The Law of Labeling: What Brands Need to Know

Miuccia Prada rather famously declared a few years ago that in our modern world it does not matter where a product is made. That same logic does not hold up in court. In light of last week’s Selima Optique v. Kering case – in which eyewear retailer Selima alleges that Gucci, YSL, and Balenciaga’s parent company is “deliberately and falsely represent[ing] that their eyeglasses and sunglasses are ‘Made in Italy,’” when “in truth, their products, or substantially all parts of their products, are made in China – is seems an apt time to revisit the labeling laws that govern the fashion industry.

The Selima v. Kering lawsuit comes almost exactly a year after Detroit-based brand Shinola came under fire for failing to abide by the American version of this labeling standard. Following an investigation into Shinola’s labeling of its watches as “Made in America,” the Federal Trade Commission (“FTC”) stated that even if the brand assembles its watches in the U.S., it uses imported parts and must disclose that fact … on the watches themselves. Hence, the amended language on Shinola’s watches that now reads, “Built in Detroit - Swiss and Imported Parts.”

And nothing if not a hot topic even before Donald Trump took office, a handful of other lawsuits centering on allegedly deceptive “Made in USA” labeling have been filed in recent years against denim brands, in particular, including Hudson, Joe’s, Citizens of Humanity, and AG Adriano Goldschmeid, alleging that they misrepresented the country of origin of some of their products – due to the use of foreign-made parts, including zippers and other hardware – in violation of federal law and the even more restrictive California state law.

While California remains the hotbed for “Made in USA” litigation, lawsuits like these are popping up across the U.S.

United States

On a national basis, the FTC requires that products labeled or marketed with an unqualified “Made in USA” claim must be “all or virtually all” made in the U.S. In other words, the product should contain “no—or negligible—foreign content.”

Additionally, each state has its own separate standards apart from and sometimes in contrast to the FTC’s federal guidelines. Each new market should be scrutinized before entering to ensure that any proposed “Made in USA” label can be used and supported.

For instance, California’s amended “Made in USA” labeling requirements lowered the state’s domestic content requirement from 100% to, in most cases, a 95% percent domestic content requirement.

France

Home to no shortage of luxury brands, France’s labeling laws are significant. In accordance with the Community Customs Code, a manufacturer or importer of a product must be able to justify the "Made in France" label affixed on that product. They must be able to prove that the product has been fully manufactured in France or that its "final substantial transformation" was performed in France.

This standard of derived from the French requirement that the products must "originate in the country where they underwent their last, substantial, economically justified processing or working in an undertaking equipped for that purpose and resulting in the manufacture of a new product or representing an important stage of manufacture.”

Italy

The "Made in Italy" labeling requirements – an initiative funded by the Italian government and one that is considered a national economic resource – requires that products be completely manufactured in the country: components, design, the works.

In 2011, the Italian Supreme Court clarified the standard in a case in which a leather goods manufacturer had been found to have imported leather goods made in China with the indication 'vera pelle Italy' ('genuine leather Italy').

The lower court found that the goods were effectively made in China with Italian leather and that a small adhesive label on the product - bearing the words 'Made in PRC' - indicated their Chinese origin. Nevertheless, the Appeals Court ruled against the manufacturer, holding that the adhesive label was insufficient to prevent consumers from being misled as to the origin of the products.

The Supreme Court overturned the decision, confirming that 'origin' does not refer to provenance from a particular place; rather, it refers to provenance from a specific manufacturer which guarantees quality control in the manufacturing process and bears sole responsibility in respect of consumers.

The fact that a product is manufactured abroad on behalf of an Italian manufacturer that guarantees its quality is irrelevant if the words 'Made in Italy' are used fraudulently to suggest to consumers that the product has been manufactured entirely in Italy.