For US Fashion Industry – Design Protection Law Searches for the Right Pattern

(IPRinfo 3/2012)

Mitchell C. Stein
Michael J. Student
Natalie S. Lederman
Sullivan & Worcester LLP

Despite the financial and creative success of the US Fashion Industry, US courts struggle to provide adequate protection for fashion designs, although promising legislation is pending in the US Congress.

The current US legal regime does not adequately protect fashion designs. US Trademark law will protect a design only if it serves a branding function. For example, the famous Burberry plaid may be protected in the US as a trademark, but other unique plaid combinations will not be unless they are used to brand the product. Also, US trademark law will protect fashion designs from counterfeiting, but such claims again are based on the reproduction of the trademark, not the design. A knock-off artist that copies the cut of a Levi’s blue jean is not a counterfeiter if he does not copy any of the registered trademark elements on the jeans, such as pocket stitching or the Levi’s ”tab” on the back pocket.

US copyright law, which protects creative works, typically does not protect fashion designs because copyright does not protect ”useful articles,” and designs are often intrinsic to the ”useful” nature of the apparel. Also, considering the relatively short life of a particular fashion design and the relatively narrow scope of protection for copyrights, enforcement becomes impractical and expensive. US design patent law requires that a design be ”novel” and ”nonobvious” based on prior designs, which is a very difficult standard to achieve. Like copyright, design patent law will not protect functional elements, a concept that is broadly construed when it comes to the fashion industry.

Two recent cases from US courts in New York demonstrate the difficulties fashion houses face in protecting their designs.

Gucci America, Inc. v. Guess, Inc.: Protecting Stripes and Logos
The Gucci case exemplifies the way fashion designers seek to protect their designs through trademark law, and the potential obstacles they face. In 2009, Gucci sued Guess and other defendants asserting that defendants copied certain protected features of its products, including the Gucci ”red-green-red” stripe, ”G” logos and ”4G Square Repeating Logo.”

In order to prevail on its claims, Gucci must show that the designs at issue served to identify the products as Gucci products, and that customers were confused or likely to be confused as between the Guess and Gucci products either at the point of sale, or by post-sale exposure to the Guess products. Determining point-of-sale or post-sale confusion required both sides to engage in extensive pre-trial discovery and retain multiple marketing and other experts to conduct surveys or furnish opinions on consumer confusion and other issues.

After approximately three years of pre-trial proceedings and discovery, the court ruled that issues of material fact remained unresolved and sent the case to a full-blown trial, which was held in April, 2012. A decision is currently pending. Given the delay, consumption of business resources, and legal costs associated with a case of this magnitude, even where trademark protection is available, it is difficult to imagine how designers other than well-established design houses such as Gucci, could afford to protect their rights.

Christian Louboutin S.A. v. Yves Saint Laurent America, Inc.: Court Gives a ”Red Light” to Protecting Color
Until a US Supreme Court ruling in 1995, courts were split on whether a single color could be protected as a trademark. In 1995, however, the Supreme Court in Qualitex Co. v. Jacobson Products Co. rejected concerns that protecting colors would lead to ”color depletion” and recognized that a single color could be protected as a trademark.

The Louboutin case squarely addresses whether a single color can be protected when the color appears on a fashion item, rather than packaging. Since 1992, Louboutin has designed and sold women’s designer footwear featuring a distinctive, lacquered red outer sole. Louboutin obtained a registered trademark for its sole design in 2008. When Yves St. Laurent came out with a line of four all-red shoes (including a red sole) in 2011, Loubotin sued YSL for trademark infringement and sought an injunction.

The New York federal court denied Louboutin’s motion for injunction, concluding in effect that a single color never could be protected as a trademark in the fashion industry because color serves ornamental and aesthetic functions beyond serving as a brand identifier, and that grant of the injunction Louboutin sought would hinder competition.

The court’s denial of injunction is currently on appeal, and the decision from the appellate court is expected to become a leading case on the issue of protecting color in the fashion industry. Critics of the ruling argue that color should be treated no differently than other trademarks, provided it serves a branding function. Supporters of the ruling argue that the ruling protects competition and may even stimulate innovation.

Pending US Legislation: A New Dawn for US Design Protection?
The US Congress has not been completely blind to the need for federal design protection laws. In 1998, it passed for the first time a federal design protection law, the Vessel Hull Design Protection Act (”VHDPA”), which protects the designs of vessel hulls. The first proposed legislation in support of protecting fashion designs was introduced in 2006, but the legislation died in Congress.

In 2010, Senator Charles Schumer of New York and ten co-sponsors introduced a new fashion design protection bill, the Innovative Design Protection and Piracy Prohibition Act (”IDPPPA”). The bill, which was reintroduced in 2011 and is currently pending, is supported by the Council of Fashion Designers of America, which represents fashion designers, and the American Apparel and Footwear Association, which represents fashion manufacturers and distributors.

The IDPPPA would offer three years of protection to fashion designs, but would not require designers to register their designs prior to enforcing rights. Eliminating the registration requirement will particularly benefit emerging designers, who may lack the resources to maintain an effective registration program.

The statute would protect designs that are ”the result of a designer’s own creative endeavor” and that ”provide a unique, distinguishable, non-trivial and non-utilitarian variation over prior designs for similar types of articles.” A garment would have to be ”substantially identical” to the original design in order to meet the threshold for piracy. To avoid stifling competition, the statute contains various provisions aimed at preventing frivolous law suits, including a ”home sewing” exception that would exempt non-commercial copiers making a copy for personal wear.

Although the IDPPPA has gained more support than its 2006 predecessor, whether the legislation will be passed and signed into law, particularly during this presidential election year in the US, remains to be seen.

Going Forward: Three Steps to Help Protect Fashion Designs in the US
Despite the lack of clarity under US law when it comes to design protection, we recommend the following three tips:
* Trademark protection currently remains a designer’s best avenue for protecting designs in the US. If a designer can use its design as a brand identifier, such as the Burberry’s plaid, it will have the best chance of protecting the design.
* US copyright protection for designs is weak, but can be used in circumstances when there is a purely ornamental design element, and is relatively inexpensive to obtain. For example, it may not be possible to copyright protect a belt buckle due to its functional components, but an ornamental design on the buckle itself may be protected.
* Although it may be difficult to prevent knock-offs until the IDPPPA or similar legislation becomes law in the US, designers should have air-tight contracts with their distributors and retailers, including strong audit provisions, to ensure that goods do not end up in the hands of grey-market dealers.

The authors of this article are IP and corporate attorneys at the New York offices of Sullivan & Worcester LLP (). Among other things, they specialize in brand management, licensing, and IP development, protection and litigation.

February 14, 2012 Opinion and Order in Gucci America, Inc. v. Guess?, Inc., United States District Court for the Southern District of New York, 09 Civ. 4373 (SAS).

August 10, 2011 Decision and Order in Christian Louboutin S.A. v. Yves Saint Laurent America, Inc., United States District Court for the Southern District of New York, 11 Civ. 2381 (VM).