B.A.F.F.L.E.D. Fashion Law
Fashion Law and the Local Economy--
Fashion law is in fact taking over the globe. But, its impact is local in nature, too. Despite there being an ongoing battle for protection of fashion designs at the national level in the U.S., many large cities, are doing their part to protect brands as well as their local economies.
While fashion trends change almost faster than the seasons, brands are made to last forever. Creators set out to achieve longevity. In recent years, there have been a number of efforts to curb harm to brands. Whether it be through the sale of fakes, thereby infringing on trademarks, or even penalizing the consumers of fakes, local governments are taking no prisoners in preserving the integrity of fashion.
What's been happening?!
What's set to happen next?
Local governments are pressed to keep up the services they've been able to provide. We need smooth streets and snow plowed, right? Losing out on tax revenue is no help. Locales with counterfeit districts, like Canal St. in NYC are watching for dealers who skimp residents of their service money and are issuing penalties left and right. Cities with flea markets are heavily watching the products coming through their borders, too. Many large flea markets have been the scene of busts when local or federal authorities uncover fakes sold by vendors.
Surely fashion industry leaders like Susan Scafidi and Diane von Furstenberg will continue working with the CFDA on federal legislation as well.
We'll continue watching the counterfeit scene. You should do the same. Fakes are never in fashion.
Fashion law is in fact taking over the globe. But, its impact is local in nature, too. Despite there being an ongoing battle for protection of fashion designs at the national level in the U.S., many large cities, are doing their part to protect brands as well as their local economies.
While fashion trends change almost faster than the seasons, brands are made to last forever. Creators set out to achieve longevity. In recent years, there have been a number of efforts to curb harm to brands. Whether it be through the sale of fakes, thereby infringing on trademarks, or even penalizing the consumers of fakes, local governments are taking no prisoners in preserving the integrity of fashion.
What's been happening?!
- Both coasts are equipped with amazing fashion law programs to help train upcoming lawyers in this billion-dollar industry. The Fashion Law Institute at Fordham and the Fashion Law Project at Loyola dig deeply into fashion law issues. Being in the garment districts of the nation's 2 largest cities doesn't hurt either.
- In 2011, the New York City Bar Association established a fashion law committee. Many bar associations across the country have held symposiums on the topic since then.
- In 2013, NY Councilwoman Margaret Chin introduced an ordinance to penalize counterfeit purchasers. It's not far-fetched--Italy, France, and England all penalize consumers for purchasing fakes. The NYC measure didn't pass, but it definitely got the attention of counterfeiters and the impact tax avoidance has on the local economy. She introduces a subsequent effort to prohibit the storage or sale of fake goods in any NYC building. She's not giving up on this.
- Chicago makes necessary use of its Trademark Violation Ordinance, which revokes the business licenses of retailers possessing and selling counterfeits. O'Hare Airport, recently named the busiest in the U.S. has uncovered millions in fakes at their international gates as well.
- North Carolina isn't playing any games either. The Secretary of State's office led police throughout NC on Operation Faux Pas, seizing more than $12million in fakes across the state.
What's set to happen next?
Local governments are pressed to keep up the services they've been able to provide. We need smooth streets and snow plowed, right? Losing out on tax revenue is no help. Locales with counterfeit districts, like Canal St. in NYC are watching for dealers who skimp residents of their service money and are issuing penalties left and right. Cities with flea markets are heavily watching the products coming through their borders, too. Many large flea markets have been the scene of busts when local or federal authorities uncover fakes sold by vendors.
Surely fashion industry leaders like Susan Scafidi and Diane von Furstenberg will continue working with the CFDA on federal legislation as well.
We'll continue watching the counterfeit scene. You should do the same. Fakes are never in fashion.
B.A.F.F.L.E.D. Fashion Law
How to Spot Fake Merchandise--
This topic has been visited a few times--on this site through various posts, and by some of our fashion law friends. However, a reminder is always good, especially as e-commerce continues to dominate. We want to make sure you're fully aware of what you're buying, and why you shouldn't be buying items not properly sourced to the right designer.Here's some guidance on purchasing the right pieces:
It's improperly placed
If it's not in an approved retailer, is positioned in a mall kiosk, or is sold on a street corner or out of a trunk--it's fake!
The price is too good to be true
Real luxury goods come at a cost. When you enter their stores, they'll tell you you're making and investment, not a purchase. If the price is way beyond right, it's not real. No hardworking designer--established or rising--is short selling their work.
It doesn't look quite right
Does the design look just a tad bit off? Are the letters skewed? Are the letters wrong?! If anything about the item is not right--it's fake. Artists are perfectionists, and they don't let imperfect products hit the market. If an item looks off, don't buy it.
The signs are obvious
This is when logos are incorrect. Trademarks are terribly infringed, and real artistry is compromised. You know you are dealing with a fake when all of the 3 above are present. You can also be sure when the seller can barely give you facts about the brand. Frequenting designer shops--even department stores--you'll find knowledgeable sales associates who know about what their selling. When you can't get a straight story on what you're buying, keep your money.
It's produced in the gray market
Gray market goods skirt the line of infringement. Their crafty, shifty ways to make goods seem legit. They're not. Gray market goods are produced at legitimate factories, but under illegitimate terms. These goods are categorically fake. Don't support them. They're made contrary to the factory's terms with the designer, skim designers of their rightful money, and impair brand quality in the market. How would you want your hard work treated? As Fashion Law Trailblazer Susan Scafidi points out in this news spot on Superfakes, these items often fund organized crime and terrorism.
The Rating System
(1) The real thing(2) The real thing....but the designer finds something about it imperfect for sale
(3) A great fake; looks real, but it's not. We still discourage purchase of these.
(4) A terrible fake. Sellers and buyers should know and do better. Smh.
Be careful when shopping and make sure your purchases are legit on all levels. For more, check out our 3-part series on The Battle Against Counterfeits.
B.A.F.F.L.E.D. Fashion Law
The Battle of Counterfeits in Big Cities, Part 3--
Not too long ago, we started talking about the fight large American cities have against counterfeits in their markets. We discussed how they get to the market, and what legislatures and law enforcement are doing to counter the problem. Today, we're taking things a little bit further. Here are 3 additional points about the counterfeit market.
Counterfeits v. Employment
The Cost Hits Local Governments, Too
It doesn't get the news coverage it may deserve to help alleviate it, but the fake trade has been linked to drug trafficking, child labor, and even terrorism. Counterfeiting often feeds drug rings and are literally accessories in human trafficking. Further, children are frequently used to produce illegal items. The Zara factory in Argentina was investigated and shut down earlier this year because of poor working conditions, no breaks for adult workers, and consistent use of children in their labor force. The investigation also included a search into whether or not unauthorized products were made. The gray market is heavily sustained by child labor.
Not too long ago, we started talking about the fight large American cities have against counterfeits in their markets. We discussed how they get to the market, and what legislatures and law enforcement are doing to counter the problem. Today, we're taking things a little bit further. Here are 3 additional points about the counterfeit market.
Counterfeits v. Employment
Counterfeits are directly responsible for the loss of over 750,000 American jobs. As we mentioned before, having particular global locations be responsible for certain pieces in the economic cycle is not a bad idea. it works well in many ways. However, having local jobs is necessary in every nation. It may be more efficient for a nation or city to produce certain products because of their climate or other unique settings. But, moving jobs overseas to keep profits sky high is not helpful to the overall economy. It is also a detriment to the receiving nations, where they often work for wages and in conditions Americans would never accept. We also can't forget how much counterfeits cost the actual brands. This starts a chain reaction as well. International copyright piracy has cost U.S. companies $9billion in trade losses.
The Cost Hits Local Governments, Too
In NYC alone, counterfeit sales cost residents about $1billion in lost sales tax. This is doing the same in places like Chicago, Atlanta, LA and other areas with large fashion constituencies. Local governments are already struggling to keep services and necessities available. Missing additional tax revenue is not helpful. Sure, some tourists make it a point to visit the counterfeit markets when traveling, but this takes away from the money used for local infrastructure and contributes to the financial hardships in which many cities have found themselves.
There is a Social Cost
There is a Social Cost
It doesn't get the news coverage it may deserve to help alleviate it, but the fake trade has been linked to drug trafficking, child labor, and even terrorism. Counterfeiting often feeds drug rings and are literally accessories in human trafficking. Further, children are frequently used to produce illegal items. The Zara factory in Argentina was investigated and shut down earlier this year because of poor working conditions, no breaks for adult workers, and consistent use of children in their labor force. The investigation also included a search into whether or not unauthorized products were made. The gray market is heavily sustained by child labor.
Harper's Bazaar has been extremely active in the battle against counterfeits in their Fakes are Never in Fashion campaign. Check them out and see what you can do to help keep fakes out of the market.
B.A.F.F.L.E.D. Fashion Law
The Battle of Counterfeits in Big Cities, Part 2--
Last week we talked about the fight big cities are having against counterfeits. Places like Chicago, New York, and Atlanta--largely because of their transportation centers--are consistently working to keep the counterfeit market in check within their borders. Today, we're going to talk about how the counterfeit chain begins.
How do counterfeits come to the market in the first place?
Counterfeits are considered products purporting to be part of a popular designer brand, but sold in what we'll call a shady way. Designer items are sold directly from their source, or through licensing agreements permitting items to be sold in other outlets. An example of such licensing would be Christian Louboutin shoes being sold at Bloomingdale's. Bloomingdale's has an agreement with Louboutin allowing them to sell their shoes in the store.
What happens in the counterfeit market is contrary to direct sales or licensing agreements. Items which look a lot like the real deal show up in places the designer has not authorized, and the price is always far less than the true value or market price of the item. Often, counterfeits circulate through the market innocently, when consumers buy them from sources they trust, like friends having "purse parties" or donations to charitable organizations. However, the source to these innocent consumers is far from innocent. They may start at a place like Canal St. in NYC or boutiques claiming to have deals on designer items. The items come in in droves. Here's how the chain starts.
Gray Market Production
We know the black market is where items are sold illegally. Well, the gray market is somewhat similar. The gray market is created when factories licensed to produce designer goods under certain terms and conditions step outside those boundaries and create their own, infringing items.
As an example, a factory is licensed to produce Chanel bags under the protocol provided by Chanel. Bags are to be made from 9am local time to 5pm, using specific materials and methods. At 5:30, the production continues, but the items are 1) unauthorized by Chanel, and 2) produced in such a way to make consumers believe the goods are Chanel, but protect the infringing bag-maker from a quick infringement, contracting, and licensing lawsuit. The goods get shipped, and in the best cases, they're stopped at customs to protect designers and consumers from infringing products. No worries, the lawsuit does come later.
This gray market method is one of the largest sources of counterfeit goods and is the baseline of a billion-dollar market. To curb the negative effects of this market, a myriad of things must be done: legislation, brand vigilance, accurate contracting, policing, and more.
Share with us how you feel about counterfeits, fakes, and knockoffs. Let's keep the conversation going.
Stay tuned for more on international production and fashion labor.
*Designer goods is a fairly loose term when used in this article. It does not describe high priced goods only, it includes items at any price point, but specifically those protected by a trademark or brand recognition in some way. Price is not a factor.
Last week we talked about the fight big cities are having against counterfeits. Places like Chicago, New York, and Atlanta--largely because of their transportation centers--are consistently working to keep the counterfeit market in check within their borders. Today, we're going to talk about how the counterfeit chain begins.
How do counterfeits come to the market in the first place?
Counterfeits are considered products purporting to be part of a popular designer brand, but sold in what we'll call a shady way. Designer items are sold directly from their source, or through licensing agreements permitting items to be sold in other outlets. An example of such licensing would be Christian Louboutin shoes being sold at Bloomingdale's. Bloomingdale's has an agreement with Louboutin allowing them to sell their shoes in the store.
What happens in the counterfeit market is contrary to direct sales or licensing agreements. Items which look a lot like the real deal show up in places the designer has not authorized, and the price is always far less than the true value or market price of the item. Often, counterfeits circulate through the market innocently, when consumers buy them from sources they trust, like friends having "purse parties" or donations to charitable organizations. However, the source to these innocent consumers is far from innocent. They may start at a place like Canal St. in NYC or boutiques claiming to have deals on designer items. The items come in in droves. Here's how the chain starts.
Gray Market Production
We know the black market is where items are sold illegally. Well, the gray market is somewhat similar. The gray market is created when factories licensed to produce designer goods under certain terms and conditions step outside those boundaries and create their own, infringing items.
As an example, a factory is licensed to produce Chanel bags under the protocol provided by Chanel. Bags are to be made from 9am local time to 5pm, using specific materials and methods. At 5:30, the production continues, but the items are 1) unauthorized by Chanel, and 2) produced in such a way to make consumers believe the goods are Chanel, but protect the infringing bag-maker from a quick infringement, contracting, and licensing lawsuit. The goods get shipped, and in the best cases, they're stopped at customs to protect designers and consumers from infringing products. No worries, the lawsuit does come later.
This gray market method is one of the largest sources of counterfeit goods and is the baseline of a billion-dollar market. To curb the negative effects of this market, a myriad of things must be done: legislation, brand vigilance, accurate contracting, policing, and more.
Share with us how you feel about counterfeits, fakes, and knockoffs. Let's keep the conversation going.
Stay tuned for more on international production and fashion labor.
*Designer goods is a fairly loose term when used in this article. It does not describe high priced goods only, it includes items at any price point, but specifically those protected by a trademark or brand recognition in some way. Price is not a factor.
B.A.F.F.L.E.D. Fashion Law
The Battle at Red Sole: Did The Court Get It Right?
We don't think so. News hit earlier today about the drama over red-soles. If you've been paying any attention to the trademark case between Christian Louboutin and Yves Saint Laurent, you know they are battling over the use of the red sole trademark.
Louboutin has a trademark protecting their use of a "bright red outsole" for the footwear they produce. The Southern District of NY judge denied their motion to keep YSL from using red soles on their shoes while the case pends: “Because in the fashion industry colour serves ornamental and aesthetic functions vital to robust competition, the court finds that Louboutin is unlikely to be able to prove that its red outsole brand is entitled to trademark protection, even if it has gained enough public recognition in the market to have acquired secondary meaning,” said the judge in his ruling. YSL even alleges Louboutin does not deserve the trademark at all because of the generic nature of red shades to possibly be used in shoe soles.
We have some trouble with this. As mentioned here before, trademarks are tested based on: Strength, Similarity, and Proximity in the market. In this case, we see YSL failing to prove Louboutin shouldn't have their trademark, and then so, the injunction. Here's the breakdown:
Strength: Louboutin has an extremely strong mark in their "red-bottoms", simply because everyone knows them by the moniker, and expects shoes with red soles to be made by Christian Louboutin. It's known everywhere, in all media outlets-- fashion and non-fashion. The company has made their mark in the shoe and fashion industry, simply by making sure every shoe they produce has a red outsole. All YSL shoes do not.
Similarity: Sure the shades of red are vast and vary, but any non-"Louboutin Red" should be immediately suspected as a fake. You know it when you see it. The sole YSL claims to have been using since the 70s is, in fact, similar to the Louboutin sole. However, using the colored sole on a shoe here and there over the years leaves way for a gap in the market, which Louboutin has filled.
Proximity in the marketplace: Louboutin wins here, too. YSL shoes and Louboutin shoes are clearly in the same market and can lead to confusion in the exact same customer base. EVERY Louboutin shoe has a red sole, no matter the style, upper color, or heel height; and the brand is widely known for it. Finding red soles on other shoes, especially in the luxury market will confuse consumers, and force the ever-vigilant fashionista to watch their purchases and selections. No shot to YSL; it's a great brand. You just need your own niche in the market.
So, after this breakdown of trademark testing, we are extremely anxious to see how this case pans out. We believe Louboutin has met all the criteria it needs to keep its red sole protected, and are actually quite shocked this case is even in court.
Share your thoughts on this one with us. We'll be watching it every red step.
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