April 2010 Archives

For an established designer with a dedicated customer base and well-known trademarks, cheap knockoffs are a nagging problem.  For an emerging designer, cheap knockoffs can be a knockout blow.  And despite Counterfeit Chic's many years of publicizing the issue (both as a law prof actively working with members the industry and Congress, and also as a blogger), U.S. law doesn't offer much respite -- yet. 

In today's WSJ, Christina Binkley offers a brilliant up-close look at small designers who are bearing the brunt of the knockoff economy.  These emerging designers have borne many of the blows that I've seen over and over again -- a successful piece that wasn't reordered by retailers, who bought the knockoff instead; consumers who may not even know they're buying a knockoff; copies that hit the stores before the real thing; stores that complain to original designers about the imitations in the marketplace (as if the designers could do anything about it!). 

Otrera_scarf_knockoff_WSJ_4-29-10.jpg

Interestingly, the article focuses on 2 examples, a printed scarf by Otrera (original above left, but go to the WSJ for an interactive version) and a Shashi bracelet, that could actually be subject to copyright protection, unlike most clothing designs.  But the point remains:  Emerging designers, who fund their future creativity by selling in the present, can't affort to lose sales to the large, mass-market chains that cherrypick their most successful designs. 

While Christina notes the concern that even the pending Design Piracy Prohibition Act couldn't help emerging designers with few resources, Counterfeit Chic's own longstanding and frequently published opinion is that young and independent designers are exactly the ones who need a bit of legal protection.  (Just a bit, narrowly tailored to fit the problem -- minimalism can make for the best legal style.  But more on that another day, hopefully with reference to yet another new version of the bill, coming sooner (or later) to a legislature governing you.)  Not only can a bit of legal light shine into the dark corners where copyists lurk and change industry practice, but the vast majority of intellectual property cases settle out of court, or indeed without ever filing in court, and thus are relatively inexpensive.

Given that some emerging designers feel left out in the cold when it comes to access to and understanding of law, the launch of the Fashion Law Institute at Fordham isn't a moment too soon.  The WSJ article reminds me that I need to get back to work -- before yet another young designer becomes a large knockoff artist's lunch.   

Fashion Law Institute

We did it!

After more than a decade of working to convince legal academia that fashion was a field worthy of study, after finally establishing a law school course in the field, and after hundreds of hours of interaction with industry stakeholders ranging from international icons to emerging designers, Fashion Law has a home:  the Fashion Law Institute at Fordham.

As a result of the support and advice of the CFDA and its president, Diane von Furstenberg, the Fashion Law Institute will be able to offer training to aspiring lawyers, assistance to designers, and a center for research and information exchange to everyone involved in the field, starting in fall 2010.  None of this could have happened without not only DVF but also the CFDA's executive director, Steven Kolb, and his talented associates; Fordham Law School's dean and associate dean, Bill Treanor and Sheila Foster; and many other wonderful people on both the law and fashion sides of the equation.

When I dreamt of the Fashion Law Institute shortly before our announced launch, however, the scene was simple and dramatic.  As I stretched a hand toward the heavens, the clouds parted and a majestic reclining figure in a wrap dress reached down.  Then a voice sounded.  "Fiat fashion law!"  And lo, there was a Fashion Law Institute.  And she saw that it was good fabulous.

I really must stop watching television just before bedtime. 

Sistine_Chapel_detail.jpgSo what happens after the creation story?  Keep watching the webpage of the Fashion Law Institute (and occasionally this space).  And thanks to WWD's Marc Karimzadeh for a great article! 

Related post:  Fashion Law

They are "such stuff as dreams are made on:"  High-heeled pumps, crafted in fine chocolate, with a telltale flash of red sole. 

Jacques_Torres_shoe_crop.jpgHave award-winning chocolatier Jacques Torres and master shoe designer Christian Louboutin teamed up to produce the ultimate eat-it-or-wear-it experience, or has Jacques stolen Christian's immortal sole? For once, Counterfeit Chic doesn't want to know whether these chic chocolate creations are lusciously licensed or craftily copied -- at least until after dessert. 

While Torres last year had a not-so-sweet legal exchange with Hershey's over allegedly stolen "kisses," the two French craftsmen would seem to make a perfect pair.  What could be more decadent than a shoe that melts to fit, unless it's imbibing Torres' signature champagne truffles from one of these chocolate slippers? 

At $39 per painted pump, the chocolate versions aren't exactly made for a shoestring budget, but for designer shoes they're a sweet deal. Let's hope they're not picked up by "lawyers' fingers, who straight dream on fees."

Jacques_Torres_shoes_website.jpg *Romeo and Juliet, Act 2, Scene 4.


It took an act of Congress, a year and a half, who knows how many taxpayer dollars, and a 41-page report, but the results are finally in:  The U.S. government is clueless.

About the cost of counterfeits, that is.  

(Of course, Counterfeit Chic could have told you that years ago -- and come to think of it, actually did.) 

shrug.jpgAmong those who concern themselves with all things counterfeit, it's been an open secret for some time:  Despite the massive numbers thrown around, nobody really knows how large the counterfeit trade is in monetary terms, or the extent to which it affects the targeted industries or the national economy as a whole.  The number most frequently thrown around is $200 billion, the amount of money that U.S. businesses allegedly lose to counterfeiting each year.  But when the the U.S. Government Accountability Office tried to trace this number back to its source, it turns out that there is no source.

Perhaps the most remarkable thing about the GAO's report is that the agency doesn't have any plans to actually try and come up with a number.  A big part of the problem is that the whole point of illicit trade is NOT to be detected and counted.  The other major part of the problem is that experts can't agree on a methodology for evaluating the various harms -- and even potential offsetting benefits -- attributable to counterfeit goods.  There's even a certain amount of disagreement as to what those harms and/or benefits are.  

Of course, there are a few statistics thrown in as consolation prizes for disappointed numerophiles.  There are a lot of fakes out there; over the past 6 years, U.S. law enforcement has seized $1.1 billion worth of counterfeit goods.  57% of the goods seized over that period have been apparel, footwear, and handbags.  China and Hong Kong combined have accounted for about 84% of the value of these items.

At the end of the day, however, the GAO not only couldn't put a real number on the fakes' effect, but also concluded that it had been asked to perform an impossible task.  Maybe the agency will have better luck with next season's snipe hunt.


Related post:  One, Two, Three, Many
Opening day at the Cathedral of Baseball 2.0:  Balmy April breezes, Yankee heroes and fans basking in the afterglow of their 27th World Series win, and more diamonds than Ivana and Ivanka combined.  In the context of an event so carefully choreographed that even the weather cooperated, it was refreshing to learn that a pair of pinstriped pranksters had plans of their own.

Each 2009 Yankee, right down to World Series MVP Hideki Matsui wearing the uniform of his new, geographically confused team, was presented with a commemorative ring.  Or so he thought. 

But Derek Jeter had switched Hideki's for a giveaway fake...and Mariano Rivera had done the same to Nick Swisher.  

Of course, both players eventually received their real rings.  While the authentic Balfour bling is presumably worth a small fortune, however, it's the silly substitutes that showcased more genuine affection and captured a storyline better than any junk jewelry since Audrey Hepburn's Cracker Jack ring in Breakfast at Tiffany's.

With team chemistry like that, can 28 be far behind?
 
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Piracy or parody?  We'll never know, now that performance apparel and equipment company The North Face has settled its lawsuit against its comfort gear doppleganger, The South Butt.

NorthFace_v_SouthButt.jpgSt. Louis-area native Jimmy Winkelmann, now a freshman at the University of Missouri Columbia, started The South Butt to help pay for college.  When The North Face's trademark action against Jimmy and retailer Williams Pharmacy followed, Jimmy's attorneys offered a highly original and colorful answer, including at least 7 non-salacious synonyms for "butt" and reproducing the company's "disclaimer":

We are not in any fashion related to nor do we wish to be confused with The North Face Apparel Corp. or its products sold under "The North Face" brand.  If you are unable to discern the difference between a face and a butt, we encourage you to buy North Face products.  
And yes, folks, they still managed to negotiate a settlement.  Terms were not disclosed, but both companies continue to fleece the public -- er, that's sell fleece to the public -- in the form of classic but pricey jackets and other gear.

Thanks to Counterfeit Chic reader and former student Antonia Ponder for a heads-up on the case back in January!
How can you tell whether that guy down at courthouse is a practicing attorney or just someone who wears pinstripes well? 

  • Law degree?  Check.
  • Bar exam passage?  Check.
  • Business cards with a formal title, or at least an "Esq."?  Check.
  • Client?  Check.
  • Case?  Check.
  • Current state bar membership?  Oops.
When Gucci's then-in-house counsel Jonathan Moss first noticed that Guess seemed perhaps a bit too admiring of certain famous Gucci trademarks (you saw it here first, folks!), it seemed that he had everything going for him.  A job with a storied fashion house and a juicy brand protection case to pursue -- what more could a lawyer want?

A reminder to reactivate his long-dormant California bar membership, apparently.  It seems that the New York-based Moss had deactivated his only state bar membership some 13 years before filing the case to avoid the annual fee -- and counsel for defendant Guess noticed.  Now Guess is requesting access to internal Gucci communications with respect to the case, arguing that they are not covered by attorney-client privilege because Jonathan wasn't a licensed lawyer at the time they were made. 

Whether or not the Guess gambit works, and whether or not the court ultimately finds that Guess infringed Gucci's trademarks, this case will be remembered for the error that caused a luxury label to turn its inside counsel out.

gucci_guess_shoes.jpgCounterfeit Chic's sympathy goes out to Jonathan, whom I've met on a number of occasions and whose dedication to defending Gucci's reputation via IP law was readily apparent.  Here's hoping that he'll soon recover from this blow to his own.

And lawyers?  Don't play a Guessing game when it comes to your professional prerequisites. 

First, Tiffany lost to eBay.  Badly.

Then, Tiffany appealed.  And waited.  And waited some more.

Now, the U.S. Court of Appeals for the Second Circuit has affirmed most of the district court's holdings, specifically that eBay is liable for neither direct trademark infringement nor contributory infringement nor dilution with regard to the sales of counterfeit Tiffany silver jewelry through its site.  However, on the issue of whether eBay engaged in false advertising, the Second Circuit has remanded the case to the lower court for additional consideration.  (Opinion here.)

While Tiffany's legal team still has reason to be blue, the new ruling on the false advertising claim may prove to be a silver lining for the storied jeweler.

In essence, the appellate court reasoned that eBay, by advertising Tiffany jewelry on its own site and buying the term "Tiffany" as a sponsored link on search sites, may have misled consumers.  Although there was a battle of experts at trial regarding exactly how much of the Tiffany silver jewelry sold on eBay was counterfeit, with Tiffany claiming some 75% and eBay admitting only to at least 30%, there's no question that a significant chunk of the challenged charms were fake.  Since eBay was aware that so many of the items offered by its sellers were counterfeit, even if it couldn't determine which ones were real and which ones weren't, its creation and purchase of links that directed consumers to "Tiffany" jewelry listings might be considered false advertising. 

This decision follows on the heels of last week's European Court of Justice ruling that, while Google is probably not liable for selling trademarked terms like "Vuitton" as AdWords, those advertisers who buy others' trademarks as sponsored links and use them for questionable purposes like peddling fakes can be found liable.  The Tiffany decision confirms that advertisers in the U.S. can face similar liability for purchasing deliberately misleading links.  It's now up to the district court to determine whether or not eBay's "Tiffany" links actually constituted false advertising, given that they led consumers to both real and fake goods.   

The moral of the story?  Think before you link.
Tiffany_chain.JPG