All counterfeits are infringements, but not all infringements are counterfeits. Knockoffs are distinct from counterfeits, and design piracy is not actually illegal in the United States. This is some of the legal jargon that gets thrown around in fashion. While all of the aforementioned information is accurate, quite frequently the terms that identify different types of wannabe designer goods are used synonymously and thus, inappropriately. So, here's a breakdown of some of the terms we frequently come across in terms of fashion fakes and what they mean, in plain English ...
Knockoffs – This term refers to a garment or accessory that looks very similar to the original design but likely does not utilize the original designer’s name, logo, original print, etc. This is the term most frequently used in connection with the perfectly legal garments and accessories that fast fashion retailers – like Zara, H&M, Forever 21, and Nasty Gal – churn out, based on garments and accessories straight from the runway. For instance, in 2013, fast fashion retailer Rare London created a dress (pictured below, left), which bore a Rare London label, and was nearly identical to an existing Michael Kors design (pictured below, right). This is perfectly legal in the U.S., as long as Kors doesn't hold design patent protection over the appearance of the dress (which he does not, as such protection is rare for such seasonal items).
As for why copyright law is not at issue here – that is because in the U.S., in particular, copyright law does not protect useful articles, such as clothing, shoes, and purses in their entirety. While aspects of these items may be protected, such as an original print that covers a dress or a highly intricate, sculpted heel on an Alexander McQueen shoe, the dress and the shoe as a whole are not protected.
Trademark infringements – A trademark is any word, name, symbol, or design, or any combination thereof, used to identify a particular manufacturer or seller's products and distinguish them from the products of others. As such, trademark infringement, which is set forth by the Lanham Act (the federal law that governs trademarks), as well as state law (in the a party lacks federal trademark registration), occurs when one party uses the trademark of another (or one that is similar) in connection with the sale of goods or services. The key inquiry in a trademark infringement action is whether consumers are likely to be confused by the allegedly infringing use. As a result, to amount to trademark infringement, the mark must be used in a manner that is likely to cause confusion, deception, or mistake about the source of the goods and/or services.
For example: Remember the Fancy Bones t-shirt Nasty Gal was offering a couple of years ago, the one that looked like the double “C” trademark of Chanel’s? Well, that t-shirt likely gave Chanel grounds to file a trademark infringement lawsuit. The house didn’t have to file a lawsuit against Nasty Gal because the fast fashion retailer complied with a cease and desist letter Chanel sent. However, if Chanel had filed a trademark infringement suit against Nasty Gal, it could have done so on trademark infringement grounds, as Nasty Gal was a close variation of Chanel’s federally registered double “C” trademark in a class of goods in which Chanel’s trademark is registered. (Note: Trademarks are registered by classes of goods and services. Clothing, for instance, is one of the classes). In order to prevail in its case, Chanel would have to show that in using its trademark, Nasty Gal created (or could have created) confusion amongst consumers as to the source of the t-shirt.
Counterfeits – Last but not least, counterfeiting is a term that is most commonly used in connection with trademark law. As indicated above, all counterfeits are infringements, but not all infringements are counterfeits. This is because the requirements that must be met for something to be deemed a counterfeit are higher than those required for a good that infringes a party’s trademark.
A counterfeit is a good that is produced by a party (other than the trademark holder) that knowingly and deliberately uses another's trademark without the authorization to do so. This is almost always paired with the company's intent to deceive the consumer by presenting itself as the trademark holder by way of the fake logo, fake tag, etc. A counterfeit refers to a trademark made to look identical to or substantially indistinguishable from the actual mark (which is federally registered, of course), and is one intended to cause consumer confusion about the source of the counterfeit goods or services. Further distinguishing a counterfeit from an infringement is the fact that in order to be a counterfeit, the trademark must be used in the same classes of goods that the authentic trademark owner's registration extends to.
We most commonly see this in the form of Canal Street-type fake bags, such as a bag that bears the trademarked “Gucci” print, and oftentimes, has a tag that reads “Gucci.” Not only is the bag meant to look exactly like an authentic Gucci one, the inclusion of the “Gucci” tag demonstrates the company's intent to deceive the consumer by presenting itself as Gucci.
Design piracy – This is a synonym for knockoffs, as it refers to the practice of copying that is perfectly legal, as it does not amount to trademark or copyright infringement.