What Happens When Fashion Brands Sue Over Trademark Infringement?

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October 30, 2014

Just two weeks ago Converse filed a lawsuit against 31 companies, claiming that their iconic Chuck Taylor sneaker had been copied by brands like Ed Hardy, Walmart, H&M and more. The company, now owned by Nike, claims that copyright infringement has occurred as well as unfair competition (basically, when the customer can’t tell the difference between the fakes and the original). They are seeking compensation and also demanding that the retailers destroy all the imitation Chuck Taylors on the market. It’s a major case that comes on the heels of over 180 letters issued by Converse over the years asking retailers to stop knocking off their shoe.

Another copyright infringement case, also involving sneakers, has made headlines recently. New Balance filed a similar lawsuit against Karl Lagerfeld earlier this year, claiming that Lagerfeld’s leather suede mesh sneakers ($360) were so similar to their own 574 black sneakers ($112.88) that customers were mistaking them. Lagerfeld seemingly swapped out the ‘N’ for his own ‘K’. (We noticed the striking resemblance when we first saw the kicks, and our article was even referenced in court docs!) The case is still in court.

These lawsuits date back to the 1930s, when Madeleine Vionnet and Coco Chanel filed a suit in Paris against dressmaker Suzanne Laniel, claiming that she was copying their designs to sell to her clients. In this case, the French court ruled in favor of the two designers, stating that “the dress models, by reason of the choice of colors and materials and their designing, partake of the character of real works of art and therefore come under the special legislation which forbids imitation and plagiarism by artists and writers.”

And while the French courts protected early Chanel designs as “real works of art,” U.S. courts today take a very different approach. It is much more difficult to obtain a trademark here; clothing is seen as something utilitarian or as serving a functional purpose and therefore isn’t protected the same way a painting or piece of art would be. So, any of the components of the Chuck Taylor shoe that are considered functional (the sole, the toe cap), may not be protected under the terms of the trademark. It’s tricky.

So, does Converse have a case? In fashion, what crosses the line from imitation to an illegal knock-off? And if a finished piece of clothing can’t be trademarked, how can designers protect themselves and their designs? We took a closer look at a handful of these cases, in an effort to better understand all sides:

How Can Brands Protect Themselves From Knock-Offs?

Although Converse claims that they’ve owned trademarks to the design of the Chuck Taylor, it might not be a slam-dunk case. There are legal factors to consider—like, if the trademarks hold any validity and whether the court will agree that infringement has taken place (do the shoes really look identical?). Converse will have to convince the judge that shoppers are mistaking the knock-offs for the original Chuck Taylors in order to win.

Knockoffs and copies not only take away from a designer’s profit, but they can also devalue a product. Take, for example, Isabel Marant’s wedge sneaker. Since the sneaker first came out, there have been dozens of knock-offs made, and many of them could easily be mistaken for the real thing. So when a consumer has the option to get a pair of really good Marant knock-off wedges for under a hundred bucks, instead of shelling out over $300 for the real thing, the cheaper version wins out.

And generally, winning a trademark infringement case isn’t so easy. There’s a large pushback by many who oppose the concept of trademarking fashion designs, arguing that copying is what establishes trends, and that trends drive the fashion industry. This argument is part of the reason why trademarking laws are so thin for fashion designs. “Without copying, paradoxically, the fashion industry would be smaller and less innovative and poorer,” says Chris Sprigman, an NYU law professor in an interview with NPR.

So when does imitation cross that line into breaking the law? “The law basically says that elements of a design of a product—be it a shoe or anything else—that are functional cannot be protected by trademark law,” explains Sprigman in the same NPR article. Since an overall article of clothing is considered functional, it isn’t subject to copyright protection.

In regards to the Chuck Taylor, Sprigman goes on to say that the both the rubber bumper and toe cap were advertised as functional by the brand in the past, which basically leaves the stripes and the iconic star suitable for trademark protection.

Because an overall article of clothing is considered functional, copyright law can’t protect it. However, there are still steps a fashion designer can take to protect elements of their designs. They can register copyrights for original prints and patterns, innovative combinations, and unique color arrangements. They can also protect any conceptual elements of a design that can stand away from the functionality of an article of clothing.

In other words, if an element of a design can be identified as reflecting a designer’s artistic judgment that was executed independently of functional influence, and the concept of the design can be separated by the functionality, it can be protected by copyright. This is why patterns and textiles can be protected—they are seen as creative and independent of any functionality.

Colors can be trademarked, but only when the color uniquely identifies the origin of a product. So for Christian Louboutin, obtaining a trademark for his red soles was crucial—those red soles are what denote a Louboutin heel to consumers. We’ll get into the lawsuit he filed later on.

Designers that have created something that’s considered innovative and new can apply for a design patent, but only when the ornamental elements dominate the functional elements. Celine was granted design patents for the Diamond Clutch and the Case Bag. It makes sense for designers to apply for design patents when an item in their collection is meant to be a staple piece that will be reintroduced with more than a few collections. The same goes for an ornament that’s meant to be a trend-setter, like Alexander Wang’s studs. In 2011, the designer was granted a patent for the studs he created for the Rocco Bag.

Do Lawsuits Stop Knock-Offs?

So, does filing a lawsuit put an end do knock-offs? Not in the case of copy houses, like Forever21.  In many ways, Forever21’s business is built on knocking designers off. The company has been sued over 50 times by designers like Anna Sui and Diane von Furstenberg, but it hasn’t stopped them from continuing these practices, and likely never will. For a company that’s success depends on making cheap knock-offs of designer clothing, getting slapped with lawsuits just comes with the territory—it’s more than likely that settlement money is built into their budget (we’re just speculating)—but when a company is worth 3 billion dollars, coming up with the money to pay a fine is no big thing. “They go ahead and they take what they want, and when they get caught, they pay up. It’s probably cheaper than licensing it in the first place,” explains fashion legal expert Susan Scafidi in an article on Jezebel.

Can A Brand Be On Both Sides?

In the 90’s, Yves Saint Laurent filed a lawsuit against Ralph Lauren, claiming that the designer was knocking-off his ‘Le Smoking’ tuxedo suit. He charged Lauren with counterfeiting and disloyal competition. Saint Laurent won the case and was awarded $395,000 by Ralph Lauren.

But YSL doesn’t only play victim in these cases; in 2011, famed shoe designer Christian Louboutin filed a lawsuit against Yves Saint Laurent, accusing the designer of ripping off his trademarked red-soled heels. The judge initially ruled in favor of Saint Laurent on the grounds that Louboutin’s trademark was too broad, therefore not protectable. The court explained that fashion designers can obtain trademarks for a single color if the color is used in specific pattern or color combination, and that color is a basic element of fashion so it can’t be claimed by one designer.

But a color can be trademarked when it uniquely identifies the origin of the product, which is exactly what a red sole does for Louboutin’s shoes. So the designer appealed, and proved that his red sole is what distinguishes a Louboutin heel the same way Tiffany uses blue to distinguish their box from other jewelers. The court then rejected its earlier ruling, and stated that Louboutin was entitled to its trademark on red soles, except when the entire shoe is red. So Louboutin may have won, but technically Saint Laurent didn’t lose because the court ruled that his monochromatic red shoe did not infringe on any of Louboutin’s trademark rights.

What Is The Outcome Of Most Cases?

Only 5% of lawsuits actually make it to trial, and companies often settle before lawsuits go to trial to avoid the expense, which can often wind up costing more in both finances and bad publicity, even if they end up winning. Settling could likely be the way many of the brands that Converse is going after deal with the lawsuit, especially a company as huge as and wealthy as Walmart.

Such was the case for Steve Madden when both Alexander McQueen and Balenciaga sued him. Each of the two design houses filed a suit against Madden for knocking off a specific shoe. In McQueen’s case it was the Faithful bootie that was being knocked off, and for Balenciaga it was the Lego sandal. Madden settled both suits out of court, and paid each of the designers an undisclosed amount.

In 2011, Hermes went after LA-based accessories company Thursday Friday for silk-screening images of the Birkin onto canvas totes, accusing them of copyright infringement. Although the totes were meant as a parody, Hermes was not amused, and the case was settled.

Tory Burch and her ex-husband, the owner of C. Wonder, went through a long and messy lawsuit as they were in the midst of their divorce, which also ultimately ended up in settlement.

Being that Converse’s entire value as a brand is the iconic design of their sneakers, they need to protect that with everything they have; otherwise they cease to have any value whatsoever. For Converse, it’s all about brand recognition, and some of the copies can easily be mistaken for the real thing (Walmart, H&M). Converse may have a good chance at winning due to the near identical nature of these copies, so they could likely be able to prove that their trademark is as crucial as the Christian Louboutin red sole.

 

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