Use Now, Pay Later: How Fast Fashion Has Created an Ex-Post Licensing System

The success of fast fashion retailers demonstrates quite clearly that legal protection for garments and accessories is somewhat limited in comparison to the protection afforded to other creative works (think: art, music, literature, etc.).

While some original elements of a dress or parts of a shoe may be protected from blatant replication, for the most part, because clothing is characterized as primarily utilitarian in nature (we do wear it, after all), it is largely blocked from copyright protection, which provides only limited coverage for useful articles.

Moreover, while an article of clothing or a purse may be eligible for design patent protection, this form of intellectual property is not always best suited for fashion designs because the patent process is lengthy (far longer than a single fashion season) and quite costly, making it less than ideal for most designers. Having said this, it seems we (and by "we," I mean, fast fashion giants) have created a makeshift licensing system for designs.

Fashion is one of the few creative industries that is not heavily run on a structure of formal licensing. In music, if you want to use another's song in a commercial way, you pay the artist and/or his agency a royalty/licensing fee, at the outset or otherwise. Similar royalties exist for literature and other art forms, as well.

With this is mind, it seems that fashion is one of the few industries where licensing for designs virtually does not exist. If Zara blatantly copies a Celine garment design, the original designer does not see a penny from the fast fashion brand. This is because most copying, or designs piracy as we call it, while objectively lazy and arguably unethical, is legal.

The situation changes a bit if an original print is copied. Central Saint Martins graduate Mary Katrantzou comes to mind almost immediately, as the Greece-born, London-based designer is known for her hyperrealist aesthetic and bold graphics. The prints that adorn Mary Katrantzou garments are original to the designer and her brand.

In fact, Katrantzou, who pioneered her own digital-print technique, says: "It takes three months to produce the 40 prints we develop each season." These prints, and the original prints that adorn other brands' garments and accessories, are protectable via copyright law.

Put simply, the prints, themselves, that appear on useful articles (something copyright law doesn't really cater to), fall within an exception of sorts: They are protected via the Pictorial, Sculptural or Graphic works category. If the print can be "separated" from the utilitarian aspects of the article, then that print may be protected. 

What does this mean for Katrantzou and the many other designers who show original prints that are quite obviously separable from the bare bones of a garment or accessory? It means that the print is protected by copyright law and thus, may not be reproduced in its entirety or reproduced as a derivative work (a subsequent work that is based upon the original work) by anyone other than the copyright holder.

This is where licensing comes in. A copyright holder may authorize another party to use its copyright-protected creations. For instance, Coach teamed up with Disney for a Mickey Mouse-themed collection not too long ago. The collection included imagery that is the property of Disney, but which Coach was authorized to use. 

Conversely, there were the graphic designs that appear on Jimbo Phillips skateboards (one of which is pictured below, right). Jeremy Scott was not authorized to use Phillips' prints and as a result, once Scott showed his Fall/Winter 2013 collection, complete with images almost exactly the same as Phillips', the graphic artist filed suit against the designer for copyright infringement. The two ultimately settled the case before trial, and herein lies the interesting part.

In most instances, the copyright holder sues for monetary damages, and so, we have a bit of an unconventional licensing system, albeit a short one, because not only does the copyright holder want damages, he also wants the court to order an injunction prohibiting the infringing party from selling or continuing to sell any of the goods at issue.

The Phillips v. Scott instance is a bit different in that Scott's designs had not been manufactured/sold but merely sent down the runway at the time Phillips filed suit. For instances involving fast fashion retailers, the situation is often quite different in that the designs at issue are being sold or had already been sold (and sometimes sold out, quite often a telltale sign of an accurate copy) by the time the lawsuit is filed.

I liken this to a licensing system - an ex post licensing system to be exact - because of how the majority of these copyright lawsuits are handled. The copyright holder sues once it gets wind that a copy of its print is being sold (a clear violation of its exclusive right to reproduce and distribute its original creation), and the defendants are most commonly fast fashion brands (think: Forever 21, Primark, Urban Outfitters, Topshop, Nasty Gal, etc. ... or the Kardashian/Jenners) and not Jeremy Scott-type design brands.

And while every designer that has his/her original print copied does not sue (certainly one of the incentives that exists for retailers to copy), this type of lawsuit is not completely unheard of. In fact, over the past several years alone, a few of the lawsuits centering on copyright infringement include: Diane von Furstenberg v. Forever 21, Mara Hoffman v. Charlotte Russe, Feral Childe v. Forever 21, Trovata v. Forever 21, and Ashley Wilde Boulevard v. Primark.

In almost all of the cases, the fast fashion retailer, which had often been selling the infringing designs for some time, settled the case out of court (and before trial), paying the copyright holder a monetary award, which is more often than not never disclosed. However, sources have reported on some of UK-based retailer Primark's settlements; in 2004, Monsoon received nearly $40,000 from the retailer and in 2011 textiles company Ashley Wilde Boulevard received approximately $140,000. Is this not little more than fast fashion retailers using the federal court system (as copyright infringement is a federal offense) to more or less extort licenses from designers? 

Essentially, the fast fashion retailer is retroactively paying the designer/copyright holder for its use of the copyright, which it used without the designer's authorization in the first place. Because remember, there is a chance that a designer would refrain from striking a deal with Forever 21 and co. and refusing to license a print to the retailer because she does not want her brand image to be tarnished due to an association with a low-priced, mass market brand with questionable manufacturing/labor practices.

It seems clear that the situation could be perfected. As I mentioned, not only do the copyright holders sue for monetary damages, they sue to have the retailer ordered from further selling the design. If the retailer were to license the print up front, it could avoid time-consuming and costly litigation, and could continue to sell the design without the interruption of a temporary and/or permanent injunction, if the designer were able to meet such a standard.

However, based on the number of cases that arise and settle, and the continued practice of copying, we can conclude that it seems to be in the fast fashion retailer's best interest economically to copy and deal with the aftermath accordingly.

For instance, in 2011, Forbes reported that Forever 21 had been named in approximately 51 copyright infringement lawsuits, all of which it settled out of court in the manner discussed above. If this is anything to go by (along with the fact that big fast fashion retailers maintain a fund within their annual budget that is allocated solely for settling lawsuits of this kind), it may be that it is cheaper for them to copy and settle than to license outright, however unlikely that seems, given the costs and other resources associated with litigation.

And while it is better for the copyright holders to receive compensation via a settlement than nothing at all, the process is certainly not ideal for them, either.