IP Rights in the Fashion Industry: Trademarks, Copyrights and Patents to Protect Designs and Strengthen Brands

Presenting a live 90-minute webinar with interactive Q&A IP Rights in the Fashion Industry: Trademarks, Copyrights and Patents to Protect Designs and Strengthen Brands THURSDAY, APRIL 12, 2018 1pm Eastern 12pm Central 11am Mountain 10am Pacific Today s faculty features: Theodore C. Max, Partner, Sheppard Mullin Richter & Hampton, New York Natasha N. Reed, Counsel, Foley Hoag, New York The audio portion of the conference may be accessed via the telephone or by using your computer's speakers. Please refer to the instructions emailed to registrants for additional information. If you have any questions, please contact Customer Service at 1-800-926-7926 ext. 1.

Tips for Optimal Quality FOR LIVE EVENT ONLY Sound Quality If you are listening via your computer speakers, please note that the quality of your sound will vary depending on the speed and quality of your internet connection. If the sound quality is not satisfactory, you may listen via the phone: dial 1-866-570-7602 and enter your PIN when prompted. Otherwise, please send us a chat or e-mail sound@straffordpub.com immediately so we can address the problem. If you dialed in and have any difficulties during the call, press *0 for assistance. Viewing Quality To maximize your screen, press the F11 key on your keyboard. To exit full screen, press the F11 key again.

Continuing Education Credits FOR LIVE EVENT ONLY In order for us to process your continuing education credit, you must confirm your participation in this webinar by completing and submitting the Attendance Affirmation/Evaluation after the webinar. A link to the Attendance Affirmation/Evaluation will be in the thank you email that you will receive immediately following the program. For additional information about continuing education, call us at 1-800-926-7926 ext. 2.

Program Materials FOR LIVE EVENT ONLY If you have not printed the conference materials for this program, please complete the following steps: Click on the ^ symbol next to Conference Materials in the middle of the lefthand column on your screen. Click on the tab labeled Handouts that appears, and there you will see a PDF of the slides for today's program. Double click on the PDF and a separate page will open. Print the slides by clicking on the printer icon.

Copyright Scope of Protection Original fixed works Independently created Minimal creativity needed Protection against substantially similar copies Copyright duration is generally life of author plus 70 years For works made for hire, duration is 95 years from first publication or 120 years from creation, whichever is shorter Useful articles not protected unless - They contain visual or sculptural features, and - Those features are physically or conceptually separable from their useful function Physical separability - Creative features can be physically removed Conceptual separability - Creative features invoke a concept separate from the article s function 2015 Foley Hoag LLP. All Rights Reserved. 8 8

Fashion Designs Protected by Copyright Jewelry Designs as a Sculptural Work Van Cleef & Arpels Logistics, S.A. v. Landau Jewelry, 547 F. Supp. 2d 356 (S.D.N.Y. 2008), holding original jewelry design protected by copyright 2015 Foley Hoag LLP. All Rights Reserved. 10 10

Supreme Court Defines Separability in Fashion In Star Athletica LLC v. Varsity Brands, Inc., the plaintiff, Varsity Brands alleged that the defendant committed copyright infringement by copying its two-dimensional stripes, zigzags, colors and other ornamentation familiar to cheerleading uniforms. The district court dismissed the copyright claims, holding the plaintiff s designs were not protectable under copyright law, and the Court of Appeals for the Sixth Circuit reversed. The United States Supreme Court had to decide whether the designs were subject to copyright protection. 2015 Foley Hoag LLP. All Rights Reserved. 11 11

Star Athletica v. Varsity Brands, No. 15-866 (U.S. Supreme Court, argued Oct. 31, 2016) MAJORITY: On March 22, 2017, the United States Supreme Court, in the majority opinion written by Justice Clarence Thomas held that: a feature incorporated into the design of a useful article is eligible for copyright protection only if the feature (1) can be perceived as a two-or three-dimensional work of art separate from the useful article and (2) would qualify as a protectable pictorial, graphic, or sculptural work -- either on its own or fixed in some tangible medium of expression -- if it were imagined separately from the useful article into which it is incorporated. 2015 Foley Hoag LLP. All Rights Reserved. 12 12

Star Athletica v. Varsity Brands, No. 15-866 (U.S. Supreme Court, argued Oct. 31, 2016) The Court set forth a new two-part separability test, resolving a split between circuit courts and upholding the previous Sixth Circuit holding that the stripes, chevrons and other visual elements of Varsity Brands cheerleading uniform are eligible for copyright protection. New Two-Step Test: 1)Separate Identification: The decision maker need only be able to look at the useful article and spot some two- or three-dimensional element that appears to have pictorial, graphic, or sculptural qualities. 2) Independent Existence: The feature must be able to exist as its own pictorial, graphic, or sculptural work as defined in 101 once it is imagined apart from the useful article. (i.e. on some other non-useful medium like a canvas.) 2015 Foley Hoag LLP. All Rights Reserved. 13 13

Star Athletica v. Varsity Brands, No. 15-866 (U.S. Supreme Court, argued Oct. 31, 2016) Applying this new two-part test to the facts of the case, Justice Thomas concluded: The decorations are separable from the uniforms and therefore eligible for copyright protection because: (1) one can identify the decorations as features having pictorial, graphic, or sculptural qualities and (2) the surface decorations would qualify as twodimensional works of art if separated from the uniform and applied in another medium, for example, a painter s canvas. For the purposes of this analysis, it does not matter that applying such designs onto a canvas will result in creating pictures of cheerleader uniforms and would retain the outline of a cheerleading uniform. 2015 Foley Hoag LLP. All Rights Reserved. 14 14

Star Athletica v. Varsity Brands, No. 15-866 (U.S. Supreme Court, argued Oct. 31, 2016) Concurrence: Justice Ginsburg concurred in the Court s judgment but not in its opinion and wrote that consideration of the separability test is unwarranted because the designs at issue are not designs of useful articles. Instead, the designs are themselves copyrightable pictorial or graphic works reproduced on useful articles. 2015 Foley Hoag LLP. All Rights Reserved. 15 15

Star Athletica v. Varsity Brands, No. 15-866 (U.S. Supreme Court, argued Oct. 31, 2016) Justice Ginsburg did not view the designs as inherent elements of the cheerleading uniforms that would be useful in distinguishing them from other dresses, as argued by Star Athletica and noted in the Sixth Circuit s Judge McKeague s dissenting opinion: In short, Varsity s designs are not themselves useful articles meet for separability determination under 101; they are standalone PGS [i.e., pictorial, graphic, or sculptural] works that may gain copyright protection as such, including the exclusive right to reproduce the designs on useful articles. 2015 Foley Hoag LLP. All Rights Reserved. 16 16

Dissent: Star Athletica v. Varsity Brands, No. 15-866 (U.S. Supreme Court, argued Oct. 31, 2016) The dissent, which was written by Justice Breyer with Justice Kennedy joining, argued for a narrow interpretation of the majority decision and focused on the policy and economic implications. Justice Breyer noted that, even though Congress had rejected approximately seventy design protection bills since 1914, the fashion industry had means of protection: Patent design protection is available.... A maker of clothing can obtain trademark protection under the Lanham Act for signature features of clothing.... And a designer who creates an original textile design can receive copyright protection for that pattern as placed, for example, on a bolt of cloth, or anything made with that cloth. 2015 Foley Hoag LLP. All Rights Reserved. 17 17

Star Athletica v. Varsity Brands, No. 15-866 (U.S. Supreme Court, argued Oct. 31, 2016) Justice Breyer s dissent expressed concern about how the new standard would be applied in light of the low standard of originality: Were I to accept the majority s invitation to imaginatively remov[e] the chevrons and stripes as they are arranged on the neckline, waistline, sleeves, and skirt of each uniform, and apply them on a painter s canvas,... that painting would be of a cheerleader s dress. Justice Breyer s dissent voiced a fear that the majority holding may result in increased litigation if the new standard is broadly interpreted, which will risk increased prices and unforeseeable disruption in the clothing industry, which in the United States alone encompasses nearly $370 billion in annual spending and 1.8 million jobs. 2015 Foley Hoag LLP. All Rights Reserved. 18 18

Star Athletica v. Varsity Brands, No. 15-866 (U.S. Supreme Court, argued Oct. 31, 2016) The Breyer dissent also viewed copyright protection in general as a cost-benefit analysis: Years ago Lord Macaulay drew attention to the problem when he described copyright in books as a tax on readers for the purpose of giving a bounty to writers.... He called attention to the main benefit of copyright protection, which is to provide an incentive to produce copyrightable works and thereby promote the Progress of Science and useful Arts. U. S. Const., Art. I, 8, cl. 8. But Macaulay also made clear that copyright protection imposes costs. Those costs include the higher prices that can accompany the grant of a copyright monopoly. They also can include... the costs of discovering whether there are previous copyrights, of contacting copyright holders, and of securing permission to copy. 2015 Foley Hoag LLP. All Rights Reserved. 19 19

Star Athletica Applied: What Does It Mean? Application of Star Athletica to Light Set in SDNY In Jetmax Ltd. v. Big Lots, Inc., 2017 WL 3726756 (S.D.N.Y. 2017), the court concluded that ornamental tear-drop shaped lanterns were copyrightable, explaining that [t]he decorative covers are sculptural works that are capable of existing apart from the utilitarian aspect of the light set, i.e. the light bulbs and other components that cause the Tear Drop Light Set to light a room. The primary purpose of the cover is artistic; once the covers are removed, the remainder is a functioning but unadorned light string. 2015 Foley Hoag LLP. All Rights Reserved. 20 20

Star Athletica Applied: What Does It Mean? Application of Star Athletica to Clothespins in CD Illinois In Design Ideas, Ltd., v. Meijer, Inc., 2017 WL 2662473 (C.D. Ill. 2017), the plaintiff claimed that Meijer, a grocery and retail chain infringed its copyright for Sparrow Clips, a clothespin with a silhouetted bird design on top with a beak. Plaintiff claimed copyright only in the separate bird portion and the color selection shown in each set of Sparrow Clips. The district court applied Star Athletica and found that the bird portion of the Sparrow Clips was subject to copyright protection. The court said that the first requirement was met because the bird portion could be perceived as a three-dimensional work of art separate from the useful article. The bird portion also met the second requirement because it would qualify as a protectable sculptural work on its own if it were imagined separately from the useful article and had been originally fixed in some other tangible medium. The court also rejected the defendant s additional argument that the separated bird portion was, by itself, useful by asking essentially what is the use of a hanging bird beak? 2015 Foley Hoag LLP. All Rights Reserved. 21 21

Star Athletica Applied: What Does It Mean? Application of Star Athletica to Furniture in ND Illinois In Halo Creative & Design, Ltd. v. Comptoir Des Indes, Inc., (N.D. Ill. 2018), Halo Creative & Design, Ltd. prevailed at trial involving one of Halo s most iconic Aviator Tomcat Chair and two US design patents, Odeon trademark, and nine copyrights and granted a permanent injunction and awarded damages in an amount of $3.8 million. In January 2017, the district court granted defendant s motion for summary judgment that a desk s shape was not copyrightable because it did not satisfy Star Athletica s independent existence requirement. The Court... rejects [plaintiff s] arguments regarding the relevancy of the concept behind its designs.... [U]nder Star Athletica, L.L.C. v. Varsity Brands, Inc., 137 S. Ct. 1002, 1007 (2017), the subjective intent of the designer and the conceptual undertaking for the piece is irrelevant as the statutory text focuses solely on how the article and feature are perceived, not how or why they were designed.... Star Athletica affirmed that the feature identified for copyright cannot be the useful article itself. Copyrighting the shape of [plaintiff s desk] is essentially seeking copyright protection for the useful article. 2015 Foley Hoag LLP. All Rights Reserved. 22 22

Fashion Designs Not Protected The overall look of a fashion design Jovani Fashion, Ltd. v. Fiesta Fashions, 2012 WL 4856412 (2d Cir. 2012). Prior to Star Athletica, the Second Circuit ruled in a motion to dismiss decision that prom dresses with sequins and tulle layers not protected by copyright. Decorative elements not physically separable from article without adversely affecting the article s ability to function as a prom dress and elements are not conceptually separable since they do not invoke an idea separate from the clothing. 2015 Foley Hoag LLP. All Rights Reserved. 23 23

Copyright Protection Best Practices File for copyright protection for original prints and patterns, including lace and sculptural works - (Application Filing Fee: Single Application: $35; Standard Application: $55; and Special Handling Expedition Fee: $800) Consider filing for design elements that can be physically or conceptually separated from the functional aspects Include notice on labels: 2017 Jane Doe Fashions, LLC Seek copyright registration before marketing fashion designs to receive statutory damages, costs and attorney s fees for infringements Make sure the source of the design is known to prove independent creation Keep documentation if work-made-for-hire or independent contractor Obtain assignment of rights from independent contractors 2015 Foley Hoag LLP. All Rights Reserved. 24 24

Trademarks and Trade Dress What Is Protected? Trademarks: Words, Names, Letters Slogans Domain Names Symbols and logos Prints and patterns Color Trade Dress: Product design, configuration, shape, color and appearance Product packaging Business décor 2015 Foley Hoag LLP. All Rights Reserved. 25 25

Trademarks and Trade Dress Scope of Protection Distinguish the source of goods and services of one person or entity from another Source Identifier + Source Distinguisher= Distinctiveness - inherently distinctive, or - acquired distinctiveness through use/secondary meaning Protection against marks that are likely to cause confusion or dilution Trademark and trade dress rights last for as long as they are in use 2015 Foley Hoag LLP. All Rights Reserved. 26 26

Trademarks and Trade Dress Fashion Limitations Functionality - No protection for designs that are essential to the use or purpose of the article or affects the cost or quality of the article Merely Ornamental - No protection for marks and designs that are merely decorative features on the goods and not used as a trademark to indicate the source of the goods Distinctiveness - Must prove that your mark or design is inherently distinctive or has achieved a certain level of consumers-source recognition (called secondary-meaning ). 2015 Foley Hoag LLP. All Rights Reserved. 27 27

Protected Fashion Trademarks Letters and Numbers - Should be distinctive Abbreviations or acronyms for descriptive terms and numbers that are merely style, grade or size designations are not protectable without secondary meaning 2015 Foley Hoag LLP. All Rights Reserved. 28 28

Protected Fashion Trademarks Designer s Personal Name - Should be distinctive - Should function as a source identifier and not just a personal name/surname JA Apparel Corp. v. Abboud, 568 F.3d 390 (2d Cir. 2009). When acquiring or selling a fashion brand comprised of a designer s name, make sure contract is clear on whether the designer can or cannot continue to use his or her personal name. 15 U.S.C. 1052(c) - When a name or signature in a mark identifies a particular living individual, the mark can only be registered with the written consent of the individual. 2015 Foley Hoag LLP. All Rights Reserved. 29 29

Protected Fashion Trademarks Brand phrase/slogan - Should function as a trademark In re Superba Cravats, Inc., 149 U.S.P.Q. 852 (Cal. App. 1996) and In re Sanda Hosiery Mills, 154 U.S.P.Q. 631 (T.T.A.B. 1967) Use caution when adopting a long slogan or using a slogan only as advertising copy Norm Thompson Outfitters, Inc. v. General Motors Corp., 448 F.2d 1293 (9th Cir. 1971) - Descriptive slogans need secondary meaning for trademark protection 2015 Foley Hoag LLP. All Rights Reserved. 30 30

Protected Fashion Trademarks Symbol and logos - Should be distinctive and not merely ornamental US Polo Ass'n, Inc. v. PRL USA Holdings, Inc., 800 F. Supp. 2d 515 (S.D.N.Y. 2011), holding Ralph Lauren s polo player logo inherently distinctive 2015 Foley Hoag LLP. All Rights Reserved. 31 31

Protected Fashion Trademarks Prints and Patterns - Should be distinctive and not merely ornamental Vuitton et Fils S.A. v. J Young Enterprises. Inc., 644 F.2d 769 (9th Cir. 1981), holding that repeating LV Toile Monogram pattern covering surface of bags eligible for trademark protection 2015 Foley Hoag LLP. All Rights Reserved. 32 32

Protected Fashion Trademarks Product design elements - Should be distinctive and not merely ornamental - May be registered as an inherently distinctive logo (vs. product configuration) without secondary meaning In re Penthouse International, Ltd., 195 U.S.P.Q. 698 (C.C.P.A. 1977), holding stylized key logo used on jewelry found to be fanciful, arbitrary and entitled to trademark protection without proof of secondary meaning 2015 Foley Hoag LLP. All Rights Reserved. 33 33

Protected Fashion Trademarks Shapes - Unique shapes and placement of designs on fashion apparel and accessories can be protected as trademarks, including stitching Lois Sportswear, USA, Inc. v. Levi Strauss & Co., 631 F. Supp. 735 (S.D.N.Y. 1985), Levi s back pocket stitching is a very strong mark 2015 Foley Hoag LLP. All Rights Reserved. 34 34

Protected Fashion Trade Dress Color - Must be non-functional - Must acquire distinctiveness through secondary meaning for registration on the Principal Register Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., 696 F.3d 206 (2d Cir. 2012), holding that single color used in conjunction with fashion accessory can function as a trademark in the fashion industry provided the color achieves secondary meaning 2015 Foley Hoag LLP. All Rights Reserved. 35 35

Protected Fashion Trade Dress Product shape or configuration - Must be not merely functional - Must acquire distinctiveness through secondary meaning for registration on the Principal Register Hermes International v. Lederer de Paris Fifth Avenue, Inc., 219 F.3d 104 (2nd Cir. 2000), Second Circuit held Hermes distinctive and famous handbag trade dress entitled to protection and laches no defense to selling knockoffs 2015 Foley Hoag LLP. All Rights Reserved. 36 36

Protected Fashion Trade Dress Retail store décor - Should be inherently distinctive or establish secondary meaning for registration on the Principal Register Two Pesos, Inc. v. Taco Cabana, Inc., 505 U.S. 763 (1992), holding that the interior of a restaurant is akin to product packaging and thus can be an inherently distinctive trade dress 2015 Foley Hoag LLP. All Rights Reserved. 37 37

Functional fashion products and packaging get no protection Non-distinctive and ornamental clothing, fashion accessories, prints, patterns, and fashion design elements get weak protection - May seek protection on the PTO s Supplemental Register Fashion Designs With Little or No Trademark- Trade Dress Protection Henri Bendel, Inc. v. Sears, Roebuck and Co., 25 F. Supp. 2d 198 (S.D.N.Y. 1998), cosmetic bags held functional The Board of Trustees of Univ. of Alabama v. Pitts, 107 U.S.P.Q.2d 2001, 2013 (T.T.A.B. 2013), held that hounds-tooth fabric pattern used on hat was merely ornamental not inherently distinctive. No secondary meaning found. TTAB decision later vacated by decision in The Board of Trustees of Univ. of Alabama v. Houndstooth Mafia Enters. LLC, 163 F. Supp. 3d 1150 (N.D. Ala. 2016), but University still has no federal trademark registration for hounds-tooth fabric design. 2015 Foley Hoag LLP. All Rights Reserved. 38 38

Trademark and Trade Dress Protection Best Practices If practical, file an application to register your trade dress and file for incontestability after 5-years of continuous use Use look for advertising Do not file for a utility patent for your trade dress Consider filing for design patent protection for trade dress Avoid touting the utilitarian advantages of your design Avoid common shapes or colors that serve functions other than brand identify Clear your trademarks and designs Use trademark notices ( when registered or when not) on your products, packaging and/or marketing materials 2015 Foley Hoag LLP. All Rights Reserved. 39 39

Design Patent What is Protected? Designs that are: - Novel - Non-obvious - Ornamental L.A. Gear Inc. v. Thom McAn Shoe Company, 988 F. 2d 1117 (Fed. Cir. 1993) Finding L.A. Gear s Hot Shot sneaker design sufficiently ornamental despite functional components and nonobvious. 2015 Foley Hoag LLP. All Rights Reserved. 40 40

Design Patent Scope of Protection The right to exclude others from making, using and selling designs that closely resemble the design The test for infringement is based upon an ordinary observer and whether they would be non-obvious to the ordinary intelligent man. Protection lasts for 15-years from the date granted 2015 Foley Hoag LLP. All Rights Reserved. 41 41

Design Patents Fashion Limitations Functional elements in fashion design are generally not protected - Clasps on jewelry or hand bags, etc. Design patents can take from 1 to 2 years to issue - Can sometimes exceed the lifespan of a seasonal fashion design - Experienced practitioners can sometimes obtain design patents within a year or less There is no patent protection while your patent is pending (damages limited to period after issuance of patent), until the registration is issued Design patent protection is generally limited to the drawing and claims of the patent - A clever infringer can make certain changes to avoid liability 2015 Foley Hoag LLP. All Rights Reserved. 45 45

Design Patent Best Practices File a design patent application before fashion design is on the market or runway Provide notice of your patent on your products - Patent Pending if your application is pending - Design Patent No. if your patent has issued Don t delay in bringing your claim 2015 Foley Hoag LLP. All Rights Reserved. 46 46

Best Practices Recording IP With U.S. Customs US Customs will detain and seize imported goods for intellectual property violations US Customs enforces trademarks, trade names, trade dress and copyrights that are recorded with Customs Record your federally-registered trademarks, trade dress, and copyrights with US Customs - You cannot record registered patents with US Customs Train US Customs about your brand through Product Identification Guides and webinars 2015 Foley Hoag LLP. All Rights Reserved. 47 47

Enforcement Tips Thoughts to Consider When enforcing rights on the Internet consider using all IP and branding materials Consider economies of scale and cost/benefits What works for a major brand might not work for an emerging brand What makes a brand? How law enforcement views a brand Strategies for anti-counterfeiting versus infringements and knockoffs 2015 Foley Hoag LLP. All Rights Reserved. 48 48

Practical Examples: What Do You Do? How do you protect fashion designs? What are your chances of success to succeed? Would you litigate the case? What could you do to protect the design? 2015 Foley Hoag LLP. All Rights Reserved. 49 49