Fashion Design:Thinking Across Boundaries

Margaret Hallet

University of Connecticut

School of Law

May 2008

2

Overview

Prevalence of Copying in Fashion Industry Impact of Technology on Copying Where Does Fashion Fit Within Various IP

Protections? Current Status of IP Protections Available to

Fashion Designers Impact of Low-IP Equilibrium in Fashion Industry Where Do We Go From Here?

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Prevalence of Copying in the Fashion Industry

Widespread and largely accepted Large retailers like H & M and Zara actually

specialize in copying Trends are created by copying and remixing

designs

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Impact of Technology on Copying

Digital photography Digital design platforms Internet Global outsourcing of manufacture More flexible manufacturing technologies H & M Designer Allen Schwartz declares that he

has “collections that emulated runway trends, which would be delivered to stores so quickly, they beat other major designers to the racks.”

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Zara

Spanish retail chain that uses a proprietary IT system to shorten their production cycle.

Company receives daily email streams from store managers signaling new trends, fabrics, and cuts from which its designers quickly prepare new styles.

Fabric is cut in an automated facility and sent to workshops.

High-tech distribution system ensures the finished items are shipped and arrive in stores within 48 hours.

Entire process takes 30 days (most competitors take from 4-12 months).

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Independent Designers

Favianna Clothing company manufactured copies of designer

dresses worn by celebrities at the 2006 Emmy Awards three days after the event.

Narcisco Rodriguez Rodriguez designed Carolyn Bessette

Kennedy’s wedding gown. One copyist sold 80,000 copies. Rodriguez was only able to sell 45.

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Application of IP to Fashion

Copyright Trademark Trade dress Patent

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Copyright

EU: IP Protection based on © law

US: Most promising form of protections

needs only to be “original” – much lower bar than “novelty” No filing requirement; protection is secured automatically

when the work is created Lack of protection stems from rule largely denying ©

protection to the class of “useful articles” Sketch may be protected, but not actual garment © law does not apply since the article’s expressive

component is not separable from its useful function

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Trademark

Useful when a fashion design visibly

integrates a trademark to an extent

that it becomes and element of the

design Ex: Burberry’s distinctive plaid Ex: Louis Vuitton handbags covered with “LV” mark

For a majority of garments, the trademarks are not visible or only subtly displayed (on buttons, tabs on side or back of item) and, therefore, do not prevent design copying.

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Trade Dress

Limited to non-functional design elements that are “source-designating” rather than merely ornamental.

U.S. law: Wal-Mart Stores, Inc. v. Samara Bros., Inc. held that product design “almost invariably serves purposes other than source identification.” Someone seeking TD protection for any product design is required to show that the design has acquired “secondary meaning.” To meet this requirement, a designer must show that “in the minds of the public, the primary significance of a product feature or term is to identify the source of the product rather than the product itself.” 529 U.S. 205 (2000)

Standard is hard to meet in fashion industry, especially by new designers due to costs, time, and uncertainty.

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Patent Substantive Issues:

Design patents are limited to designs that are truly “new” & must be novel and non-obvious

Does not extend to designs that are merely re-workings Design patents sometimes encounter problems with

functionality Procedural Issues:

Process of preparing a patent application is expensive and lengthy

Design patents are too slow given the short shelf-life of most fashion designs (often more than 2 years)

Uncertainty (approx 1/3 applications denied)

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Current Status of IP Protections Available to Fashion Designers

France “unity of art” approach Protection is provided under sui generis design laws and ©

laws 1994 – Yves Saint Lauren successfully

sued American designer Ralph Laurenfrom copying a popular design for a tuxedo dress in French court under © law in Societe Yves Saint LaurentCouture S.A. v. Societe Louis DreyfusRetail Mgmt. S.A., [1994] E.C.C. 512 (Trib. Comm. (Paris)).

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Japan

Protects the form, pattern, or color of an object Requirements include: visual appeal to aesthetic

sense, industrial usability, novelty, ease of creation, and uniqueness

Length of protection: 20 years Registration takes an average of 6-7 months No fashion designs listed as registered on the

Design Gazette (where registered designs are published)

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EU Protections Created uniform design protection for fashion designs

Design must be new and give an overall impression different from known designs

Design = “the appearance of the whole or a part of a product resulting from the features of, in particular, the lines, contours, colors, shapes, texture, and/or materials of the product itself and/or its ornamentation”

Unregistered Protects against deliberate copying Term- 3 years starting from date on which the design is first made

available to the public in any of the 25 countries of the EU Registered

Protect against both deliberate copying and the independent development of a similar design

Term – 5 years, renewable for 4 additional 5 year renewable terms

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US Proposed Protections Design Piracy Prohibition Act (H.R. 5055/H.R. 2033) –

currently pending Expansion of vessel hull protection provided in Ch 13

of the Digital Millennium Copyright Act Would provide limited © protection to fashion designs Fashion design = “the appearance as a whole of an

article of apparel, including its ornamentation” Must be attractive or distinct in appearance to the

purchasing or using public Term of protection – 3 years Registration – creator must register the design within

3 months of the design’s publication

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International Agreements

Berne Convention for the Protection of Literary & Artistic Works Preable provides that signatories are “equally animated by

the desire to protect, in as effective and uniform a manner as possible, the rights of authors in their literary and artistic works.”

Does not include fashion design in its list of what falls under “literary or artistic works,” but some have suggested that it is implied

Interpretation has not yet been addressed by WIPO, which acts as the administrative arm of Berne

Only applies to the extent such protection is afforded to nationals under a country’s own domestic regime.

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International Agreements (cont)

Trade-Related Aspects of IP Rights (TRIPs) Seeks to harmonize international IP rights by setting a minimum

level of protection each signatory government must provide Article 25(2) states: “Each Member shall ensure that

requirements for securing protection for textile designs, in particular in regard to any cost, examination or publication, do not unreasonably impair the opportunity to seek and obtain such protections. Members shall be free to meet this obligation through industrial design law or through copyright law.”

Under narrow reading, US is in compliance due to limited TM and © protections available

Under broad reading, it may be construed that signatories must provide IP rights equivalent to those given to other artists; in this case, US would be in breach

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Impact of Low-IP Equilibrium in Fashion Industry

Impact on economy Benefits to industry as a whole

“The Piracy Paradox” Induced obsolescence Anchoring

Negative impact on SMEs

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Impact on Economy

Knock-offs provide less expensive copies and have economic utility IP protections will slow the fashion cycle leading

to higher prices to offset lack of demand for new trends

Licensing costs resulting from IP protection increase prices

IP protections did not negatively affect other industries such as music and film

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“The Piracy Paradox”

Introduced by Kal Raustiala & Christopher Sprigman

Copying fails to deter innovation in the fashion industry because copying is not very harmful to originators, and may actually promote innovation and benefit originators.

Reasons Induced obsolescence Anchoring

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Induced Obsolescence

Fashion is a status-conferring or “positional” good As a design begins to spread, its status-conferring

value grows. Once the design is so wide-spread, though, it

reaches exhaustion, and people look to the fashion industry for new designs.

Copying and re-working designs speeds up this process.

Some argue that the industry’s goal is to quickly exhaust the status-conferring value of clothes to induce us to chase the new thing.

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Anchoring

The process by which the fashion industry is able to put consumers on notice of changes in fashion trends.

The industry communicates the latest trend by flooding the market with a large number of copies and derivative re-workings of a limited number of designs each season.

Copying helps to anchor the new fashion season to a limited number of design themes, which are freely workable by all firms in the industry within the low IP equilibrium.

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Christian Louboutin: Original Designer of the Platform Pump

The Platform Pump

Brian Atwood Gucci Michael Kors Diba

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Effect on Fashion Industry as a Whole & Large Retailers

This cycle promotes innovation by creating a large demand for new designs and trends.

Large retailers like H & M and Zara base their central business model on the copying of design elements that appear on runway shows.

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Effect on SMEs

SMEs take many forms: designers, manufacturers Pros of IP Protections:

Often SMEs do not have the money or technology to mass produce copies.

Little incentive for SMEs to innovate if their design can be stolen by large retailers who have the ability to take the designs to the marketplace faster.

IP protections and licensing is important to protect the SMEs

Cons of IP Protections: SMEs can also be copycats

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B. Shaps, a.k.a. the “Golden Boy”

Rivalry between the Golden Boy and Donny Maharelli. By age of 27 each had begun his own fashion company

The Golden boy in France reinventing European classics Maharelli in U.S. reinventing American classics

In 2008, Maharelli’s business suffered as new designers sprung up and European styles grew in popularity.

He sent assistants to the Golden Boy’s fashion shows throughout Europe, had them take digital photos and email them back.

Maharelli’s knock-offs reached the public before the Golden Boy’s original designs, resulting in significantly decreased sales for the Golden Boy.

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Brimful Designs

A small textile design studio in Lahore, Pakistan making high quality printed cotton designer clothing.

Faced large scale copying in 2003 that almost put them out of business.

Salesmen used the designer’s product

catalogue, confusing Brimful’s loyal

customers

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Underutilization of IP Protections in Fashion

Review of EU fashion design registration database for all apparel registered from Jan 1, 2004 – Nov 1, 2005 showed only 1631 fashion designs had been registered (approx 800 “designs” were plain t-shirts or other tops with TM or pictorial works, pocket stitching for jeans, and athletic wear bearing TMs)

Small number of companies registered their designs Street One GmbH, a mid-tier German fashion firm was

solely responsible for 409 registrations. Those seeking protection appear to be largely SMEs

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Possible Explanations for Apparent Underutilization

Costs Time Threshold for originality may be too low Figures may be misrepresentative

Designers may be opting for unregistered free 3-year protection

3 ways to register With individual member state With WIO through the Hague Agreement With the Union-wide Community design system

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Moving Towards Utilization: Brimful Designs

Large scale copying in 2003 that almost put them out of business.

Consulted experts at an IP training seminar sponsored by Pakistan’s Small and Medium Enterprise Development Authority (SMEDA) who recommended seeking protection under Pakistan’s Industrial Design Ordinance 2000.

Registered all designs for the Yahsir Waheed Designer Lawn Collection.

Infringers are no longer making exact replicas, but copies are still close enough to confuse buyers.

Brimful owners complain about high costs of legal counsel, and lengthy process of obtaining & implementing a court injunction.

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Finding the Right Balance

No indication that existence of IP protection has harmed the fashion industry

There is evidence that a lack of protection has harmed SMEs

Important to provide the appropriate form of IP protection: Time

Must be available immediately to protect designers Must not last too long to protect the fashion industry and the public

Coverage Protection for parts of a design is important Need appropriate threshold of originality requirement

Effective Policing