Full Disclosure

By Thomas Brom
     
      Fast Fashion
      The devil may wear Prada, but movie stars at the 79th Annual Academy Awards could take their pick of designers. Nicole Kidman wore Balenciaga, Gwyneth Paltrow wore Zac Posen, and Jennifer Hudson wore Oscar de la Renta. Couture and Hollywood are made for each other. And, best of all, the fashion designs were all up for grabs. "Within 48 hours, a guy on network TV was offering knockoffs of some of those dresses for $300," says Alain Coblence, principal at Coblence & Associates, which represents the New Yorkbased Council of Fashion Designers of America (CFDA). "He described the dresses as 'my Versace, my Oscar de la Renta.' It's so blatant, so open."
      The CFDA is a prime mover in the campaign to pass legislation extending copyright protection in the United States to fashion designs. "Copying today through technology is instantaneous," designer Jeffrey Banks told a congressional committee last summer. "Software programs develop patterns from photographs taken at the [runway] show, and automated machines cut and then stitch copies of designers' work with those patterns. Within days, the pirates in China are shipping U.S. consumers tons of copies before the designer can even get his into the store."
      Banks, a CFDA director, spoke at a committee hearing on the proposed Design Piracy Prohibition Act (H.R. 5055), which would have amended section 1301 of title 17 of the United States Code, to create a limited three-year sui generis right for the design of outer garments, underwear, gloves, footwear, headgear, handbags, purses, tote bags, belts, and eyeglass frames.
      "Every young designer has a knockoff story to tell," says Susan Scafidi, a visiting professor at Fordham University School of Law in New York who also testified and maintains an IP blog called Counterfeit Chic. "Civil law systems in the European Union offer substantial IP protection to designers. It is simply inequitable not to protect fashion design here."
      But Chris Sprigman, an associate professor at the University of Virginia School of Law and coauthor of a 2006 article that justifies fashion-design copying (The Piracy Paradox: Innovation and Intellectual Property in Fashion Design (92 Va. L. Rev. 1687)), questioned the connection between creativity and IP law, and whether protections would be counterproductive. "The 'substantial similarity' standard, as it has developed in the courts, has to do with taking inspiration, which is what the fashion industry does," Sprigman said. "I can't tell you that this bill is going to wreck the fashion industry, but it puts its creative process under threat."
      At the hearing, the experts quarreled over the amount of copying worldwide and whether copyright protection would benefit or cripple the industry. In the end, H.R. 5055 died with the 109th Congress. But that's just where the story gets interesting.
      Fashion design is a hole in the fabric of IP law: The cut of clothing is considered a "useful article" and thus ineligible for copyright protection. So the industry relies on trademark and dress-trade law to discourage brand counterfeiters, and the courts have extended copyright protection to clothing ornamentation and textile designs.
      "The law is clear that copyright extends to design [elements] on the clothing," says Lynda Zadra-Symes, a partner practicing IP law in the Irvine office of Knobbe Martens Olson & Bear. "But clothing design is ambiguous?it's not clear whether it refers to the cut, which is functional, or the design on or in the fabric." Zadra-Symes says copyright registration affords designers some protection and also provides the basis for an infringement suit. But she admits many designers don't bother to take advantage of the quick and easy process.
      The curious thing is that much of the garment trade is OK with copying. "California is all about flash fashion?quick turnaround, getting in and getting out," says Ilse Metchek, executive director of the California Fashion Association (CFA) in Los Angeles. "Here, fashion moves in ten-week cycles. In ten weeks, who knows where inspiration comes from?" she says. "We're not about couture?and we are very healthy. We love Zara and H&M."
      Ah, Zara and H&M, the mass-marketing hot buttons of the fashion industry. Zara, a unit of the Spanish firm Inditex, was launched in 1975 and now has more than 2,800 stores worldwide. Using an in-house design staff, its own factory, and a tightly controlled distribution network, Zara claims it can get new products to stores in two weeks. H&M Hennes & Mauritz AB, a Swedish firm, has about 1,300 stores in 25 countries, and it draws inspiration from street trends as much as couture. Designs are intentionally shipped in short supply, sold quickly, and replaced with something really new. It's a business model that pushes the physical limits of inventory turnover.
      "H.R. 5055 was driven by the Zara/ H&M phenomenon," claims Olivera Medenica, a principal in Wahab & Medenica in New York. "The French and Italian fashion designers also supported this bill. But to my knowledge there isn't a lot of support from clothing retailers, such as Wal-Mart and Target."
      Fast fashion is still couture's distant cousin, but overnight knockoffs do happen. "This is disposable fashion. It's not made well, and you may wear it only four or five times," says Staci Jennifer Riordan, an IP lawyer at the Los Angeles office of Thelen Reid Brown Raysman & Steiner who participated in a recent CFA symposium on H.R. 5055. "But at the price you paid, it's worth it."
      Though CFA's Metchek cautions that she can't speak for the L.A. garment industry, she considers H.R. 5055 "a disaster" that would benefit only lawyers. "Once you start litigating, you will just generate settlements that will bankrupt the most creative part of the industry," she says.
      Still, proponents of the legislation contend that even flash fashion may want protection soon. "H&M's current strategy is completely focused on licensing its own designs," says Coblence, the CFDA's lawyer. Adds Fordham's Scafidi, "A number of retailers are now doing creative things. H&M is doing runway shows, and Target is pairing with young designers who enjoy some publicity for their work."
      So U.S. fashion designers may yet be protected. A spokesperson for Rep. Bob Goodlatte (R-Va.) says he will again cosponsor the bill this year. Coblence says the CFDA and lawmakers are currently debating language changes to make protections more specific. "The bill didn't die; it just hasn't passed yet," he says.
      The devil may wear Prada, but she still resides in the details.
     

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