Intellectual Property on Guard of the Boundaries of the Fashion Industry
Author: Roman Buzko
A high-quality three-dimensional photograph of a new art object taken at the opening of a fashion week in London can turn into a large batch of first-class copies in a matter of days, delivered to the Foggy Albion by the end of the same week. At the same time, such copies (also known as "knockoffs") can be a completely legal way of competing in the fashion industry, especially in its segment called fast fashion. It is not surprising that against this backdrop, designers are increasingly looking for ways to protect their rights. This article will focus on such tools for protecting the results of intellectual activity in the fashion industry.
Today, fashion industry players operating in the Russian market do not often take measures to protect the design of their unique products and are in no hurry to defend their rights in court. There can be several reasons for this, such as the awareness of Russian consumers who can distinguish a fake from an original, as well as the small share of the Russian market in the portfolio of global brands. However, the Russian legal system provides all the necessary tools for protecting the unique design and appearance of a product. In this article, we will explore relevant methods of protection, including trade marks, copyrights, industrial designs, and trade secrets. The article concludes with several examples of "multi-layer" protection for fashion products.
Trade Mark Registration Will Protect Against the Most Obvious Violations
When it comes to brand protection, the first thing that comes to mind is a trade mark (TM). A TM can be a word, a picture, a three-dimensional object, or any other type of designation. A designation becomes protected as soon as it is registered with Rospatent, and the person who files the application first has priority. The protection provided by a TM is not unlimited; the owner's monopoly only applies to the specific classes of goods for which the TM is registered.
Registration of a Trade Mark for Goods of a Different Class May Be Considered as Unfair Competition
In 2009, the Swiss watch manufacturer Vacheron Constantin discovered that an identical verbal designation had been successfully registered in Russia as a trade mark for goods of the 25th class (clothing, footwear) with a priority date of 2003. The Swiss company's trade mark only covered goods of the 14th class (watches). The Swiss watchmakers were unable to challenge the registration of the competing trade mark with Rospatent. The courts of three instances refused to grant them this request, citing the heterogeneity of the goods. The dispute was only resolved by the Supreme Arbitration Court of the Russian Federation, which agreed with the argument that registering an identical trade mark for a different class of goods in this case constitutes unfair competition.
As a general rule, a trade mark protects a specific designation (logo, phrase, slogan, etc.), but it does not cover the shape of the product or its design. This limits the perimeter of TM protection to fairly obvious violations in the form of copying a logo, but does not include protection of the design of creative elements of fashion products. However, since 2014, Russian law has introduced a rule that non-protected elements, including shape, packaging, or color, can still be protected if such elements or their combination have acquired distinctiveness as a result of their use prior to the filing of a TM application.
Registration of a Corporate Color as a TM in Russia
In February 2016, the media space was actively discussing the news of the registration of their corporate colors as TM by large Russian companies. Gazprom registered blue, MTS — red, and Sberbank — green. Of course, these colors are limited to the classes of goods and services, in relation to which they acquired a distinctive ability and were, accordingly, registered.
In the US, the shape of a product and its packaging can receive protection as trade dress, as a variety of TM, since the adoption of the Lanham Act in 1946. Some of the most well-known examples of product or packaging design include the Tiffany blue box, the Hermès Birkin bag, and the Christian Louboutin shoes with red soles.
Can't Anyone Now Sell Shoes With Red Soles?
The red sole of Christian Louboutin shoes has been registered as a trade mark in the United States since 2008. In 2011, the company filed a lawsuit against Yves Saint Laurent (YSL) to protect its trade mark. The stakes were high. If the case had been unsuccessful, Christian Louboutin could have lost its monopoly on the red sole forever. Both companies were represented by well-known law firms, and each claimed victory after the final decision was made. It's no surprise that the court reached a compromise: Christian Louboutin retained its trade mark for the red sole, but its monopoly was limited to red soles that contrast with the main color of the shoe. For more information about this case, please refer to our other post.
Registering a trade mark in Russia can take anywhere from 12 to 18 months. In the world of "fast fashion", such deadlines reduce the relevance of registering seasonal names as TM, for example, collection names. At the same time, registration of a TM is a particularly effective way of protection if there is reason to fear that counterfeit products are imported from abroad and/or distributed in online stores. We will talk about this in more detail in one of the following publications.
It is worth mentioning one interesting aspect characteristic of the fashion industry: the names of designers are often registered as TM. As a general rule, proper names cannot be registered as TM. However, it is difficult to accept this general rule, considering that the name of a fashion designer is their most valuable asset, and most global companies proudly bear the names of their founders. Therefore, an exception has been made in this case: like other unprotected elements, a proper name can be protected as a trade mark if it has acquired distinctiveness as a result of its use.
When registering a designer's name as a trade mark, it is important to think ahead, as the fates of the company and its renowned designer may diverge. It is best to establish the rules of the game in advance.
Paolo Gucci and Paul Frank Cannot Sell Clothes Under Their Own Names
The court banned Paolo Gucci, the chief designer and grandson of the founder of Gucci, from using his last name ("Gucci") to sell his products after he left the family business. The same fate befell Paul Frank after his departure from Paul Frank Industries, Inc. Both companies made sure at the very beginning that the rights to the TM in the format of designer names would belong to the companies themselves.
It is in the company's interest to provide restrictions on the way the designer uses his name, in case he leaves the company. Designers are interested in keeping the name for themselves, for example, by registering the TM on themselves and transferring the company the rights to use the name (as a TM) under a license agreement for the duration of cooperation.
Design Is a Protected Object of Copyright, However Russian Practice Has Yet To Determine the Scope of Protection Provided
Is the design of a product, its proportions and appearance protected as an object of copyright? This question remains one of the most pressing in the fashion industry. Primarily because the protection provided to copyright objects does not require registration or compliance with any formalities, and the duration of their protection is significantly longer than in the case of industrial designs, and is 70 years from the date of the author's death.
The objects of copyright are works of science, literature, and art, regardless of the merits and purpose of the work, expressed in any objective form, including written, oral, pictorial, sound, or video form, or in three-dimensional space. The open list of copyright objects is contained in Article 1259 of the Civil Code of the Russian Federation and includes, among other things, works of graphics, design, and other works of fine art and works of decorative and applied art.
This broad definition and the examples of copyright objects provided in the law suggest that the design of clothing or a product (such as a bag, jewelry, or eyeglass frames) can also be considered an object of copyright and be protected accordingly. However, there have been only a few instances in Russian law enforcement practice where the owner of exclusive rights to a product's design has filed a claim against an unscrupulous competitor.
The Design of Patterns on Bedding Is a Protected Object of Copyright
In 2013, a Russian court granted the company's claim against one of its competitors on the grounds that the latter was distributing bedding with a design similar to a work for which the plaintiff held exclusive rights. In this case, the protected work was a set of "croquis" (drawings) commissioned by the plaintiff from a design studio. Interestingly, the relevant product (bedding) was manufactured and imported into Russia by a Chinese company. It is quite possible that the defendant was unaware that the fabric design had been copied.
The global practice on this matter also varies. In the United States, there is a position that clothing is a "utilitarian" object and is therefore not protected by copyright, which applies to objects created through creative work. However, unique patterns on fabrics are still protected (Prince Group v. MTS Prods.), jewelry design (Yurman Design, Inc. v. PAJ, Inc.), and original-style buckles (Kieselstein-Cord v. Accessories by Pearl, Inc.). At the other end of the spectrum is the European Union, where a special act, the Community Design Protection Regulation 2002, explicitly recognizes the protectability of design and provides protection for both registered and unregistered designs.
In Russia, this practice has not yet been established, and for now, fashion designers always retain the right to claim that their products are protected by copyright.
The Appearance of a Product Can Be Protected by a Design Patent
Have you come up with the idea of making a leather jacket with a lining? Be careful. Designers from the Stavropol Territory have already received a patent for a "leather jacket for men with a removable mouton lining".
Indeed, as in most other countries, the appearance of a product can be protected by a design patent. To obtain protection, the appearance of a product must meet two conditions: (1) it must be new and (2) it must be original.
Conditions for the Patentability of an Industrial Design
An industrial design is new if the set of its essential features, which are reflected in the images of the product's appearance, is not known from information that became publicly available in the world before the priority date of the industrial design.
An industrial design is original if its essential features are due to the creative nature of the product's features, in particular, if the design of a product of a similar purpose is unknown from the information that became publicly available in the world before the priority date of the industrial design, and the informed consumer has the same general impression as the industrial design reflected in the images of the product's appearance.
Not every product can meet the above conditions. Moreover, the fashion industry has a centuries-old history, and truly new designs do not appear frequently, even though new collections are introduced every season. Obtaining a patent is relevant for products that have a truly unique appearance. Additionally, since obtaining a patent takes at least 18 months, a product that has the potential to be in trend for several seasons is a good candidate for protection as an industrial design. Bags, eyeglass frames, perfume containers, and jewelry are often protected as industrial designs.
Having a design patent allows you to effectively prohibit competitors from using the protected appearance of your product. The exclusive rights to a design patent are valid for 5 years, with the possibility of multiple 5-year extensions, but no more than 25 years in total. You must apply for a patent within 12 months of the disclosure of the information (such as at an exhibition or fashion show).
Crocs Was Late in Applying for a Patent for One of Their Most Famous Shoe Designs
In February 2016, it was reported that the U.S. Patent Office had denied Crocs a patent for an industrial design to protect the appearance of one of its well-known shoe models. The reason was that the appearance of the shoe had been disclosed on the company's website long before the patent application was filed.
What Is the Benefit of a Trade Secret, Know-How, or Commercial Confidentiality?
In the fashion industry, competitive advantages often involve confidential information that does not fall under the categories mentioned above. These may include, for example, a special fabric processing technique, a list of key customers, or a method for building a supply chain. The World Intellectual Property Organization (WIPO) cites ZARA's IT system as an example of a trade secret in the fashion industry, which allows the company to reduce its production cycle (the time between identifying a new trend and delivering products to stores) to as little as 30 days. Competitors may take anywhere from 4 to 12 months to achieve the same result.
A Trade Secret (or Know-How) Under Russian Law
Information of any kind [...] about the results of intellectual activity in the scientific and technical field and about the methods of carrying out professional activities that have a real or potential commercial value due to the fact that they are unknown to third parties, if such information is not freely accessible to third parties on a legal basis and the owner of such information takes reasonable measures to ensure its confidentiality, including by establishing a commercial secret regime.
As follows from the definition of a trade secret, in order for information to become protected, it must meet three criteria: (1) it must have commercial value due to its lack of knowledge by third parties, (2) it must be inaccessible to third parties, and (3) reasonable measures must be taken to ensure its confidentiality.
Louis Vuitton's Production Secrets Were Transferred to Coach Along With the Former Vice President of the French Fashion House
In 2014, Louis Vuitton filed a lawsuit against its former vice president responsible for Canada and Bermuda. According to the company, the former employee violated his non-competition and non-disclosure obligations when he joined the American Coach brand. Moreover, the company demanded to recover more than 500 thousand dollars from the defendant as a penalty.
Similar cases, albeit with smaller amounts, are regularly encountered in Russian court practice. The main challenge for conscientious Russian owners of know-how is to prove that they have taken measures to ensure the confidentiality of their secret information. Unfortunately, companies often only consider this when a problem arises. However, in some cases, a signed non-disclosure agreement may be sufficient. To ensure certainty, companies should implement a comprehensive commercial confidentiality regime within their organization. This requires implementing simple organizational and technical measures.
"Multi-Layered" Security or How To Protect Your Creativity as Much as Possible
As can be seen, the same product or a combination of its elements can be simultaneously protected using several legal protection methods listed above. This technique is sometimes called "multilayer" security.
"Multi-Layered" Protection of Jeans Design
The jeans brand is protected as a trademark. A unique fabric processing technique can be protected as a production secret, provided that measures are taken to ensure its confidentiality. Depending on the circumstances, the original design may be protected either as a work of art or as an industrial design.
"Multi-Layered" Protection of Sunglasses Design
As in the first example, the brand of the glasses may be protected as a trade mark. The unique material used to make the glasses (such as an ultra-lightweight material) may be protected by an invention patent. The original pattern on the glasses may be protected as a work of art.
In Conclusion
Hermès' Birkin and Kelly bags are registered as trade marks in the United States. Such vigilance allowed the French fashion house in 2012 to recover losses of $100 million from three dozen websites for selling fakes. In the same year, designer Tory Burch accused her ex-husband of violating trade secrets, to which he gained access while working as a consultant for her company Tory Burch LLC and being married to her at the same time. At the same time, a famous legal battle broke out between Christian Louboutin and Yves Saint Laurent for the right to sell shoes with red soles.
The fashion industry is rich in interesting legal stories, which usually revolve around its foundation: intellectual property. As the fashion industry and law continue to evolve, we can expect Russian designers and foreign brands operating in Russia to increasingly rely on legal mechanisms to protect their unique creations.