Design Piracy Prohibition Act Fashion Industry Gets Tough Jack B. Hicks, Vice Chair AIPLA Industrial Designs Committee Womble Carlyle Sandridge & Rice, PLLC 300 N. Greene St., Suite 1900 Greensboro, NC 27401 Direct Phone: (336) 574-8050 Direct Fax: (336) 574-4513 Email: jhicks@wcsr.com www.wcsr.com/JackHicks Doc #3525999

Design Piracy Prohibition Act (H.R. 5055, 109th Cong. (2006)) To amend title 17 - Vessel Hull Design Protection, to protect fashion design

“ Boat Hull Fashion” http://www.powerboatmag.com/2004tests/03_04_dana.php

Fashions and Boat Hulls Henry Lanman Posted Monday, March 13, 2006, at 2:59 PM ET http://www.slate.com/id/2137954/

Fashion and Boat Hulls

Fashion and Boat Hulls The African Queen (1952) Starring: Humphrey Bogart, Katharine Hepburn Director: John Huston

Fashion and Boat Hulls Gilligan's Island was an American TV sitcom which aired for three seasons on the CBS network from September 26, 1964 to September 4, 1967.

Fashion and Boat Hulls http://rcnevada.com/?p=80

“ Red Carpet” Knock-offs??? “ Red Carpet” Designs

“ Red Carpet” Designs Designer, Zac Posen Dress Worn by Felicity Huffman 2006 Academy Awards

“ Red Carpet” Knock-offs

Not a New Problem 1932 - Fashion Originators' Guild Explicit purpose was to curb design copying. “ Declaration of Cooperation" Retailers and manufacturers affirmed only handle original creations. Members risked fines and other penalties if they didn't comply. Curbed design piracy FASHION ORIGINATORS' GUILD v. FEDERAL TRADE COM'N, 312 U.S. 457 (1941) – FOG Violates Antitrust Laws

1932 - Fashion Originators' Guild

Explicit purpose was to curb design copying.

“ Declaration of Cooperation"

Retailers and manufacturers affirmed only handle original creations.

Members risked fines and other penalties if they didn't comply.

Curbed design piracy

FASHION ORIGINATORS' GUILD v. FEDERAL TRADE COM'N, 312 U.S. 457 (1941) – FOG Violates Antitrust Laws

Council of Fashion Designers of America http://www.cfda.com/flash.html http://www.cfda.com/

H.R. 5055, 109th Cong. (2006) Apparel defined as "(A) an article of men's, women's, or children's clothing, including undergarments, outerwear, gloves, footwear, and headgear; (B) handbags, purses, and tote bags; (C) belts; and (D) eyeglass frames." H.R. 5055, p. 2, ll. 11-17. Items visible

Apparel defined as "(A) an article of men's, women's, or children's clothing, including undergarments, outerwear, gloves, footwear, and headgear; (B) handbags, purses, and tote bags; (C) belts; and (D) eyeglass frames." H.R. 5055, p. 2, ll. 11-17.

Items visible

H.R. 5055, 109th Cong. (2006) SHOES AND SHIRTS AND JACKETS AND BELTS …

H.R. 5055, 109th Cong. (2006) Nate ( Adrian Grenier ): “ For shoes and shirts and jackets and belts.” Andy ( Anne Hathaway ): “I turned my back on my friends and my family ... everything I believed in ...and -- and for what?”

H.R. 5055, 109th Cong. (2006) Designer or owner must register the design "within 3 months after the date on which the design is first made public*." H.R. 5055, p. 3, ll. 1-5 . The term of protection is 3* years from the date of commencement of protection. H.R. 5055 p. 3, ll. 14-16

Designer or owner must register the design "within 3 months after the date on which the design is first made public*." H.R. 5055, p. 3, ll. 1-5 .

The term of protection is 3* years from the date of commencement of protection. H.R. 5055 p. 3, ll. 14-16

H.R. 5055, 109th Cong. (2006) What qualifies for protection “ Original design of a useful article which makes the article attractive or distinctive in appearance to the purchasing or using public may secure protection” § 1301 (a)(1) Owner of design has exclusive right to make, have made, or import, for sale or for use in trade, sell, distribute any useful article embodying that design § 1308 ® ?

What qualifies for protection

“ Original design of a useful article which makes the article attractive or distinctive in appearance to the purchasing or using public may secure protection” § 1301 (a)(1)

Owner of design has exclusive right to make, have made, or import, for sale or for use in trade, sell, distribute any useful article embodying that design § 1308

H.R. 5055, 109th Cong. (2006) Useful article , including an article of apparel , which “in normal use has an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information.” 1301 (b)(2) “ Fashion Design” is the “appearance as a whole of an article of apparel , including its ornamentation.” 1301 (b)(2)*. But see 1301 (b)(2) (An article “which normally is part of a useful article shall be deemed to be a useful article”.) ®

Useful article , including an article of apparel , which “in normal use has an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information.” 1301 (b)(2)

“ Fashion Design” is the “appearance as a whole of an article of apparel , including its ornamentation.” 1301 (b)(2)*. But see 1301 (b)(2) (An article “which normally is part of a useful article shall be deemed to be a useful article”.)

H.R. 5055, 109th Cong. (2006) Originality shown if “result of designer’s creative endeavor that provides a distinguishable variation over prior work pertaining to similar articles … more than merely trivial and has not been copied from another source.” 1301 (b)(1) © ?

Originality shown if “result of designer’s creative endeavor that provides a distinguishable variation over prior work pertaining to similar articles … more than merely trivial and has not been copied from another source.” 1301 (b)(1)

H.R. 5055, 109th Cong. (2006) § 1302 Designs Not Subject to Protection No protection if not original. §1302(1) Not available if “ staple or commonplace , such as a standard geometric figure, a familiar symbol, an emblem, or a motif, or another shape, pattern, or configuration which has become standard, common, prevalent, or ordinary” or different therefrom “only in insignificant details or in elements which are variants commonly used in the relevant trades ”. §1302(2-3)

§ 1302 Designs Not Subject to Protection

No protection if not original. §1302(1)

Not available if “ staple or commonplace , such as a standard geometric figure, a familiar symbol, an emblem, or a motif, or another shape, pattern, or configuration which has become standard, common, prevalent, or ordinary” or different therefrom “only in insignificant details or in elements which are variants commonly used in the relevant trades ”. §1302(2-3)

H.R. 5055, 109th Cong. (2006) § 1302 Designs Not Subject to Protection (cont’d) Not available if “ dictated solely by a utilitarian function of the article that embodies it.” 1302(4) Not available if design made public by the designer or owner more than 3 months prior to application

§ 1302 Designs Not Subject to Protection (cont’d)

Not available if “ dictated solely by a utilitarian function of the article that embodies it.” 1302(4)

Not available if design made public by the designer or owner more than 3 months prior to application

H.R. 5055, 109th Cong. (2006) BUT… § 1303 Revisions, adaptations and rearrangements Protection nonetheless available for designs excluded under §1302 if “ substantial revision, adaptation, or rearrangement of such subject matter” Query: Can substantial revision of a design “dictated solely by function” qualify for protection?

BUT…

§ 1303 Revisions, adaptations and rearrangements

Protection nonetheless available for designs excluded under §1302 if “ substantial revision, adaptation, or rearrangement of such subject matter”

Query: Can substantial revision of a design “dictated solely by function” qualify for protection?

H.R. 5055, 109th Cong. (2006) § 1309 Infringement “A design shall not be deemed to have been copied from a protected design if it is original and not substantially similar in appearance to a protected design.” 1309(e) Secondary Liability incorporated (fee-based websites show new instantaneous detailed photographs of Red Carpet designs) ©

§ 1309 Infringement

“A design shall not be deemed to have been copied from a protected design if it is original and not substantially similar in appearance to a protected design.” 1309(e)

Secondary Liability incorporated (fee-based websites show new instantaneous detailed photographs of Red Carpet designs)

H.R. 5055, 109th Cong. (2006) § 1306 Design Notice Required [Protected Design / Prot’d Des. / *D* / D in-circle] Omission of Notice Actual notice suffices Precludes recovery against person commencing infringement before receiving written notice

§ 1306 Design Notice

Required [Protected Design / Prot’d Des. / *D* / D in-circle]

Omission of Notice

Actual notice suffices

Precludes recovery against person commencing infringement before receiving written notice

H.R. 5055, 109th Cong. (2006) Retailer Liability: infringers liable if they know or have " reasonable grounds to know ” that protection for the design is claimed and was copied Amount of recovery for infringement from $50,000 or $1 per copy to $250,000 or $5 per copy, whichever is greater. H.R. 5055, p. 3, ll. 20-21 and p. 5, ll. 8-11.

Retailer Liability: infringers liable if they know or have " reasonable grounds to know ” that protection for the design is claimed and was copied

Amount of recovery for infringement from $50,000 or $1 per copy to $250,000 or $5 per copy, whichever is greater. H.R. 5055, p. 3, ll. 20-21 and p. 5, ll. 8-11.

H.R. 5055, 109th Cong. (2006) § 1323 Recovery for Infringement Damages vs. Infringer’s Profits 3 year statue to limitation Attorneys Fees to prevailing party Disposition of infringing articles and means to make same

§ 1323 Recovery for Infringement

Damages vs. Infringer’s Profits

3 year statue to limitation

Attorneys Fees to prevailing party

Disposition of infringing articles and means to make same

H.R. 5055, 109th Cong. (2006) § 1313 (b) Cancellation Proceedings Application to Cancel sent to Design Owner Design Owner respond within 3 months Administrator determines cancellation Costs to prevailing party [Opposed by Copyright Office]

§ 1313 (b) Cancellation Proceedings

Application to Cancel sent to Design Owner

Design Owner respond within 3 months

Administrator determines cancellation

Costs to prevailing party

[Opposed by Copyright Office]

H.R. 5055, 109th Cong. (2006) § 1325 Liability for Action on Registration Fraudulently Obtained $10,000 awarded to defendant, in addition to attorneys fees and costs § 1326 Penalty for False Marking $500 per offense; suit by “any” private person

§ 1325 Liability for Action on Registration Fraudulently Obtained

$10,000 awarded to defendant, in addition to attorneys fees and costs

§ 1326 Penalty for False Marking

$500 per offense; suit by “any” private person

H.R. 5055, 109th Cong. (2006) § 1329 Relation to Design Patent Law Issuance of design patent shall terminate protection § 1330 Common law and other Rights Unaffected common law, trademark, copyright rights preserved

§ 1329 Relation to Design Patent Law

Issuance of design patent shall terminate protection

§ 1330 Common law and other Rights Unaffected

common law, trademark, copyright rights preserved

H.R. 5055 – Practice Pointers Relevant Terms A Many! Original design Useful article Intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information Whole of an article Distinguishable variation More than merely trivial Staple or commonplace, such as a standard geometric figure, a familiar symbol, an emblem, or a motif, or another shape, pattern, or configuration which has become standard, common, prevalent, or ordinary Only in insignificant details or in elements which are variants commonly used in the relevant trades Dictated solely by a utilitarian function Substantial revision, adaptation, or rearrangement Not substantially similar Reasonable grounds to know

Original design

Useful article

Intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information

Whole of an article

Distinguishable variation

More than merely trivial

Staple or commonplace, such as a standard geometric figure, a familiar symbol, an emblem, or a motif, or another shape, pattern, or configuration which has become standard, common, prevalent, or ordinary

Only in insignificant details or in elements which are variants commonly used in the relevant trades

Dictated solely by a utilitarian function

Substantial revision, adaptation, or rearrangement

Not substantially similar

Reasonable grounds to know

H.R. 5055 – Practice Pointers What qualifies for protection? J. Ireland, Encyclopedia of Fashion Details , 1987 Not available if “staple or commonplace, such as a standard geometric figure…”

H.R. 5055 – Practice Pointers Search Prior Art Collections: The Fashion Institute of Technology http://www.fitnyc.edu museuminfo@fitnyc.edu or 212 217.5701. Philadelphia University Engineering & Textile http://www.philau.edu/engineering NC State School of Textiles http://www.tx.ncsu.edu/departments/tatm/ American Textile History Museum – Chace Catalogue http://www.athm.org/home

J. Ireland, Encyclopedia of Fashion Details , 1987 No protection for design elements “which are variants commonly used in the relevant trades” Revisions, adaptations and rearrangements Protection nonetheless available for designs excluded under §1302 if “ substantial revision, adaptation, or rearrangement of such subject matter”

J. Ireland, Encyclopedia of Fashion Details , 1987 No protection for design elements “which are variants commonly used in the relevant trades” Revisions, adaptations and rearrangements Protection nonetheless available for designs excluded under §1302 if “ substantial revision, adaptation, or rearrangement of such subject matter”

Father Georg Gaenswein, (aka Father-What-A-Waste) Gorgeous Georg's priestly chic inspires a new Versace show (reported by Prof. Susan Scafidi) "I was certainly inspired by him," Donatella Versace

H.R. 5055, 109th Cong. (2006) Arguments in Support of Enactment The Act Closes a Hole In Intellectual Property Protection For Fashion Designs No effective copyright, trademark/tradedress or patent protection The Act Moves Toward Harmonization With Other Jurisdictions (EU)

Arguments in Support of Enactment

The Act Closes a Hole In Intellectual Property Protection For Fashion Designs

No effective copyright, trademark/tradedress or patent protection

The Act Moves Toward Harmonization With Other Jurisdictions (EU)

H.R. 5055, 109th Cong. (2006) Arguments in Support of Enactment The Act Protects Un-Established Designers The Act's Limited Duration (3 yrs) of Protection, Requirement for Fast Registration (3 months) and Notice (required) Will Not Stifle Competition or Harm the Public Interest

Arguments in Support of Enactment

The Act Protects Un-Established Designers

The Act's Limited Duration (3 yrs) of Protection, Requirement for Fast Registration (3 months) and Notice (required) Will Not Stifle Competition or Harm the Public Interest

H.R. 5055, 109th Cong. (2006) Arguments Against Enactment The Act Provides Special Protection For A Single Industry Possibility of Regulating Where No Regulation Is Needed Act Would Potentially Expand Retailer Liability

Arguments Against Enactment

The Act Provides Special Protection For A Single Industry

Possibility of Regulating Where No Regulation Is Needed

Act Would Potentially Expand Retailer Liability

H.R. 5055, 109th Cong. (2006) Arguments Against Enactment Harmonization With EU Practice is a Red Herring The Act Currently Protects Only The Whole Article Inadequate Definition of Protected Items Vulnerability To Orphan Works Act

Arguments Against Enactment

Harmonization With EU Practice is a Red Herring

The Act Currently Protects Only The Whole Article

Inadequate Definition of Protected Items

Vulnerability To Orphan Works Act

H.R. 5055, 109th Cong. (2006) Arguments Against Enactment The Definition of Infringement May Work* for Boat Hulls, But Not for Fashion Design _______________________________________ *But only single reported case: Maverick Boat Co. v. American Marine Holdings Inc. , 75 USPQ2d 1590 (11th Cir. 2005) (holding registration invalid for failing to disclose design that is “ substantial revision, adaptation, or rearrangement” of a pre-existing design), affirming Maverick Boat Co. v. American Marine Holdings Inc. , 70 USPQ2d 1493 (S.D. Fla. 2004)

Arguments Against Enactment

The Definition of Infringement May Work* for Boat Hulls, But Not for Fashion Design

_______________________________________

*But only single reported case:

Maverick Boat Co. v. American Marine Holdings Inc. , 75 USPQ2d 1590 (11th Cir. 2005) (holding registration invalid for failing to disclose design that is “ substantial revision, adaptation, or rearrangement” of a pre-existing design), affirming Maverick Boat Co. v. American Marine Holdings Inc. , 70 USPQ2d 1493 (S.D. Fla. 2004)

H.R. 5055, 109th Cong. (2006) Arguments Against Enactment No unifying Circuit Court of Appeals, e.g., Federal Circuit Not using statutory terms well interpreted by U.S. Courts, e.g., point of novelty, novelty, non-obviousness

Arguments Against Enactment

No unifying Circuit Court of Appeals, e.g., Federal Circuit

Not using statutory terms well interpreted by U.S. Courts, e.g., point of novelty, novelty, non-obviousness

H.R. 5055, 109th Cong. (2006) Industry Arguments Against Enactment The Design Piracy Prohibition Act seeks to affect trends/inspiration (“There are no new designs” Congressional Testimony) The Design Piracy Prohibition Act seeks to limit consumer’s access to affordable clothing

Industry Arguments Against Enactment

The Design Piracy Prohibition Act seeks to affect trends/inspiration (“There are no new designs” Congressional Testimony)

The Design Piracy Prohibition Act seeks to limit consumer’s access to affordable clothing

H.R. 5055, 109th Cong. (2006) Industry Arguments Against Enactment The Act will not protect designers and businesses of every size and clothing at every price point The Act aims to punish consumers, and will result in frivolous lawsuits or protection for common items

Industry Arguments Against Enactment

The Act will not protect designers and businesses of every size and clothing at every price point

The Act aims to punish consumers, and will result in frivolous lawsuits or protection for common items

H.R. 5055, 109th Cong. (2006) Conclusions Majority of AIPLA ID Committee members to date believes that protection is warranted Additional comments needed Specific wording and aspects of protection can be improved Determine whether to finalize resolution prior to re-introduction

Conclusions

Majority of AIPLA ID Committee members to date believes that protection is warranted

Additional comments needed

Specific wording and aspects of protection can be improved

Determine whether to finalize resolution prior to re-introduction

H.R. 5055, 109th Cong. (2006) Questions / Comments / Concerns / Actions

Questions / Comments / Concerns / Actions