Lawsuits that pit fashion brands and retailers against one another are filed every day. In light of the large number of cases on courts’ dockets across the country and internationally involving fashion brands, retailers, and even various fashion-adjacent media companies, some certainly stand out more than others in terms of the potential ramifications they will have for the companies at play and maybe even on the fashion and retail industries at large. Following from previous posts in this running series, here are four (more) currently pending cases that are worth keeping an eye on …
Is Amazon liable for the mass of third-party products its hosts and oftentimes, packages and ships, by way of its sweeping marketplace? According to a summer 2019 decision from a U.S. court of appeals, the answer is yes. In July, a 3-judge panel for the U.S. Court of Appeals for the Third Circuit Court of Appeals determined that Amazon is, in fact, liable for the damage caused by a defective dog leash purchased from its marketplace in December 2014, opening the door for what could be a downright damning development for the $1 trillion market titan.
The court decided that Amazon “plays a large role in the actual sales process” and thus, may be held liable when the products are defective, a decision that is expected to impose a greater – and potentially model-altering – level of responsibility on Amazon for the goods offered up on its marketplace. A judge has since approved Amazon’s quest to have the case reviewed en banc (i.e., in front of the full panel of judges for the Third Circuit, not the routine 3-judge panel).
The court’s ultimate decision stands to have sweeping effects for Amazon given that more than half of the products sold on its site each year come from third-parties. With that in mind, the outcome “could impose on Amazon greater responsibility over the goods posted on its site,” Bloomberg predicts, “possibly adding new costs and complexities to a business model designed around efficiency.”
In one of the most closely-watched high fashion v. fast fashion lawsuits as of late, Versace filed suit against Fashion Nova for allegedly selling “deliberate copies and imitations of [its] most famous and recognizable designs, marks, symbols and other protected elements” – from its famed black and gold Barocco print to the “Jungle Print” dress that Jennifer Lopez made famous in 2000 – in an attempt to “exploit the popularity and renown of Versace’s signature designs, and to trade on [its] valuable goodwill and business reputation in order to drive profits and sales to line Fashion Nova’s pockets.”
Responding to Versace’s suit in January, Fashion Nova set out 32 affirmative defenses and a number of interesting copyright and trademark/trade dress-specific arguments. Arguing, for instance, that while Versace does, in fact, maintain copyright registrations “for certain designs at issue in this suit,” those registrations should be invalidated because Versace’s “copyrighted [prints] … lack originality,” “are standard geometric figures and patterns,” “are in the public domain,” and “are widely used in the fashion/apparel industry.”
It will be interesting (and telling) to see how the court handles Fashion Nova’s claims about the lack of originality in Versace’s designs, particularly given that while the bar for originality in the realm of copyright is very low, at least some practitioners have suggested in recent years that the Copyright Office may be increasing the threshold level. For instance, in September 2019, the U.S. copyright body’s Review Board shot down British menswear brand Dunhill’s application for protection for a fabric print called “Engine Turn.”
Following an initial refusal from the Copyright Office’s Review Board in February 2019, Register of Copyrights and Director of the U.S. Copyright Office Karyn A. Temple held that Dunhill’s 2-dimensional fabric design – which consists of “diamonds repeated in symmetrical rows and columns” and which appears on everything from Dunhill card cases and belts to sneakers and duffle bags – is ineligible for copyright registration. The reason: “the work merely consists of uncopyrightable elements arranged in an unoriginal manner.”
To be exact, Temple asserted that “the individual elements [embodied in the pattern], diamonds and a six-sided arrowhead shaped polygon, are uncopyrightable standard geometric shapes.” Moreover, “The simple blue and brown coloring is not copyrightable.”
Considering that at least one of the copyright-protected prints at issue in the Versace v. Fashion Nova case consists of repeating heart shapes, there is a chance the court will not look upon the originality aspect in a way that is favorable to Versace.
Almost exactly six years after Tiffany & Co. filed suit against Costco for allegedly running afoul of federal trademark law by selling engagement rings – some costing upwards of $6,000 – using the “Tiffany” name to thousands of Costco members, who snatched up the sparklers under the false impression that they were authentic Tiffany products, the case is expected to go before the U.S. Court of Appeals for the Second Circuit.
Following several years of back-and-forth before New York federal courts, the case is set to be decided by the Second Circuit this year. On the table are a couple key issues. For one thing, the court will grapple with the very definition of counterfeiting and its application, as Costco argued that despite Tiffany & Co.’s claims, its use of signs bearing the word “Tiffany” to identify the multi-pronged solitaire diamond rings it was offering was not enough to give rise to counterfeiting liability, as the Costco rings had non-Tiffany trademarks on them, were sold to consumers in non-Tiffany packaging, and came with non-Tiffany paperwork. This does not meet the high bar required for a funding of counterfeiting, per Costco.
Also up for determination: whether or not Costco’s descriptive fair use defense is persuasive, i.e., whether or not Costco’s use of the allegedly generic word “Tiffany” is a non-infringing way to “describe” a certain style of ring, as opposed to a way to identify the specific source (or brand) behind a product.
Both issues and the Second Circuit’s handling of them stand to have an impact on fashion and non-fashion brands, alike.
Watch company laCalifornienne’s colorful, custom offerings might be winning over consumers and taste-making stockists across the globe but one party that is certainly not a fan is Rolex. The Swiss watch giant filed a striking lawsuit against Los Angeles-based laCalifornienne in November, arguing that the 3-year old company’s practice of putting a brightly-hued spin in “pre-owned Rolex watches” by swapping out original Rolex parts – such as dials, crystals (i.e., the cover located between the dial and the hands), etc. – with unauthorized or modified alternatives turns those otherwise perfectly authentic watches into counterfeit goods.
Unlike most other fashion and luxury-centric counterfeiting cases, which see brands file suit against third parties for making and selling outright fake products (i.e., products that bear the famous brands’ trademark(s) but are not produced by and/or authorized by the brands), the case at hand is different – and interesting – thanks to Rolex’s notorious bright-line rule for how it distinguishes between authentic and counterfeit products.
Rolex goes a step further: it looks at authorized watches that have come from its very own workshops, and considers whether any changes have been made to the original components of authentic Rolex timepieces that would impact their aesthetic and/or their functionality. If changes have been made, an otherwise perfectly authentic watch becomes a counterfeit in the company’s eyes. This is where laCalifornienne gets itself in trouble, per Rolex, as it customizes traditional Rolex watches with a combination of equally colorful – but non-Rolex approved – parts, such as dials, crystals (i.e., the cover located between the dial and the hands), etc.
While Rolex has accused laCalifornienne of counterfeiting, the company has since argued that its practice of customizing authentic Rolex watches and using the Rolex trademarks on the watches is fair use, making this lawsuit an interesting one in a string of resale-related cases that are proving to be particularly telling given the steady rise of the $50 billion-plus resale market.
To a large extent, the case, itself, speaks to more than merely Rolex’s quest to rigorously protect its name and relevant trademarks. Beyond that, it seems to demonstrate the still rocky relations between brands and the resale market, as well as brands’ discomfort with – and in some cases, active attempts to crack down on – other instances of unauthorized distribution.
Amazon, for instance, is currently battling brands’ claims that its site is rife with counterfeit goods. In regards to at least some of those instances, Amazon says that brands are “conflating concerns about counterfeits with … the ‘unauthorized’ distribution of authentic products,” potentially in furtherance of their own quest to regain some of the absolute control over the distribution outlets, merchandising, pricing, etc. that they once had.
Maybe unsurprisingly, these endeavors by brands to carefully control how and where their products are sold – whether it be Birkenstock and Swatch pulling their products from Amazon or trade group American Apparel and Footwear Association calling for certain Amazon sites to be blacklisted by the U.S. government – are only growing, and are finding backing in the European Union, where courts have proven willing to side with luxury-level brands in their quests to restrict distribution.