I have to give it to BuzzFeed for doing some research, reaching out to some sources and posting an article on design patents. This form of intellectual property is not a heavily covered topic when it comes to fashion publications, and so, props for charting relatively unknown territory. However, "Lululemon Is The Fashion Industry’s Biggest Patent Troll"? Not so fast. In fact, not only is Lululemon NOT The Fashion Industry’s Biggest Patent Troll, Lululemon is not actually a patent troll at all. Yes, Lululemon has an arsenal of design patents and yes, it enforces its patent rights against infringing parties, but that does not make it a patent troll. That makes it a diligent patent holder. Please read on, it gets so much better ...
A design patent, for those who are not familiar, is a form of legal protection granted over the ornamental design of a functional item. If issued, it lasts for 14 years. A design patent extends to aesthetic features of a design, and is distinct from utility patents, which are issued for function inventions (i.e. an apparatus, a process, a product, or a composition of matter). In simple terms, a “utility patent” protects the way an article is used and works, while a "design patent" protects the way an article looks. (There is also a third category of patents: plant patents). In order to qualify for a design patent, the design must be new and original (more specifically, the applicant must show novelty, originality, non-obviousness, ornamentality, and the subject matter must be an article of manufacture, which is all neatly codified in Title 35 of the United States Code Section 171).
Design patents are not terribly common place in the fashion industry for a number of reasons. Put simply: They are expensive, especially in comparison to the other forms of intellectual property. Federal trademark registration costs roughly $300 per trademark. Common law trademarks (aka those that are not registered and exist on a state-by-state basis) are free. Copyrights, if you register them, which is a prerequisite for filing a copyright infringement lawsuit, involve a $35 filing fee. Otherwise, they are also free to acquire. So, in this context, a design patent, which costs, at minimum, $2,500 (for most companies), is expensive.
They are also not a commonly utilized form of IP in fashion because of the time and complexity involved in acquiring one. Unlike copyrights, which are automatically acquired once you fix an original work of authorship in a tangible medium (draw it, paint it, record it, etc.) and common law trademarks, which generally attach once you begin using your mark in commerce, federally registered trademarks and design patents require an application and vetting process. According to the U.S. Patent and Trademark Office (USPTO), it can take anywhere from "almost a year to several years" to federally register a trademark, and design patents currently take 24.6 months, on average, to be processed, according to the USPTO's most recent estimate.
If we think about that amount of time (two and a half years) in terms of fashion seasons, it's almost completely unworkable. A design house will have shown the design, manufactured it, sold it and moved on to entirely new designs by the time the patent issues (i.e. is granted). As a result, only a small number of designs are worth obtaining design patents over. Which ones? Commonly, design houses will file to protect designs that they plan to introduce and re-introduce for quite awhile. So, for instance, Italian design house, Missoni, has patented a number of its zig-zag prints, as they are used every season; Balenciaga patented the design of its Motorcycle bag, as it has been producing that bag and an array of variations since 2000; and both Jimmy Choo and Stuart Weitzman have patented a number of footwear designs, namely those that are their best sellers and ones they repeatedly reintroduce. Thus, it makes sense for design houses (with the financial resources) to protect key designs that they plan to sell for quite some time.
So, with that background, I'd like to (with all due respect to Buzzfeed) offer a few corrections to the Buzzfeed article from a legal, historical and factual perspective.
First, Lululemon is not a patent troll. A patent troll (or "non-practicing entity" as the white house recently coined) is an entity that buys up ambiguous, vague or broad patents (typically patents that are not otherwise being used) and then tries to make money off of them by threatening to sue (i.e. demanding a license fee from) anyone who could arguably be said to be using them without permission ("infringing them"). "Trolls" typically operate as shell companies and file hundreds of lawsuits against everyone who could potentially be infringing. Because many of these alleged infringers cannot afford the lengthy litigation that would be necessary to establish that they are not infringing or to prove that the patent at issue is invalid (because it is too broad or too vague), they just agree to pay the "troll" a license fee.
What makes an entity a troll is that it is "non-practicing." This means that it doesn't use, make or sell goods that embody the patent. It merely uses the patent to extort money from would-be infringers. So, the first problem here is clear. Lululemon is a seller and manufacturer of goods embodying these patents. This gives them a very legitimate right to enforce their patents to stop others from infringing them. For example, the waistband of Lululemon's “Astro Pant," which it makes and sells, served as the basis for its patent infringement suit against Calvin Klein that commenced in 2012 and subsequently settled out of court. Looking at the list of 31 patents that Lululemon currently holds, which consist of an array sports bras, shorts, pants, etc., reveals, very clearly, that Lululemon is making and selling garments that embody these patents. Hence, it is not a troll.
However, since "patent troll" is a phrase a lot of people are throwing around these days when they don't like the patents someone else is trying to enforce, I think this is where Buzzfeed may have gotten confused.
Substantively debating whether a class of technology is worthy of patent protection in the first place is usually a more constructive place to begin a discussion of this sort. But, instead of doing so, Buzzfeed's article accuses the USPTO of being unqualified to judge patentability in the first place. The article states: "[w]ithin the apparel industry, there are questions around how unique Lululemon’s merchandise is and whether the patent office is qualified to distribute patents on workout clothing." It is important to pause here to say that I think it is really wonderful that the fashion industry is thinking about fashion law and about patents, and that a mainstream site like Buzzfeed is joining in. Having said this, I wish the article had engaged in a discussion of the substantive issue (what the requirements for a design patent should be if Buzzfeed disagrees with them), rather than accusing the USPTO of not being able to do its job. In fact, the article suggests that the USPTO patent examiners are not capable of determining the patentability of fashion designs, and suggests that the USPTO "hire fashion designers, or people with expertise in fashion" to determine what is and is not patentable. This is the second big problem with the article.
Following this, the USPTO would need to hire industry "experts" in every single possible field of patentable subject matter. Let's think for a moment about what exactly this means. According to this line of reasoning, when a new area of technology is introduced (like, say, when sewing machines, airplanes, or smart phones were first invented) there would be no one qualified to pass on the patentability of these technologies because there would be no one with the "expertise" to tell us whether these inventions are worthy of protection. The issue here is that this is not how our patent system works. It was set up in the 1700's precisely to be adaptable to new fields of technology, without needing highly trained field experts in every single potential field of technology or design. Patents are awarded not based on the invention or design's merits relative to some secret industry know-how privy only to an elite group of experts, but by judging them against a set of statutory (sometimes shaped by common law, or judge-made law) standards. This includes comparisons to existing inventions and designs (called "prior art"). The patent applicant and the patent examiner compare the proposed invention or design against the standards and the existing prior art to determine whether the invention or design is sufficiently new and original, all according to 35 USC 171. Suggesting that the USPTO's patent examiners are somehow unqualified to judge the patentability of yoga pants (or any other garment for that matter) because they aren't fashion experts misses the point.
Frankly, what is even more disappointing is that this article could be interpreted as an insult to the patent examiners of the USPTO because it suggests that they are issuing patents that do not meet the requirements of the law, which is simply wrong. However, let us assume for a moment that Buzzfeed is right and the USPTO is issuing tons of "bad" fashion patents that lack the necessary requirements for patentability. If this is the case, shouldn't we see them being invalidated by the courts or the USPTO? Because if they were so obviously invalid, it should be easy to establish this in court, right?
What's more, in 2011, Congress passed the America Invents Act, which made it significantly easier, faster and cheaper to challenge existing patents. Even independent third parties can challenge patents (these are called inter partes reviews). Staying with Buzzfeed's suggestion that the USPTO is issuing tons of "bad" fashion patents, shouldn't it be especially easy (given these new developments) for the legal team at Calvin Klein, for example, when it was facing the aforementioned patent infringement suit filed by Lululemon, to parade a handful of "experts" (as happens in every case involving a specialized industry) in front of a judge, jury or the USPTO and clearly show how the design patent at issue is invalid? Certainly, this would be the type of home-run situation where settlement (which ultimately occurred in the Lululemon v. Calvin Klein case) wouldn't even be on the table because Calvin Klein would be able to show (using these industry experts) that the USPTO examiners made such an obvious mistake, which would result in the court or USPTO simply invalidating the patent. Right? Wrong.
Sure, it would be "embarrassing for the [USPTO] if they start issuing patents in this area and the courts start overturning them on a regular basis," (as a Buzzfeed source states) but that simply is not happening. There is absolutely no evidence to suggest that any meaningful number of patents are being invalidated. Since inter partes reviews became available in 2012, they have been enormously popular, with over 1,500 petitions filed as of July 17, 2014 (when the USPTO last published this info). Of those 1,500+ petitions, only 0.04% challenged the validity of design patents (and that includes ALL design patents, which cover a voluminous array of fields, only one of which is fashion). It is quite telling that we have scant evidence of these "wrongly issued [fashion design] patents" being invalidated. And I think it is very safe to say that we would see companies like Calvin Klein utilizing this tool when faced with a patent infringement lawsuit if Lululemon's patents really were defective (i.e. wrongly issued by incompetent examiners as the article suggests).
Thus, instead of engaging with substance (perhaps by arguing that the existing legal requirements for patentability of design patents are out of touch with the needs of the fashion industry), the article chooses to mislabel Lululemon as a "troll" and suggest that the USPTO patent examiners, who examine the patentability of space ships, molecular pharmaceuticals, and quantum computers, are somehow totally unable to comprehend pants.
Towards the end of the article things really start to drop off: "[w]e’re in a situation where we are not yet sure how valuable design patents are in general," which is, for lack of a better word, silly. First of all, design patents have been issuing in the U.S. since 1847 -- I think we are very "sure" of the value of design patents. Assuming Buzzfeed and its source are referring to the fashion industry alone, we have quite a bit of history to the contrary. Gucci, for instance, has been obtaining design patents for decades, first filing to patent a fabric design back in 1979. Swiss watchmaker, Rolex and Paris-based design houses Chanel, Hermès and Christian Dior have similarly utilized patent protection since the 1970's; Louis Vuitton since the 80's. Also, consider the number of brands that have recently successfully defended their design patents (L.A. Gear's lawsuit against Thom McAn Shoe Co. comes to mind). But, again, don't take my word for it: according to Hector Andres Pacheco of Mitchell Silberberg & Knupp LLP, "the successful resolution for Lululemon [in the Calvin Klein case], has inspired designers to take another look at the usefulness of design patents in protecting intellectual property." In this same vein, over the past several years alone, Alexander Wang, Céline, Marc Jacobs, Prada, Hermès, Louis Vuitton, Stella McCartney, and Diane Von Furstenberg, just to name a few rather international sophisticated brands, many of which maintain extremely competent legal counsel, have all filed design patent applications for garment and accessories designs. So, this sort of sweeping generalization that "we are not yet sure how valuable design patents are in general" is misleading at best.
What I think Buzzfeed is trying to say there (and in general, actually) is that some individuals are unsure of the value of design patents TO THE FASHION INDUSTRY. As stated above, this is still not entirely true, but is a discussion that this blog can get behind. As you have undoubtedly heard me say time and again, intellectual propert protection for fashion designed is woefully inadequate in the US. And we here at TFL welcome all perspectives on the matter, even Buzzfeed's.
P.S. Buzzfeed, I still love you. Maybe just vet your sources a little better next time.