Saturday, September 09, 2017

New York Fashion Cool-Aid by Laurel Marcus

Fashion Law Institute Breakfast Tackles the Art of the "Cease & Desist" Letter

Left to right: Susan Scafidi, Nicole Marra, John Maltbie & James Donoian
Photo: Laurel Marcus - click image for full size view

“To C&D or not to C&D?” That was the question at yesterday morning’s New York Fashion Week breakfast edition of the Fashion Law Institute’s 7th anniversary seminar held at Fordham University.“ Is Sending a C&D Risk-Free? The Hidden Pitfalls of Intellectual Property Enforcement” featured the knowledgeable panel of Nicole Marra, Vice President, General Counsel, Corporate Affairs Gucci America; John Maltbie, Director of Intellectual Property, Civil Enforcement Louis Vuitton Americas; and James Donoian, Partner, McCarter & English, moderated by Professor Susan Scafidi, Founder and Director of the Fashion Law Institute.

As this is a topic of such high concern in the industry, I was informed that we were “off the record” and in this case, what is said at the Fashion Law Institute stays at the Fashion Law Institute. At the risk of “never getting into another sample sale” I will not be attributing much of what I’m reporting to individual panel members of the two high-end design entities.

Professor Scafidi’s opening remarks included a tribute to Yves Saint Laurent’s business and life partner the late Pierre Berg√© who had reached out with his congrats seven years ago when the Fashion Law Institute was born. She also mentioned that something just short of world peace has been achieved (at least in fashion-land) referring to the latest news about Kering and LVMH burying the hatchet, working together to end model abuse, with a new charter. See article.

Fashion first: let me mention that Marra was sporting Gucci’s floral embellished “Blind For Love” denim jacket (see the sweater version on Taylor Swift in her new video “Look What You Made Me Do”) and carried a Gucci snake tote. I’m pretty sure I’m seeing that red and blue striped snake knocked off everywhere, which is actually apropos to this conversation -- more on that later.

Where was I? Oh yes, back to Cease and Desist letters and defending your mark from: a nameless, faceless person in China, a fast fashion company, or another brand.  The panel agreed that before you send off one of those letters to a company who may be infringing on your IP, it’s important to consider many factors such as:  how important is this particular case to your overall brand? Fashion comes and goes so make sure that this is something truly intrinsic to your core, as in the distinguishing Gucci red and green stripes. (Yes, Forever 21 has been accused of appropriating both Gucci’s stripes and those of Adidas). Clearly, certain elements are more important than others when it comes to trade dress. Also, don’t send a letter just to send a letter – no saber rattling for nothing – you must be prepared to back it up if necessary, and apparently “these things can get ugly fast.”

What happens after you’ve sent a C&D? Donoian mentions one familiar response as he is often on the receiving end of the dreaded “seven page missive but in the last paragraph it says they will stop. I wish they’d just cut to the chase…”

It’s also important to find out about your copycat or counterfeiter. Who is doing the copying? How impactful is it to the business? Is this your best use of resources? Will you maximize “bang for the buck”? Is it having a major commercial factor on the market or is it an “artistic use” of your design element? Is it the nature of their business (ie. Forever 21 and other fast fashion brands)? What type of reaction will we get? Who noticed it? And perhaps most important: Who is the counsel on the other side? Believe it or not, “there are some lawyers you don’t want to litigate.”

Professor Scafidi points out that it’s important to pick your battles -- someone could say you’re violating their rights and counter sue you for defamation. This actually happened over the YSL tuxedo dress which Ralph Lauren was accused of copying. Lauren turned around and made a counterclaim in which he sued for being called a thief. Interestingly, Europe has “design rights” that the US does not, enabling a European brand to sue someone in the EU but a “stitch for stitch copy” made in the US is not under that jurisdiction. Another bad outcome such as between Louboutin and YSL over the red soled shoes – your mark can be cancelled if it is not strong enough. A judge could always invalidate your design, for instance, ruling that red soles on shoes are not protected – therefore judges are the “wild card” in these situations, something a client must be made aware of.

There are also situations where a company will say they aren’t infringing because they did one thing different such as changing the color of a stripe.  It’s very important to look at what you put in your mark description as it’s very bad to lose your mark. Another argument used to determine infringement: is the customer confused? Somehow I doubt that anyone thinks they are getting Gucci at F21.

Other topics discussed included whether to go after the department store/retailer or their supplier/vendor; how to dissuade your boss from going after someone difficult or risky; as well as the impact of social media on these cases. Donoian mentions that fashion companies have a higher profile on social media therefore “things can go viral very quickly.” Scafidi (in a brightly colored Gucci tiger skirt BTW) mentions the case of Paypal suing Pandora over a logo, as an example of a non-fashion case which went viral but these are two companies that people are familiar with online.

If you do decide to send a C&D letter how to word it? One panelist mentions that it should be “pretty plain vanilla,” just make your point and say what you plan to do about it. Once again, who you’re writing to is a factor in assessing risk. These things are case by case dependent yet the trend may even be increasing – a little lawyer "in" joke is that they are on a first name basis with the attorney for that pesky retailer Forever 21 – a company who has built into their budget a fund to defend and flip lawsuits. Sometimes the letters are almost too nice in defending “brand protection” such as the famous “whisky flavored rather than plain vanilla” Jack Daniels versus a book cover case: see article.

What about the smaller client with no real “war chest”? The analysis is different with limited resources so you must focus on what’s most important to your brand. What if you are on the defense side? It’s important to figure out if the case has merit or is merely attention seeking. How do luxury design brands know about copies? Believe it or not, many of these cases are brought to their attention by the general public or a relative of an employee so, if you see something, say something. Meanwhile, I’ve been wracking my brain to think where I saw that Gucci snake knockoff!

Lastly, is there an alternative to bringing out the big guns or the hourly charging attorney? How about a “quick and easy solution” to the problem instead of the C&D letter? The old fashioned approach of reaching out and touching someone is one possibility. According to one panel member, “a phone call sometimes works.”




- Laurel Marcus

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