D'Aquino Group of Companies,' a non-existent legal entity, for infringement of the mark WALLABY CREEK based on the defendants' importation and sale of the wine. Most notably, Fernbrew is one of the 'D'Aquino Group of Companies.' So at the end of the day we have what is a common situation – the former distributor of a product claiming ownership of the trademark and bringing a trademark infringement claim against the manufacturer and the new distributor. But because of the joint ownership of the mark, what happens next is far from typical.

Rather than sorting out the ownership under the usual manufacturer-distributor framework (alert - recursive link), the defendants challenged International Importers' standing under Fed. R. Civ. P. 12(b)(1), on the theory that all co-owners must be joined, and under Fed. R. Civ. P. 12(b)(7) for failure to join a necessary and indispensable party under Rule 19, namely, the other owners of the trademark. [Lengthy legal analysis...]

[In the end,] Fernbrew found itself in a world of hurt because of a misguided decision, made long ago, to allow for joint ownership of its U.S. trademark. I don't know to what end the parties thought that a joint ownership of the trademark was an appropriate arrangement.... [R]ather than devising a legal relationship that more accurately reflected the various roles and stakes of the parties, such as granting a security interest in the mark, the parties divvied up the ownership of the mark itself. Perhaps under Australian law the arrangement would have worked out fine, but under U.S. law, by allowing the distributor to have a claim of legal ownership, Fernbrew finds itself in a position where another company can start labeling goon 'Wallaby Creek.'..."


"Marks & Spencer to take on the beauty world - High street favourite Marks & Spencer will introduce a new in-store beauty concept selling multi-branded products" (Telegraph)


“[D]epartment store Marks & Spencer is hoping to get a foothold on the beauty ladder with the introduction of multi-brand products.... The new space in each store will be divided into three sections - well-being, performance and lifestyle - and will offer interactive screens where customers can upload a photograph of themselves and test out make-up virtually.... Marks & Spencer's Kensington High Street store will be the first to welcome the new concept, with the new products also becoming available online.”


"USPTO Tightens [Documentation] Standards For Trademark [Registrations]" (IP 360; sub. required)


"The U.S. Patent and Trademark Office said Monday that it is revising certain trademark rules that will allow the agency to require more materials deemed necessary to examine a post-registration affidavit or declaration of continued use or excusable nonuse in trademark cases....

[F]or a two-year period, the office will conduct a pilot program to assess [potential] rule changes [that would expand the USPTO’s power to] look at the nature and accuracy of allegations of use made during the trademark application process or post-registration phase, and upon request, may require additional specimens or other information or exhibits, like a photograph of the mark appearing on particular goods...."


"Ted Davis Outline From INTA 2012: Annual Review of U.S. Federal Case Law [in Trademarks]" (The TTABlog®)

Good stuff.


“U.S. Customs adopts new rule to help brand owners identify counterfeits” (Lexology)

"U.S. Customs and Border Protection ('CBP') has historically taken the position that it will not share bar code or serial-number information of seized goods with brand owners because if those goods turn out to be genuine gray market goods, the trade secrets of the gray marketer regarding sourcing and shipping information will be disclosed to the brand owner. This has been frustrating to brand owners who need this information to determine that the shipment is counterfeit....


As of April 24, 2012, CPB has adopted a new temporary ('Interim') rule that allows CBP to share this kind of information with brand owners if the importer does not provide proof of genuineness after notification of CPB’s suspicions. The Interim Rule is open for public comment until June 25, 2012...."

"New IP insurance allows smaller companies to defend their intellectual property" (Inside Counsel)

"Probably you are aware that some intellectual property insurance covers you for your alleged infringement of someone else’s IP property. It covers your legal defense and your liability should you be found to be at fault.


However, there is a new type of IP insurance for the initiation of a case against an infringer of your IP property, where you are the plaintiff—not the defendant. The beauty of this insurance is that it gives you resources that you may not otherwise have to protect your IP property, and allows you to act quickly. It is called 'intellectual property abatement/enforcement' insurance...."


"Reinvented Clothes Hanger Won’t Ruin Your Necklines [but is it reinvented *enough* to land a patent?)]" (Fast Company Co.Design)


"The basic shape of the clothes hanger hasn’t changed much in over a hundred years: a flattened triangle with a hook. They’re perfectly serviceable for jackets and button-up shirts but fail miserably when it comes to T-shirts and crewneck sweaters, stretching and deforming their collars. Why hasn’t someone redesigned the hanger already?


Finally, someone has: Mehdi Mojtabavi, an industrial designer at Portland-based Ziba, ditched the rigid model and developed a hanger made from two polypropylene parts: a hook attached to a flexible cross-piece that, when squeezed with one hand, collapses to slip gently through a neck hole before releasing to support the garment’s shoulders. The concept won an IDSA award in 2011, and Ziba has since built a patent-pending prototype...."


The thing is, there's actually been quite a bit of action in the "inventing-a-better-hanger" arena over the past few years. See this, this, this, and, of course, this.


May the best (or rather, first) man/woman win! Or maybe there's room for these slightly different inventions to coexist?


International IP


"Gucci Presses Trademark Case in Other Courts - The company's lawsuit appears to be over in the U.S., but it is forging ahead with new cases filed against Guess Inc. in China, Italy and France" (WWD; sub. required)


"One down, three to go. Gucci America Inc.’s lawsuit against Guess Inc. appears to be over in the U.S., but the luxury goods maker is forging ahead with new cases filed in China, Italy and France. Fresh off its $4.7 million [sort-of] win against Guess and its footwear licensee, Marc Fisher Footwear, in a Manhattan federal court Monday, Gucci said it remains 'firmly committed to take the necessary action to preserve the integrity, exclusivity and distinctiveness' of its brand...."


And a quote from Guess CEO Paul Marciano on


"Gucci is currently court-forum shopping to find a friendl[ier] court, but Guess will vigorously defend our rights in every jurisdiction...."


"Exporting copyright: Inside the secretive Trans-Pacific Partnership - Meet 'ACTA-plus,' and the people trying to stop it" (Ars Technica)


"TPP is a massive new free-trade style agreement that aims to provide 'comprehensive market access,' 'regulatory coherence,' and, most notably for the tech community, a commitment 'to ensure an effective and balanced approach to intellectual property rights among the TPP countries.' The agreement is currently undergoing its latest round of negotiations between representatives of nine Pacific Rim countries: Australia, Brunei, Chile, Malaysia, New Zealand, Peru, Singapore, Vietnam, and the United States. (Japan, Mexico, and Canada are trying to enter the negotiations as well.)


'I would say it’s ACTA-plus, not ACTA redux,' said Gwen Hinze, the Electronic Frontier Foundation’s (EFF) international IP director, in an interview with Ars. In other words, if you loved to hate the Anti-Counterfeiting Trade Agreement (ACTA), then you may love to hate the Trans-Pacific Partnership Agreement (TPP) even more....


Who’s in favor of the TPP? So far, the usual suspects: the Obama Administration, the Motion Picture Association of America (PDF), and the United States Chamber of Commerce, to name a few. Most declined to speak to Ars beyond their published statements...."


“Row over Rajasthan Fashion Week" (Times of India)

"The three-day Rajasthan Fashion Week is to begin today, but it has gotten into a bit of legal hot water at the last minute. A Jaipur-based company has sued the organizers of the week, claiming that the organizers are using the name Rajasthan Fashion Week 'illegally', while they, the company, have applied for a trademark for 'Rajasthan Fashion Week' and have been using that name since 2003...."


Indian government declares practice of importing goods without intellectual property owner's approval (i.e., "parallel imports"/"gray goods") perfectly legal (EXIM India)

“[India’s] Finance Ministry recently made it clear that imports of goods protected by patent or trademarks are permissible even without the authorisation of the Intellectual Property Rights (IPR) holder....


In response to representations from the traders seeking clarity on the issue, also referred to as ‘parallel imports’, the Central Board of Excise and Customs (CBEC) asked Customs officials to decide cases of parallel imports on the basis of the concerned legislation, which does not prohibit it...."


(In the U.S., the legality of importing such goods depends on the type of IP at issue and the law of the relevant circuit court... at least for now: read this and this.)




“FTC: Skechers deceived consumers with shoe ads” (U.S. News / AP)


"Skechers USA Inc. will pay $40 million to settle charges by the Federal Trade Commission that the footwear company made unfounded claims that its Shape-ups shoes would help people lose weight and strengthen their butt, leg and stomach muscles. Kardashian, Burke and other celebrities endorsed the shoes in Skechers ads.


Wednesday's settlement also involves the company's Resistance Runner, Toners, and Tone-ups shoes and claims of deceptive advertising for those shoes as well. Consumers who bought the shoes would be eligible for refunds, though it's not clear how much money they'll get...."


For more information, see “Skecher Shape Ups: Why Toning Shoes Don't Deliver On The Hype” (HuffPost Healthy Living) and “Want Kardashian curves? Don't look to Skechers for fix” (LA Times).


Incidentally, Kim Kardashian seems to have a knack for endorsing products that draw the ire of disappointed consumers (and/or the FTC). Just recently, news broke of this unappealing episode.  If only KiKard had actually endorsed Old Navy -- a company less inclined toward grandiose claims -- which opted for a lookalike instead.

"Undisclosed Synthetic Diamonds Appearing on Market" (JCK Magazine)


"After more than 600 synthetic colorless diamonds were submitted to the International Gemological Institute without disclosure, the lab is warning the trade about the possibility of more undisclosed stones on the market....

The [IGI] alerts note that while gem labs can distinguish synthetic diamonds with tools such as De Beers’ DiamondView, they cannot be distinguished from naturals with standard gemological tools such as loupes and microscopes. Disclosure of man-made gems is required by the FTC Guides.... It was not immediately clear who produced the diamonds in question."


"The $4,000 Bulletproof [or Rather, 'Bullet-Resistant'] Polo Shirt" [or, The story of a high-tech apparel company that needs to ensure its product claims are accurate and consistent... RIGHT NOW] (SmartMoney)


"[Miguel Caballero's] 4-pound shirt's antiballistic panels promise to shield the wearer from a range of weaponry, though a version designed to withstand an Uzi costs a bit more than the one made to fend off a 9mm (prices range from $3,000 to $4,000 a shirt). The company, which calls itself the 'Armani of bulletproof clothing,' says its clothes are proven to work....


[But] even though the company's website declares, 'Yes, it's bulletproof,' there is a fine distinction here. The National Institute of Justice, which rates body-armor products, actually approves it for protection against some firearms -- but not heavy-duty guns like rifles or AK-47s. A company general manager says, 'Bullet-resistant is more accurate.'..."


Eye-Tracking "Heatmaps" Reveal What Consumers Focus on in Advertisements; Implications for False Advertising and Trademark Litigation Could Be Significant (Business Insider)


“They say the eyes tell all. Now thanks to eye-tracking technology we can tell they're saying, and the results point to fascinating … insights into [consumer engagement with] advertising and design….”




"School Pays 20K in ‘Jesus Is Not a Homophobe’ T-Shirt Lawsuit" (WSJ Law Blog)


"There are fashion statements, and there are First Amendment fashion statements. On Monday, a federal judge in Ohio ordered the Wayne Local Schools to pay $20,000 in damages and court costs to a student who was twice prevented from displaying the message 'Jesus is not a Homophobe' on a T-shirt in school, and who was threatened with disciplinary action if the shirt was worn a third time, the Daytona Daily News reported....


Mr. Couch was initially prevented from wearing the shirt in April 2011 during a “Day of Silence,” an event to raise awareness of bullying of gay students, and later brought suit in conjunction with the Lambda Legal firm, claiming his First Amendment rights were violated...."


"Elephants, Donkeys And Judges [or, what jewelry/apparel is off-limits for judicial candidates?]" (Legal Profession Blog)


“Another opinion from the Florida Judicial Ethics Advisory Committee:


ISSUE: Whether a judicial candidate may wear jewelry or apparel depicting an elephant or donkey.


ANSWER: If a reasonable person objectively viewing the jewelry or apparel would conclude that the judicial candidate is ‘commenting on the candidate’s affiliation with [a] political party’ or is engaging in ‘conduct that suggests or appears to suggest support of . . . a political party,’ then no...."


"'Canal Zone' Collages [Appeal] Test[s] The Meaning Of 'Fair Use'" (NPR)


"For those of us who need a brief refresher on fair use: U.S. copyright law generally prohibits you from using somebody else's work without permission. But there's an exception for so-called 'fair use' — that's what allows you to comment, or criticize, or somehow transform the original work into something new....


[Celebrated artist Richard] Prince has been playing on traditional notions of authorship and originality since the late 1970s. His earliest success consisted of taking images from advertising, including the Marlboro Man, which Prince re-photographed and manipulated. Later on, Prince took famous books by other writers, slapped his own name on the cover in their place, and sold the result as a new work of art....


Last year, a judge found Prince liable for copyright infringement for using the photographs of another artist [in a series of collages] without permission.... In his deposition, Prince admitted he did not intend to comment directly on the Rasta photos he used — which is one factor the court cited in its ruling [that Prince's collage did not constitute 'fair use'.] If the lower court ruling stands, it could have implications far beyond the art world...."


“[South African President] Jacob Zuma goes to court over painting depicting his genitals” (Guardian)


"It began with an impression of a man's penis in an art gallery where only a tiny fraction of the population would normally set foot. Now it has become a national debate running the gamut from freedom of expression to the right to privacy, from the nature of racism to 'what is art?', and is being seen as nothing less than a test of South Africa's constitutional democracy.


On Wednesday the [South African] president, Jacob Zuma, will bring a court action to argue that a painting showing him with exposed genitalia should be removed because it violates his right to dignity and makes a mockery of his office....


Zuma is a polygamous Zulu who has married six times and has four wives. In 2010, he publicly apologised for fathering a child out of wedlock, said to be his 20th overall. In 2006, he was cleared of raping an HIV-positive friend but caused anger by saying he took a shower after having sex with her....


[Some] South Africans, both black and white, have taken the view that, as a public figure, Zuma should be thick-skinned when it comes to satire...."


[This post is for entertainment and informational purposes only, and does not constitute legal advice or create an attorney-client relationship among any individuals or entities.  Any views expressed in this post or at the linked web pages are those of the writer on a particular date, and should not necessarily be attributed to this writer, his law firm, or its clients.  Neither LAW OF FASHION nor any person or entity associated with it can warrant the thoroughness or accuracy of the content here or at the linked sites.]