trademark, design and copyright update for fashion brands · luxury & fashion webinar series...

© Copyright 2019 by K&L Gates LLP. All rights reserved.

Susan Kayser, Friederike von Brühl, Serena Totino, Anaïs Ligot, Simon Casinader, Savannah Hardingham

Trademark, Design and Copyright Update For Fashion Brands

Luxury & Fashion Webinar Series – Facing the FutureMarch 21, 2019

TODAY‘S PRESENTERS – A WARM WELCOME

LondonSimon Casinader,

Sr. Associate

BerlinFriederike von Brühl, Partner

MelbourneVIA RECORDING:

Savannah Hardingham, Partner

Washington DCSusan Kayser, Partner

LondonSerena Totino, Associate

ParisAnaïs Ligot, Associate

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OVERVIEW OF TOPICS

– U.S. Issues and Cases

Proving Irreparable Harm Continues To Evolve

Blurring The Line In Using Celebrity Names Or Images

Parody Or Infringement - How Funny Does It Need To Be?

U.S. Supreme Court Weighs in on IP Issues

– EU Directive 2015/2436

– EU Issues and Cases

– Brexit

– Australia Issues and Cases

Copyright protection for clothing

Google Ads and trade mark infringement

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OVERVIEW OF TOPICS








– Brexit




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U.S. ISSUES AND CASES –“PROVING” IRREPARABLE HARM

Irreparable Harm Needed for Injunctive Relief‒ May 2006 – eBay v. MercExchange – U.S. Supreme Court rejects

“presumption” in patent cases– 2014 Ninth Circuit – Herb Reed Enterp. v. Florida Entertainment Mgmt. –

plaintiffs in trademark actions must show irreparable harm (no presumption)

Third Circuit – Groupe SEB USA Inc. v. Euro-Pro Operating LLC –“permissable inference” of irreparable harm

Supreme Court did not accept cert in Herb Reed– 2014 – 2018 Continued split requiring “proof” of irreparable harm, “inferences”, or

middle ground – some “proof”

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U.S. ISSUES AND CASES –PROVING IRREPARABLE HARM CONTINUES TO EVOLVE

adidas v. Skechers* 9th Circuit

adidas asserted trade dress for Stan Smith design: – three perforated stripes on the body of the shoe, – prominent heel tab, and – "a particularly flat sole," among other elements

Adidas Am., Inc. v. Skechers USA, Inc., 890 F.3d 747 (9th Cir. 2018)

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U.S. ISSUES AND CASES –THE STAN SMITH v. THE SKECHERS ONIX

adidas* proved irreparable harm: 1. Consumer surveys 2. Extensive marketing efforts3. Controlled supply of Stan Smiths available for purchase

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U.S. ISSUES AND CASES –THE STAN SMITH v. THE SKECHERS ONIX

adidas built a specific reputation around the Stan Smith with “intangible benefits”

– Extensive and targeted advertising– Unsolicited media– Survey– Controlling Supply

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U.S. ISSUES AND CASES –THREE STRIPE MARK v. SKECHERS CROSS COURT

adidas failed to show irreparable harm

Three-Strip Mark The Skechers Cross Court

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Evidence of Loss of Control over Business Reputation and Damage to Goodwill = Irreparable Harm

Provided “Concrete Evidence” in the Record

Post-sale confusion and “value” brand arguments not sufficient– Not sufficient evidence that Skechers had less favorable reputation– No evidence of consumer perception

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Judge Clifton’s Dissent: Lesser quality imitator could harm value of prestige brand

Record evidence to support irreparable injury– Employee testimony: adidas is “premium sports brand” and Skechers is

“value brand”– Value of adidas’ mark– Investment– Quality control

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U.S. ISSUES AND CASES –TAKEAWAYS ON PROVING IRREPARABLE HARM

– Venue matters

– “Prestige” v. “Lower Quality”

– Employees ≠ Consumer Perception

– Advertising

– Unsolicited media

– Controlling Supply

– Surveys

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U.S. ISSUES AND CASES –BLURRING THE LINE IN USING CELEBRITY NAMES OR IMAGESUse of celebrity’s name might be legal even when clearly chosen to capitalize off famous singer’s name

– Feyoncé Inc. selling T-shirts and other goods featuring “Feyoncé”

– References Beyoncé’s 2008 “Single Ladies” track

Knowles-Carter et al. v. Maurice et al., 1:16-cv-02532 (S.D.N.Y.)

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U.S. ISSUES AND CASES –BEYONCÉ v. FEYONCÉ

– Use of letter “F” in “FEYONCÉ” was a play on words to sound like “fiancé”

– A pun the court found could dispel consumer confusion

– SJ and a permanent injunction denied– Case dismissed– Number of FEYONCÉ items currently for

sale by third parties

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Knowles-Carter et al. v. Maurice et al., 1:16-cv-02532 (S.D.N.Y.)

U.S. ISSUES AND CASES –PARODY OR INFRINGEMENT - HOW FUNNY DOES IT NEED TO BE?

Louis Vuitton Malletier SA v. My Other Bag Inc., 1:14-cv-03419 (S.D.N.Y.)

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U.S. ISSUES AND CASES –PARODY OR INFRINGEMENT - HOW FUNNY DOES IT NEED TO BE?

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U.S. ISSUES AND CASES –LOUIS VUITTON v. MY OTHER BAG

A parody must convey two simultaneous and contradictory messages: – that it is original – but also that it is not the original and is instead a parody– MOB met this standard

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Louis Vuitton Malletier SA v. My Other Bag Inc., 1:14-cv-03419 (S.D.N.Y.)

U.S. ISSUES AND CASES –LOUIS VUITTON v. MY OTHER BAG

– “My Other Bag is a…” = a designation of source Makes clear that MOB’s tote bag is not a LV-branded bag but merely

a parody– LOC = extremely low– MOB's parodic use of LV's designs: produces a “new expression [and] message” constitutes transformative use

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U.S. ISSUES AND CASES –TAKEAWAYS

– Parody part of initial confusion assessment– Play on Words– Merely co-opted the mark? Or repurposed it?– Third Party Use– Negative Press / “Bullying” Charges Against Big Brands

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U.S. ISSUES AND CASES –U.S. SUPREME COURT RESOLVES CIRCUIT SPLIT ON COPYRIGHT REGISTRATION REQUIREMENT

– Supreme Court unanimously held: copyright owners must obtain a registration from the U.S. Copyright Office prior to filing an infringement action

– Impact: likely to be a flood of copyright applications at the U.S. Copyright Office low cost to file average seven-month wait time to receive

registration

Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, 586 U.S. __ (slip op., March 4, 2019).

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U.S. ISSUES AND CASES –FOURTH ESTATE PUBLIC BENEFIT CORPORATION v. WALL-STREET.COM

Brands in the luxury goods and fashion industries should routinely file copyright applications

– Fashion companies regularly create seasonal designs used on handbags or clothing (floral prints, animal designs, and other pictorial features/arrangements)

– Packaging designs may be protectable through copyright– Notorious infringers frequently create replicas of designs, and brands

need to be armed and ready with copyright registrations for immediate action upon learning that the brand’s design has been copied

– Registration = prerequisite for statutory damages and attorneys’ fee

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Fourth Estate Public Benefit Corp. v. Wall-Street.com, LLC, 586 U.S. __ (slip op., March 4, 2019).

U.S. ISSUES AND CASES –DEFINING RECOVERABLE COSTS IN COPYRIGHT LITIGATION

The Supreme Court recently determined that “full costs” under § 505 of the Copyright Act did not authorize the appellate court to award litigation expenses beyond those specified by Congress in the general costs statute

– Not included: expert fees, consultant fees, and electronic discovery costs– Included:

1. clerk and marshal fees2. transcript fees3. printing and witness fees and costs4. exemplification and copying fees5. docket fees6. compensation of court-appointed experts and interpreters

Rimini Street, Inc. v. Oracle USA, Inc. 586 U.S. ___ (slip op., March 4, 2019).

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OVERVIEW OF TOPICS








– Brexit




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EU DIRECTIVE 2015/2436 –HARMONIZATION OF EU TRADEMARK REGISTRATION PRACTICE

EU Directive 2015/2436

Aims Strengthening TM owners’ rights Harmonization of EU TM systems

Timing Implementation deadline: January 14, 2019 Almost half of the member states have not implemented yet!

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German Trademark Modernization Act (14 January 2019)

New registration options Before: only graphic display; now: any form of display! Licenses

New technical framework QR-Code on TM certificate Use of key words for TM research

New TM types Sounds, animations, holograms Certification marks

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Certification Mark

Guarantee for certain characteristics of the goods/services Applicants provide a statute Reliability

Relevance for fashion industry Guarantee for standards of material, fabrication, quality e.g. Fair Trade Rules and Environmental Protection


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OVERVIEW OF TOPICS








– Brexit




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Description of Trademark Registration EU 008845539:

“The trademark consists of the color red (Pantone 18.1663TP) applied to the sole of a shoe as shown (the outline of the shoe is therefore not part of the trademark but serves to show the positioning of the trademark).”

Notion of “shape”, Article 3(1)(e)(iii) Directive 2008/95:

”A set of lines or contours that outline the product concerned.”

EU ISSUES AND CASES –CJEU – JUDGMENT C-163/16 LOUBOUTIN

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FERRAGAMO’S TRADEMARK RIPANI & VAL VIBRATA

Italian Supreme Court – 2018

EU ISSUES AND CASES –FERRAGAMO v. RIPANI & VAL VIBRATA

EU ISSUES AND CASES –COURT OF MILAN

Ferragamo filed a lawsuit agaist Ripani and ValVibrata claiming:

– Infringement of its iconic «omega» trade marks

– Unfair competition

The Court of Milan decided in Ferragamo’s favour

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2013 – The first instance decision was overturned:

– Similarity does NOT imply likelihood of confusion in the market– Ripani & Val Vibrata’s signs held an instrumental function, while

the Ferragamo trade mark has an ornamental function

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EU ISSUES AND CASES –COURT OF APPEAL

EU ISSUES AND CASES –THE ITALIAN SUPREME COURT

Marks with reputations should be protected:‒ Independently from the likelihood of confusion

of the relevant public‒ If the infringing mark takes unfair advantage of,

or is detrimental to, the distinctive character or repute of the earlier mark

STAY TUNED…Court of Appeal will have to decide the case

taking into account the reputation of the earlier mark

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EU ISSUES AND CASES –LANDOLL v. MECS SRL

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LANDOLL’S TRADE MARK

PRINCIPLE OF EXHAUSTIONPRINCIPLE OF EXHAUSTION

MECS SRL

Unauthorised reseller of NASHI products on its website and on a

third party online marketplace SELECTIVE DISTRIBUTION

AGREEMENT

Court of Milan – 2019

EU ISSUES AND CASES –PRINCIPLE OF EXAUSTION

A trade mark owner may not oppose the further commercialization of its branded goods that are distributed in the EEA with its consent

unless there are LEGITIMATE REASONS:

– Conditions of the goods are changed or impaired– Legitimate selective distribution agreement in place

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PRELIMINARY INJUCTION:

‒ Principle of exahustion does not apply‒ Selective distribution agreement may be a

«legitimate reason»– Infringement of Nashi Trade mark– Withdrawal of Nashi’s products from the

market within 3 days + legal costs– Publication of the preliminary injuction on

the the reseller’s homepage for 30 days

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Will the Court of Milan uphold this decision?Will this decision be persuasive for other EU Courts?

EU ISSUES AND CASES –COURT OF MILAN

“A distribution system where the supplier undertakes to sell the contract goods …, either directly or indirectly, only to resellers selected on the basis of specified criteria

and

where these resellers undertake not to sell such goods …to unauthorized resellers within the territory reserved by the supplier to operate that system…”

Article 1(e), EC Regulation No. 330/2010 (“Vertical Block Exemption Regulation”)

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EU ISSUES AND CASES –WHAT IS A SELECTIVE DISTRIBUTION SYSTEM?

EU ISSUES AND CASES –HOWEVER…

Many luxury brands already operate a “DE FACTO” selective distribution system BUT unless structured in accordance with EU laws:

– May not be legally enforceable – so of little/no protective value to brand– May include terms or practices which expose the company to significant

legal risk (see Guess case) Cross-sale restrictions? Territory restrictions? Online sales restrictions? Resale pricing pressures?

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EU ISSUES AND CASES –LIONEL MESSI v. EUIPO & J.M.-E.V. E HIJOS SRL

Action Trademark registration filed by Opposed by

Party Messi J.M.-E.V. e hijos SRL’s prior trademark

TrademarkWord trademark

“MASSI” No 3436607

Word trademark “MASSI” No

414086

Classes92528

25 928

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Are these trademarks similar?

Court of the EU – 26 April 2018 No T-554/14

– According to the Court of the EU: Visually: Average degree of similarity Phonetically: Strong degree of similarity Conceptually: Different since Lionel Messi is famous for any average

consumer of sports goods

– Decision of the Court of the EU: No likelihood of confusion The relevant public will associate the term “Messi” with the name of

the football player, not with the trademark “Massi”

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Are these trademarks similar?

Court of the EU – 26 April 2018 No T-554/14

EU ISSUES AND CASES –LIONEL MESSI v. EUIPO & J.M.-E.V. E HIJOS SRL

EU ISSUES AND CASES –CROCS v. EUIPO AND GIFI DIFFUSION

Action Design registration filed by

Declaration of invalidity by

Party Crocs Gifi Diffusion

Design

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“Unluxury” shoes – Take 1

Court of the EU – 14 March 2018 No T-651/16

– Considering the three disclosure events: The Crocs’ design had been made available to the public prior to the 12-month period preceding the date of priority claimed

– No demonstration by Crocs that three disclosure events could not: reasonably have become known in the normal course of business to the circles specialized in the sector concerned operating within the EU

– Decision: Lack of novelty

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Court of the EU – 14 March 2018 No T-651/16

EU ISSUES AND CASES –CROCS v. EUIPO AND GIFI DIFFUSION

EU ISSUES AND CASES –BIRKENSTOCK v. EUIPO

Action Trademark registration filed by Refused by

Party Birkenstock EUIPO

Trademark

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Court of the EU – 13 Sept. 2018 No C-26/17

Criteria for distinctive character for surface patterns – Criteria for trademarks that coincide with the appearance of the goods is

applicable to surface patterns trademarks. When the use of a pattern is unlikely in the light of the nature of the

products at issue -> no coincidence with the goods and services = distinctive trademark

When the use of a surface pattern for fashion items is made up of elements which are repeated regularly and can be extended ad infinitum, it lends well to being used as a surface pattern -> it coincides with the goods and services = no distinctive trademark

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Court of the EU – 13 Sept. 2018 No C-26/17

EU ISSUES AND CASES –BIRKENSTOCK v. EUIPO

OVERVIEW OF TOPICS








– Brexit




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BREXIT –WHAT DOES IT MEAN FOR IP?

– … …

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BREXIT –WHEN?

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BREXIT –DESIGNS

– No loss of rights in UK due to Brexit UK registered and unregistered designs Unchanged

EU registered designs Equivalent rights to be created in UK

Pending EU design applications Priority for UK applications

Continuing Unregistered Designs Supplementary Unregistered Designs

– Inability to rely on UK rights in the EU post Brexit

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BREXIT –DISCLOSURE OF DESIGNS

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BREXIT –TRADE MARKS

– No loss of rights in UK due to Brexit UK registered and unregistered trade marks Unchanged

EU registered trade marks Equivalent rights to be created in UK

Pending EU trade mark applications Priority for UK applications

– Inability to rely on UK rights in the EU post Brexit

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BREXIT –ENFORCEMENT/OPPOSITIONS

– UK proceedings based on UK rights Unchanged

– EU proceedings based on EU rights Unchanged

– UK proceedings based on EU rights Will proceed on basis of newly created rights

– EU proceedings based on UK rights Terminated Possibility for new UK proceedings if relevant

– Existing EU wide injunctions will still apply in UK

– New EU wide injunctions from UK Courts or including UK not possible

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BREXIT –IP AGREEMENTS

– “Future proofing” required

– License Territory – EU, Europe, country list

– Governing law and dispute mechanism

– Diligence existing material settlement and co-existence agreements before Brexit day

– Have Brexit as a live issue for all new agreements and term sheet discussions

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OVERVIEW OF TOPICS








– Brexit




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AUSTRALIA ISSUES AND CASES –COPYRIGHT PROTECTION FOR CLOTHING IN AUSTRALIA

– No unregistered design right in Australia– Copyright cannot generally be relied

upon to protect garment cut– Copyright can be relied on to protect

fabric prints & other 2D designs appliedto garments

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COPYRIGHT PROTECTION FOR CLOTHING IN AUSTRALIA –INFRINGEMENT OF COPYRIGHT

– Works that reproduce the whole or a “substantial part” of a copyright work, without authority, will infringe

– Two elements: Reference/ copying

– Established by evidence of direct copying or inferred if access to the copyright work was possible and designs are similar

Substantial part– Quality rather than the quantity of the part taken – no “safe” amount

to copy– Is the part taken an ‘essential’, ‘material’ or ‘recognisable’ part of the

copyright work?

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COPYRIGHT PROTECTION FOR CLOTHING IN AUSTRALIA –SEAFOLLY v. FEWSTONE (CITY BEACH)

City Beach found to have infringed copyright in two original Seafolly fabric prints and an embroidery design

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COPYRIGHT PROTECTION FOR CLOTHING IN AUSTRALIA –PRINTS

Seafolly’s English Rose City Beach’s Rosette/ Rosario

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Seafolly’s Covent Garden City Beach’s Sienna

COPYRIGHT PROTECTION FOR CLOTHING IN AUSTRALIA –PRINTS

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COPYRIGHT PROTECTION FOR CLOTHING IN AUSTRALIA –EMBROIDERIES

Seafolly’s Senorita City Beach’s Richelle

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COPYRIGHT PROTECTION FOR CLOTHING IN AUSTRALIA –FINDINGS

– City Beach infringed copyright in all 3 works

– Ordered to pay damages – AU$250,000– Injunctions – cease making/selling the garments

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COPYRIGHT PROTECTION FOR CLOTHING IN AUSTRALIA –WHY WAS SEAFOLLY SUCCESSFUL?

– Seafolly kept design files

– Evidence of direct copying by City Beach

– Generous approach to “substantial part” (although many differences)

– Once copying proven, difficult to avoid “substantial part” and infringement

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AUSTRALIA ISSUES AND CASES –GOOGLE ADWORDS & TRADE MARK INFRINGEMENT

Keyword search

Sourced from: https://www.sharetribe.com/academy/get‐started‐google‐adwords‐marketplace/

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GOOGLE ADWORDS & TRADE MARK INFRINGEMENT –VEDA ADVANTAGE LTD v. MALOUF GROUP ENTERPRISES (2016)

TM Infringement Not TM Infringement

Use of the trade mark in the text of a sponsored link as a badge of origin andin relation to the same or similar goods/services for which the trade mark is registered

Merely selecting and bidding on a trade mark in Google Ads on its own, or in combination with another word or in any format

Descriptive search terms or descriptive use of a TM

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GOOGLE ADWORDS & TRADE MARK INFRINGEMENT –ACCC v. TRADING POST AUSTRALIA (2011)

Use of a competitors’ business name as an Adword can constitute misleading and deceptive conduct

– When Internet users conducted a search for “Kloster Ford”, the following sponsored link appeared:

Kloster Ford

www.tradingpost.com.au New/Used Fords – Search 90,000 + auto ads online. Great finds daily!

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GOOGLE ADWORDS & TRADE MARK INFRINGEMENT –GOOGLE v. ACCC (2013)

– Google itself is not liable– Liability rests with AdWords subscriber

(need to sue subscriber)– Google will no longer remove keywords at trade mark owner’s request

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GOOGLE ADWORDS & TRADE MARK INFRINGEMENT –KEY TAKEAWAYS

– Conduct regular Google searches of your trade marks– You may use descriptive terms or use a trade mark in a way that is

descriptive – Do not use another’s trade mark (or similar mark) in the Google Ad or

sponsored link of a Google Ad

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PLEASE DO NOT HESITATE TO BE IN TOUCH!

Friederike von Brühl BerlinT +49.(0)[email protected]

Susan KayserWashington DCT [email protected]

Simon CasinaderLondonT +44.(0)[email protected]

Serena TotinoLondonT +44.(0)[email protected]

Anaïs LigotParisT +33.(0)[email protected]

Savannah HardinghamMelbourneT [email protected]

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