Forever 21 Plays the Dumb Card In the Final Hour

Forever 21 had been slammed with a lawsuit by the label Trovata. As you can tell from the photo above, there is an uncanny similarity between its t-shirts (top row) and Trovata's (bottom row). Trovata is a smaller design label that has a cult following for its prepster look with an edge.

It has taken Trovata two years to bring this case to court (Federal District Court in Santa Ana, CA). Closing arguments were today.

Forever 21 introduced its potentially infringing articles back in 2007. The trial commenced two months ago and today was closing arguments. This is one of the first cases where a jury will decide whether or not Forever 21 has been illegally pilfering other designers' creative works (designs). What is unique about this particular case is that unlike previous lawsuits against Forever 21, Trovata is arguing its case under trade dress protection versus copyright protection.

There is very little protection for designers' creative works under copyright law in the United States which is why many of them are lobbying for the Proposed Design Piracy Prohibition Act.

Trade dress involves visual appearance of a product or store that creates a link in the consumer's mind to a particular brand (ex: Abercrombie case).

Trovata attorneys are attempting to argue that Trovata's unique placement of various buttons, decorative seamwork, and labels (which Forever 21 has copied) are being infringed upon by Forever 21.

Forever 21 admits that its garments do look similar but argues that Trovata's garments are not unique enough to warrant trade dress protection:

“Trovata is claiming that certain button patterns and stripes on a sweater would cause consumers to associate the garments with its brand, but there is no evidence to suggest that consumers would be confused,” said Bruce Brunda, an attorney for Forever 21. “Forever 21’s products are only sold in Forever 21 stores and are labeled with Forever 21’s brand. The design features on the Trovata designs are rather generic and are not protected by copyrights.”

Forever 21 has a long history of knocking off other designers. It seems that the company's litigation history may help decide the outcome of this case:

In a March 13 order in the case, U.S. District Court Judge Michael Dolinger in Manhattan reprimanded Forever 21 for deceptive conduct during the discovery phase. He added, “We note the extraordinary litigating history of this company, which raises the most serious questions as to whether it is a business that is predicated in large measure on the systematic infringement of competitors’ intellectual property.” Forever 21 is willing to endure these lawsuits and continue to use other designers' work because it is extremely profitable for the company. If you just flip through any fashion magazine, you can see recession inspired pages of "Splurges and Steals" which pair high fashion with uncannily similar Forever 21 products. Consumers want to access high fashion at low price points. Forever 21 caters to those desires.

The cofounder of Forever 21 played dumb while she testified about her company's profits, practices, and its officers: "Asked by Colucci whether she would be 'surprised' if Forever 21’s sales exceeded $1.5 billion annually, Chang responded, 'Yes, it’s surprising. I didn’t know.' She could not identify her officers, she said she had never even heard of Trovata until her company was used by them.

In closing arguments today, both sides rallied hard. Frank Collucci, the attorney for Trovata has a hard case to make from the legal side. While it is easy to see that their designs have been copied by Forever 21, there is no legal protection unless the average consumer can link those particular "looks" in the garments shown above with the label Trovata. Keep in mind that Trovata is a smaller label that is not well known to the average Forever 21 shopper. If the court rules in favor for Trovata, it would mean that large discount fashion chains such as H&M, Uniqlo, Zara and Mango would have to start creating their own creative designs rather than zipping through their copies of Women's Wear Daily.

American Apparel Needs To Repent (To a Rabbi?)

*Photo courtesy of Getty Images*

I outlined Woody Allen's lawsuit against American Apparel back in April 2008. Woody Allen was just outraged that Dov Charney from American Apparel would have the gall to use his image for commercial purposes without the actor's permission: "They're not classy," Allen said. "If I'm going to do a commercial, it would have to be for, as I said, a large amount of money, it would have to be very clever, kind of witty or intellectual-style commercial, and it would have to be for a product that would enhance my image." The lawsuit was over billboards put up by American Apparel of Woody Allen dressed as a rabbi from his movie Annie Hall. Charney claimed that the lawsuit was silly at the time.

It seems that Allen's ten million dollar lawsuit was not as silly as Charney thought it was. Allen has agreed to settle his lawsuit for five million dollars. Charney remained unrepentant because he felt the advertisements expressed his feelings of negative marginalism. He claims that the insurance company that deals with American Apparel forced him to settle: "I'm not sorry of expressing myself," he said.

Charney said he hoped that the lawsuit would not affect Mr. Allen's feelings of him personally: "We would never try to malign the dignity of Mr. Allen," he said. "I have respect for Mr. Allen. ... I hope to meet him on more friendly terms at a different point."

Looks like clothing companies need to be more careful about using celebrity images...like I pointed out in my earlier post about this case, misappropriation never pays. It is easier to get permission than to use first and then pay out.

No Mercy for DVF

After championing copyright rights for fashion designers under the proposed Design Piracy Prohibition Act, Diane von Furstenberg has done the unthinkable....she has ripped off a fellow designer's work. Her Garden Zaria jacket pictured left looks eerily similar to the label Mercy's floral silk jacket pictured on the right.

The irony of it is that the original jacket by Mercy costs $300 while the DVF knockoff version costs $1,000. Diane von Furstenberg has agreed to compensate the designers of Mercy for this. She says: "I am devastated. But this can be a lesson for everyone... I will do what is necessary to do, and if indeed there was an infringement, I will compensate and will use this example to make sure this doesn't happen again - not just for me, but for everybody."

The designer who copied the design on her staff has been fired. I wonder if this will serve as ammunition for groups lobbying for the proposed legislation? Will DVF recover from this fauz pas? It does seem hypocritical to lobby for design copyrights when you are ripping off small designers right?

Tim Gunn Does DC To Lobby for the New Design Piracy Prohibition Act

Tim Gunn and Project Runway Season 5 winner Leanne Marshall made a trip out to Washington in order to rally support for the reintroduced Design Piracy Prohibition Act which was brought back to life last month.

As I have blogged about the previous incarnation of the Act, it would serve to provide copyright protection to designers for their creative works. Currently, there is no such legal protection for designers except for blatant infringement of trademarks.

The current proposed Act would provide designers copyright protection for three years. Designers would be able to apply for protection by submitting a sketch or photo of their design via mail or email. This would register their design. It would cost designers $30 to register their works.

Mr. Steven Kolb who is the executive director of the Council of Fashion Designers of America was also in Washington DC to lobby for the passage of this legislation. He plans on coming back to Washington DC next week with designers Tracy Reese and Francisco Costa.

LV Has No Love for Google

Google gets no love from the luxury retailer Louis Vuitton. It took the world's largest search engine to court in Paris back in 2003. Louis Vuitton claims that Google was infringing on its trademark rights when it sold certain sponsored links with key search words such as "vuitton". Louis Vuitton claims that Google does not have the right to sell trademark protected names to advertisers when those trademark protected words are used in a key word search.

Google appealed a Parisian high court decision in favor of Louis Vuitton this past Tuesday in the highest EU Court. Here is an excerpt from Business Report:

"'Google makes money not by reason of the nature of the keyword but by someone clicking on the keyword,' Google lawyer Alexandra Neri told a 15-judge panel of the European Court of Justice in Luxembourg.

The case is the EU tribunal's first on whether companies in the 27-nation region can block search engines from using trademarked brand names to trigger search results. Internet ads tied to search results generate most of Google's revenue."

The outcome of this case is expected to be announced in 2010. It is considered to be a pivotal case for the new expanding area of e-commerce.

Does Counterfeiting Create "Bad Seeds"?

It seems that on top of all of the other evils that counterfeiting produces, it also creates a tendency among its consumers to be less moral. According to a blog written by the New York Times, a study has been done about the moral implications of counterfeit consumption. The study found that individuals who were told that they were wearing counterfeit sunglasses were more likely to cheat on tests than individuals who were told that they were wearing real sunglasses.

From NYT post:

“The effect on morality, people don’t anticipate,” said Prof. Dan Ariely, the author of “Predictably Irrational,” who conducted the studies. “We asked them if wearing fakes would get people to cheat more, they didn’t think it has an effect.”

It seems that most consumers do not even realize the impact of their choices, but there is a subconscious effect. Consumers tend to cheat more when they realize that their peers are cheating. Consumers also tend to purchase more counterfeits when they realize their peers are doing it as well.

This study also asked consumers how authentic they would feel with one, two or three counterfeit items. The researchers found that once the consumer wore at least one counterfeit item, it was easier to wear two or three. This indicates that once a consumer starts to wear counterfeit items, it is easier to keep buying counterfeits than if they never started at all.

To read more about this study, the moral effects of counterfeits, and the impact of branding, check out the NYT post here:

http://cityroom.blogs.nytimes.com/2009/03/16/the-moral-costs-of-counterfeiting/

Glaceau VitaminWater Boasts of IP Success

Glaceau Vitamin Water has taken the time to write a very interesting piece about the efforts of its in house legal department in order to protect Glaceau's intellectual property rights (trademark rights in particular). The company has a small legal department that is comprised of general corporate counsel Mr. Joseph DiSalvo, associate general counsel Brian Howard, part time IP attorney and a paralegal on staff.

The piece highlights something that seems to be very important in this ever competitive economy: Intellectual property rights are everything right now:

"There's nothing more important to this company than its intellectual property," says general counsel Joseph DiSalvo. "Nothing." This is something that Coca Cola Inc. has to think about (see previous post). Apparently the devotees of sham glam will tell you that IP rights are not necessarily important.

I agree with Mr. DiSalvo. If you look at one of the leading competitors for the vitamin enhanced water sector (SoBe's Life Water which is owned by Pepsi Co), it definitely looks like Glaceau has a reason to litigate for trademark infringement, trade dress, and also trademark dilution. Hence the three different incarnations. The first bottle by SoBe was found to infringe on Glaceau's trademark, the second bottle was too confusing (and still contained contrasting color fonts with the words Life/Water which was too similar to Glaceau's Vitamin Water), and the third is the final incarnation. Can you say sham glam?

You can read the entire article (which I feel sounds like a press release) here:

http://www.law.com/jsp/ihc/PubArticleIHC.jsp?id=1202428379193&pos=ataglance