Interview: IP Enforcement In The US Fashion Industry

Protecting intellectual property rights in the fashion industry can be a tricky exercise in this fast-moving environment. Several avenues are possible for fashion designers in the United States, such as trademark, trade dress or design patents.

Perkins Coie IP litigation partner Ann Schofield Baker, based in New York, participated in an interview with Intellectual Property Watch’s Catherine Saez on ways fashion designers can protect and enforce their rights in the US.

Intellectual Property Watch (IPW): What impact does counterfeiting have on the US fashion market?

Ann Schofield Baker (BAKER): The loss to the fashion business is enormous. Counterfeiting costs US designers billions of dollars every year.

IPW: What kind of IP is the fashion industry using in the US?

BAKER: The most common form of intellectual property protection in the fashion industry is certainly trademark protection. the trademark itself is a distinctive logo or name that indicates the source of the product. So if you look at a t-shirt and see a logo of an alligator, you know that it is Lacoste. The same goes for word marks like Gucci or Michael Kors, for example.

In the US, trademark rights are established by use. You develop trademark rights in a brand simply by being the first to use it as a trademark on your class of products in commerce. You don’t necessarily have to register a trademark with the patent and trademark office to have a protectable interest, however, registering the trademark gives you a broader range of trademark protection as well as remedies, and it gives notice to the fashion industry that you have a trademark on a particular logo or name.

The duration of a trademark in the US is potentially infinite, which sets it apart from other forms of intellectual property protection. As long as you are the first and exclusive user of the trademark on a class of goods, and as long as you continue to use the mark in the US without interruption, your trademark protection can last forever. Ralph Lauren will own the word Ralph Lauren forever as long as he keeps manufacturing under that name. Every couple of years you have to file a Statement of Continued Use with the trademark office to keep the registration alive.

There is a subset of trademark law called trade dress protection. Trade dress protection covers the characteristics and distinctive visual presentation of the product. So this could include packaging of a particular product as well as design elements. It is harder to get trade dress protection because it requires what we call “secondary meaning” in the market for marks that are not inherently distinctive. In a nutshell, “secondary meaning” means that consumers associate the mark exclusively with a single brand or source. In the United States, there is quite a high threshold to establish secondary meaning, but if you can do it, trade dress is another avenue you can use to protect your designs.

One of the elements of intellectual property that is not utilised as frequently as it could be is a design patent. A design patent is a new ornamental design that is non functional. It can be used to protect things like shoe design or handbags. Those are the areas that have used design patents more than others. The downside of having a design patent is that it takes anywhere from eight to twenty four months to obtain one, which is a little bit slow for a fashion cycle. But designers who know that they have come up with an iconic shoe design that they know will be staying in their line for many years to come should consider obtaining a design patent for it. To get a design patent, a designer must file an application with the patent and trademark office and receive a registration. A design patent in the United States lasts for 14 years.

One of the areas that is not protected nearly as well in the United States as in Europe is in the realm of copyright protection. In the United States it is next to impossible to get a copyright on a fashion design. You can sometimes get copyright protection on items like fabric prints and jewellery, but garment designs are not protected by copyright.

IPW: How do IP owners enforce their rights in the fashion industry?

BAKER: The most common way is to file a federal court litigation if you believe someone is infringing your trademark or your patent. That gives you the right to file a lawsuit in federal courts. Federal courts are better staffed, they have a good reputation with respect to being able to handle intellectual property disputes so it is a good thing to be able to file in federal, as opposed to state court.

There are several kinds of federal court litigations that you could bring as well. It depends on how urgent the situation is. You have the ability to request a temporary restraining order (TRO) which is used in urgent circumstances. For example, if someone is at a trade show selling counterfeit goods and the show is about to end, you would want to bring a TRO to get an immediate court order to go in there with law enforcement and scoop up evidence of the counterfeit goods. TROs can often be heard on the same day that they are filed and you have immediate access to law enforcement to go and give you a remedy in advance of trial. You need to have a really good case to win a TRO, and you still need to ultimately prove your case at trial.

In most cases, the plaintiff sues the defendant for infringement in federal court, and the parties either settle, or duke it out for years. Litigation is expensive, but sometimes it is the only way to stop an infringer.

Another venue that famous brand owners can go to is filing an action in the International Trade Commission (ITC). That is becoming a popular avenue for larger brands. Instead of filing a federal court action, you can file in the ITC. The benefit to an ITC case is that it is super fast. Discovery happens in a matter of months but the downside is that it is quite expensive because you have to move so quickly.

A recent example of a famous brand bringing an infringement case in the ITC is Nike. The company filed an ITC action for infringement of its “Chuck Taylor” shoes. Nike brought a suit against a number of large retailers and designers for alleged knockoff Chuck Taylor shoes. They brought the case in the ITC because it is faster and because the remedy is that you get an injunction to stop the importation of the infringing goods. You don’t get damages in the ITC, that is one of the reasons why it is a streamlined procedure, but there is a lot of heft behind an importation ban.

There is also the possibility to send a cease and desist letter to a party which you believe is infringing your intellectual property. However, my experience over the last couple of years is that people are sending fewer and fewer cease and desist letters. The minute you send one, although you are intending to resolve the matter without having to go file a litigation, you give the other side the ability to run into court and seek what we call a declaratory judgment that they don’t infringe, which gives them the opportunity to chose the venue of their choice as opposed to a venue that the plaintiff would prefer.

IPW: What is the difference between a copycat and a counterfeit?

BAKER: A counterfeit is a good that knocks off every aspect of a product, stitch for stitch, including the label. It passes off a fake good as a real good. A counterfeiter tries to convince a purchaser that a knockoff bag is, in fact, a real Louis Vuitton, for example. To me, a copycat would be someone who changes a few things here and there to basically steal the designs and ideas but uses its own brand-identifying label.

IPW: How can you enforce rights against copycats?

BAKER: That is a very fact-intensive question. Trademark infringement is inherently a highly fact-intensive inquiry. You have to look at the product at issue, the design, the overall look and feel of the product, the market in which it is sold, and whether someone has actually been confused into thinking the products are associated with each other. Many, many trademark infringement litigations have been filed over people that are not trying to knock off a brand but have come too close to a brand-established trademark.

IPW: Would you say that it is easier to go after counterfeiters than copycats?

BAKER: It is easier to prove an outright knockoff. It is a harder set of circumstances to prove when it is not an exact copy. There are more facts to look into and issues for a jury to decide.

IPW: Would you say it is common that designers get inspired by previous creation?

BAKER: Of course. It is very common for designers to draw inspiration from vintage pieces and styles. It is also very common in the fashion industry to shop the market. Designers will often go out and buy dozen of different brands for inspiration to see what other designers are doing. That does not inherently make one of their designs infringing. To infringe, you have to copy what is protectable, and what is protectable is a trademark or a trade dress, or a design patent or copyright.

In the fashion industry in the United States, the protection available to designers is far less than in Europe. Unless someone has copied a protectable form of intellectual property, the designer won’t be able to stop copycats.

IPW: Wouldn’t you say that the line is very thin?

BAKER: Look at it this way. You often see beautiful gowns designed for celebrities to wear on the red carpet. The dress design is not going to be protectable in the US. That explains why the very next day, somebody can go and copy the overall design of the dress to sell for a fraction of the price. That is very common. There is nothing you could do in this country to stop it.

What you can stop is someone putting a fake label inside that dress and trying to pass it off as an original put out by a famous designer or brand.

You can also sue to stop another designer from coming too close to your trademark. If a company goes out and makes minor changes to a Tommy Hilfiger logo, and adopts the logo on a new clothing line put out by the company, Tommy Hilfiger would sue to stop it. If he could prove that consumers would likely be confused into thinking that the company’s products are put out by Hilfiger, he’d win. If the changes are significant enough that consumers would not likely be confused, he’d lose. So yes, the line can be very thin.

IPW: Thank you.

 

Image Credits: New York Times, Perkins Coie