A fast fashion copycat and an alleged copyright troll walk into a court room: That is the start of the trial that kicked off on Tuesday between Swedish fast fashion giant H&M and Unicolors, Inc., a Vernon, California-based company in the business of creating, purchasing and/or obtaining exclusive rights to unique graphic artworks that are printed on fabrics and sold to fashion brands. The two parties first faced off over a year after Unicolors first filed suit against H&M for copyright infringement.
According to Unicolors’ suit, which was filed in April 2016, in the U.S. District Court for the Central District of California, H&M copied one of its patterns for two styles of garments, a jacket and a skirt. This is exactly what Unicolors told the court on Tuesday, while H&M denied ever seeing the design in the first place, let alone copying it.
(Note: In order to make a case for copyright infringement, it must be established that the two parties’ designs are substantially similar, and also, that the defendant – H&M in this case – had access to design at issue, or a reasonable opportunity to observe the design).
Interestingly enough, both parties come to court with less than stellar reputations. In addition to coming under fire recently for allegedly burning unworn, recyclable clothing (despite its widespread vows to close the loop as part of its highly-publicized recycling programs), H&M has been slapped with no shortage of intellectual property-related lawsuits in connection with its practice of copying. As recently as last month, H&M was sued for trademark infringement over its collection of Justin Bieber merch.
Unicolors, on the other hand, has been a topic of conversation, albeit for a different reason, since Fortune published an article in October 2015, lumping the textile company into a group of so-called “copyright trolls” said to be terrorizing the fashion industry.
According to Fortune’s Noah Smith, “[Los Angeles-based law firm] Doniger/Burroughs has filed more than 700 copyright infringement cases over the past five years … Their suits have targeted garments which feature designs [attorneys Stephen Doniger and Scott Alan Burroughs] claim are purloined from their clients, who are mostly large textile converters and importers, such as Unicolors.”
As for whether these 700 cases represent merited copyright infringement suits, Doniger and Burroughs are adamant that they do; others, however, are less convinced. For instance, Doug Lipstone, a partner at Los Angeles-based firm Weinberg Gonser LLP, whose clients have been targets of Doniger/Burroughs, told Fortune that he “is skeptical” about the nature of the lawsuits, in large part because the prints that are being sued over are “the most basic patterns imaginable.”
Mark Brutzkus, founding partner at Ezra Brutzkus Gubner LLP, whose clients have also been targets of Doniger/Burroughs’ clients, agreed, saying: “There are only so may ways you can make a floral design.”
According to Lipstone, the pattern of litigation that centers on these companies’ prints “is not about copyright.” Instead, he says, “this is about legalized extortion, it is shakedowns under the presumption of validity you can get from a copyright registration. It is an absolute tax.”
And Unicolors is very much at the center of this. The company filed nearly 100 copyright infringement lawsuits in 2016, and as of this year, there are over 30 new cases in play. On the receiving end of some of these suits are big names, such as Ivanka Trump, Urban Outfitters, Zara, and Nordstrom (the latter of which Department store Nordstrom Inc. filed what Law360 called “a scathing motion” in New York federal court Tuesday demanding the dismissal of the copyright infringement lawsuit that Unicolors filed against it over lace fabric designs, blasting the action as a “copyright troll case.”), among others.
An additional commonality among these 130+ lawsuits: Very few of them have gone to trial. With the exception of Urban Outfitters, which went to trial and lost, and a few others, these cases have mostly settled out of court, ahead of trial, largely because it tends to be much cheaper and more expeditious to settle a case than it is to finance and fight through a trial.
With the pattern of settlements in mind, the outcome of the Unicolor, H&M case – one of the few to actually make it this far – should prove interesting.
UPDATED (DECEMBER 10, 2017): A California federal jury has ordered H&M to pay Unicolors $845,000 in connection with its finding that the Swedish fast fashion giant willfully infringed a copyright on a Unicolors fabric pattern.