European Design Rights: A Model for the Protection of All Designers from Piracy

American Business Law Journal Volume 48, Issue 1, 27 76, Spring 2011 European Design Rights: A Model for the Protection of All Designers from Piracy Susanna Monseau n INTRODUCTION Fashion designers have attempted many times in recent years to lobby Congress for copyright protection for fashion designs, so far unsuccessfully. 1 In this article I consider the fashion lobby s various proposals for the protection of fashion design under U.S. law. I argue that the operating conditions of the fashion industryfan industry that has survived many years without strong legal protectionfhave changed significantly in recent decades due to evolutions in the technology available to those who pirate designs, due to the types of designers, and even due to the shopping habits of customers. In my view, designers may now require some limited legal protection from direct copying of their designs. However, I also argue that both the recently introduced Senate bill, the Innovative Design Protection and Piracy Prevention Act, 2 and the House bill that preceded it, the Design Piracy Prohibition Act, 3 (hereafter the Design Bills) are misnamed. n Associate Professor, School of Business, The College of New Jersey, Ewing, New Jersey. I would like to thank Michael Pudlowski for his assistance with the research for this article. 1 Susan Scafidi, March on Washington 3: All-American Appeal, Counterfeit Chic (May 13, 2009), http://counterfeitchic.com/2009/05/march-on-washington-3-all-american-appeal.html. 2 A Bill to Amend Title 17, United States Code, to Extend Protection to Fashion Design, and for Other Purposes, S. 3728, 111th Cong. 2 (2010). 3 A Bill to Amend Title 17, United States Code, to Extend Protection to Fashion Design, and for Other Purposes, H.R. 2196, 111th Cong. (2009). There has been no action on this bill since it was referred to the House Committee on the Judiciary on April 30, 2009. Bill Summary and Status, 111th Congress (2009 2010) H.R. 2196 Congressional Research Service, http://thomas.loc.gov/cgi-bin/bdquery/z?d111:hr02196:@@@d&summ2=m& (last visited Oct. 15, 2010). r 2011 The Author American Business Law Journal r 2011 Academy of Legal Studies in Business 27

28 Vol. 48 / American Business Law Journal The Design Bills provide protections for fashion designers that go far beyond prohibiting fakes and knockoff designs, and they will not benefit either the fashion industry or its customers. Instead, both bills overprotect high-end and well-known designers, while being underinclusive in only protecting the designers in one (admittedly important) design industry, fashion. In this article, I compare the fashion industry s legislative proposals to the law of the European Union, which provides a two-tier system of legal protection for all industrial designers. I further suggest that Congress consider incorporating aspects of the European system. In particular, Congress should consider expanding legal protection to all design, while limiting any legislation to prohibition of only the most egregious examples of piracy, in order to prevent any new design law from being used to inhibit legitimate competition among designers. The issue of whether fashion design merits extended legal protection has generated much debate among legal scholars in recent years. 4 On the one hand are Professors Raustiala and Sprigman, the leading proponents of the view that additional legal protection is unnecessary for the fashion industry. They have argued that the industry shows little sign of blight 5 and that it has thrived, at least in part, because of the lack of legal protection (or low-ip [intellectual property] equilibrium ) 6 in the fashion industry. Further, Raustiala and Sprigman have recently defended their stance that all copying, whether line by line or derivative, is beneficial to the fashion industry because of the way it speeds the fashion cycle. 7 On the other hand, a number of scholars have rejected Raustiala and Sprigman s view, raising a variety of reasons the fashion industry now 4 See generally Lynsey Blackmon, The Devil Wears Prada: A look at the Design Piracy Prohibition Act and the Extension of Copyright Protection to the World of Fashion,35PEPP.L.REV. 107 (2007); C. Scott Hemphill & Jeannie Suk, The Law, Culture and Economics of Fashion, 61 STAN. L. REV. 1147 (2009); Lisa J. Hendrick, Tearing Fashion Design Protection Apart at the Seams, 65 WASH.& LEE L. REV. 215 (2008); Matthew S. Miller, Piracy in Our Backyard: A Comparative Analysis of the Implications of Fashion Copying in the United States for the International Copyright Community, 2 J. INT L MEDIA & ENT. L. 133 (2008); Kal Raustiala & Christopher Sprigman, The Piracy Paradox: Innovation and Intellectual Property in Fashion Design, 92 VA. L. REV. 1687 (2006). 5 Raustiala & Sprigman, supra note 4, at 1734. 6 Id. at 1698 99. 7 Kal Raustiala & Christopher Sprigman, The Piracy Paradox Revisited, 61STAN. L.REV. 1201, 1217 (2009).

2011 / European Design Rights 29 requires increased IP protection. 8 The most common criticisms are that Raustiala and Sprigman underestimate the new technologies of copying, 9 and they misunderstand the effect of various other changes in the fashion business, especially the motivations and buying habits of consumers. 10 The speed of global communication with factories in China, which are ready and able to execute commissions from fashion design pirates, has significantly affected the dynamics of the business. In some cases, knockoffs can reach the stores before the originals. 11 When this happens, the original designers are being denied the economic fruits of their creative labors, which could in turn provide a disincentive to innovate. 12 Raustiala and Sprigman s critics also argue that the democratization of the fashion business, with many different types of designers creating clothing and selling to an increasingly diverse set of consumers, has affected the ability of high-end designers to make a profit from innovative design. 13 Although almost all recent scholarly work has concentrated on fashion designers, there is another strand of scholarship concerning the proper protection of industrial design or applied art generally under American IP law. Professor Afori has suggested that industrial design, which might include fashion design, enhances market efficiency 14 and is underprotected by U.S. law. 15 Design has certainly been the Cinderella of 8 See, e.g., Lauren Howard, An Uningenious Paradox: Intellectual Property Protections for Fashion Designs, 32COLUM. J.L. & ARTS 101 (2009); see also Hemphill & Suk, supra note 4. 9 See, e.g., Erika Myers, Justice in Fashion: Cheap Chic and the IP Equilibrium in the United Kingdom and the United States, 37 AIPLA Q.J. 47, 55 57 (2009) (detailing the changes in the dynamics of the industry, including the change in business model of high-end designers and overlap in customer base between high-end designers and cheap chic). 10 See, e.g., Howard, supra note 8, at 113 17 (discussing the sociology of the modern fashion customer). 11 Eric Wilson, Before Models Turn Around, Knockoffs Fly, N.Y. TIMES, Sept. 4, 2007, at A1, A15. 12 Pamela Samuelson, Should Economics Play a Role in Copyright Law and Policy?, 1 U. OTTAWA L. &TECH.J.3, 3 (2004) ( The principle justification for intellectual property (IP) laws in the Anglo- American tradition is economic. ). 13 See Myers, supra note 9, at 57. 14 Orit Fischman Afori, Reconceptualizing Property in Designs, 25CARDOZO ARTS &ENT. L.J. 1105, 1111 (2008). 15 Id. at 1118.

30 Vol. 48 / American Business Law Journal IP law, remaining relatively unchanged since the 1950s, 16 while trademark and copyright law have expanded relentlessly during that period. 17 Indeed, various arguments have been made that the legal protections often used in the United States for industrial design, comprising design patents, trademarks, and copyrights, have significant shortcomings. 18 Industrial design enjoys stronger legal protection in many other countries than it does in the United States. 19 In this article I use aspects of the European Union s protections for industrial design to suggest changes to U.S. law. Not only does industrial design enjoy greater protection in Europe than in the United States, but the protection in Europe appears to be more logical and conceptually coherent. Further, in Europe, industrial design plays a much greater role in government policy making than it does in the United States. 20 In the context of jump-starting the economic recovery, recent commentators suggested that [b]usiness innovation ought to be declared a public policy objectivefone at least as important as boosting home ownership and agriculture. 21 It is time for the United States to reconsider its regime of weak legal protection for works of industrial design and applied art. In Part I of this article, I describe the traditional relationship between applied art or craft and fine art, the aspects of the current fashion businessfincluding the cult of the designerfand the challenges provided by the vibrant knockoff 22 industry, in an effort to demonstrate why legal 16 J.H. Reichman, Past and Current Trends in the Evolution of Design Protection Law, 4FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 387, 388 89 (1993). 17 Dana Beldiman, Protecting the Form but not the Function: Is U.S. Law Ready for a New Model, 20 SANTA CLARA COMPUTER & HIGH TECH. L.J. 529, 530 (2004). 18 See, e.g., Afori, supra note 14; Perry J. Saidman, The Crisis in the Law of Designs, 89J.PAT. & TRADEMARK OFF. SOC Y 301 (2007); Eric Setliff, Copyright and Industrial Design: An Alternative Design Alternative, 30 COLUM. J.L. & ARTS 49 (2006). 19 IP and Business: Intellectual Property in the Fashion Industry, WIPO MAGAZINE (May 2005), http:// www.wipo.int/wipo_magazine/en/2005/03/article_0009.html. 20 George Cox, Cox Review of Creativity in Business: Building on the UK s Strengths, H.M. TREASURY (Dec. 2, 2005), http://www.hm-treasury.gov.uk/independent_reviews/cox_review/coxreview_ index.cfm. 21 Edmund S. Phelps & Leo M. Tilman, Wanted: A First National Bank of Innovation, HARV. BUS. REV., Jan Feb 2010, at 1, 2. 22 Throughout, I shall refer to knockoffs to signify those designs that have been slavishly copied from an earlier design and design borrowing or referencing for the very common

2011 / European Design Rights 31 protection for design may now be necessary. In Part II, I briefly consider the protections U.S. law currently provides for designers and illustrate how the law fails to protect designs adequately. I also study the changes to the law proposed by the fashion industry s Design Bills, and I explain why these legislative proposals will not necessarily assist all designers or benefit consumers. In Part III, I review the European scheme of legal protection for design, focusing particularly on the scheme of design protection introduced by the 2002 E.U. design regulation. 23 Here I argue that this European law has already answered some of the questions surrounding how best to protect new design without chilling legitimate competition. Then, in Part IV, I make recommendations for amending the pending House and Senate bills, using European design law as a model. These are followed by some concluding thoughts. I. THE FASHION INDUSTRY The following subparts explore the development of the fashion business from its origins in the craft of the dressmaker, through the debate about whether fashion is art or craft, to the modern cult of the designer. To explain the need for limited legal protection, I discuss the importance for the industry of these trends, the changes in fashion consumer behavior, and the recent rise in counterfeiting piracy. A. History and Development of the Fashion Industry Fashion as a concept is a fairly recent phenomena. For many hundreds of years, clothing was viewed as a functional necessity rather than a means of artistic expression. In the seventeenth and eighteenth centuries, the craft of clothes making, which involved dressmakers, tailors, and eventually designers, existed exclusively in the realm of the upper class. 24 The middle and lower classes were left to wear second-hand clothing. Clothes were handed down to lower classes until eventually they could be used for practice in the fashion industry of making substantially similar, or derivative but not identical, copies from an original. 23 See infra Part III.A.1. 24 VERONICA MANLOW,DESIGNING CLOTHES:CULTURE AND ORGANIZATION OF THE FASHION INDUSTRY 35 (2007).

32 Vol. 48 / American Business Law Journal nothing but rags. 25 As most people excluding the wealthy upper class wore clothes for the purpose of covering their bodies, the vast majority of clothing served a utilitarian, not an aesthetic, function. The advent of the sewing machine and the emergence of large factories, the wholesale trade, and department stores put an end to the home dressmaking of the past. During the industrialization of Europe, ready-to-wear clothing began to emerge, and by the beginning of the twentieth century, the United States had become the world leader of ready-to-wear clothing. 26 Now, inadditiontothetinymarketforcustom-madeclothingforthewealthy, 27 there exists a larger market segment of ready-to-wear fashion that is cheaper and thus more available to the masses. It is this sector in which U.S. designers are now setting the trends, after years of copying them from Europe. 28 Perhaps this is why they now seek more legal protection for their work. B. Fashion: Art or Craft? Fashion was not historically protected by copyright law in the United States. This was due to the division in the eyes of the law between the fine arts, like literature, music, and art, which are accorded copyright protection, and crafts, which are generally not. 29 Until the last one hundred years, the design and manufacture of clothing was seen as a craft 30 and, like cooking, a function of homemaking. Even if clothing designs are protectable IP, the argument goes, because clothing is more functional than artistic, and so, of necessity, cannot be particularly innovative, it falls somewhere between the traditional protections accorded by copyright and patent law. This insular view of IP 25 Id. 26 Id. 27 Id. The haute couture industry originated in Paris where those who belong to the Syndicate de la Haute Couture still produce runway shows of their designs twice a year in January and July. Id. at 36. 28 Design Piracy Prohibition Act: Hearing on H.R. 5055 Before the Subcomm. on Courts, the Internet, and Intellectual Property of the H. Comm. on the Judiciary, 109th Cong. 2 (2006), 2006 WL 2127240, at n 7 [hereinafter Hearings on H.R. 5055] (statement of Jeffrey Banks, fashion designer). 29 See, e.g., Registrability of Costume Designs, Policy Decision, 56 Fed. Reg. 56,530 31 (Nov. 5, 1991). 30 See Hearings on H.R. 5055, supra note 28, at n 5 (statement of Susan Scafidi, Visiting Professor, Fordham Law School).

2011 / European Design Rights 33 protection and the rigid doctrinal distinctions between the subject matter of different legal rights avoid the real issue of whether the law should allow designers to appropriate the benefit of their investment in research and development (R&D) and product quality. 31 In testimony before Congress, designer Jeffrey Banks talked about advancing the status of fashion design as a branch of American art and culture, 32 in a clear attempt to align fashion with fine art, making it worthy of copyright protection. Banks also said that, because fashion designers cannot compete with piracy, the creativity and innovation that has put American fashion in a leadership position will dry up. 33 Although fashion is meant to be functionalfit has to fit the human form and keep us warm and dryfit clearly can also be artistic and creative. Most would agree that fashion is rarely fine art because it also fulfills a utilitarian function, but that this should not necessarily preclude designers entirely from protecting their investment in truly innovative design in the same manner as other creative people, like artists and musicians. The law has traditionally treated each field of IP as providing discrete and separate protection. 34 Patents protect innovation in functional design, copyrights protect artistic expression, and trademarks protect goodwill and reputation. These firm divisions between patentable and copyrightable subject matter have left creative designers of utilitarian objects like clothing without protection. By contrast, according to the E.U. system of protection for industrial design, which was promulgated by regulation in 2002, 35 registered and unregistered design rights help fill the void between the legal protections for creative and innovative works into which these designers so often fall. C. Changes in the Fashion Business: Designers, Creativity, Consumers, and Counterfeiting The following subsections highlight the many recent changes in the fashion business environment. These are the rise of named designers, new 31 Gideon Parchomovsky & Peter Siegelman, Towards an Integrated Theory of Intellectual Property, 88 VA. L. REV. 1455, 1460 (2002). 32 Hearings on H.R. 5055, supra note 28, at n 1 (statement of Jeffrey Banks). 33 Id. 34 See Parchomovsky & Siegelman, supra note 31, at 1456. 35 Council Regulation 6/2002, 2002 O.J. (L 3) 1 (EC).

34 Vol. 48 / American Business Law Journal patterns of creativity and consumer behavior, and the growth of counterfeiting. 1. The Role of Designers As the ready-to-wear fashion industry has grown in importance, so has the role of individual named fashion designers. Designers are no longer mere dressmakers to the upper classes, but instead they are creators of style in apparel for the masses. They are the arbiters of fashion, interpreting culture and setting trends. Today, high-end designers particularly, but not exclusively, can be highly influential across the industry. 36 In our modern consumer culture, fashion designers create the clothing and accessories of our desire, and the fashion industry brings them to the marketplace. Over the last forty years the focus on status symbols has led to the increased importance of the individual named designer, and the designer logo has developed, allowing people to seek out and purchase the products of well-known, star fashion designers. 37 And, obviously, there is a huge cadre of other fashion designers creating clothing that does not bear designer labels. Consumerism and the public appetite for named designers as well as brand-named clothing and accessories are the drivers of the increasingly global business of fashion. Many consumers buy clothing and accessories not so much out of necessity, but for those less tangible product attributes and benefits. 38 The fashion business uses factors like celebrity endorsement, design, quality, and the skillful promotion of brand image to build brand loyalty and increase sales. 39 To survive, the global and complex business of fashion must constantly produce and determine how to market new designs. 40 36 See MANLOW, supra note 22, at 47 (describing how French couturier Christian Dior created the famous New Look in 1947 as a reaction to privations of war). But see id. at 94 (describing how fashion design can also derive from what real people wear, explaining that, in the 1960s, London street fashion was one of the first styles to bubble up from the street). 37 See id. at 99 (stating that designer Jeffrey Banks was instrumental in creating designer logos). 38 See Kevin Lane Keller, Conceptualizing, Measuring, and Managing Customer-Based Brand Equity, 57 J. MKTG. 1, 4 (1993) (discussing product attributes that make up brand equity). 39 Id. 40 See MANLOW, supra note 22, at 81.

2011 / European Design Rights 35 2. Creativity The symbiotic nature of the fashion design process makes it particularly hard to distinguish between the creator and the copyist of a fashion design. Fashion designers may call it interpreting, referencing, or borrowing, 41 rather than copying, but the process of creating new styles of clothing is rarely accomplished by a solitary genius working hidden away from the world in his or her garret. 42 Designers both influence and are influenced by other fashion designers. They look for inspiration on the Paris catwalks, in the clothes of celebrities, and on the street. They also collaborate. 43 Every season common themes can be traced in the fashion business. Fashion magazine features like Marie Claire s Splurge or Steal make clear that some types of copying happen all the time, at all levels of the industry, and are accepted as standard practice. 44 Because it is hard to distinguish original from derivative work, it is also difficult to identify exactly what in fashion design is worthy of protection. Raustiala and Sprigman have noted that design copying in the fashion industry is ubiquitous. 45 However, they make no distinction between slavish line-by-line copying and the creation of designs that are substantially similar but not identical to the original, arguing that both are beneficial as they have the same effect of speeding the fashion cycle. 46 Their point is really that copying helps fashion designers rather than consumers, who buy more clothing than they need: The creation and accelerated extinction of these trends helps to sell fashion. 47 41 See Raustiala & Sprigman, supra note 4, at 1687. 42 See SIVA VAIDHYANATHAN, COPYRIGHTS AND COPYWRONGS 71 (N.Y.U. Press 2003). 43 See, e.g., MANLOW, supra note 22, at 99. 44 See Susan Scafidi, Sois Belle et Tais Toi!, Counterfeit Chic (Feb. 3, 2009, 12:27AM), http:// www.counterfeitchic.com/2009/02/sois_belle_et_taistoi.php (noting that Tony Duquette sued designer Michael Kors, alleging that a dress fabric design in Kors 2009 collection was too closely inspired by Duquette s own work); Susan Scafidi, Le Miz, Counterfeit Chic (Feb. 3, 2009, 1:52PM), http://www.counterfeitchic.com/2009/02/le_miz.php (reporting that designer Isaac Mizrahi was accused of designing a shoe too similar to Belgian Shoes Midinette style). 45 Raustiala & Sprigman, supra note 4, at 1706. 46 Raustiala & Sprigman, supra note 7, at 1207. 47 Raustiala & Sprigman, supra note 4, at 1733.

36 Vol. 48 / American Business Law Journal While Raustiala and Sprigman argue that all types of imitation are good; they also appear to assume that design copying is basically unidirectionalfthat is, low-end designers copy high-end designers. Further, they argue that the industry divides fairly easily into market segments, with the high end creating new designs that gradually filter down to the masses, whereupon they are abandoned by the upper end, which moves on to the next new thing. 48 This view is outdated. The advent of cheap-chic or knockoff designers and the democratization of fashion have blurred the lines between high-end and low-end designers. Street fashion sometimes precedes high fashion, and fashion designers of all levels sometimes take inspiration too closely from others. 49 It is true that cheap-chic designers focus more often than their named colleagues on the production of derivative alternatives to high-fashion designs and that for higher-end designers there is possibly more of a stigma attached to referencing another s design too closely. 50 But it is not always high-end and well-known designers being copied; new designers also see their designs copied. 51 In fact, copying occurs between all layers of the fashion industry. 52 All designers are influenced by each other, and even high-end designers sometimes borrow too much of their peers work. 53 3. Consumers The increase in the availability of new design from many quarters has also altered fashion consumers behavior. Raustiala and Sprigman maintain that status-conscious consumers buy high-end designs until those are copied for the masses by cheap-chic designers, at which point these designs 48 Id. at 1706 (explaining the term induced obsolescence ). 49 See Myers, supra note 9, at 58. 50 See, e.g., Susan Scafidi, Project Runway: Birds of a Feather, Counterfeit Chic (Oct. 9, 2008, 11:49AM), http://www.counterfeitchic.com/2008/10/project_runway_birds_of_a_feat_1.php (noting that every season of Project Runway involves a contestant censured for copying a well-known designer too closely). 51 See Howard, supra note 8, at 350 51. 52 See Myers, supra note 9, at 58. 53 See, e.g., Susan Scafidi, Copying Cavalli, Counterfeit Chic (Mar. 31, 2009, 8:17AM), http:// www.counterfeitchic.com/designs_designers.

become less attractive because they are no longer exclusive. 54 Others have pointed out that this model of consumer behavior is no longer completely accurate. Increasingly, and for a number of reasons, fashion consumers are purchasing their clothing from a variety of different outlets, including both high-end designers and cheap-chic designers. 55 4. Counterfeiting 2011 / European Design Rights 37 Proponents of legal protection for fashion designers argue that counterfeiting is growing rapidly and is increasingly a global problem. 56 There was a time when the fashion cycle from designer shows to mass market took months, but the digital age has made copying easier and quicker. Many designers complain that designs from their catwalk collections can now be copied from photos in minutes, and cheap versions of their designs can reach stores like Forever 21 from a factory in China quicker than the designers can produce their own more detail-intensive versions. 57 Scholars testifying before Congress is 2006 disagreed about the effect of counterfeiting on the industry. Professor Sprigman took the position that counterfeiting encourages designers to be more creative. 58 For her part, Professor Scafidi said that the ease with which clothes can be knocked off by pirates has rendered the traditional fashion cycle obsolete. 59 To illustrate the problems for individual designers that are caused by wholesale copying, Professor Scafidi related the story of a handbag designer, who was told by a department store that her designs were no longer wanted because the store could source virtually identical copies at a lower price. 60 Designers may have legitimate objections to the fake designer bags sold on the street in New York City, and some of the almost identical copies of designer gowns sold by Forever 21, an apparel retailer that employs no 54 See Raustiala & Sprigman, supra note 4, at 1702. 55 See Howard, supra note 8, at 345. 56 See, e.g., id. at 55. 57 See Wilson, supra note 11, at A15. 58 Hearings on H.R. 5055, supra note 28, at n 3 (statement of Christopher Sprigman, Associate Professor, University of Virginia Law School). 59 Id. at n 4 (statement of Susan Scafidi). 60 Id. at n 9.

38 Vol. 48 / American Business Law Journal designers. 61 But there is a fine line, in this highly collaborative and derivative industry, between slavish copying of goods and design borrowing. Some interpretations of high-end designers by mass-market fashion stores like Top Shop and Hennes & Mauritz do require innovation and require design resources. 62 II. LEGAL PROTECTIONS FOR FASHION DESIGNS IN THE UNITED STATES At present, the United States has no specific legislation protecting fashion, but it would be wrong to say fashion designers are without any legal protection. U.S. IP laws are some of the strongest in the world, and they do already provide some useful legal protections for designers, particularly, as will be seen, those who are well known. Unfortunately, IP laws are seen as providing discrete and separate protections for different types of subject matter: copyright, patent, and trademark. 63 None of these laws was intended specifically to protect industrial design; instead they have evolved to protect art, innovation, and reputation, respectively. Because of this, there are some unintended consequences of using these legal protections for design. A. Current U.S. Copyright, Patent, and Trademark Law The following subparts briefly explain the shortcomings of current U.S. law when it comes to protecting design. Copyright, patent, and trademark schemes are addressed. 1. Copyright Law U.S. law has long sought to draw a line between copyrightable works of fine art and useful articles, which are generally not protected. 64 This 61 See Myers, supra note 9, at 67. 62 Id. 63 See generally Parchomovsky & Siegelman, supra note 31 (discussing the insular view of intellectual property rights protection). 64 See 17 U.S.C. 101 (2006) (defining useful articles as having an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information ).

2011 / European Design Rights 39 means that designs per se are not protected, but pictorial, graphic or sculptural works, for which the features of the design can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article, are protected. 65 Thus a textile print is protectable, but a new jacket design is not. 66 This doctrine of conceptual separability, which allows for the protection of design when the design can be conceptually separated from the object in which it is embodied, tends to protect flourishes, like an appliqué on a jacket, but not the unusual design of the jacket itself. It has also unfortunately not proved a very clear or workable guide for industrial designers. 67 Although pictorial, graphic and sculptural works were added to the 1911 Copyright Act as protectable subject matter, it was not until the 1940s that the Copyright Office started to register copyrights in such objects. 68 In 1954, in Mazer v. Stein, 69 the Supreme Court got a chance to consider whether to protect a sculpture sold as a lamp base. Succinctly phrasing the issue as whether a lamp base manufacturer could copyright his lamp bases, the Court reasoned that a work of art that is incorporated into the design of a useful article is protectable under copyright law. 70 Justice Reed said, We find nothing in the copyright statute to support the argument that the intended use in industry of an article eligible for copyright bars or invalidates its registration. 71 The Mazer ruling potentially put the United States on the path of creating a general design protection as part of 65 Id. 102(5). 66 Mazer v. Stein, 347 U.S. 201 (1954). 67 See Brandir Int l, Inc. v. Cascade Pac. Lumber Co., 834 F.2d 1142 (2d Cir. 1987) (holding that a designer must have intended to exercise artistic judgment independent of functional influences); Poe v. Missing Persons, 745 F.2d 1238 (9th Cir. 1984) (using multifactor test); Carol Barnhart, Inc. v. Economy Cover Corp., 773 F.2d 411 (2d Cir. 1985) (requiring that artistic features of an article be superfluous or wholly unnecessary to the performance of its utilitarian function); ROBERT C. LIND, COPYRIGHT LAW 40 (3d ed. 2006) (noting the split of authority regarding the test of conceptual separability). 68 J.H. Reichman, Design Protection in Domestic and Foreign Copyright Law, 1983 DUKE L.J. 1143, 1150 (1983). 69 347 U.S. 201 (1954). 70 Id. at 204. 71 Id. at 218.

40 Vol. 48 / American Business Law Journal copyright, 72 and courts initially started interpreting very broadly the question of which designs could be copyrighted. 73 However, the Copyright Office apparently favored protecting designs through new legislation rather than as part of the existing copyright law. 74 Thus it did not give its support to a broad judicial approach to copyright law that would reduce the chance of Congress passing a design statute. 75 Eventually, with encouragement from the Copyright Office, 76 the conceptual separability rule was codified narrowly in the Copyright Act of 1976, which specifically permitted the protection of a useful article for which the design element can be identified separately from its utilitarian aspect. 77 Though it seems that this would allow designers to copyright at least the artistic ornamentation portions of their apparel designs, the reality is that courts since Mazer have so inconsistently applied tests for conceptual separability that this codification has not been useful in protecting industrial design. To make matters worse, although numerous attempts have been made over the years, Congress still has not passed a law specifically protecting design to broaden the narrow formulation of copyright protection under the conceptual separability rule. 78 In 1991, to try and clarify the principle of conceptual separability as it related to clothing, the Copyright Office issued a policy decision. It explained that the Office generally refused to register copyright in threedimensional aspects of clothing or costume design, as clothes were useful and ordinarily contained no artistic authorship separable from their overall utilitarian shape. But the Office would register fanciful costumes if they contain separable pictorial or sculptural authorship. 79 72 See Reichman, supra note 68, at 1152 ( With Mazer the United States acquiesced in the proposition that an ornamental design did not necessarily cease to be artistic when embodied in a useful article. ). 73 Id. at 1174. 74 Id. at 1173. 75 Id. at 1176. 76 Id. 77 17 U.S.C. 102(a) (2006). 78 See Reichman, supra note 68, at 1171 n.139 (noting seventy-one design bills not passed by Congress since 1914). 79 Registrability of Costume Designs, Policy Decision, 56 Fed. Reg. 56,530 31 (Nov. 5, 1991).

2011 / European Design Rights 41 Despite this attempt to explain the proper application of the conceptual separability test to clothing, the Fifth Circuit has complained of the lack of clarity. 80 Finding none, that court used a likelihood-of-marketability standard, under which a useful article is protectable if it would still be marketable to some significant segment of the community simply because of its aesthetic qualities. 81 Employing the Fifth Circuit s reasoning, if a market existed of buyers who wanted the piece of apparel simply to hang on a wall or be displayed in some manner, but not worn on the body, the fashion item would be deemed protectable under copyright law. 82 This test allowed it to reject buttons and artistic pleats on uniforms as eligible for copyright protection, 83 returning us directly to the question of whether fashion is art or a utilitarian craft. No doubt some fashion designs are conceptually independent of the human form beneath, 84 and some are displayed in museums (although so are many cultural artifacts not fitting the traditional definition of art). But given the utilitarian nature of clothing, this test would not protect most fashion designers work from copyists and imitators. Also in 2005, in a case involving Halloween costumes, the Second Circuit held that conceptual separability could be shown if artistic elements invoke in the viewer a concept separate from that of the costume s clothing function, and that their addition to the costume was not motivated by a desire to enhance the costume s functionality. 85 Under this lower standard, many artistic elements in a design can be protected as long as they are not functional. A Supreme Court decision resolving the conflicting authorities regarding the test for conceptual separability would obviously bring some consistency and clarity to copyright law for design. In the meantime, the courts narrow formulation of the Mazer rule, whichever interpretation is chosen, effectively prevents copyright law from protecting design generally. And, in the end, conceptual separability is not a useful distinction, 80 Galiano v. Harrah s Operating Co., 416 F.3d 411, 417 (5th Cir. 2005) ( There are at least six distinct variations of [the conceptual separability] test. ). 81 Id. at 421. 82 Hendrick, supra note 4, at 232. 83 See Galiano, 416 F.3d at 419. 84 See Hearings on H.R. 5055, supra note 28, at n 3 (statement of Susan Scafidi). 85 Chosun Int l, Inc. v. Chrisha Creations, Ltd., 413 F.3d 324, 330 (2d Cir. 2005).

42 Vol. 48 / American Business Law Journal especially considering modern functional design, wherein a product s features dictate and are closely linked with its function. 86 If, in order to obtain copyright protection, a demarcation is required between the ornamentation and the functional features of the design, much good quality design marrying form and function will never be protected under copyright law. And, absent a high standard of originality or innovation in the design, it will not be eligible for protection as a design patent either. 2. Design Patents Since 1842, Congress has provided protection for new, original and ornamental design[s] for an article of manufacture through patent law. 87 Various commentators have argued that design patents have significant shortcomings, making them particularly unsuitable for the protection of fashion and numerous other short-lived new designs. 88 There are three reasons that are most compelling. First, as a practical matter, the design patent process is both lengthy and costly. After the application is made, it must be reviewed by a patent examiner to determine if it is eligible for protection; this process takes approximately two years. 89 Further, protection begins only on the date of grant and is not retroactive. 90 Moreover, publication of the design in the patent application is likely to aid and even to spur copyists. In any event, most fashion designs are obsolete too quickly for this lengthy application process to be worthwhile. Second, since design patents must meet the generally applicable standards for inventions and design patents protect only any new, original and ornamental design for an article of manufacture, 91 design patents 86 See Brandir Int l, Inc. v. Cascade Pac. Lumber Co., 834 F.2d. 1142, 1147 (2d Cir. 1987) (noting that a designer was denied copyright protection for his design because he had considered utility in adapting a tubular-steel sculpture to become a bike rack). 87 See Act of Aug. 29, 1842, ch. 263, 3, 5 Stat. 543 (1842) (current version at 35 U.S.C. 171 (2006)). 88 See, e.g., Saidman, supra note 18; Setliff, supra note 18. 89 See William T. Fryer, The Evolution of Market Entry Industrial Design Protection: An International Comparative Analysis, 21(12) E.I.P.R. 618, 620 (1999). 90 35 U.S.C. 154(a)(3), 173 (2006). 91 Id. 171.

2011 / European Design Rights 43 must be examined for novelty 92 and nonobviousness. 93 This means that the design must be new and involve an inventive stepfa higher standard than that of originality required for copyright protection. 94 Many fashion designs that are original works in the copyright sense of being created by an author and distinguishable from the prior art, will nevertheless not be sufficiently different from it to meet the higher design patent standard. In determining whether a design patent is infringed, courts look from the perspective of an ordinary observer to determine if designs are substantially similar. 95 Unfortunately, various circuits have created confusion by applying other tests along with the ordinary observer test. In a recent case, Egyptian Goddess v. Swisa, Inc., 96 the Federal Circuit sought to eliminate confusion about the various tests for design patent infringement, by creating the modified ordinary observer test. So, the court held that the standard for design patent infringement is that a purchaser familiar with the prior art would be deceived by the similarity between the claimed and accused designs. 97 This test, relying on the confusion of a consumer, appears more like the test for trade dress infringement, suggesting that a design patent may protect the consumer from confusion as well as protecting the innovation of the designer. Thus, the simplified test might encourage more use of design patents by fashion and other designers, 98 but it does nothing to eliminate the more serious problems for designers in fastmoving industries of the lengthy and costly patent application process during which the design is on display to potential copyists. Finally, design patents do not protect features dictated solely by function. 99 This, of course, brings into doubt whether a design patent (or any 92 Id. 102. 93 Id. 103. 94 17 U.S.C. 102 (2006) ( Copyright protection subsists... in original works of authorship.... ). 95 Door Master Corp. v. Yorktown, Inc., 256 F.3d 1308, 1313 (Fed. Cir. 2001). 96 543 F.3d 665 (Fed. Cir. 2008). 97 Id. at 672. 98 See, e.g., Crocs, Inc. v. Int l Trade Comm n, 598 F.3d 1294 (Fed. Cir. 2010) (reiterating test for patent infringement is ordinary observer test without any point of novelty perspective). 99 35 U.S.C. 171 (2006).

44 Vol. 48 / American Business Law Journal other IP right) could cover features of clothing that are required for the garment to fit the human form. Unless the designer has a highly innovative design and wishes to protect a significant investment in R&D, the lengthy design patent process and the high standard of originality are strong deterrents to use of the design patent system. But for lasting and particularly innovative fashion items, design patents can be useful. Protection lasts fourteen years from the grant of the application, 100 and it prohibits any unauthorized use of the design by a third party. 101 During this period of exclusivity a designer can focus on developing secondary meaning in order to protect the article as a trademark once the design patent expires. 102 Some fashion designers, notably athletic shoe manufacturers, have successfully used design patents to protect their merchandise in this manner. 103 This strategy might be useful for more enduring fashion items. However, in general, the time and expense of design patent applications, together with the high standard of novelty, and the prohibition on protection of functional features, will preclude many fashion designs from even qualifying for design patent protection. 3. Trademark Law Trademarks can be a very powerful tool in protecting design. This is so because, unlike either copyrights or design patents, trademarks protect a design indefinitely, assuming payment of renewal fees. a. Trademarks. A trademark is intended primarily to protect the consumer from being misled as to the source of the goods and secondarily to protect 100 Id. 173. 101 Id. 271. 102 Apple Inc. has also used design patents very successfully as part of its strategy to protect the design of the ipod, which, while it is not an item of clothing, is certainly an iconic design. Once Apple had been granted a design patent, the company spent time and money on advertising to link the product and its design in the minds of consumers before going on to use this advertising to register the shape of the ipod as a nontraditional trademark. David Orozco & James Conley, The Shape of Things to Come, MIT SLOAN MGMT. REV., May 12, 2008. 103 Perry J. Saidman & Mark B. Mondry, Sneakers, Design Patents and Summary Judgments: Opening a New Era in the Protection of Consumer Product Designs, 71 J.PAT. &TRADEMARK OFF. SOC Y 524, 524 (1989).

2011 / European Design Rights 45 the reputation of the producer of the goods. 104 In protecting the sourceidentifying function of a trademark, the law focuses on false designations of origin, and the standard is not whether the customer is actually confused or mistaken as to the origin of particular goods, but whether such confusion is likely given the relevant circumstances. 105 In his seminal article, Professor Schechter describes the real value of a trademark as lying in its selling power, which depends on the psychological hold the mark has on the consumer. 106 The more well-known and unique a mark is, the more powerful it is and, Professor Schechter argues, the more protection it deserves even where its use by another causes no confusion but may dilute the mark s unique power to identify one seller. 107 The registration of trademarks enables designers to sue counterfeit producers who directly copy their marks so as to deceive consumers into believing they are purchasing genuine goods. However, trademark law does not generally provide any protection against the knockoff artist, who makes an exact copy (presumably using inferior materials) of an original new design while omitting the logo or other symbol that is legally protected as a trademark. Fashion designers complain that trademark law helps designers prevent copying only where the trademark is visible and copied or where the product is well known and has come to have such a strong association with the design that the design itself is capable of being a trademark. 108 Trademarks can be used to protect brands and even product designs. 109 However, whether protecting product designs or brand names from customer confusion or dilution by similar marks, 110 trademarks generally 104 See 4J.THOMAS MCCARTHY, MCCARTHY ON TRADEMARKS AND UNFAIR COMPETITION 2:14, 24:67 (4th ed. 2009). 105 15 U.S.C. 1115 (2006). 106 See Frank Schechter, Rational Basis of Trademark Protection, 40HARV. L.REV. 813, 830 31 (1927). 107 Id. at 831. See also 15 U.S.C. 1125 (2006) (providing that only owners of famous marks may bring dilution claims). 108 See Susan Scafidi, The Logic of Logomania, Counterfeit Chic (June 8, 2008 12:59PM), http:// www.counterfeitchic.com/2008/06/the_logic_of_logomania.php. 109 David Orozco, Rational Design Rights Ignorance, 46AM. BUS. L.J. 573 (2009). 110 See Schechter, supra note 106, at 830 (discussing how brand associations are weakened when a well-known trademark of one concern is used by another business, even in the absence of confusion).

46 Vol. 48 / American Business Law Journal require significant recognition of their uniqueness. Thus trademark protection tends to be stronger for well-known designers with famous brand names. There is also evidence that the type of reputational protection provided by trademark law encourages design decisions, such as prominent use of visible trademarks on merchandise, which would not be necessary if the design, rather than the brand, was the subject of protection. 111 b. Trade dress. Typically, trademark protection can assist fashion and other designers in two ways. As discussed, well-established and well-known designers in particular can register their brand names and other insignia as traditional trademarks. They can also, in certain circumstances, assert that the actual shape of an article has become, through association in the customer s mind, a nontraditional trademark or trade dress. In Wal-Mart v. Samara, a case in which Wal-Mart admitted to asking its supplier to manufacture clothes based on photographs of Samara s outfits, 112 the Supreme Court held that to prevail on a trade dress infringement claim, the plaintiff must prove that its trade dress is distinctive. To do so, the plaintiff must show that the trade dress is either inherently distinctive or has acquired distinctiveness through secondary meaning. 113 In that opinion, a unanimous Supreme Court held that design, like color, is not inherently distinctive. 114 Writing for the Court, Justice Scalia reasoned that this is because consumers are aware that the purpose of design is to make the product itself more useful and appealing, not to indicate source. 115 According to the Court, if product design were allowed to function as an inherently distinctive source identifier, consumers would be deprived of the benefit of competition by allowing lawsuits against new entrants in the market based on alleged inherent distinctiveness. 116 The Court clearly 111 See Market Movers, Susan Scafidi on Copyrighting Fashion (Sept. 19, 2007 12:00AM EDT), http://www.portfolio.com/views/blogs/market-movers/2007/09/19/susan-scafidi-on-copyrightingfashion ( [Y]ou didn t think that all of those repeated logos were just aesthetic choices, did you? ). 112 Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205, 209 (2000). 113 Id. at 210. 114 Id. at 212. 115 Id. at 213. 116 Id.

2011 / European Design Rights 47 believed that trademark protection was unnecessary for designs because a producer can ordinarily secure a design patent or copyright to protect a design that is inherently source identifying but has not yet acquired any secondary meaningfsomething Samara had done for certain elements of its designs. 117 The Court s point is that each IP right provides a separate and distinct protection, and they are not part of a scheme of potentially complementary protections. 118 The availability of other types of IP protectionfdesign patent and copyright protection, in this casefwould, in the Court s view, greatly reduce any harm to the designer resulting from the Court s ruling. 119 It appears from this comment in the Court s brief Samara opinion that the shortcomings of design patents and copyrights as mechanisms for protecting design are not well understood even by the Supreme Court. 120 While Samara could possibly have registered copyrights in its fabric patterns, it is extremely doubtful that it could have obtained either a design patent (due to insufficient innovation) or copyright protection (due to conceptual separability problems) for any other aspect of its clothing designs. Even where available, trade dress protection tends to assist in the protection of more well-established designs, rather than new ones. A suit brought by the makers of Adidas brand shoes against retail giant Target is illustrative. 121 Adidas alleged in its trademark infringement case that Target was selling shoes that were confusingly similar to its own. Adidas claimed that the trade dress of its original Superstar shoe was based on four ornamental elements: the trademarked three stripes on the side of the shoe, a flat sole, a rubber toe with a shell design ( shell toe ), and a heel patch including a trefoil design. 122 The district judge held that these elements, including the toe portion of the original Superstar shoe, were strictly ornamentalfadding neither durability nor performance to the shoefand were therefore part of Adidas s 117 Id. at 214. 118 See Parchomovsky & Siegelman, supra note 31, at 1457. 119 Wal-Mart Stores, Inc., 529 U.S. at 212. 120 See Parchomovsky & Siegelman, supra note 31, at 1456. 121 Adidas-Salomon AG v. Target Corp., 228 F. Supp. 2d 1192 (D. Or. 2002). 122 Id. at 1200.