Nike and John Geiger Collection have settled a trademark lawsuit over “copycat” footwear. In a motion lodged with the U.S. District Court for the Central District of California on Tuesday, the parties are seeking the court’s approval of a consent judgment and motion for permanent injunction regarding Nike’s trademark infringement and dilution claims against John Geiger Collection, which stem from its sale of its signature GF-01 sneakers, and the Los Angeles-based footwear brand’s declaratory judgment counterclaims against Nike, in which it sought to have Nike’s Air Force 1 (“AF1”) trademark registrations invalidated on the basis that the AF1 trade dress consists of “functional features.”  

Setting the stage in the proposed consent judgment and permanent injunction, Nike and John Geiger Collection (“JGC”) do away with Geiger’s counterclaims, which will be dismissed with prejudice, as “JGC stipulates, agrees, and acknowledges that Nike is the exclusive owner of the following registered trademarks and all related common law rights: U.S. Trademark Registration Nos. 3,451,905; 3,451,907; and 5,820,374,” which cover Nike’s AF1 designs, and JGC “stipulates, agrees, and acknowledges that [these] marks are valid and enforceable.” (JGC previously argued that Nike lacks rights in the AF1 marks, as elements of the marks are “essential to the use and purpose of the sneaker and/or affect the cost, quality, performance, durability, and safety of the sneaker,” making them functional and ineligible for protection. The company also alleged that Nike has failed to police unauthorized uses of its AF1 marks, thereby causing them “to cease functioning as a symbol of quality and a controlled source.”)

Turning to the claims that Nike made against Geiger in furtherance of its lawsuit, the parties state that a judgment should be entered against JGC “on all of Nike’s counts in the First Supplemental First Amended Complaint” – trademark infringement, false designation of origin, contributory trademark dilution, and unfair competition – “because JGC, although without intent, infringed [Nike’s] asserted marks by having manufactured, using, transporting, promoting, importing, advertising, publicizing, distributing, offering for sale, and/or selling [a long list of the GF-01] products.” (While JGC has seemingly traded an infringement judgment (and other things) in exchange for Nike dropping its claims, there is certainly some room for discussion about likelihood of confusion and thus, infringement, here.)

Nike sneaker and John Geiger sneaker

As for what will happen to any remaining inventory that JGC has of the “infringing” GF-01 sneakers, the agreement enables the company to sell-off its “existing inventory […]  up to and through May 31, 2023,” and after that point, the company is required to “destroy within 14 days any remaining inventory of infringing products.” 

As part of the settlement, Nike has also garnered itself a permanent injunction (subject to court approval), which places strict limits on what JGC and any parties acting in concert with it cannot do with regards to Nike’s trademarks, this includes a permanent bar against “manufacturing, transporting, promoting, importing, advertising, publicizing, distributing, offering for sale, or selling any products … under the asserted [AF1] marks or any other [Nike] marks” that are likely to confuse consumers into believing that any JGC products “or any of JGC’s commercial activities are sponsored or licensed by Nike, are authorized by Nike, or are connected or affiliated in some way with Nike.” 

Beyond that, JGC cannot imply that it has “Nike’s approval, endorsement, or sponsorship of, or affiliation or connection with, JGC’s products, services, or commercial activities, pass off [its] business as that of Nike, or engag[e] in any act or series of acts … [that] constitute unfair methods of competition with Nike and from otherwise interfering with or injuring the asserted marks or the goodwill associated” with those mark, among other things.

The filing follows from a win for Nike early this year when Judge Mark Scarsi of the U.S. District Court for the Central District of California refused to dismiss the Beaverton-based sportswear giant’s claims against JGC, who accused the brand of attempting to “capitalize on the strength and fame of Nike and its Air Force 1 (“AF1”) by making, promoting, advertising, marketing, and selling footwear bearing the AF1 trade dress and/or confusingly similar trade dress,” albeit without Nike’s involvement or authorization, among other things. (More about that here.)

Nike sneakers and John Geiger sneakers

A statement published on Geiger’s Twitter on Tuesday states, “Nike and John Geiger have resolved the lawsuit related to Nike’s Air Force 1 trade dress and John Geiger’s footwear products, specifically his GF-01 Shoes. The lawsuit has been resolved through an amicable resolution that includes a consent judgment. As part of the resolution, John Geiger has agreed to modify the design of his GF-01 shoes. Nike respects John Geiger as a designer and other designers like him, and both parties are pleased to resolve this dispute in a way that allows John Geiger to continue building his brand while also respecting Nike’s intellectual property rights in its iconic Air Force 1 trade dress”

Customizations, Unauthorized NFTs 

Nike’s lawsuit, which started as an action against Warren Lotas’ footwear manufacturer La La Land Production & Design and subsequently added Jian Geiger as a defendant, comes as part of an enduring push by the sportswear giant to “hold accountable all bad actors” that “wrongfully trade off of Nike’s famous brand and dupe consumers into purchasing fake Nike products.” In addition to this case, Nike has filed a number of trademark-centric lawsuits against entities and individuals that it alleged were looking to build businesses on the back of its famous branding. After filing a headline-making suit against MSCHF in the wake of backlash over the Brooklyn-based company’s sale of customized (read: blood-infused) Air Max sneakers, Nike filed suit against a former employee that was customizing – and selling – initially-authentic Nike sneakers without its authorization. That case has since settled. 

Around the same time, Nike initiated a trademark suit against Drip Creationz, which has allegedly offered up unabashedly counterfeit AF1 sneakers, which it advertises as “100% authentic,” while also promoting and selling unauthorized footwear that it markets as handmade “customizations” of Nike’s most iconic products. That case is currently underway in federal court in California, with Nike recently amending its complaint to add new defendants to the lineup. 

And most recently, Nike has taken its trademark enforcement virtual, filing suit against StockX on the basis that the marketplace has allegedly offered up NFTs that amount to “unsanctioned products [that] are likely to confuse consumers, create a false association between those products and Nike, and dilute Nike’s famous trademarks.” 

The case is Nike, Inc. v. La La Land Production & Design, Inc., 2:21-cv-00443 (C.D. Cal.)

As the U.S. Patent and Trademark Office (“USPTO”) continues its relatively early-stage review of the barrage of metaverse and non-fungible token (“NFT”)-focused trademark applications for registration that have been filed over the past year and a half over so, the trademark body is providing insight along the way as to how it views/will treat these applications and the marks at issue. Primarily, as reflected in its initial responses to an array of Nike-filed trademark applications for use in the virtual world, the USPTO has shed light on what the appropriate descriptions of goods/services look like for quintessential “metaverse” filings, namely, “downloadable virtual goods” (in Class 9), “retail store services featuring virtual goods” (Class 35), and “entertainment services, namely, providing on-line, non-downloadable virtual footwear, clothing … for use in virtual environments” (Class 41). 

A number of additional responses from the USPTO take likelihood of confusion and failure to function into account (as TFL dove into here), and still yet, a couple of other Office actions from the trademark office suggest that another issue is worth considering when it comes to the specimens submitted with applications for registration for marks in this realm: “Premature use.” (Note: These are the examiners’ words, not mine.)

As TFL reported in April, the USPTO first raised this concern in response to the specimen submitted with an application for registration that Yuga Labs filed in May 2021 for the “Bored Ape Yacht Club” for use in connection with “digital collectibles; digital collectibles sold as non-fungible tokens” (Class 16), “maintain[ing] and record[ing] ownership of digital illustrations; maintain[ing] and record[ing] ownership of digital illustrations represented by non-fungible tokens; providing a website featuring an online marketplace for exchanging digital collectibles” (Class 35), and “online social networking services provided through a members-only website; computer services, namely, creating an online community for registered users to access a collaborative graffiti board” (Class 45). 

A screenshot from Bored Ape Yacht Club's website

In a non-final Office Action in March, a USPTO examining attorney stated that she was refusing to register the BAYC word mark due – in part – to the “premature” specimen that Yuga was using to show use within Class 45. The USPTO’s pushback on this front centers purely on the specimen that Yuga submitted with its application, which consists of screenshots from the BAYC website that show the inside of the yacht club bar; describes the BAYC collection, the membership access/benefits, and the community tools; and sets out “goalposts” for the project, such as “unlocking” the BAYC merch store, among other things. 

The prematurity issue arises, according to examining attorney Megan Clifford, as while Yuga’s Class 45 identification includes “computer services, namely, creating an online community for registered users to access a collaborative graffiti board,” the specimen that it provided as evidence of how it is using the mark in connection with such services suggests that such use has not actually occurred – yet. The specimen “indicates that ‘The Bathroom,’ applicant’s online graffiti board, ‘will become operative once the presale is over,’” Clifford asserts. “Accordingly, applicant is not using the applied-for mark in connection with the identified Class 45 services” – at least not based on the specimen at play. (Emphasis courtesy of the USPTO.) 

With the foregoing in mind, Clifford states that Yuga may either submit a new specimen that “was in actual use in commerce at least as early as the filing date of the application or prior to the filing of an amendment to allege use,” and that shows the BAYC mark “in actual use in commerce for the goods and/or services identified in the application or amendment to allege use.” Alternatively, Yuga can amend its filing basis to intent to use (under Section 1(b)) for the application as a whole to avoid having to produce a specimen at this point. 

It is not immediately clear which Yuga will opt to do, as it has not yet responded to the Office Action; although, it is worth noting that the graffiti board appears to be accessible to BAYC NFT holders based on relevant media reports. (One thing that is clear is that the USPTO could find more specific/appropriate terminology when pushing back against applications in the basis of specimens that appear to show anticipatory use given that ”premature use” does not make a lot of sense when talking about 1(a) applications.)

Not the only party that is currently facing a “premature use” refusal, Clinique received a non-final Office action this spring for the application that it lodged in November 2021 for its name for use on “non-fungible tokens (NFTs) and other application tokens” in Class 9 and “providing on-line non-downloadable virtual goods, namely, digital art, photographs, videos, or audio recordings” in Class 42. In an Office action in May, USPTO examiner Abigail Lueken preliminarily refused to register Clinique’s word mark “because the specimen shows that [it] has not used the applied-for mark in commerce in connection with the identified goods and services as of the application filing date.” 

A screenshot from Clinique's website

The specimen that Clique filed with the USPTO to show that it is using the mark in commerce in Classes 9 and 42 consists of screenshots of its e-commerce site, including pages that advertise a chance to win its “first NFT” along with “an assortment of [tangible] products.” (In a substitute specimen that Clinique filed in February, it highlights the use of its word mark on the webpage along with a “shop all” button (which presumably refers to its offering up of physical products) along with the messaging about the NFT contest.) 

Taking issue with the specimen, Lueken states “the specimen advertises the opportunity to win NFTs in a contest that has not yet occurred, and therefore, the specimen does not demonstrate use of the mark in commerce in association with the goods and services identified in the application.” If Clinique’s goods “were being sold or transported or the services were being rendered in commerce as of the application filing date,” she states that the company must submit a new specimen showing use of the mark in that way. The Estee Lauder-owned cosmetics company’s response to the Office action is not due until November. 

Taken together, the two Office actions shed light on yet another obstacle that brands that have filed metaverse and NFT-centric applications for registration on a Section 1(a) basis (i.e., claiming actual use in commerce) may face in this relatively uncharted territory. (It is worth noting, of course, that to date, 1(a) applications are relatively few; as most brands have filed NFT and metaverse-focused applications on an intent-to-use basis amid a largescale rush to file applications for such novel tech that has been underway since last year.)

Fashion Nova has famously been on the receiving end of a long list of infringement lawsuits; the since-settled copyright and trademark infringement case that Versace filed against it for allegedly selling “deliberate copies and imitations of [its] most famous and recognizable designs, marks, symbols and other protected elements,” including the design of its famous “J.Lo dress,” for instance, comes to mind. But a new Fashion Nova lawsuit flips the script, with the fast fashion giant accusing a fellow Los Angeles-based fast fashion retailer of copyright infringement for taking product images from Fashion Nova’s website and using them on its own site in order to compete with its well-established competitor.

Setting the stage in the complaint that it filed with the U.S. District Court for the Central District of California on August 29, Fashion Nova claims that it has experienced “explosive growth since the launch of the e-commerce website in 2013,” with its website “now rank[ing] as one of the most viewed fashion sites in the United States.” By way of its “dynamic e-commerce site,” Fashion Nova says that it “markets and sells a diverse range of lifestyle clothing and accessories for men, women, and children, with as many as 200,000 different styles offered for sale, including over 1,000 new styles per week, and up to several hundred new styles per day, with price points generally within the $10-$50 range.” 

At the heart of its e-commerce site and corresponding social media channels, Fashion Nova claims in its newly-filed lawsuit, are “visually appealing, striking photographic images and videos of [models] wearing or using [its] products – which serve to attract consumer interest and, ultimately, purchases of Fashion Nova products.” 

A product listing from Fashion Nova and a product listing from Blush Mark

In light of the success of its e-commerce-centric venture, Fashion Nova claims that budding young rival Blush Mark has “intentionally and wrongfully stolen [its] valuable product images and is using them on its website to market and sell products that directly compete with the very same Fashion Nova products depicted in those product images.” Specifically, Fashion Nova points to eleven images that it maintains copyright registrations for, which it alleges that the almost-two-year-old Blush Mark has “downloaded digital copies of from the Fashion Nova website,” removed the file names from (in furtherance of an attempt to “conceal [its] infringement of Fashion Nova’s copyright rights in and to product images owned and/or exclusively licensed by Fashion Nova”), and published to its own site without Fashion Nova’s authorization.

Blush Mark “engaged in its infringing uses of the images at issue for the purpose of marketing, advertising, promoting, offering, and selling products that directly compete with Fashion Nova’s products,” Fashion Nova contends, “with the intention of obtaining an unfair business advantage against Fashion Nova and avoiding the investment of time, money and resources that would otherwise be necessary to develop and create its own product imagery.” 

With the foregoing in mind, Fashion Nova sets out a single claim of copyright infringement, as well as copyright management information violations due to Blush Mark’s alleged removal of Fashion Nova’s copyright management information for the product images at issue. The retailer is seeking monetary damages, namely, “all damages sustained by Fashion Nova as a result of Blush Mark’s infringements of Fashion Nova’s copyright rights in and to the images, as well as all gains, profits, and advantages realized by Blush Mark from said infringements,” along with injunctive relief barring Blush Mark from continuing to infringe its imagery and from removing or altering the copyright management information tied to such imagery. 

A Case Over Copyright or Competition? 

A read between the lines of the Fashion Nova lawsuit suggests that there is more going on here than just a straightforward copyright infringement battle; the case seems to center more significantly on competition between the two fast fashion companies, with Fashion Nova asserting that Blush Mark’s infringement comes as the newer market entrant has been busy “pursu[ing] a business model that replicates [the] successful business model that has led Fashion Nova to be the ‘fast fashion’ industry leader,” including offering up “products are the same as and highly similar to Fashion Nova’s products, targeted to the same customers, and sold at comparable price points.”

In short, Fashion Nova alleges that “Blush Mark and its products directly compete with Fashion Nova.” 

Fashion Nova has been accused in the past of trying to monopolize the market and maintain its spot on the fast fashion totem pole in the U.S., and the company may be feeling threatened given that its competitive advantage rests largely on its ability to offer up substantial quantities of trendy garments and accessories for low, low prices. After all, Blush Mark is offering at least some of the exact same products for even lower prices (it boasts that its “styles start as low as $5”), and gaining rising media attention and a growing number of Instagram and TikTok tags in the process. It is worth noting that Fashion Nova’s wares come from a collection of “hundreds of manufacturers … which are hired by middlemen to produce garments for fashion brands.” Given the lack of exclusivity at play in at least some of its supplier arrangements, those garments can be purchased by other brands, such as Blush Mark, which seems to be what is going on here. 

Since replicating the fast fashion business model (without going so far as to interfere with Fashion Nova’s existing contracts with vendors to boost its business, for instance, or misappropriating its trade secret-protected customer and/or supplier lists) does not give rise to an actionable offense, Fashion Nova appears to be left with the copyright infringement claims that it has lodged against Blush Mark as a means of chipping away at its burgeoning competitor.

Another striking takeaway: The overarching push towards ESG in fashion and the oft-reported penchant among Gen-Z and millennial consumers for sustainably-made wares has not put much of a dent in the global fast fashion market, which was worth an estimated $91.23 billion as of 2021, and enduring competition among established entities and rising new players.

A rep for Blush Mark was not immediately available for comment about the Fashion Nova lawsuit. 

The case is FASHION NOVA, LLC, v. Blush Mark, Inc., 2:22-cv-06127 (C.D.Cal.)

Vans has landed a win in the latest round of a trademark battle over infringing footwear in China. In a newly-issued decision, the Wenzhou Intermediate People’s Court upheld the judgment of a lower court, holding that the defendants, including a footwear manufacturer headquartered in Rui’an, are on the hook for copying Vans’ OLD SKOOL sneakers and selling them in “large quantities” despite being busted and fined for selling the infringing footwear on two occasions between 2019 and 2021. Siding with Vans, the appeals court confirmed that consumers are likely to confuse the defendants’ lookalike offerings with those of Vans, and ordered that the defendants permanently refrain from making, marketing, and selling footwear that infringes Vans’ trademarks and pay a sum of 2.7 million RMB ($392,297), which includes punitive damages. 

The case got its start back in June 2021 when Vans lodged a trademark infringement and counterfeiting claims against the main defendant, who was responsible for making/selling the infringing footwear, and three major e-commerce retailers in China, who similarly offered up the lookalike footwear, arguing that they had sold more than 160,000 pairs of sneakers that mimicked the design of its well-known OLD SKOOL sneakers (including Vans’ trademark-protected jazz stripe) between 2018 and 2021, generating 553,581 yuan ($80,558) in the process. With the foregoing in mind, VF Corporation-owned Vans sought injunctive relief and monetary damages. 

The defendants pushed back against Vans’ case, according to Schwegman Lundberg & Woessner’s Aaron Wininger, arguing that, among other things, consumers are not likely to be confused by the allegedly infringing footwear due to a notable variation in the design of the stripe adorning the side of the sneakers and the price points at issue. Specifically, the defendants claimed that the stripe that appears on their sneakers is split at one end, making it “unique” and capable of distinguishing its offerings from those bearing Vans’ solid “jazz stripe” mark. Beyond that, the defendants argued that the price of their sneakers – 20 yuan (almost $3) – is significantly lower than Vans, who’s OLD SKOOL sneakers retail for “more than a few hundred yuan” ($70). 

A Vans sneaker and a copycat sneaker
Vans’ OLD SKOOL sneaker (left) & the defendants’ sneaker (right)

The difference in price means that the two companies are targeting consumers in different segments of the market, the defendants asserted, and so, “the relevant public will not misunderstand the source of the [parties’] goods.” 

Unpersuaded, the Rui’an City People’s Court determined – and the Wenzhou Intermediate People’s Court affirmed – that consumers are likely to be confused as to the source/nature of the defendants’ sneakers. For one thing, the courts held that the products at play “belong to the same [category] of commodity.” At the same time, the courts determined that despite the defendants’ arguments to the contrary, the sneakers and trademarks at issue are confusingly similar, as they are “basically the same in overall composition, line shape, etc.; only the ends of the lines are split, and the overall composition is similar.” Still yet, the Wenzhou court confirmed that the defendants were making use of their stripe “as a logo” in a “clear and conspicuous” manner, and that the stripe “obviously plays a role in identifying the source of the product” in the minds of consumers, and thus, the defendants were, in fact, using the design was a trademark. (As opposed to using it in a purely decorative manner, for instance.) 

As a result, the court held that the allegedly infringing footwear made use of “the same or similar trademarks on the same [types of] goods” and are “likely to cause confusion among the relevant public,” thereby, infringing Vans’ rights in the marks. 

The court also pointed to the “long-term publicity” and “consistent use” of the OLD SKOOL design, including the jazz stripe mark, by Vans in China, which has resulted in a “high” level of popularity and consumer awareness of the brand and its sneakers. (No small share of VF Corp.’s annual revenue comes from the Chinese market, where Vans’ has been building in retail footprint since 2008, boasting 400 points of sale including retail, wholesale, and multi-brand in first- to third-tier cities as of 2014, according to Jing. Vans China Brand Marketing Manager Brian Smith said at the time that the company and its offerings were “well established in first- and second-tier cities,” with such brand awareness likely growing to third-tier cities since then.)

In ordering the main defendant to pay a sum of 2.43 RMB ($353,361) in damages and the retailer defendants to collectively pay a total of 267,561 yuan ($38,936), the Rui’an Court cited Paragraph 1 of Article 63 of China’s Trademark Law, which enables courts to award punitive damages in the event that the infringement is malicious. The court found that was relevant here given that the defendants continued to sell the infringing footwear after being put on notice of the infringing nature of the shoes and penalized for such sales two different times by the Rui’an Municipal Bureau of Supervision in 2019 and 2021. 

(In furtherance of an overarching attempt to crack down on bad faith trademark registrations, China’s Trademark Law was amended in 2019. In addition to the inclusion of new provisions that aim to prevent the registration of marks when the filing-parties lack intent to use such marks, the amended law boosted the maximum allowable level of punitive damages that can be awarded in infringement cases. Amended Article 63, in particular, states that “for malicious infringement of the trademark exclusive right, if the circumstances are serious, the amount of compensation may be determined at more than one time but not more than five times the amount determined in accordance with the above method. The amount of compensation shall include reasonable expenses paid by the right holder to stop the infringement.”)

Upholding the damages award that the Rui’an court awarded to Vans, the Wenzhou Intermediate People’s Court stated that the lower court did not err in ordering “the malicious manufacturers pay a heavy price,” and the award sends a message that courts will “deter potential infringers, vigorously regulate the market competition order, guide the society in respecting property rights, and protect innovation and creation.” 

The win for Vans comes closely on the heels of another headline-making development in a footwear case, in which the Supreme People’s Court of China invalidated the trademark registration that a Chinese individual secured for “Manolo & Blahnik” for use on footwear in China in 2000. In a decision in June, the Chinese high court found that the registrant, who was not affiliated with famous footwear brand Manolo Blahnik, had filed the application in bad faith, benefitting from the fact that China issues trademark registrations on a first-to-file (as opposed to a first-to-use) basis, and thereby, standing to significantly limit the operations of the Manolo Blahnik brand in the Chinese market, despite years of existing operations in other markets and major marketing placement. 

THE BOTTOM LINE: The win for Vans, along with wins for brands like Manolo Blahnik (which is expected to pave the way for the 50-year-old brand to engage in a major expansion effort on the Chinese mainland, as well as in Taipei and Hong Kong), New BalanceMichael Jordan, and Burberry, among others, seem to suggest that while bad-faith filings continue to be a critical challenge for non-native rights holders, Chinese courts are increasingly recognizing the legitimacy of Western companies’ intellectual property rights, which “will help ensure that brands are safeguarded, and consumers’ interests are protected.”

Sephora has agreed to pay $1.2 million to settle allegations that it violated the California Consumer Privacy Act (“CCPA”), a state law that limits companies’ collection and sale of consumers’ personal information and provides consumers with expansive rights with respect to their personal information. The LVMH-owned beauty retailer came under fire after an enforcement sweep of online retailers by the California Attorney General’s office revealed that it “failed to disclose to consumers that it was selling their personal information, failed to process user requests to opt out of sale via user-enabled global privacy controls in violation of the CCPA, and did not cure these violations within the 30-day period currently allowed by the CCPA.” The settlement, which is dependent upon court approval, is the first CCPA enforcement action since the law went into effect on January 1, 2020. 

“The settlement with Sephora underscores the critical rights that consumers have under California Consumer Privacy Act to fight commercial surveillance,” California Attorney General Rob Bonta said in a statement on Wednesday. “Consumers are constantly tracked when they go online, [with] many online retailers allowing third-party companies to install tracking software on their website and in their app so that third parties can monitor consumers as they shop. These third parties track all types of data – in Sephora’s case, the third parties could create profiles about consumers by tracking whether a consumer is using a MacBook or a Dell, the brand of eyeliner or the prenatal vitamins that a consumer puts in their ‘shopping cart,’ and even a consumer’s precise location.” 

“Retailers like Sephora benefit in kind from these arrangements, which allow them to more effectively target potential customers,” Bonta says. 

In addition to paying $1.2 million in penalties, as part of the settlement, Sephora will also be required to clarify its online disclosures and privacy policy to include an affirmative representation that it sells data; provide mechanisms for consumers to opt out of the sale of personal information, including via the Global Privacy Control (“GPC”); conform its service provider agreements to the CCPA’s requirements; and provide reports to the Attorney General relating to its sale of personal information, the status of its service provider relationships, and its efforts to honor GPC. 

In response to the settlement, which it says “does not constitute an admission of liability or fault by Sephora,” the New York-headquartered beauty chain pushed back against the Attorney General’s classification of its data practices as the “sale” of data. The CCPA “does not define ‘sale’ in the traditional sense of the term,” a representative for Sephora said in a statement on Wednesday. “‘Sale’ includes common, industry-wide technology practices such as cookies, which allow us to provide consumers with more relevant Sephora product recommendations, personalized shopping experiences and ads.” 

The Sephora settlement comes as part of a larger effort by Bonta’s office to enforce the California Consumer Privacy Act, with Bonta revealing on Wednesday that he sent notices to “a number of businesses” alleging non-compliance relating to their failure to process consumer opt-out requests made via user-enabled global privacy controls. 

Characterized as one of the strongest consumer privacy laws in the country, the law applies to for-profit “businesses” that do business in California, collect California resident personal information (or on behalf of which such information is collected), alone or jointly with others determines the purposes or means of processing of that data; and that either … have at least $25 million in annual revenue, have personal data on at least 50,000 people, or derive at least 50 percent of annual revenue from selling consumers’ personal information must comply with the law. (Companies need not be headquartered – or even have a physical presence – for the law to apply.) 

The CCPA provides a non-exhaustive list of categories of personal information, including name, postal address, address, email address, account name, social security number, driver’s license number, passport number, or other similar identifiers; characteristics of protected classifications under California or federal law; commercial information, including records of personal property, products, or services purchased, obtained, or considered, or other purchasing or consuming histories or tendencies; biometric information; internet or other electronic network activity information, including, but not limited to, browsing history, search history, and information regarding a consumer’s interaction with an internet website, application, or advertisement; geolocation data; professional or employment-related information; and education information that is not publicly available. 

Not only are CCPA actions being initiated by the state’s Attorney General, the CCPA provides a private right of action, which has prompted more than 170 CCPA claims to filed as of earlier this year, a handful of which have targeted retailers. According to Steptoe & Johnson’s Stephanie Sheridan, Meegan Brooks and Surya Kundu, “Courts are continuing to determine what conduct falls within the CCPA’s narrow private right of action, which applies only when a statutorily-defined subset of a California resident’s ‘non-encrypted and non-redacted’ personal information ‘is subject to an unauthorized access and exfiltration, theft, or disclosure as a result of the business’s violation of the duty to implement and maintain reasonable and appropriate security procedures and practices.”

All the while, a new, more aggressive iteration of CCPA, the California Privacy Rights Act, will take effect in 2023, which Sheridan, Brooks and Kundu came “could usher in a new wave of private and public enforcement suits.”