Seven months after first filing suit against fellow frozen food company Revive, citing claims of trademark and trade dress infringement, and unfair competition, among others, Daily Harvest has amended its complaint to include copyright infringement allegations in connection with Revive’s alleged launch of a “competing product line in Canada,” complete with “shameless copying of wholesale portions of Daily Harvest’s trade dress, including its product packaging, website and other key branding elements.”

According to its amended complaint, which was filed in a New York federal court on November 20, Daily Harvest – a buzzy and “rapidly growing” direct-to-consumer startup that aims to bring “healthy, easy-to-make foods” directly to the consumer’s home – asserts that Revive has engaged in a scheme to “free-ride [on its] coattails and trade off of [its] reputation.” Mirroring the claims in its April 2020 complaint, Daily Harvest asserts that in a quest to “receive all the benefits of Daily Harvest’s investments [in its branding and digital presence] without incurring any of the costs” as it expands in the U.S. market, Toronto-based Revive has adopted “an identical and confusingly similar website design, content, product packaging, [and] images.” 

Specifically, Daily Harvest alleges that it has consistently used “unique and inherently distinctive” packaging – namely, “a white background, featuring the two letters DH, displayed in black in the center of the packaging inside a square with a line placed in between the letters D and H, with a black and white geometric-patterned band along the upper rim of the cups, featuring photographs of the product ingredients on the front of the cups, with the ingredients listed on the back of the package in large black font” – to “distinguish [its products] from similar goods offered by others,” thereby, giving rise to trade dress rights, which Revive has allegedly copied. 

Beyond its packaging, 5-year old Daily Harvest argues that it also maintains trade dress rights in the “look and feel” of its website – from the layout and some of the language to the “user shopping experience and interface design.”

Adding to the claims it set out in April, Daily Harvest asserts in its newly-filed amended complaint that Revive is also engaging in copyright infringement, as it has allegedly hijacked “product packaging and certain original photographs,” as well as “the unique and innovative design of [Daily Harvest’s] website.” 

Taken together, Daily Harvest contends that Revive’s conduct – which “constitutes not only copyright infringement and trade dress infringement, but unfair competition under both federal and state law” – is intended to “confuse consumers to believe that [it] and/or [its] goods and services emanate from or are otherwise approved or sponsored by Daily Harvest, and it is an attempt by [Revive] to reduce its costs of entry into the market by freeriding off of Daily Harvest’s brand image and the goodwill developed by Daily Harvest.” 

“Meritless” Trade Dress Claims?

Potentially even more interesting that Daily Harvest’s latest allegations is a joint letter that parties filed with the court back in July, in which Daily Harvest summarized its case, and Revive set out some preliminary arguments of its own, namely, shooting down Daily Harvest’s trade dress claims – and its case as a whole – as devoid of merit. 

Setting the stage in that letter, counsel for Revive asserted that despite what Daily Harvest has argued, “This not a case about intellectual property infringement, [and instead], this action is a bald effort by Daily Harvest to stifle fair competition by invoking invalid purported intellectual property rights to protect an unprotectable business idea.” 

According to Revive, Daily Harvest has sought to protect its DTC frozen food subscription business model – as opposed to protectable branding-centric assets – by setting out trade dress infringement claims that fail both in regards to the design of its website and its product packaging. To be exact, Revive argues that because the trade dress that Daily Harvest’s asserts in the appearance of its website and its packaging is not registered, the company “bears a ‘heavy burden to demonstrate it is entitled to protection,’” and in fact, the company fails to meet that burden for three reasons, per Revive. 

Primarily, Revive asserts that Daily Harvest’s alleged website trade dress is not distinctive, “meaning that the design of the website itself is not an indicator of source.” Aside from the Daily Harvest name, Revive argues that Daily Harvest’s “website is a compilation of common ornamental and functional features that are neither inherently distinctive nor have they acquired distinctiveness.” 

In case that is not enough, Revive claims that Daily Harvest’s alleged website trade dress is invalid because “the vast majority of its listed elements are functional and, even when combined with ornamental elements, cannot serve as part of its protectable trade dress.” 

Examples of the functional elements that Daily Harvest claims as part of its protectable trade dress? “Crisp white backgrounds,” “modern and sleek black font,” brand names “centered at the top of a homepage,” “sleek black banners,” “colorful photograph[s] of a line up [of the products sold on the website] with garnishes,” “categories of products displayed horizontally in black font,” displaying ingredients in a “transparent cup” so they can be seen, “photograph[s] from a head-on view perspective as if ready for the consumer to enjoy,” “subpages featuring rows and columns of product images” and “textual description[s] of the product, with a summary of the benefits delivered.” 

These elements “are ubiquitous on websites and designed to make it easier to read the contents of the website,” Revive argues, and thus, are not protectable. 

Finally, Revive contends that “even if Daily Harvest could prove a protectable trade dress in its website,” it cannot show that consumers visiting Revive’s website are likely to confuse its products with Daily Harvest’s. Pointing to a 2004 decision from U.S. District Court for the Southern District of New York in the Louis Vuitton Malletier v. Dooney & Bourke case, Revive asserts that “the prominent use of … brand names throughout [the respective companies’] websites is itself powerful evidence that confusion is unlikely.” 

Revive notes that its site “significantly, contains the name REVIVE SUPERFOODS on every single page,” and that Daily Harvest, in order “to clearly identify its source … uses the name DAILY HARVEST prominently all over” its site, as well. 

And still yet, in terms of Daily Harvest’s trade dress claims for its product packaging, those fail for the same reasons, per Revive. In addition to noting that “another court in the Southern District” determined in 2018 “in a previous litigation that Daily Harvest filed against yet another competitor” that Daily Harvest’s “claims as to secondary meaning [in the package design] . . . are conclusory at best,” Revive argues that Daily Harvest’s description of its alleged packaging trade dress leaves out the very things that consumers likely use to tie the products to Daily Harvest: its word mark and logo. 

Revive argues that Daily Harvest “deceptively leaves out the elements that are the mostly likely to help consumers identify the brand – namely, the repeated references to DAILY HARVEST on the cups and the prominent D/H logo.” Revive says that it “has never used those elements; to the contrary, its colorful packaging prominently features the REVIVE SUPERFOODS trademark.” 

Revive followed up on the July letter to with a subsequent letter on August 7, in which it alerted the court to a survey that it had commissioned “to assess the extent to which the Revive website, which is at the center of [Daily Harvest’s] trade dress infringement challenge, was likely to cause confusion.” According to Revive, its expert conducted a consumer perception survey of more than 200 individuals “likely to purchase the parties’ products in the next three months,” and found that “less than one percent of the respondents indicated that they associated the Revive website with Daily Harvest,” making the notion of potential confusion between the two companies’ sites virtually “inconceivable.” 

As for the copyright claims, Revive asserted in July that while it had not seen Daily Harvest’s claims yet, they were likely to fall short, as well. Speaking specifically to Daily Harvest’s claims in connection with photos that feature “arms or hands popping out of walls,” Revive stated that “although both companies have posted their own versions of this concept … they are similar once again only with respect to the idea and concept. The idea of photos of arms or hands popping out of the wall is not original, and the expression is not substantially similar: The poses are different, the products depicted are different, and the backgrounds are different. Indeed, other brands have utilized similar concepts.”

Revive’s points in the July letter generally raise some interesting questions about the protectability of website designs (in the DTC space and beyond), including “the user shopping experience and design interface,” particularly as websites come to look more and more alike over time. This is something that Sam Goree, a PhD student in Informatics at Indiana University, and his colleagues recently determined in connection with a study of the websites of the top U.S. businesses by market capitalization, as well as those on Alexa’s list of the 500 most trafficked sites, among others.

They found that most websites are essentially beginning to look the same for a variety of reasons (many of which are inherently practical in nature). This trend is presumably even more obvious when it comes to companies operating within the same space, such as DTC subscription companies, and given that design form – from an e-commerce website’s layout/user flow to the specific language used by a brand is in many cases defined, to some extent at least, by the function of the business model, and the constraints of digital operations more generally.

Still yet, as Modern Retail noted early this year in reference to the increasingly crowded DTC space, where many buzzy young brands rather notoriously share similar aesthetics, it is simply “getting harder for startups to design a website that doesn’t rely on at least some of the same design principles as competitors.”

*The case is Daily Harvest, Inc., and Rachel Drori, v. Revive Organics, Inc., 1:20-cv-03087 (SDNY). 

Some of the most valuable assets of businesses within the fashion and luxury spaces (and beyond) are their innovative and creative works, and the distinctive elements of their branding. Given the importance of such intellectual property, McCann FitzGerald attorneys Rory O’Malley and John Neeson say that “companies no matter their size are encouraged to at least consider such protection” – from copyright and patents to trademarks and trade dress – at the outset in order to protect against infringement and/or enhance the commercial value of the business, and ultimately, will make their companies a more attractive investment for investors and compelling source of goods/services for consumers. 

While COVID-19 and the corresponding financial crisis are wreaking havoc on the market, startups are proving to be among some of the hardest hit, raising the question of whether even some of the buzziest ones will be able to weather the storm. As Fast Co.’s Elizabeth Segran asserted this spring, the future for direct-to-consumer startups – whether it be apparel brands like Everlane and Outdoor Voices or beauty brand Glossier and footwear companies Allbirds and Rothy’s – “is complicated,” but it is safe to say that “brands that have cash on hand, continue to innovate, and stay relevant to customers are more likely to make it to the other side.” 

“Some brands are unfortunately just not going to be able to survive this,”  Matt Scanlan, an investor in Buffy and True Botanicals, and CEO of Naadam Cashmere, told Fast Co. But at the same time, he says that “those that do are going to be in a stronger position.”

With that in mind, brands across the board, and startups, in particular, need to pay attention to their intellectual property in light of the enduring health pandemic and the resulting market volatility in order to be well-positioned when the dust settles. O’Malley and Neeson say the following three steps are worth keeping in mind for all companies throughout the various stages of their development and evolution, start-ups included … 

Step 1: Identify your intellectual property

Given that intellectual property is often one of the most important elements of a business, it is key that companies identify their assets and understand how they can be protected by way of the various intellectual property doctrines. As part of this exercise, it is not only imperative to understand the different types of intellectual property and what they protect, it is important to consider the entirety of the company’s products, the technology used in its business, and the various elements of its branding (such as its product packaging), among other assets. 

In a nutshell, intellectual property includes:

(1) Copyright: This type of protection extends to “original works of authorship fixed in any tangible medium of expression.” Such rights can be particularly important for technology businesses, as many works they create such as software, content, databases and various types of technology can be protected. While copyright arises automatically upon the creation of an original work, it is worth noting that in the U.S., registration is a prerequisite to filing an infringement lawsuit.

(2) Patents: Depending in the type of patent at play, this doctrine provides exclusive rights in connection with inventions of new and useful processes, machine, manufacture, or composition of matter, or new and useful improvements thereof, or the decorative, non-functional features of a product’s appearance. For start-ups creating innovative products and technologies, patents can be useful, particularly since they give the patent owner the right to prevent others, for a limited period, from exploiting (i.e. making, using, selling and importing) the invention without its permission.

(3) Trademarks: A company’s brand is often one of its most valuable assets, and it can be useful to protect this by way of trademark rights, which can exist in generally any word, phrase, symbol, or design, or a combination thereof, that identifies and distinguishes the source of the goods ofone company from those of others. While registration of a trademark is not necessary to give rise to rights, there are certain benefits that come with it. 

Consideration should be given as to what intellectual property rights may already exist and what intellectual property can be registered. For example, copyright may already exist – and be registered – in a company’s proprietary software or the imagery that is central to its staple advertising efforts. But what about its brand name and logos? Those important elements of branding should be registered with the U.S. Patent and Trademark Office and/or other relevant international trademark bodies. 

More than that, if a company is in the business of selling staple products, such as Allbirds and Rothys, which respectively boast a lineup of core footwear, building up secondary meaning in those products (i.e., proof that consumers link the individual products to a single source) will enable such companies to claim trade dress rights in them. 

Step 2: Assignment of intellectual property to the enterprise vehicle

Once the relevant intellectual property has been identified, it is important to identify who owns it and whether the business is entitled to use it. In the earlier stages of a start-up, founders often develop the business without having a formal business structure in place. As a result of this, they often personally own the intellectual property at play. To avoid future issues, for example when a founder leaves, the ownership of such intellectual property should be assigned to the company, itself. This can be done by way of a written assignment agreement between the founders and the company. 

Step 3: Protection through non-disclosure agreements

Beyond intellectual property rights and registrations, another valuable tool for protecting certain assets and valuable business information is confidentiality. In certain circumstances, for example, when negotiating with external investors or collaborating with third parties, it might be necessary to share certain confidential information. Before sharing such information, it is recommended that companies enter into a non-disclosure agreement (“NDA”) with that third-party in order to protect propriety information, whether that be sales, manufacturing and distribution methods or consumer profiles, advertising strategies, and/or lists of important suppliers and clients. Typically, this information falls within the realm of trade secret law.

When drafting an NDA, it is essential to ensure that the agreement is suitable for the specific business of the startup and that the definition of confidential information is sufficiently detailed to adequately protect the information at play. 

For every order that a consumer makes on Glossier’s e-commerce site or in its small network of brick-and-mortar outposts (pre-COVID, that is), the products come in a millennial pink ziplock pouch. In much the same way as the 6-year old brand’s stylized “G” logo and its catchy product names – from the cult-favored “Boy Brow” eyebrow product to its “Balm Dotcom” lip salve – have become trademark elements of the billion dollar brand, so, too, have certain aspects of its packaging. That is precisely what Glossier argued when it filed two trademark applications in the spring of 2019 for its inherently-Instagrammable packaging. 

A little over a year after Glossier filed applications for those packaging-specific trademarks, it has been issued a registration for one of them. On Tuesday, the U.S. Patent and Trademark Office (“USPTO”) handed Glossier a registration for the pink bubble wrap pouch that the venture capital-magnet has been using since October 2014 in connection with an array of cosmetics. Specifically speaking, the mark consists of a certain shade of the color pink – presumably Pantone’s 705C hue – “as applied to bags featuring lining of translucent circular air bubbles and a zipper closure.” 

The registration for the pink pouch comes after Glossier – which was born on the back of founder Emily Weiss’ popular beauty site, Into the Gloss, and has since gone on to nab a $1.2 billion valuation (as of Match 2019) – faced pushback from the trademark office, which preliminarily responded to Glossier’s application by refusing to register the mark. In a July 2019 Office Action, USPTO examining attorney Michelle Dubois stated that while she could not find any conflicting marks in the trademark office’s database of registered and pending marks that would stand in the way of the registration of Glossier’s mark, she, nonetheless, took issue with the pink pouch for a couple of key reasons. 

Functional & Non-Distinctive?

For one thing, Dubois asserted that the pink pouch was ineligible for registration because it is “a functional design for such packaging,” which is problematic, as functionality is an absolute bar to registration. (Glossier was able to overcome this aspect of the refusal by submitting a new trademark drawing, and “clarifying that the air bubbles and the packaging itself are not claimed as features of the mark,” which exclusively consists of “the claimed color pink as applied to a very particular type and configuration of product packaging.”)

More than that, Dubois argued that the mark “consists of a nondistinctive configuration of packaging for the goods,” making the ziplock pouch incapable (on its face) of identifying the source of the products at play. This was due, at least in part, to the fact that bubble wrap lining is a common feature of “goods that are going to be in transit or are going to be shipped,” per Dubois, and Glossier’s use of “the color pink … on such pouches is not unique.” 

With that in mind, Dubois preliminarily refused the mark on the basis that “consumers will not immediately consider [Glossier’s] packaging as an indicator of source.”

“Glossier’s Pink Pouch”

On the heels of the USPTO’s Office Action, counsel for Glossier filed a 252-page response in January, in which it set out to establish that the pink pouch does, in fact, serve to indicate the source of the products associated with it. The bulk of that filing centered on the brand’s assertion that its use of the color pink on its packaging has acquired distinctiveness, namely “based on five years’ use of the mark, as well as extensive evidence that when the relevant consumers see the color pink on a bubble-lined, zip-top pouch, they immediately recognize it as Glossier’s Pink Pouch.” 

To prove that, Glossier provided third-party media articles about the company that mention its use of the pink pouch. It also pointed to examples of consumer social media posts featuring the pink pouch, which Glossier says “demonstrate that many consumers already associate the Pink Pouch with [it], [while also] serving to educate even more consumers and reinforce the association between the Pink Pouch and Glossier.”

The brand asserted that the pink pouch “has been used continuously since at least as early as 2014 [by Glossier], and in 2018, the revenue generated by sales of goods [that included use of] the mark amounted to more than $100 million.” And all the while, the company says that it “has consistently promoted the Pink Pouch by featuring it on the Glossier website, in numerous marketing emails, in social media posts, and even on New York City subway ads.” 

With such an “abundance of evidence” in mind, Glossier asserts that “the color pink, as applied to bags featuring lining of translucent circular air bubbles and a zipper closure, has acquired source-indicating significance in the minds of the relevant consumers.” In other words, “when consumers see the Pink Pouch, they immediately recognize it as emanating from Glossier,” and thus, the mark should be registered. As of August 25, the USPTO agreed, issuing a registration to Glossier for the mark. 

It Makes Sense

Beyond being a clear demonstration of what brands are endeavoring to do in a branding sense in order to help set themselves apart in the minds (and wallets) of consumers in an inherently digital age, Glossier’s successful quest to earn a trademark registration for its use of the specific color pink on specific product packaging is interesting for a whole host of reasons, including what this potentially says about the role that social media can play in brand building (and showing secondary meaning). This is particularly relevant for young companies that do not have decades of continuous use of a mark and tens of millions of dollars in sales to point to, which is precisely what 125-year old Barbour, for instance, had in 2018 when it filed an application for registration with the USPTO for its famed wax jacket.

Speaking of social media, University of New Hampshire School of Law professor Alexandra J. Roberts says that it is noteworthy that Glossier’s evidence of secondary meaning included not only its own social media posts and those from paid influencers in its filing as evidence of secondary meaning, but also made use of examples of individual consumers posting photos on social media that feature the pouch. Such consumer-generated content “both reflects and contributes to the acquired distinctiveness” of the pink pouch trade dress, and overall, amounts to evidence that she says is “really strong.”

Beyond the sheer power of social media and influencer marketing, Roberts sees “Glossier’s speedy success with the registration” as reflecting the power of look-for advertising when it comes to establishing secondary meaning in the minds of consumers. “In assessing whether trade dress has acquired distinctiveness,” a registration pre-requisite for marks that are not inherently distinctive, “the USPTO and courts often want to see advertisements that highlight and play up the particular [trade dress] feature for consumers.” She says “that type of marketing does not always explicitly include language like ‘look for___ ,’ but may take the approach that points to the feature and directs consumers to pay attention to it as a source indicator.”

“That is what Glossier did by featuring the pink pouch on its website, in marketing emails, in social media posts, and in subway ads.”

Ultimately, Glossier’s process here, which has seen it “decide on packaging of a notable color and notable ‘translucent circular’ air-bubble design, identifiable at a glance, and endeavor to get it in front of as many eyes as possible, as often as possible,” as trademark attorney and former USPTO trademark examining attorney Ed Timberlake characterizes it, is right up the alley of the U.S. trademark statute … even if the mark at play is not a traditional wordmark or logo. In other words, many marks that people tend to characterize as non-traditional are actually “playing entirely traditional cognitive roles under the Lanham Act,” and that is what is going on here.

“At least as I read it, the Lanham Act [treats trademark rights] less like real estate,” or property, “and more akin to cognition.” With that in mind, “The point is not simply to make claims but to make an impression,” he says.

Timberlake states that it is likely that “an aggressive social media campaign behind a symbol less capable of distinguishing the source of goods [than Glossier’s pouch] may well have made less of an impression on consumers (potentially leading consumers to make less of a connection with applicant’s goods) and may well have had little but litigation to fall back on in an effort to carve out cognitive space.” 

Viewed in this light, he says that Glossier’s approach – which has seen it adopt a symbol, notably, colored bubble-bags, by which its goods may be distinguished from the goods of others – “seems to make a great deal of sense.” 

On the heels of being slapped with a $10 million trade dress infringement, fraud, and unfair competition lawsuit in May by burgeoning womenswear brand dbleudazzled, Khloe Kardashian and her brand, Good American, want the court to strike the two unfair competition claims lodged against them by dbleudazzled, alleging that they are based on the company’s unmerited allegation that they made “public statements [about the lookalike bodysuits that they allegedly copied from dbleudazzled] that were false or misleading to consumers,” when the statements are, in fact, true. 

According to the motion to strike that counsel for Kardashian and her 4-year old Good American brand (the “defendants”) filed in a California Superior Court on August 4, the court should toss out dbleudazzled’s unfair competition claims because those claims depend on the challenged statements being “false and deceptive to consumers” when the statements are “absolutely true.” More than that, though, the claims should be struck, the defendants assert, because they fall within the bounds of California’s anti-Strategic Lawsuits Against Public Participation (“SLAPP”) statute, and thus, should be dismissed in order to protect the defendants’ “constitutionally protected speech.”

Kardashian, Good American’s Anti-SLAPP Claims

Setting the stage for its anti-SLAPP claims, Kardashian and Good American assert that dbleudazzled’s “unfair competition claims present a classic case of trying to suppress a victim’s public response to a series of widely publicized fabrications, [which is] precisely the kind of protected speech the anti-SLAPP laws were enacted to safeguard.” Enacted in 1992, California’s anti-SLAPP statute protects parties from lawsuits brought to “chill the valid exercise of constitutional rights of free speech,” and provides parties with the ability to file a special motion to strike a complaint or parts of a complaint when a case has been filed “primarily to discourage speech about issues of public significance,” which is precisely what the defendants claim is going on in the case at hand.

Specifically, Kardashian and Good American claim that dbleudazzled “relies on three of [their] statements … as the basis for [its] unfair competition claims,” arguing that the claims are false and misleading, and therefore,“constitute a fraudulent business practice” in violation of the California state law, which characterizes “any unlawful, unfair, or fraudulent business act or practice, or false, deceptive, or misleading advertising” as unfair competition, and assumes that the plaintiff can prove “suffering and financial or property losses” due to the allegedly unfair practice. 

In terms of the statements, themselves, the first is an official statement from Good American – which asserted in a June 2017 article published by Cosmo in connection with dbleudazzled’s public claims that Kardashian and her brand copied her distinctive bodysuits – that “under no circumstances did Good American or Khloe Kardashian infringe another brand’s intellectual property.” The second “statement” comes in the form of June 2017 Instagram posts of images of Cher, Diana Ross and Britney Spears in crystal embedded tops along with the language, “Important to know your fashion history #nofrauds,” “Vintage Diana Ross. Showgirl vibes. #inspo” and “Britney in Toxic #inspo,” in reference to allegations that they were inspired by/infringed dbleudazzled’s trade dress in embellished bodysuits. 

Finally, in the third statement, Kardashian suggested in a June 2017 Instagram post, in which she announced the launch of the Good American bodysuit collection, “that she came up with the designs for [the allegedly copycat] bodysuit over the course of almost a year, when in reality,” dbleudazzled claims, “she spent several months ordering [dbleudazzled’s] bodysuits and copying those designs.”

Taken together, these statements – which were made in a “public forum in connection with an issue of public interest,” and which served the purpose of Kardashian and Good American “publicly defending themselves against the plaintiff’s widespread, fallacious media attacks” – serve as the foundation for dbleudazzled’s unfair competition claims, which is why the defendants argue that California’s anti-SLAPP statute applies. Here, the “public forum” is Instagram and Cosmo magazine, and the matter of “public interest” because Kardashian, herself, is a “media superstar,” and her “statements concerning their clothing design’s originality communicated information of interest both to Good American consumers and to Kardashian’s vast fan base.” 

With the foregoing in mind, the defendants assert that “public statements about well-known individuals are inherently matters of public interest, and therefore constitute protected speech for purposes of the first prong of the anti-SLAPP analysis,” particularly given “California’s broad standard for defining ‘an issue in which the public is interested.’” 

Proving Copying

From a procedural perspective, if a defendant can show that a plaintiff’s cause of action arises from protected activity, such as “constitutionally protected speech” that is “clearly a matter of public interest,” which is presumably what Kardashian and Good American have done, the burden in the anti-SLAPP analysis shifts to the plaintiff, who must then establish “a probability that the plaintiff will prevail on the claim.” In this case at hand, that would mean that dbleudazzled would have to produce “admissible evidence showing that the defendants were lying about the inspiration for the bodysuits and that members of the public were likely to be deceived” by such lies. 

In terms of proving copying, there are at least a couple of significant factors at play, according to Kardashian and Good American. For one thing, despite dbleudazzled’s “complaint misleadingly alleging that Kardashian received a bodysuit from” the company, that is not the case. Instead, dbleudazzled – which is hardly an unknown name in the fashion world, with fans ranging from Beyonce (whose recently-released “Black is King” visual album is smattered with the brand’s wares) and Rihanna to Mariah Carey and Lady Gaga – sent “bras, fishnets, leggings, socks, shorts and panties,” as well as “catsuits to Kardashian’s stylist.” The design of catsuit, itself, they argue “is completely different from the design of  the bodysuit at issue and cannot, as a matter of law, be deemed the basis for a copying allegation … as the dbleudazzled catsuits simply look absolutely nothing like the bodysuits created by Good American.”

Moreover, the defendants argue that dbleudazzled will have a hard time proving copying because while the company “suggests there is something unique in its bodysuit and/or ‘nipple burst’ design [on its bodysuit], neither is true.” In fact, the defendants claim that “early examples of tight-fitting crystallized tops and bodysuits date back to the flashy outfits of Las Vegas showgirls and other performers in the 1920’s” and “have also been worn in more recent popular culture by performers and artists such as Marilyn Monroe, Cher, Diana Ross, and Britney Spears.”

“In short, given its existence in popular fashion for decades, dbleudazzled cannot possibly claim that the look of a bedazzled bodysuit concentrating crystals around the bust area was in any way ‘created by’ [dbleudazzled] or was unique trade dress feature,” Kardashian and Good American assert.

Against this background, and given that dbleudazzled “cannot show that the defendants copied its designs (the defendants did not) and certainly cannot show that any of the defendants’ public statements were false or misleading to consumers,” Kardashian and Good American argue that dbleudazzled will not be able to meet “its burden of demonstrating a probability of prevailing on the merits” in connection with the anti-SLAPP motion.

The defendants argue that they are not only “permitted to publicly defend themselves from the plaintiff’s media attacks and speak to their wide audience about the sources of their inspiration for the design of their clothing line without interference from the plaintiff,” but that the court “can readily conclude as a matter of law that there is no representation (much less misrepresentation) in the above [statements] about the origin or design of the bodysuits.” As such, counsel for Kardashian and Good American assert that dbleudazzled’s unfair competition claims are subject to a special motion to strike under the anti-SLAPP statute.

“Smear Campaign”  

While the motion does not speak at length about dbleudazzled’s trade dress infringement claims, the defendants do allege that the brand lacks legal grounds on that front (and that the lawsuit, as a whole, is “entirely without merit”). According to the filing, before dbleudazzled initiated the lawsuit at play, its founder Destiney Bleu “launched an all-out media campaign, accusing the defendants of copying her work in major media outlets despite the fact that her attorney proclaimed that she had no basis for any legal action.” 

The defendants cite a June 8, 2017 letter from the plaintiff’s counsel to the defendants’ counsel, in which the plaintiff “threatened that Kardashian ‘will rightly face judgment in the court of public opinion’ even though ‘copying clothing and fashion is generally not intellectual property infringement.’” In that same letter, the plaintiff’s “counsel admitted, ‘It is not illegal for [the defendants] to copy [the plaintiff’s] designs.’” Despite such an alleged lack of legal rights in the design, Kardashian and Good American claim that dbleudazzled “deliberately engaged in a widespread smear campaign precisely because [it] knew that it had no legitimate legal claims against the defendants.” 

A hearing on the Special Motion to Strike is scheduled for September 25.

*The case is dbleudazzled, LLC v. Khloe Kardashian and Good American, LLC, 20STCV20510 (Cal.Sup.).

That women are paid less than male colleagues is a stubborn fact in the U.S. workplace. As of July, women earned 84 cents for every dollar a man earned. It is a discrepancy that has garnered significant attention from scholarsthe media and sex discrimination lawsuits, and the fashion industry is in no way immune. In fact, as of 2018, it was revealed that big-name brands and media outlets, alike, from Burberry to Vogue’s parent company Conde Nast, had significant gaps in pay between certain male and female employees.  

That 84 cents to the dollar figure, while certainly striking, only tells part of the story regarding gender pay inequality, and in fact, base pay is only one way that women are disadvantaged in the workplace. In fact, recent research sheds light on how female employees similarly lose out when it comes to other forms of pay that receive far less attention: equity-based awards. These are stock grants, in which employees are offered shares in the company as a form of pay, and stock option grants that offer the right to buy company stock at a preset price in the future. The value of both are tied to the employing organization’s market price.

Less of an option?

Equity-based awards are commonly used in technology firms and startups, the latter of which have dominated the fashion and beauty spaces, and the retail industry more generally, in recent years, and can make up a substantial part of employees’ compensation. In fact, according to the 2014 General Social Survey, which was administered to a national random sample of working adults, 20 percent of all workers in the private sector own stock and stock options in their companies. Some estimates suggest the average value of stock options to employees who receive them is $249,901, and the average value of stock is $60,078. 

With that in mind, Felice Klein, an Assistant Professor of Management at Boise State University, says that she and her colleagues wanted to see if gender played a role when it comes to equity-based pay. So, Klein, Aaron D. Hill of the University of Florida, Ryan Hammond at the data storage company Pure Storage, and Ryan Stice-Lusvardi at Stanford University analyzed equity-award data from two tech-centric companies. 

Here is what they discovered … 

What’s in a name?

The gender gap for equity-based awards we found ranged from 15 percent to 30 percent – even after controlling for the typical reasons that women tend to earn less than men, such as differences in occupation and length of service at a company. We wanted to know what could be behind the discrepancy, so we ran an experiment in which we asked working professionals to play the role of a manager in a fictitious company. Participants were asked to read a set of employee performance reviews and distribute stock options to their team based on one of two criteria often used for equity-based awards: retaining talent and recognizing high potential employees. 

The fictional employees were randomly assigned one of two gender-typical names, Steven and Susan, so that each profile was given the man’s name half the time and a woman’s the other half. This helped ensure that any differences between the profiles did not affect the results.

What emerged was a gender gap favoring men when it came to distributing stock options based on retention – but not based on potential. In other words, the data showed when it came to equity being used as an incentive to keep employees at the company, there was a significant gender gap. Our results were backed up by what we saw in the data provided by the companies, themselves, as well as publicly available data of executives. These findings come at a time when many companies are seriously looking at gender pay discrepancies.

But even with efforts underway to address the gender gap in base pay and bonuses, we believe that many businesses do not appear to be focusing equal attention to equity-based awards. We heard this firsthand in interviews conducted with 27 human resources professionals at both public and private companies. Although nearly all interviewees acknowledged their employers were doing pay audits for base pay, and sometimes bonuses, only three said their companies conducted audits on equity-based awards. We also found evidence of this within the two tech companies we studied. There was little to no gender gaps in salary and bonuses after controlling for typical reasons that women receive less pay; however, large gender gaps existed in equity-based awards. 

Unequal equity

Part of the reason this gender gap in equity awards exists is down to why they are handed out to employees in the first place. Stocks and options are most often distributed to employees to keep them from leaving. In fact, a survey of 217 companies found that almost 90 percent said retention was the primary objective of their stock option program.

Our interviews with human resources professionals backed this up. Interviewees described equity-based awards as retention incentives for “high performers” and as “a forward-looking reward program.” And studies have shown that men tend to be perceived as more capable in work settings than women and as such are likely viewed as more important to retain in a company and often seen as a higher risk of leaving for a rival. As a result, men are likely to receive more equity-based awards than women. 

While some companies are working hard to address gender inequality, our findings suggest that efforts should be applied more broadly to all forms of pay – from tech companies to global fashion giants and burgeoning direct-to-consumers startups, alike.

Felice Klein is an Assistant Professor of Management at Boise State University. (Intro additions courtesy of TFL)