Page 9 - Fashion Law

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Fashion Law | MONDAY, AUGUST 28, 2017 | S9
Debunking the Fashion Industry’s
‘Three Change’ Rule
BY KAREN ARTZ ASH AND ALEXANDRA R. CALECA
s designers move from brand to brand with growing frequency, so does an industry “rule” that is as
false as it is prevalent. While it is common practice for designers to look to a variety of sources for “inspiration,” the line between legal inspiration and illegal infringement is thin and not a straight-forward formula. The reference to “inspiration” is common in, for example, developing fabric designs, ornamentation, marketing materials, pro- motional campaigns and product configu- rations. Whether dressed up as the “Three Change Rule,” the “Five Change Rule” or the “20% Rule,” there simply is no “rule,” and any designer who relies on the common misconception that making a set number of changes will circumvent infringement puts their business at risk.
The consequences of potential lawsuits include the risk of business disruption and responsibility for disgorging profits or paying damages, and negative public perception in our increasingly social media-oriented world. Not only will the purchasing public recognize
studied changes to another’s property, but judicial tribunals will not dispose of infringe- ment claims by counting the number of changes made to the underlying “inspira- tion.”
What Are the Proper Legal Standards?
Trademark and Trade Dress. Pro- prietary rights are those that belong to its creator, differentiating that creator and creation from others and are pro- tected by law. Several legal theories might protect one or more aspects of an item (simultaneously or alterna- tively). Brand names, logos or symbols that indicate the source of a product are trademarks. Distinctive design ele- ments that are uniquely associated with a particular brand (i.e., those that have attained “secondary meaning”) constitute trade dress. Commonly, the standard trademark rights associated with brand indicia work hand-in-hand with the combination of elements that constitute trade dress. Both are pro- tected under the Lanham Act.
To establish a claim of infringement under the Lanham Act, a plaintiff must establish, first, that its claimed mark is
valid, and second, that the defendant’s
use of the same or a similar mark is “likely to confuse consumers” as to the source, origin, sponsorship or approval of the defendant’s products.
The requisite criteria for determining like- lihood of confusion was established in In re E. I. du Pont de Nemours & Co., where the U.S. Court of Customs and Patent Appeals weighed the individual factors and cautioned that “[t]here is no litmus rule which can
provide a ready guide to all cases.” 476 F.2d 1357, 1361 (C.C.P.A. 1973) (emphasis added). Each trademark tribunal has developed a multi-factor test for determining likelihood of confusion. Although the individual factors and the weight accorded each factor varies, the following are key considerations in any like- lihood of confusion determination relating to registrability before the Trademark Trial and Appeal Board (TTAB):
• The similarity or dissimilarity of the marks in their entireties as to appearance, sound, connotation and commercial impression.
• The relatedness of the goods or services as described in the appli- cation and registration(s).
The Second Circuit developed the “Polaroid factors,” a series of factors set out in the case by which the name
1993). Interestingly, the fact that buyers of fashion items may be brand conscious and brand loyal can cut both ways. The Second Circuit recognized that just because high- quality designer goods may have sophisti- cated and brand conscious buyers does not necessarily mean that those people are not likely to be confused by imitations. Rather,
these buyers are those who are most likely to notice branding or trade dress embellishments, may spot them in an imitation and incorrectly assume that there is an affiliation or collaboration between the manufac- turers. Coach Leatherware v. Ann Tay- lor, 933 F.2d 162, 18 U.S.P.Q. 2d 1907
(2d Cir. 1991).
Balancing likelihood of confu-
sion factors is not a precise science. A prudent evaluation cannot be boiled down to a deliberate number of changes to inspirational source materials. On a technical note, it bears mentioning that causes of actions in each case based on the elements of likelihood of confusion include claims for false designation of origin and false or misleading rep- resentations or descriptions of fact under §43(a) of the Lanham Act, as well as passing off, reverse passing off,
misappropriation, unfair competition, and unfair trade practices under state common and statutory law. Fashion brands may also assert these causes of action to address the sale of “knock-offs” under circumstances that falsely express or imply that allegedly copied goods are the company’s authentic designs.
Copyright. Copyright protects original, creative works fixed in a tangible form. For example, fabric prints may be subject to copyright, as can certain jewelry designs and three dimensional elements incorpo- rated into a product such as a clasp or belt buckle. Copyright protection does not extend to “useful articles,” but a feature of the design of a useful article may be eligible for copyright protection if, when identified and imagined apart from the useful article, it would qualify as a pictorial, graphic, or sculptural work on its own or when fixed in some other tangible medium.
The U.S. Copyright Act confers upon a copyright holder the exclusive right to reproduce, distribute, import and publi-
was derived in 1961: Polaroid v. Polarad Elecs., 287 F.2d 492 (2d Cir. 1961). The fol- lowing factors are balanced in evaluating whether use of one mark is likely to be con- fused with another:
• Strength of the plaintiff’s mark.
• Degree of similarity between the marks. • Proximity of the products.
• Likelihood that the prior owner will bridge the gap and enter the defendant’s market.
• Actual confusion.
• Defendant’s good faith in adopting the mark.
• Quality of the defendant’s product.
• Sophistication of the buyers.
Ultimately, the determinant is whether there is a likelihood of confusion in the mind of an appreciable number of “rea- sonably prudent” purchasers. Tribunals have developed many definitions of how this purchaser makes his or her selections in the marketplace. The Second Circuit considers the “general impression of the ordinary purchaser, buying under the nor- mally prevalent conditions of the market and giving the attention such purchasers usually give in buying that class of goods.” W.W.W. Pharmaceutical v. Gillette, 984 F.2d 567, 575, 25 U.S.P.Q. 2d 1593, 1599 (2d Cir.
cally display the copyrighted
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KAREN ARTZ ASH is a partner at Katten Muchin Rosenman in New York, where she is national co- chair of the firm’s intellectual property department and co-head of the trademarks and trademark litiga- tion practice. ALEXANDRA R. CALECA is an attorney at the firm.
THREERIVERS11 (2)