Nazli Ramzy
March 2006
Intellectual Property Law Dissertation:
“CHANEL’S LAGERFELD DOES H&M:
A REFLECTION ON HOW DESIGN PIRACY AFFECTS THE FASHION
INDUSTRY”
H&M on NYC’s 5th Avenue (December 2005)
Convener: Alan Story
Word Count: 5,350
TABLE OF CONTENTS
Abstract
Introduction
I-
Design Piracy, an Alleged Problem For the American
II-
Options for Fashion Design Protection in the U.S.
A) Trademark and Trade Dress
B) Design Patent
C) Copyright
III-
How Copyright Works for Europe
A) The Berne Convention
B) The United Kingdom
C) France
IV-
The Current State of the Law in the U.S.
A) The Useful Articles Doctrine
B) The Useful Articles Doctrine
C) The Seperability Analysis
V-
Fashion for the Masses
A) Cheap Chic
B) H&M Brings High-End Designers to the Masses
VI-
A Different Perspective: No Need For Protection – The Odd Economics of the
Fashion Industry
A) The Incentive Rationale for Intellectual Property Rights
B) Counterfeit Merchandise, Friend or Foe of the High-End Fashion Market?
Conclusion
Bibliography
Annexes 1-6
2
Abstract
Certain industries, such as the fashion realm, thrive on the imitation of ideas –
‘knocking off’ is a way of life in the fashion industry. However European countries
such as France and the UK have copyright laws that specifically protect fashion
works. On the other hand the U.S. has no such laws. Recently the U.S. has been
widely criticized for that reason and therefore many argue that it is time to make
room for the protection of fashion works. Several routes, such as trademark and trade
dress, design patents and copyright, are explored so as to determine where such
provisions could be adequately integrated – the most favorable being the latter. This
dissertation will also include a look at the current state of U.S. law which seemingly
does not easily allow for copyright to protect fashion designs because apparel is
considered to be of useful nature.
The aim of this dissertation will be to counter-argue that there is an imminent need
for a change in the law whilst proving that the ‘knocking off’ of fashion designs may
actually be advantageous to the industry because of its somewhat odd economics and
the social weight that apparel carries.
3
Introduction
“Fashion is not something that exists in dresses only, fashion is something in the air. It’s
the wind that blows in the new fashion; you feel it coming, you smell it […] in the sky, in
the street; fashion has to do with ideas, the way we live, what is happening”1.
Today’s fashion industry is an international multi-billion dollar business that’s way of life
and very survival revolves around the act of knocking off, imitating, and borrowing – it’s
based on gaining perpetual inspiration from the work of others. In this regard, imitation
could be held to be the ‘very lifeblood of a competitive economy’. Nevertheless, some
designers take the stance that stylistic innovation is the key to competitiveness in the
fashion world as opposed to imitation which is pure ‘highway robbery’ and destroys the
incentive for innovation. This view is in agreement with the standard incentive rationale
for intellectual property rights which assumes that unauthorized imitation necessarily
reduces innovation incentives by depriving the innovator of sales it would otherwise
enjoy in the absence of imitation.
However, in this paper’s opinion, in a culture of
constant sampling and remixing of ideas, imitation of all kinds appears inevitable. The
entire fashion industry thrives on the imitation of ideas. It is general practice among
fashion designers to ‘borrow’ styles and ideas from their contemporaries as well as from
the past – often reinterpreting an old idea or design and incorporating it in an updated and
modern manner.
Statement made by the legendary designer Coco Chanel. David Bollier and Laurie Racine, ‘Control
Creativity? Fashion Secret’, September 2003 at http://www.csmonitor.com/2003/0909/p09s01-coop.htm
(accessed on 09/12/2005)
1
4
Consequently, those that support the standard incentive rationale have been lobbying for
intellectual property protection to be extended to garments in the United Sates of
America (U.S.), following in the footsteps of European countries such as France and the
United Kingdom which have laws that encourage and reward stylistic innovation.
Therefore various areas of the law such as trademark, design patent and copyright shall
be explored so as to determine where there could be room for such protection in U.S. law.
From a different angle, this very much contentious issue should also be analyzed in the
light of the current state of economy and cultural contexts. Within an increasingly label
conscious society, consumer obsession with fashion and trends is creating an insatiable
materialism that innocently settles for an imitation when the original is beyond reach. The
fashion arena functions, in what is known as a fashion cycle, where the elite class sets the
fashion trends because they wish to be distinctive and where average consumers buy
cheaper adaptation of the same styles. And by the time a style reaches the masses, the
trend has become commonplace and is abandoned by the trendsetters.
I therefore propose that there is, in fact, no imminent need for the integration of apparel
protection into U.S. intellectual property law. The odd economics of the fashion industry
and the social factors are essential parts of the equation to understanding the raison d'être
of this hypothesis – knocking off does not necessarily reduce innovation and certainly
does not deprive the innovator of sales.
5
I – Design Piracy, an Alleged Problem for the Americans
In today’s world, apparel goes beyond necessity. What one chooses to wear is an
indicator of who that person is. Fashion designers from across the globe work extremely
hard at providing each and every consumer with original fashion designs that they can
assimilate with. Yet this hard work goes unprotected by law in the U.S.
Fashion design piracy is an extensive source of debate in the U.S. because some are of
the view that design piracy harms fashion designers as well as the fashion industry as a
whole. Their opinion lies in that fashion designers invest a lot of time, money, and most
importantly effort to develop designs, only to have their original designs ‘legally copied’
by manufacturers or other designers. While notions of justice and fairness suggest that
these designers should be compensated and protected by law, design piracy is entirely
legal under present U.S. law2. There was one fashion designer in the 1980’s who openly
copied designs from other designers and was able to earn, through ‘legally copying’, as
much as $200 million in just one year.
The copying of designs often occurs overtly. Design pirates will send designers to fashion
shows to sketch – or knockoff – designs as they are parading down the runway. And
Voilà! Instantly a new design appears on the racks before the original one even reaches
the market. In the case of Johnny Carson Apparel, Inc. v. Zeeman Manufacturing Co.3,
Julie P. Tsai, “Fashioning Protection: A Note on the Protection of Fashion Designs in the United States”,
9 Lewis & Clark L. Rev. 447
3
Johnny Carson Apparel, Inc. v. Zeeman Manufacturing Co., No. C75-544A, 1978 WL 21356 (N.D. Ga.
Nov. 4 1978).
2
6
the defendant, Johnny Carson purchased a suit designed by the plaintiff, took it apart so
as to copy it, put it back together, then had the audacity to try and return it to the store
where he had purchased it.
Also, a well-known fashion design company – A.B.S Clothing Collection, Inc. (ABS),
has in fact built its entire business around copying the designs of other designers. The
President of ABS, has admittedly sketched dresses worn by the ‘Stars’ whilst watching
the Academy Awards broadcast and from there determining which ones his company was
going to ‘interpret’.
The large fashion houses have taken severe measures to protect their designs to being
subject to design piracy. Hèrmes, a French internationally renowned design house, has its
lawyers searching for knockoffs of its scarves, handbags, and accessories on eBay as well
as roaming the shops to keep those knockoffs off the street4.
What high-end fashion designers refer to today, as their ‘mortal threat’ are counterfeit
products. Counterfeiting is the act of producing and/or selling “a product with a sham
trademark that is an intentional and calculated reproduction of a genuine trademark” 5.
Specifically, a counterfeit is anything that is forged, copied, or imitated without the
perpetrator having the right to do it and with the purpose of deceiving or defrauding.
Julie P. Tsai, “Fashioning Protection: A Note on the Protection of Fashion Designs in the United States”,
9 Lewis & Clark L. Rev. 447
5
Sarah J. Kaufman, “Trend Forecast: Imitation is a Legal Form of Flatter – Louis Vuitton Malletier v.
Dooney & Bourke, Inc.” (2005), 23 Cardozo Arts & Ent. L.J. 531
Black’s Law Dictionary provides the following definition of ‘counterfeit’: To unlawfully forge, copy, or
imitate an item, especially money or negotiable instrument or other officially used item of value, or to
possess such an item without authorization and with the intent to deceive or defraud by presenting the item
as genuine.
4
7
The distinction must be stressed, however, between counterfeit products and knockoff
designs. Counterfeiting is explicitly illegal, typically because it appropriates a brand
name trademark, whereas a knockoff is simply a copy of another’s design and is perfectly
legal. Thus in a culture defined by a growing fascination with fashion, one is either
required to ‘get on the wave of the trend or the style or miss it’ – imitations are not only
lawful, they become inevitable6.
II- Options for Fashion Design Protection in the U.S.
A) Trademark / Trade Dress
Trademark law serves to protect the ‘mark-good’ combination. In order to register a
trademark, the trademark must be associated to a specific product, such that the public
instantly identifies the mark and links the elements and qualities of the product with the
good7. A perfect illustration of a trademark is the Nike ‘swoush’ – the general public
recognizes this graphic mark as pertaining to a genuine Nike product, thus expecting a
product of a certain caliber. However the registration of a trademark does not protect the
actual garment design – trademark law protects a designer from unauthorized use of the
registered mark.
6
Id.
This is so-called ‘secondary meaning’ test, which states that the original trademark has become so
associated in the minds of the public that the mark is solely identified with the original goods, and that
public confusion would ensue if another’s similar mark was allowed into the public marketplace. Jennifer
Mencken, “A Design for the Copyright of Fashion”, 12 December 1997, at
http://www.bcedu/bc_org/avp/law/st_org/iptf/articles/content/1997121201.html (accessed on 1/15/2006)
7
8
A trademark is defined as “any word, name, symbol, or device, or combination thereof”
that is adopted and used by a manufacturer or merchant “to identify his goods and
distinguish them from those manufactured and sold by others”8. Trademark is suitable for
words, emblems, logos – such as the Ralph Lauren polo player, and the ‘LV’ mark on
Louis Vuitton products – or symbols, therefore trademark law is efficient in protecting
designers against counterfeiters and gray marketers. For example, a knockoff Chanel
handbag copying the ‘double-C’ logo or the imitation of Izod Lacost shirts copying the
alligator logo would be violations of trademark law.
Trade dress, like trademark, is a trade symbol and is protected by the Lanham Act 9.
However, trade dress refers to a product or service’s appearance as a whole – the
complete image either of the product itself or the packaging that is presented to
consumers. Trade dress is a much broader concept than trademark, combining various
elements of a product such as the product’s size, shape, color, graphics, packaging, label,
and advertising as well as marketing techniques.
To determine whether trade dress would be suitable for the protection of fashion designs,
it would be useful to explore the different factors involved in a suit for trade dress
infringement. To prove that there has been a violation of trade dress under §43(a) of the
Lanham Act, the plaintiff designer must demonstrate that his of her trade dress is
Christine Magdo, “Protecting Works of Fashion from Design Piracy” (2000) as extracted from Michele A.
Shpetner, “Determining a Proper Test for Inherent Distinctiveness in Trade Dress, 8 Forham Intell. Prop.
Media & Ent. L.J. 947, 948.
9
Lanham Trademark Protection Act §45(a), as amended, 15 U.S.C. §1125(a) (1994). The Lanham Act, as a
whole, serves as a consumer protection statute aimed at securing the public’s right to buy products
knowledgably without unwarranted confusion and does not protect the first creator of a trademark as a
reward for his originality.
8
9
nonfunctional, distinctive, and likely to be confused by consumers with the defendant’s
product. The doctrine of functionality dictates that a product that is considered to be
functional in nature cannot be protected. Functionality is based on whether a product
feature is “essential to the use or purpose of the article or if it affects the cost or quality of
the article”10. The functionality doctrine prevents the use of trademark law if the product
“confers competitive advantage upon its user”11 by allowing a producer “to control a
useful product feature”12.
The second limb to establishing a trade dress suit is that the product must be ‘distinctive’.
Distinctiveness may be satisfied in two distinct manners: the product can be ‘inherently
distinctive’ or it could have acquired ‘secondary meaning’. The former refers to a
product’s ability to distinguish a particular business or product from that of another. A
trade dress with secondary meaning must fulfill the primary function of identifying the
purveyor of the product13. This is quite a high threshold for a work of fashion – a
designer’s association with the trade dress is not enough to establish secondary meaning.
Secondary meaning, under normal circumstances, takes a certain amount of time to
establish and thus is not an adequate solution for the protection of fashion works.
However, the concept of ‘inherent distinctiveness’ seems to be of more relevance to
works of fashion. This concept connotes that a trade dress is so unique, creative, and
Julie P. Tsai, “Fashioning Protection: A Note on the Protection of Fashion Designs in the United States”,
9 Lewis & Clark L. Rev. 447
11
Christine Magdo, “Protecting Works of Fashion from Design Piracy” (2000) as extracted from Michele
A. Shpetner, “Determining a Proper Test for Inherent Distinctiveness in Trade Dress, 8 Forham Intell.
Prop. Media & Ent. L.J. 947, 948., extracted from Daniel J. Gifford, “The Interplay of Product Definition,
Design and Trade Dress, 75 MINN. L. REV. 769, 781 (1991).
12
Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 164 (1995).
13
Id.
10
10
uncommon that it presumably signals the source of the product. An ‘inherently
distinctive’ design need not possess a secondary meaning so as to be protected by trade
dress. The logic behind the idea of ‘inherent distinctiveness’ is to protect a producer
whose competitors can knockoff his product before secondary meaning can be
established. This doctrine appears to be well-suited for fashion designs, as opposed to the
idea of secondary meaning which is quite unrealistic given the short life span of most
fashion designs.
The third element needed to bring a suit in trade dress is to establish that is it most likely
for a consumer to be confused between the original and the knockoff. Therefore,
theoretically, once a fashion designer can establish that his trade dress is nonfunctional,
distinctive, and likely to be confused by consumers with the defendant’s imitative trade
symbol, he may seek an injunction against further marketing of the knockoff14.
While hypothetically trade dress protection could be used to protect fashion designs from
being copied, in practice many courts are still reluctant to apply trade dress law for the
protection of apparel15.
14
Id.
In the case of Abercrombie & Fitch Stores, Inc. v. American Eagle Outfitters, Inc. 280 F. 3rd 619 (6th
Circ. 2002), Abercrombie brought an action against American Eagle alleging trade dress infringement of its
clothing designs. Abercrombie sought to protect certain design elements of its clothing including the use of
the Abercrombie’s trademarks on clothing bearing “primary color combinations […] in connection with
solid, plaid and stripe designs and made from all natural cotton, wool and twill fabrics” to create a rugged
and casual clothing. The court found that Abercrombie’s competitors would be at a significant nonreputational competitive disadvantage due to the paucity in comparable alternative features if protection
were granted. Therefore, the court held that the designs were functional and rejected Abercrombie’s claim
for trade dress infringement. (Julie P. Tsai, “Fashioning Protection: A Note on the Protection of Fashion
Designs in the United States”, 9 Lewis & Clark L. Rev. 447).
15
11
B) Design Patent
Patent protection can be obtained for useful inventions and original designs for articles of
manufacture16. Design patents specifically protect the appearance of an article. To
acquire a design patent various elements are required such as the establishment of
novelty, nonobviousness, ornamentality, and nonfunctionability.
Only certain aspects of a fashion design are eligible for design patent protection for the
reason being that clothing is inherently functional. However, the main hurdle that a
fashion design will encounter in this respect is the nonobviousness requirement.
Nonobviousness is required from the angle of a skilled designer in the field. Design
patents demand some skill beyond that of an ordinary designer17. This is such a difficult
hurdle to overcome that even new fashion designs that do not incorporate any known
design element can fail to obtain patent protection.
In addition to the difficulties in overcoming the various requirements of a design patent,
there are other elements that illustrate that patents are less than ideal for the protection of
fashion designs. The Patent and Trademark Office takes approximately twenty-six
months to review each patent application. Fashion designs have a short life span and
therefore it would be a waste of time to spend twenty-six months reviewing a patent for a
Julie P. Tsai, “Fashioning Protection: A Note on the Protection of Fashion Designs in the United States”,
9 Lewis & Clark L. Rev. 447
17
Id.
16
12
fashion design with a life span of less than twelve months18. It could also be considered a
squander of financial resources as it is extremely costly to acquire a design patent.
C) Copyright
Currently under the U.S. Copyright Act, copyright protection is denied to fashion works
on the ground that they are ‘useful articles’19. However, copyright does cover design
elements of a useful article that are distinguishable and independent of the utilitarian
function of the article. The dominating opinion concerning fashion designs in apparel is
that they cannot be copyrighted because they are not physically or conceptually separable
from the useful article, i.e. the clothing20.
Any design with ‘an intrinsic utilitarian function’ seeking copyright protection, under the
1976 Copyright Act, must pass either the test of physical or conceptual separability.
Useful articles can be copyrighted to the extent that their “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”21. To pass the test of
‘physical separability’ consists of proving that the functional part of an item is physically
separable from the artistic part, however, this is not normally the case in fashion works.
Therefore, if a fashion designer is seeking copyright protection, he must persuade a judge
18
Id.
Christine Magdo, “Protecting Works of Fashion from Design Piracy” (2000) at
http://leda.law.harvard.edu/leda/data/36/MAGDO.html (accessed on 14/01/2006).
20
Id.
21
Id.
19
13
that the item of clothing is either nonfunctional or that the artistic design is separable
from its utilitarian purpose.
Some argue that since copyright has been extended to protect elements such as fashion
accessories, works of architecture, and computer chips, it might be the best legal weapon
that fashion designers have at their disposal to combat design piracy.
III- How Copyright Works for Europe
The European apparel market is of extreme importance and with the now established
European Union, there is an increase of pirating activity which explains why European
fashion capitals have a strong incentive driving them to protect their substantial interests.
Both the United Kingdom (UK) and France, which are members of the Berne
Convention22, extend significant copyright or quasi-copyright protection to fashion
works. The protection of fashion works provided by European legal systems seems to be
at the root of the success of the apparel industries in countries such as the UK and France.
A) The Berne Convention
A solution to the international issue of design piracy of fashion works can be found in the
Berne Convention23. It requires that member states reciprocate copyright protection24 - in
22
The Berne Convention for the Protection of Literary and Artistic Works, 9 September 1886.
“The Berne Convention strives to protect the rights of authors in their literary and artistic works,
including books, pamphlets, writings, musical compositions, designs and scientific works”. The Berne
Convention for the Protection of Literary and Artistic Works, 9 September 1886, Introduction.
23
14
other words, “each member state extends to nationals of other member states the same
copyright protection that it provides its own nationals”25. The Berne Convention also
imposes minimal requirements for the copyright laws of member states26.
The U.S. is indeed a member of the Convention27, however it fails to adhere to the
standards imposed by other member states of the Convention such as the UK and France.
B) The United Kingdom
The Copyright, Designs and Patents Act of 1988 creates a ‘design right’, distinct of the
law of artistic copyright, “protecting original non-compliance designs of the shape or
configuration of articles against copying”28. This design right expires: (a) fifteen years
from the end of the calendar year in which the design was first recorded in a design
document or an article was first made to the design, whichever first occurred, or (b) if
24
The Berne Convention for the Protection of Literary and Artistic Works, 9 September 1886, art. 5, para.
3: “Protection in the country of origin is governed by domestic law. However, when the author is not a
national of the country of origin of the work for which he is protected under this Convention, he shall enjoy
in that country the same rights as national authors”.
25
S. Priya Bharathi, “There is more than one Way to Skin a Copycat: the Emergence of Trade Dress to
Combat Design Piracy of Fashion Works” (1996), 27 Tex. Tech L. Rev. 1667
26
Berne Convention, supra note 66, art. 5, paras. 1-2.
(1) Authors shall enjoy, in respect of works for which they are protected under this Convention, in
countries of the Union other than the country of origin,, the rights which their respective laws now
or may hereafter grant to their nationals, as well as the rights specially granted by this Convention.
(2) The enjoyment an d exercise of these rights shall not be subject to any formality; such enjoyment
and such exercise shall be independent of the existence of protection in the country of origin of the
work. Consequently, apart from the provisions of this Convention, the extent of protection, as well
as the means of redress afforded to the author to protect his rights, shall be governed exclusively
by the laws of the country where protection is claimed.
27
since 1 March 1989.
28
Copyright, Designs and Patents Act, 1988, ch. 48, §213.
15
articles made available for sale or hire within five years from the end of that calendar
year, ten years from the end of the calendar year in which that first occurred29.
One may infringe upon another’s design right by copying an article protected by the act if
the copy produces “articles exactly or substantially to that design”30. One may also be
found in violation of the statute – as a ‘secondary infringer’ – if one “(a) imports into the
UK for commercial purposes, or (b) has in his possession for commercial purposes, or (c)
sells, lets for hire, in the course of a business” an infringing article31. Infringement of a
design right “is actionable by the design right owner”, and if established, the plaintiff is
entitled to “all such relief by way of damages, injunctions, accounts or otherwise […] as
is available to the plaintiff in respect of the infringement of any property right”32.
More importantly, the 1988 Copyright Act eliminated the indirect copying doctrine.
C) France
Since the emergence of the fashion industry, France has been considered as “the epicenter
of the fashion industry”33. This status that France holds is due to the establishment of
haute couture in the mid-nineteenth century, which evolved in an environment of
concretely enshrined copyright.
29
Id. § 216.
Id. § 226.
31
Id. § 227.
32
Id. § 229.
33
Leslie J. Hagin, “A Comparative Analysis of Copyright Laws Applied to Fashion Works: Renewing the
Proposal for Folding Fashion Works into the United Sates Copyright Regime” (1991), 26 Tex. Int’l L.J.
341
30
16
Fashion works, in France, were first afforded protection as applied art under the
Copyright Act of 1793. Further protection was extended under the 1909 Act, as
nonfunctional designs and patterns. Currently under the French copyright law system,
specific provisions are dedicated to fashion works.
Originality, as in the UK and in the U.S., also comes into play, the French courts qualify
originality on an ad hoc basis, looking to any works which may have inspired the design
at issue34.
IV- The Current State of the Law in the U.S.
A) The Useful Articles Doctrine
Currently, under U.S. copyright law, copyright protection is not available to clothing
designers, due primarily to a policy called the ‘useful articles doctrine’ which limits
copyright protection to items that possess a functional as well as an artistic purpose.
Section 113 of the Copyright Act allows for a crucial exception to the protection of works
in the pictorial, graphic and sculptural category. The following statement is known as the
useful articles’ doctrine: “This title does not afford, to the owner of copyright in a work
that portrays a useful article as such, any greater or lesser rights with respect to the
making, distribution, or display of the useful articles so portrayed than those afforded to
34
Id.
17
such works under [federal or state] law”. Regarding this statement, Congress has
expressed its desire to limit the ability of manufacturers to monopolize designs dictated
solely by the function the article is to serve. The rationale of the useful articles doctrine is
an attempt to draw a line in the sand between copyright and patent law35.
B) The Separability Analysis
The leading case on the protection of useful articles is Mazer v. Stein36. The plaintiff
manufactured a lamp whose base consisted of a statuette. The Statuette, without any lamp
components included, had been registered by the Copyright Office. The defendant sold
lamps embodying copies of the statuettes. The defendant challenged the validity of the
copyright in a work of art that was intended to be incorporated into a useful article. First,
the Court established that the statuettes standing alone could be considered works of art
eligible for copyright protection. The ‘art’ in Mazer was an integral part of the physical
structure of the lamp. Thus, Mazer stands as an example of the ‘conceptual separability’
from utilitarian function that may support copyrightable subject matter37.
In the case of Kieselstein-Cord v. Accessories By Pearl, Inc.38 the Court attempted to
clarify when a useful article contains ‘physically or conceptually separable’ copyrightable
elements. In this case, the subject matter was ornamental belt buckles, and although belt
Anne Theodore Briggs, “Hung Out to Dry: Clothing Design Protection Pitfalls in United States Law”
(2002) 24 Hastings Comm. & Ent. L.J. 169
36
Mazer v. Stein 347 U.S. 201 (1954).
37
Peter K. Schalestock, “Forms of Redress for Design Piracy: How Victims can Use Existing Copyright
Law” (1997) 21 Seattle U.L. Rev. 113
38
Kieselstein-Cord v. Accessories By Pearl, Inc 632 F.2d 989 (2d Cir. 1980)
35
18
buckles clearly serve a utilitarian purpose, the Court found that the designs were
conceptually separable works of art and upheld the Copyright Office grant of registration.
The buckles were found to “rise to the level of creative work” and met the basic
requirements of originality and creativity”. Coincidentally, the Metropolitan Museum of
Art in New York City had accepted the buckles for its permanent collection. Ultimately
what the Court appeared to be saying was that any design of sufficient creativity and
aesthetic appeal would be considered ‘art’ contains separable elements that can be
copyrightable39.
Later, the case of Brandir Int’l, Inc. v. Cascade Pacific Lumber Co.40 refines the test for
conceptual separability – “If design elements reflect a merger of aesthetic and functional
considerations, the artistic aspects of a work cannot be said to be conceptually separable
from the utilitarian elements. Conversely, where design elements can be identified as
reflecting the designer’s artistic judgment exercised independently of functional
influences, conceptual separability exists”41.
Anne Theodore Briggs, “Hung Out to Dry: Clothing Design Protection Pitfalls in United States Law”
(2002) 24 Hastings Comm. & Ent. L.J. 169
40
Brandir Int’l, Inc. v. Cascade Pacific Lumber Co. 834 F.2d 1142 (2d Circ. 1987)
41
However, the Brandir test seems to portray discrepancies between the Second Circuit and the Supreme
Court’s application of the law.
39
19
V- Fashion for the Masses
A) Cheap Chic (Annex 1)
Today’s world strives on a competitive economy where “one can [legally] capitalize on a
market or fad created by another and try to capture as much of it as possible, provided
that it is not accomplished by confusing the public”42. In the name of preserving an
economically competitive market, copying is not always discouraged or disfavored, for
after all, “imitation is the life blood of competition”, especially in the fashion industry43.
However, there is a difference between ‘intent to capitalize’ and ‘intent to profit’ via
consumer confusion. For example, in the case of Louis Vuitton Malletier v. Dooney &
Bourke, Inc.44, it could potentially hinder the marketplace competition and the consumer
to grant Louis Vuitton a monopoly over all multi-colored repeating monograms set
against a black or white background.
The Fashion world as an industry stands out from other creative sectors in that the
fashion industry revolves around collaboration, derivation, recombination, imitation, the
revival of old trends/styles and even outright knockoffs – for example, long lineages of
couturiers from Balenciaga to Ungaro, Chanel to Lagerfeld, and Gucci to Tom Ford have
shown that designers necessarily must learn, adopt, and adapt from those who have
42
American Footwear Corp. v. General Footwear Co., 609 F.2d 655, 662 (2d Cir. 1979)
Sarah J. Kaufman, “Trend Forecast: Imitation is a Legal Form of Flatter – Louis Vuitton Malletier v.
Dooney & Bourke, Inc.” (2005), 23 Cardozo Arts & Ent. L.J. 531
44
Louis Vuitton Malletier v. Dooney & Bourke, Inc., 340 F.Supp 2d. In October 2002, Louis Vuitton, for its
Spring 2003 collection, introduced a fresh, new exciting concept – printing its ‘LV’ and geometric shapes
in array of bright colors on white and black handbags. The handbag became a ‘fashionista’s must-have
item. Its popularity pushed many handbag manufacturers to launch similar lines. Among them was Dooney
& Bourke which introduces the It Bag Collection, a similar, ‘inspired’, multicolored array accessories line.
Louis Vuitton filed a suit for trademark infringement, unfair competition and dilution, in an attempt to stop
others from following its new look and profiting from it.
43
20
blazed previous trails45. While the industry aggressively protects its brand names and
logos through the means of trademark law, the actual creative design of a product or
garment is usually not owned by anyone.
It has long been embraced by the fashion industry that “creativity is too large and fugitive
an essence to be owned outright as property and fashion thrives in a competitive global
environment”46. It is indeed a factual truth that designers and knockoff artists compete in
the same market of design and creativity – when someone sets a trend, others tend to
follow or simply dish out their own version. (Annex 2)
The emergence of stores such as H&M, Zara, or TopShop that live and profit on the
creativity of the original designers, do not seem to be putting high-end brand names such
as Gucci, Armani, or Prada out of business. Moreover, this tension between creativity and
competition is precisely why the success of knockoff artists is not predicated on the
notion that their creations possess a unique artistic vision47. Those who long for the
original, which is perhaps costly and therefore beyond there reach, may instead buy the
knockoff that is cheaper and therefore more accessible to them (Annex 3). This
phenomenon, in a way, demands that knockoffs must exist for the benefit of unprivileged
consumer and by extension the marketplace.
Sarah J. Kaufman, “Trend Forecast: Imitation is a Legal Form of Flatter – Louis Vuitton Malletier v.
Dooney & Bourke, Inc.” (2005), 23 Cardozo Arts & Ent. L.J. 531.
46
Id.
47
Id.
45
21
B) H&M Brings High-End Designers to the Masses
As previously stated, it is common practice for high-street fashion chains to copy the
trends straight from the catwalks of high profile designers (Annex 4). H&M, the Swedish
mass-market retailer came up with a different approach that it was able to deliver with the
help of Chanel’s designer, Karl Largerfeld – H&M was able to offer the masses a chic
and more importantly inexpensive collection. The most expensive piece in that collection
was a black wool coat that went for £ 89.99 which is a steal when one compares it to
Chanel’s famous tweed suit that costs approximately £ 3,000 – catwalk-inspired clothing
priced for the ‘hoi polloi’48. This merger between high-end fashion and low cost fashion
is a completely innovative movement that many big names are joining. Along with
Largerfeld, there is Isaac Mizrahi at Target and guest designers at several British retail
chains, including Hussein Chalayan and Sophia Kokosalaki at TopShop and Eley
Kishimoto for New Look49.
It was in the late 1990’s that retailers such as H&M and Zara, a Spanish retailer,
pioneered this new fashion movement. They opened hundreds of stores across Europe
and sped up the design cycle with computer technology. Zara uses data from its 426
stores to spot new trends, and offers 10,000 new products a year50. TopShop, a British
retailer, generates as many as 300 new designs a week (Annex 5).
“Lagerfeld at H&M: Couture Goes to the Mall”, at http://www.dwworld.de/popups/popup_printcontent/0,,1248935,00.html (accessed on 16/1/2006)
49
Dana Thomas, “When High Fashion Meets Low” for Newsweek Magazine at
http://www.msnbc.com/id/6693197/site/newsweek/print/1/displaymode/1098/ (accessed on 16/1/2006)
50
Id.
48
22
As a consequence, luxury brands are adopting fast-fashion tactics to compete with the
mass retailers. Ferragamo centralized inventory and established computer links to
suppliers, cutting the design-to-delivery cycle by 20 per cent. Other fashion houses such
as Escada have come up with ‘hot fill-ins’ that are midseason collections51.
Stella McCartney is one of the hottest names in fashion. She is known for her sharp
tailoring and sleek silhouettes – her designs are thus coveted by many, however only a
privileged few can afford them52.
Thanks to H&M, women everywhere had the opportunity to snag a Stella original. Stella
McCartney agreed to design for H&M a one-time forty-piece collection. Again, H&M
was able to lure its style-conscious shoppers into their stores with Stella’s new line of
clothing and accessories that were priced between $10 to $170 as opposed to, for
example a T-shirt from McCartney’s signature line that goes for approximately $12053.
This clever arrangement was not solely advantageous for H&M, Stella McCartney’s label
also had something to gain. Her five-year old label has yet to turn a profit and her
collaboration with H&M should potentially boost the profile of her label.
51
Id.
Business Week Online, “H&M: Bringing Haute To The Hoi Polloi”, 30 May 2005 at
http//www.businessweek.com/print/magazine/content/05_22/b3935090_mz054.htm?chan… (accessed on
16/1/2006)
53
Id.
52
23
VI- A Different Perspective: No Need for Protection – The Odd Economics of the
Fashion Industry
A) The Incentive Rationale for Intellectual Property Rights
The standard incentive rationale for intellectual property rights assumes that unauthorized
imitation necessarily reduces innovation by depriving the innovator of sales it would
otherwise enjoy in the absence of such imitation54. The aim of this paper is to disprove
this precise point, arguing that this assumption of lost profits is unlikely to be accurate
and sometimes may even be reversed to the point where a legitimate producer will prefer
that unauthorized third-party imitators enter the market because counterfeits can
reasonably be expected to increase the producer’s revenue from sales of the original 55.
This phenomenon may occur under three conditions: (1) the relevant market consists of
goods that confer significant ‘status benefits’, (2) imitators generally produce imitations
of the original that are obviously imperfect, and (3) the legitimate producer cannot
introduce imperfect levels of the without significantly depleting its accumulated brand
capital56.
This outcome is based on consumers’ preferences for the enhanced social status conferred
by the visible ownership of certain goods. Certain products are deemed to be an attribute
of social status because ‘fashionista’ consumers dub them as ‘in style’ or fashionable.
Jonathan Barnett, “Shopping for Gucci on Canal Street: Reflections on Status Consumption, Intellectual
Property and the Incentive Thesis” (2005) at http://law.bepress.com/alea/15th/bazaar/art28 (accessed on
14/12/2005)
55
Even if it were not to increase a designer’s sales it would certainly not decrease them, therefore leaving is
economic unchanged and unaffected.
56
Id.
54
24
An explanation to this somewhat irrational statement set forth regarding counterfeiting
increasing the revenues of legitimate producers, rests on two important benefits. First, the
introduction of imperfect counterfeits may enable producers to charge an enhanced ‘snob
premium’ to elite consumers eager to distinguish themselves from the mass consumers
who settle for knockoffs. Second, sales by counterfeiters advertise and even enhance the
popularity of an item, thereby arguably leading the average consumer to purchase the
original item or its knockoff so as to better himself, by equating himself with the highend purchaser and subsequently providing him with a higher visible social status. Each of
these scenarios play out that the original producers may enjoy higher total returns with
counterfeiting than without or at the least an equally profitable return.
The benefits arguably conferred on legitimate producers by unauthorized imitators would
seem to build at least a preliminary case against intellectual property protections 57 in the
fashion industry. The standard incentive thesis cannot always securely be presumed to be
a sufficient basis for introducing or strengthening intellectual property rights in cultural
markets. At the least, in markets where purchasing behavior is strongly driven by status
preferences, unauthorized imitation is generally defected, and for the aforementioned
reasons, counterfeiting may therefore pose little or no threat to the expected revenues of
legitimate producers58.
57
58
Id.
Id.
25
B) Counterfeit Merchandise, Friend or Foe of the High-End Fashion Market?
Fashion goods, could be considered a social barometer in a way, because of the status
benefits that one possesses by owning the ‘in’ or fashionable items – there is a certain
prestige that comes with purchasing a luxury product.
In an article by Harvey Leibenstein59, he argued that fashion goods exert two types of
status effects: (1) a ‘snob effect’ – that is, the fashion good confers more status benefits if
the number of users is perceived to be limited as a result of high price, constrained output
or other factors, and/or (2) a ‘bandwagon effect’ – that is, the fashion good confers more
status benefits if the number of users is perceived to be growing. With regard to the snob
effect, status benefits are determined by the extent to which perceived usage is limited to
a certain elite consumer category, so that once a certain ‘adoption threshold’ is met,
demand falls relative to the perceived number of users60. In other words, additional
perceived users outside the elite consumer category exert a negative consumption
externality on existing users. In the case of the bandwagon effect, status benefits are
determined by the extent of perceived usage among the entire population, so demand
moved positively relative to the perceived number of users – to put it differently,
additional perceived users exert a positive consumption externality on existing users61.
Harvey Leibenstein, “Bandwagon, Snob and Veblen Effects in the Theory of Consumers’ Demand” 64
Q.J. ECON. 183 (1950).
60
Jonathan Barnett, “Shopping for Gucci on Canal Street: Reflections on Status Consumption, Intellectual
Property and the Incentive Thesis” (2005) at http://law.bepress.com/alea/15th/bazaar/art28 (accessed on
14/12/2005)
61
Id.
59
26
Another category, the ‘aspirational category’, has emerged. It is described as an
intermediate consumer category – the average consumer who purchases a fashionable
item in order to imitate the trends and lifestyles of the elite consumer rather than to
conform to the latest styles of a local peer group62. Aspirational consumers display snoblike behavior: demand decreases as a consequence of the increase in popularity among
consumers however with a later adoption threshold since aspirational purchasers follow
snob purchasers.
This analysis allows for the presumption that the fashion industry operates in a threelevel hierarchy: the snob consumers who set the trend, aspirational consumers who
follow snob consumers subsequently distributing the trend among the average consumer,
and bandwagon consumers who imitate the trend in order to ‘fit in with the crowd’63.
This three-level hierarchy draws the image of the fashion cycle, which starts off with the
trendsetters and comes to an end when an item reaches the hands of the masses leaving
the ‘fashionistas’ to search for the next ‘in’ thing. (Annex 6)
Conclusion
This paper contests the general assumption in intellectual property literature that
unauthorized copying always harms innovation incentives. The basis to this premise lies
in exposing the flaws of the incentive rationale. The purchase of luxury goods confers
62
63
Id. Category anticipated by Veblen in Thorstein Veblen, “The Theory of the Leisure Class”, 1899.
Id.
27
certain status benefits on the consumer which drives consumers of all kinds to purchase
the original merchandise as opposed to counterfeits or knockoffs which are arguably of
poorer quality. It could therefore be held that there is an interdependence of consumer
purchasing behavior and the desire to own luxury goods.
In any event, it cannot be denied that this issue of clothing design protection is
controversial as it involves consideration of several principles such as free competition,
promoting creativity, defining roles and limitations for patent, copyright, and trademark
law. However, with regard to the alternative areas of the law that could potentially
introduce intellectual property protection to clothing designs, the preferable path would
be that of copyright. Evidence has illustrated that apparel should no longer be qualified as
solely utilitarian in nature. Designers create art to fit the framework of the human form.
Yet there remains a hazy dividing line separating art from apparel leaving the nature of
apparel somewhat blurred.
However, bearing in mind the rationale presented in this paper, it would seem that the
fashion industry is ill-suited for the integration of legal prohibitions against knocking off.
Copying, ‘borrowing’, or ‘reinterpreting’ is prevalent at every level of the fashion arena –
even high-end fashion designers copy each other. In the end, it is virtually impossible to
identify who came up with the idea/design in the first place – “Any claim to originality
can be problematic today, as fashion has become increasingly derivative and designers all
28
feed at the same trough”64. It is not therefore uncommon to find striking resemblances
among the collections of different designers.
The convergence toward a small group of short-lived trends is indeed a reality of the
fashion industry nowadays. And when one considers the peculiarities of this industry, the
reluctance of courts and Congress to provide protection for works of fashion becomes
more comprehensible.
This paper now leaves you to ponder on the wise words of the legendary Coco Chanel:
“Creativity can only endure so much control before it careens into a downward spiral of
sterile involution. If it is to be fresh, passionate, and transformative, creativity must have
room to breathe and grow […]. The fashion world recognizes it cannot be bridled with
and controlled and that obsessive quests to do so will diminish its vitality”65.
Magdo, “Protecting Works of Fashion from Design Piracy” (2000) at
http://leda.law.harvard.edu/leda/data/36/MAGDO.html (accessed on 14/01/2006).
65
David Bollier and Laurie Racine, ‘Control Creativity? Fashion Secret’, September 2003 at
http://www.csmonitor.com/2003/0909/p09s01-coop.htm (accessed on 09/12/2005)
64
29
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31

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
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
‘When High Fashion Meets Low’:
http://www,msnbc.msn.com/id/6693197/site/newsweek/print/1/displaymode/1098
/ (accessed on 15/01/06)

Information on Lagerfeld: http://www.fashionunited.co.uk/news/lagerfeld.htm
(accessed on 15/01/06)

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tm?chan… (accessed on 15/01/06)

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
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
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
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protect their designs’, 5 September 2002 at
32
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Case List

Johnny Carson Apparel, Inc. v. Zeeman Manufacturing Co., No. C75-544A, 1978
WL 21356 (N.D. Ga. Nov. 4 1978).

Abercrombie & Fitch Stores, Inc. v. American Eagle Outfitters, Inc. 280 F. 3rd
619 (6th Circ. 2002)

Mazer v. Stein 347 U.S. 201 (1954).

Kieselstein-Cord v. Accessories By Pearl, Inc 632 F.2d 989 (2d Cir. 1980)

Brandir Int’l, Inc. v. Cascade Pacific Lumber Co. 834 F.2d 1142 (2d Circ. 1987)

Louis Vuitton Malletier v. Dooney & Bourke, Inc., 340 F.Supp 2d.

Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 164 (1995).
Magazines / Magazine Articles

Glamour, April 2006

Marie Claire, April 2006

Harper’s Bazaar Magazine, Luxury Report ‘The Human Cost of Fakes’, January
2006.

Nadine Rubin for Harper’s Bazaar Magazine, Luxury Report ‘Counterfeit
Update’, January 2006.
Internet Sites

2006 Fashion Trends – Counterfeit Fake & Mirror Goods: http://www.fashionera.com/Trends_2006/2006_spring_fashion_trends_counterfeit_bags.htm
33

Shop Designers Online:
http://www.shopdesignersonline.com/categorylist.asp?ParentID=5&page=4

Gucci: http://www.gucci.com/
34
Annex 166
The ‘12 Chic but Cheap Gems’ pictures are extracts from Glamour magazine, April 2006. The bottom set
of pictures are extracts from Marie Claire magazine, April 2006.
66
35
Annex 267
67
Pictures extracted from Marie Claire magazine, April 2006.
36
Annex 368
68
Pictures extracted from Marie Claire magazine, April 2006.
37
Annex 469
69
The three pictures on the left extracted from Marie-Claire magazine, April 2006. Two pictures on the
right and the title extracted from Glamour magazine, April 2006.
38
Annex 570
70
Pictures extracted from Glamour magazine, April 2006
39
Annex 671
Jonathan Barnett, “Shopping for Gucci on Canal Street: Reflections on Status Consumption, Intellectual
Property and the Incentive Thesis” (2005) at http://law.bepress.com/alea/15th/bazaar/art28 (accessed on
14/12/2005)
71
40