November December, 2015 Vol. 105 No. 6

Registering Store Design as a Trademark in the United States and Germany: A Comparative Analysis Nicolas Hohn-Hein Why Louboutin Matters: What Red Soles Teach Us About the Strategy of Trade Dress Protection Anne H. Hocking and Anne Desmousseaux Trade Dress versus Design Patents: Understanding the Different Tests for Infringement Bryan K. Wheelock Deliberate Differentiation: Strategies for Creating and Protecting Iconic Designs (How Planning Trumps Serendipity in Pursuit of The Real Thing and Other True-Life Stories of Design Protection) Joshua Cohen and Rex Donnelly Karen Millen Fashions Ltd v. Dunnes Stores, Dunnes Stores (Limerick) Ltd: Clarifying the Assessment of Individual Character in EU Designs Richard Hing and Leighton Cassidy Commentary: Faux Amis in Design Law Sarah Burstein Commentary: Should Implementation of the Hague Agreement Cause United States Based Owners of Fashion Designs to Double Down on Their Dual-System Filing Strategies Under the Lanham Act and Patent Act? Jessica Elliott Cardon November December, 2015 Vol. 105 No. 6

Vol. 105 TMR 1461 COMMENTARY SHOULD IMPLEMENTATION OF THE HAGUE AGREEMENT CAUSE UNITED STATES BASED OWNERS OF FASHION DESIGNS TO DOUBLE DOWN ON THEIR DUAL-SYSTEM FILING STRATEGIES UNDER THE LANHAM ACT AND PATENT ACT? By Jessica Elliott Cardon I. INTRODUCTION In the absence of legal protection for both registered and unregistered fashion designs, as is available in Europe, U.S. fashion companies have opportunistically pursued a dual-system filing strategy to obtain protection of designs and design elements under the Lanham Act and the Patent Act. Such a dual-system filing strategy enables a fashion company with an issued design patent registration to take advantage of the limited monopoly provided by a design patent, until such time when the fashion company can establish secondary meaning in its designs to obtain trade dress protection under the Lanham Act for a potentially unlimited time. Yet, the time delay in obtaining an issued design patent, which can take more than a year without costly expedited processing, has often led U.S. fashion companies to pursue trademark protection earlier for distinctive designs and individual design elements under the Lanham Act, to have more immediate enforcement rights against potential infringers. However, with the recent implementation by the United States of the Hague Agreement, the design protection landscape under the Patent Act has changed, and fashion-design owners in the United States would be wise to consider whether to enhance their established intellectual property filing strategies by seeking protection for their designs under the Hague Agreement through the United States Patent and Trademark Office ( USPTO ). Effective May 13, 2015, pursuant to the Patent Law Treaties Implementation Act of 2012 ( PLTIA ), 1 applicants with a United General Counsel, Camuto Group, a fashion footwear and accessory company. The views presented in this article are those of the author alone, exclusive of the views held by Camuto Group. The author would like to thank Tracy-Gene G. Durkin and Monica Riva Talley of Sterne Kessler Goldstein & Fox LLC, as well as Glenn Mitchell of the TMR editorial board, for their time and expertise in reviewing drafts of this commentary. 1. Patent Law Treaties Implementation Act of 2012, Pub. L. No. 112-211, 126 Stat. 1527.

1462 Vol. 105 TMR States affiliation may apply for design protection under the Geneva Act of the Hague Agreement Concerning the International Registration of Industrial Designs (the Hague Agreement ) in countries that are members of the Agreement, including the United States. 2 In order to modify the Patent Act to implement the Hague Agreement, several key changes were made that will afford applicants seeking design protection in the United States under the Hague Agreement s improved enforcement opportunities. These include the introduction of provisional rights typically at six months from publication and an extension of the term of design patents by an additional year from fourteen to fifteen years from the issue date of the patent. An important distinction between the international design application process under the Hague Agreement in the United States and a United States design patent application filed directly with the USPTO is publication. All applications filed under the Hague Agreement will be published by the World Intellectual Property Organization ( WIPO ), which administers the system, approximately six months after the filing date of the application, unless expedited or delayed publication is requested by the applicant. Publication provides the applicant with provisional rights in the claimed design, which could lead to the patent holder being entitled to a reasonable royalty from an infringer during the period between publication and the patent issue date once the patent issues. This additional remedy is available only to U.S. patents that result from applications filed in the United States through WIPO because the United States does not publish design patent applications. Therefore, a fashion company seeking provisional rights tied to publication should consider filing an international design application under the Hague Agreement instead of filing directly with the USPTO. Nonetheless, the patent owner cannot assert the patent until it issues. While it is too early to tell whether U.S. fashion companies will prefer filing for traditional design patent protection under the Patent Act to establish domestic rights, the author believes that the opportunity to expand territorial protection through a costsaving single application process and obtain provisional rights through the publication process will entice some U.S. fashion companies to file through the USPTO under the Hague Agreement. While the design application process under the Hague Agreement can include up to one hundred designs in a single application, notably, only the first-claimed design will have provisional rights attach following publication by WIPO. Despite 2. See Boris Milef and David Gerk, Hague Agreement Concerning the International Registration of Industrial Designs (Nov. 13, 2015, 4:12 PM), http://www.uspto.gov/ patent/initiatives/hague-agreement-concerning-international-registration-industrialdesigns.

Vol. 105 TMR 1463 the opportunities for provisional rights upon publication and for enhanced territorial scope of protection through a single application, this new opportunity to file through the USPTO for international design protection will likely be viewed as an additional tool for protection, as opposed to a comprehensive solution for fashion design protection. Consequently, the implementation of the Hague Agreement will not cause United States-based owners of fashion designs to abandon their dualsystem filing strategies under the Lanham Act and the Patent Act, but could result in increased filings by some fashion companies, who will likely use the Hague system to strategically protect key fashion designs in member countries. II. UNDERSTANDING THE CURRENT DUAL-SYSTEM FILING STRATEGIES OF UNITED STATES FASHION COMPANIES FOR DESIGN PROTECTION UNDER THE LANHAM ACT AND PATENT ACT A. Trademark and Trade Dress Protection under the Lanham Act for Fashion Designs United States fashion design owners typically have favored compound protection strategies under the Lanham Act, 3 seeking protection for individual design elements as well as for designs as a whole, by filing individual applications for traditional and nontraditional trademarks and for trade dress. As an example of an approach to protect an individual design element, Coach Services, Inc. owns a United States trademark registration (No. 4,365,898) for its repeating CC CC CC CC pattern shown below, which is used per the description of the mark in the application, as a repeating pattern featuring a stylized letter C in different orientations on various fashion goods, including handbags: Likewise, fashion design owners have sought trade dress protection for the configuration of fashion designs through the 3. United States Trademark Act of 1946 (the Lanham Act ), 50 Stat. 427 (Jul. 5, 1946), codified as amended at 15 U.S.C. 1051 et seq.

1464 Vol. 105 TMR USPTO under the Lanham Act, as exemplified by Hermes International s ( Hermes ) United States trademark registration (No. 3,936,105) for one of its famous handbag designs: Such trademark (or, more appropriately, trade dress) is described by Hermes in the application as consisting of the configuration of a handbag, having rectangular sides a rectangular bottom, and a dimpled triangular profile. The top of the bag consists of a rectangular flap having three protruding lobes, between which are two keyhole-shaped openings that surround the base of the handles. Over the flap is a horizontal rectangular strap having an opening to receive a padlock eye. A lock in the shape of a padlock forms the clasp for the bag at the center of the strap. The broken lines in the drawing represent the location of the handles and are not part of the mark. Registration under the Lanham Act enables owners to seek longer-term, renewable protection for their designs and for elements of their designs that will be re-used over multiple seasonal collections, so long as rights owners maintain use of those designs and design elements in commerce. 4 In contrast, design patent protection provides a fixed-term vehicle for protection of the claimed design for fourteen years, when the application was filed prior to May 13, 2015, and for fifteen years, for patents issuing from applications filed on or after May 13, 2015. 5 While the longevity of protection under the Lanham Act favors a strategy that requires filing multiple trademark and trade dress applications seeking protection for individually protectable design elements and for trade dress protection attached to the design, the owner of the fashion design cannot obtain protection under the Lanham Act for indistinct designs, or aspects thereof, without submitting evidence of acquired distinctiveness or secondary 4. 15 U.S.C. 1127. 5. Department of Commerce, 80 Fed. Reg. 17918 (proposed Apr. 2, 2015) (to be codified at 37 C.F.R. pt. 1, 3, 5 et al.).

Vol. 105 TMR 1465 meaning. 6 In order to obtain protection for trade dress rights in a product design, the fashion company must show that the trade dress in the fashion article has become distinctive as to the source of the product. 7 Such evidence must demonstrate use and consumer awareness of the trademarks and trade dress inherent in the fashion design over a lengthy period of time, at least five years, 8 often at substantial advertising cost throughout the duration of that period of time. Because of the advertising costs associated with proving secondary meaning in trade dress, seeking protection under the Lanham Act for fashion designs as trade dress far exceeds the costs of design patent protection and the costs involved in protecting trademarks that are inherently distinctive. However, if a trade dress application is approved for registration, the fashion company has a highly effective enforcement tool in the registered trade dress, which has a presumption of validity in favor of the owner. B. Design Patent Protection under the Patent Act for Fashion Designs In contrast to the steep costs associated with this multipleapplication filing strategy for fashion designs under the Lanham Act, protection under United States patent laws for designs can provide a lower-cost path, but historically with a longer time delay, often exceeding one year, before an issued design patent can open up opportunities to enforce patent rights against third-party infringers. However and this aspect of filing under the Hague Agreement may prove attractive to fashion design owners the Hague Agreement awards provisional rights to the applicant from the publication date of the application by WIPO, which rights were heretofore unavailable to U.S. design patent holders. With the ability to obtain provisional rights from publication, applicants under the Hague Agreement can put third parties on notice of potentially infringing activity and can seek a reasonable royalty as damages for the infringement from the publication date, in addition to a reasonable royalty or the infringer s profits from the issue date of the patent. Even after a design patent issues, the fashion company owner s enforcement efforts are limited by the narrow scope of protection afforded by the claimed design. The scope of a design patent is strictly defined by the patent claim, which is represented by the drawings of the design submitted with the application for example, front, back, and side views. Only accused infringing 6. 15 U.S.C. 1052(f). See also T.M.E.P. 1212, Acquired Distinctiveness or Secondary Meaning 7. See generally Walmart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205 (2000). 8. 15 U.S.C. 1052(f).

1466 Vol. 105 TMR designs that are substantially the same as the patented design are considered to be an infringement. As such, if a fashion company protects a design for its first retail season, but modifies the design, for future seasons, the design patent may not cover the design as altered. In contrast to design patent protection under the U.S. Patent Act, which limits applications to one patented design, under the Hague Agreement an applicant may file for protection for up to one hundred industrial designs in a single application, so long as those designs fall within the same Locarno class. While filing a multi-design application leads to a lower-cost filing fee, as opposed to individual filing fees for each design, individual member countries to the Hague Agreement, including the United States, may require the applicant to select one design for examination and prosecution and permit the applicant to file one or more divisional applications to patent the other designs. 9 Other Hague member jurisdictions, such as the Office for Harmonization in the Internal Market (OHIM), permit the registration of more than one design per application. This aspect of the Hague Agreement could lead to the expansion of the limited scope of protection traditionally afforded a single claimed design under the U.S. Patent Act, to registration of an entire seasonal collection of fashion designs in the same Locarno class. C. Optimizing Available Protection for Fashion Designs in the United States Necessitates a Dual-System Filing Strategy Due to the obstacles faced by a fashion-design owner in protecting its designs under the United States intellectual property laws, whether high costs, burden of proof of secondary meaning or time delays prior to enforcement, fashion design owners have typically used a combination of protection under both trademark and patent laws to ensure maximum protection and enforcement capabilities. However, for design owners who produce fashion products with a limited shelf life, both systems can fall short of providing timely and comprehensive coverage, as particular designs may become obsolete before a design owner can build sufficient evidence to prove acquired distinctiveness or before a design patent issues, notwithstanding the new potential for provisional patent rights upon publication by WIPO of an international design application under the Hague Agreement. 9. 37 C.F.R. 1.1064.

Vol. 105 TMR 1467 III. THE BENEFICIAL ASPECTS OF INDUSTRIAL DESIGN PROTECTION UNDER THE HAGUE AGREEMENT FOR U.S. FASHION COMPANIES AND FILING STRATEGY CONSIDERATIONS While the implementation of the Hague Agreement in the United States will not resolve the imperfections in current filing strategies for fashion design protection, it may encourage increased international design filings by U.S. nationals to acquire broader territorial protection for fashion designs. The consolidated application process allows applicants to file one international design application, standardized in format, in either English, Spanish, or French. 10 Under the implemented Hague Agreement, U.S. applicants are now able to file an international design application with WIPO through the USPTO, which can now act as an office of indirect filing to accept and transmit international design applications and as a dedicated office capable of accepting for national examination international design applications which satisfy the requirements of the Hague Agreement.... 11 With these changes, a design applicant, in theory, can reduce costs for obtaining broader territorial design protection by complying with one set of filing requirements instead of complying with individual filing requirements across multiple countries. If approved by each of the designated member countries, the design will be administered through a centralized system with streamlined maintenance and renewal processes. One significant benefit of design protection under the Hague Agreement for U.S. fashion companies is the opportunity to seek broader protection both in terms of territorial scope and design scope. Should the applicant use the single application to protect its designs in multiple countries, the applicant can save filing costs and seek wider protection for multiple designs by including within a single application additional designs, up to and including one hundred, so long as all of the designs fall within the same Locarno class. 12 With this feature under the Hague Agreement, fashion companies can seek wider protection for a collection of designs, though not every design would obtain provisional rights upon 10. Dep t Commerce, 80 Fed. Reg. 17965 (proposed Apr. 2, 2015) (to be codified at 37 C.F.R. 1.1021(a). 11. Dep t of Commerce, 80 Fed. Reg. 17964 (proposed Apr. 2, 2015) (to be codified at 37 C.F.R. 1.1002(a), 1.1003(a), and 1.1003(b)(1). 12. Id., Article 5(4) for two or more industrial designs and Article 13(1) designs that are the subject of the same application conform to a requirement of unity of design, unity of production or unity of use, or belong to the same set or composition of items, or that only one independent and distinct design may be claimed in a single application. See also WIPO Frequently Asked Questions: Industrial Designs (Nov. 13, 2015, 5:07 PM), http://www.wipo.int/designs/en/faq_industrialdesigns.html.

1468 Vol. 105 TMR publication as explained below. While the member countries and regions of the Hague Agreement are still limited, applicants can seek registration not only in the United States but also in the other member jurisdictions, including the European Union and Japan. Future members are likely to include Canada, China, and Russia. Despite the fact that the implementation of the Hague Agreement streamlines the application process for broader territorial protection for United States fashion-design owners, it does not change the fact that United States fashion-design owners will still need to obtain approval from each individual country, under its own set of laws pertaining to design protection, before the design is approved for registration in each country. The individual country laws further lead to a wide range of filing requirements, particularly with regard to the drawing requirements, as some countries require a specific number of views of the claimed design, or will allow photographic representations or color images of the claimed designs. As a result of these issues, a fashion company should consider carefully whether to file a single application in the United States under the Hague Agreement in a limited number of contracting member countries, where such member countries have limited examination processes for industrial design applications and share similar drawing and other prosecutorial requirements. 13 This strategy may reduce prosecution costs in each of the individual member countries designated in the application. Even if this approach could save some filing costs and potentially streamline application requirements, the applicant will still need to pursue individual country protection for countries that have more rigorous or unusual filing requirements that are not met through a universal approach. With the statutory changes in the United States to implement the Hague Agreement, provisional rights for United States fashion companies may be available from the date of publication of an industrial design. Provisional rights for industrial designs provide an opportunity to seek a reasonable royalty for infringement dating back to the publication date upon issuance of the design patent. A reasonable royalty or the infringer s profits can be sought by the patent owner once the patent issues. This change with respect to the provisional rights at publication is significant, since United States design patents other than those filed through the Hague system are not published after filing or before issuance. Now fashion design owners can file for patent protection at the 13. In particular, U.S. fashion companies that manufacture fashion products outside of the United States may also want to seek industrial design protection through the Hague Agreement in the country that is the point of manufacturing, if that country is a member country under the Hague Agreement.

Vol. 105 TMR 1469 time of design inception, namely the sketch stage, using rendered computer-aided design (CAD) drawings, and can potentially have provisional rights six months later, by the time the design reaches the market, a typical timeline for most fashion companies. While the ability to obtain provisional rights on a six-month timeline could prove more attractive to fashion companies, they will have to consider if they should limit their international applications to just one design, eliminating many of the cost savings available for filing up to one hundred designs in the same Locarno class since provisional rights will attach only to the first design presented in a multi-design application under the Hague Agreement. Nonetheless, provisional rights in even a single design could provide sufficient incentive to fashion companies to seek design protection under the Hague Agreement, if the applicant believes that the claimed design will attract significant third-party copying both within and outside of the United States. Indeed, it is likely that luxury fashion houses based outside of the United States, which have residency in a member country under the Hague Agreement, will pursue protection under United States patent law through a Hague international design application for select designs to obtain provisional rights in the United States. If a fashion house in Europe files for an industrial design early in the design process, the application would publish close in time to the public debut of the claimed design in the fashion house s runway show, which is typically the first public opportunity to share emerging trends and styles for the coming season. In contrast to utility patents, where the claims of the application typically change during prosecution, sometimes significantly, between publication and issuance of the patent, design patents typically issue unchanged from the application as originally filed and published. As a result, provisional rights are more likely to attach to design patents, which may lead to earlier royalty arrangements with third-party infringers. Further, the publication date of the industrial design application typically within six months of filing matches the bestcase scenarios under trademark law. The timeline for trademark protection remains uncertain, as it generally takes at least three months for the assignment of an examining attorney following the filing of the application and at least two-to-three months before the possible publication of the trademark in the Official Gazette and/or the issuance of an office action following the examining attorney s review of the trademark application. IV. CONCLUSION For fashion design owners, the prior delays in waiting months, if not more than a year, for an issued design patent under United States law could cripple enforcement strategies, as these delays

1470 Vol. 105 TMR often create a situation where infringing product has already soldthrough at retail before the design patent issues, allowing the infringer to profit from its copies without triggering accountable damages and to escape liability before the design patent issues. Given the possibility of obtaining provisional rights, which will enable fashion companies to notify third-party infringers of potential damages for design patent infringement earlier and is more in line with product development timelines, United States fashion companies will likely give more consideration to the merits of pursuing international design protection under the Hague Agreement. Companies with an international presence, whether for manufacturing operations or retail sales, should also consider the opportunity to obtain an enhanced territorial scope of protection through the Hague application process. While the attraction of earlier provisional rights, together with some potential cost savings and broader territorial protection, will likely result in an increase in filings by United States fashion companies for design protection under the Hague Agreement, they will likely use the Hague international design application process strategically, seeking selective protection in countries that share similar filing requirements and prosecution procedures. Further, fashion design companies in the United States that elect to file for design protection will likely limit their applications to one design, to ensure that provisional rights will attach to that design. In the end, however, the fixed-term lengths of U.S. design patents applied for under the Hague Agreement cannot substitute for the continued protection available to distinctive and enduring designs and protectable design elements under the Lanham Act. Despite the availability of provisional rights from publication for international designs filed under the Hague Agreement, the fast pace of the fashion industry necessitates, at a minimum, filing for Lanham Act protection, even if on an intent-to-use basis, for design elements that will be used in connection with individual designs and entire collections to obtain enforcement tools before design rights issue. Thus, United States based owners of fashion designs should continue to double-down on their dual-system filing strategies and should use the procedures under the Hague Agreement, selectively, to reinforce their existing filing strategies.