This week the industry’s activewear brands were in and out of court far more than the average fashion brand in an attempt to dismantle the offerings and legal rights of their rivals and, in Nike’s case, of counterfeit and unauthorized distributors.
The biggest story of the week, however, came by way of the strongly worded class action lawsuit that Selima Optique filed against Kering, alleging that the Paris-based conglomerate is intentionally mislabeling its “Made in China” eyewear as “Made in Italy,” which not only brings shifting manufacturing norms to the table but also sheds light on the legally mandated labeling requirements that brands face.
Activewear Giants Take Center Stage
Some of the most noteworthy legal news this week — and most weeks — comes by way of the market’s footwear giants. Unlike the majority of fashion brands, which do not boast a huge array of formal legal protections (because garments are notoriously difficult and expensive to protect), Nike, Adidas, Puma and Skechers have been dominating the industry’s legal filings as of late. This is largely because they boast significant arsenals of trademark, trade dress and patent registrations in connection with their best-selling footwear, as a result of their selling of similar styles over a longer period of time (in comparison to a regular fashion season, making sometimes time-consuming and expensive filings worthwhile) and having the resources to devote to seeking and enforcing legal protections.
As these firms continue to vie for market share, they are not only upping the ante of their offerings, endorsements and collaborations, but are using their legal rights against direct rivals and fashion industry entities.
This week, longtime competitors Adidas and Puma were back in court in Germany, sparring over Adidas’ popular Stan Smith style, the sole of which Puma claims infringes two of its registered Community designs. The Regional Court of Braunschweig handed Adidas a favorable ruling, holding that the iconic Stan Smith design does not infringe Puma’s own protected designs.
This marks the latest in a recent string of losses for Puma, which has been unable — despite a number of tries — to keep Forever 21 from selling allegedly infringing versions of footwear from musician Rihanna’s collection for its brand.
Adidas has similarly been on the losing end of recent rounds in court. Earlier this month, the company was dealt a blow in the patent infringement lawsuit it filed against Skechers, alleging that the footwear brand willfully infringed two patents related to Adidas’ Springblade design — a four-year-old design whose midsole includes blades that are meant to help propel runners forward — with its similar Mega Flex shoe.
In that instance, the U.S. District Court for the District of Oregon refused to grant Adidas’ request for a preliminary injunction, holding that the firm is not facing harm that gives rise to the need for such a remedy; monetary relief — if warranted — will do just fine.
As for Nike, it is said to be plotting to fight fakes and gray market goods out of court — with the help of Amazon. Goldman Sachs said Wednesday that Nike is close to finalizing a deal to sell directly on Amazon, stepping up the competition for brick-and-mortar sporting goods retailers and counterfeit sellers alike. This is an interesting move given that most brands are distancing themselves from the e-commerce site due to concerns over fakes.
Modern Manufacturing on the Move
A lawsuit filed early last week by buzzy eyewear boutique Selima Optique sheds light on a growing trend in fashion: The movement of distribution out of fashion’s traditional locales and the labeling complications that could come along with it.
According to Selima, Kering — whose brands include Gucci, Yves Saint Laurent, Bottega Veneta, Brioni and Balenciaga — is actively mislabeling eyewear that is made in China as “Made in Italy” in order to cut costs, but maintain the air of luxury — and the price points — traditionally associated with its brands’ offerings. Kering has denied all allegations set forth in Selima’s strongly worded lawsuit, pointing to a “one-off mistake” in distribution.
The “Made in China” labels, according to Kering, were meant for its lower-end Puma eyewear, which is distributed from the same warehouse in Italy as the brands under its luxury umbrella.
The suit coincided with claims made by the Guardian newspaper that Louis Vuitton manufactures all but the soles of its footwear in secret factories in Romania, but since the products are “finished” in Italy and France, Louis Vuitton is able to legally label them as Made in Italy and Made in France.
Labeling laws have always proven a touchy subject in fashion, especially since the ones in Italy and France prove strict — even if they do provide some loopholes for legally creative entities. In France, a party must be able to prove that the product was fully manufactured in the country or that its “final substantial transformation” was performed there. Italian law sets forth that “only products entirely made in Italy (planning, manufacturing and packaging) are allowed to use the label ‘Made In Italy.’”
Still yet, in the U.S., brands may not use the Made in the USA label unless they can meet the Federal Trade Commission’s standard, which states that “all or virtually all” of the product must be made in America and that includes raw materials. This standard was at the center of an FTC investigation last year over whether Detroit-based brand Shinola’s watches, which are assembled in the U.S., contain imported parts. The FTC held that the watches must be labeled to indicate just that: Built in the U.S. with foreign parts.
Given the rise of outsourcing within the luxury sector, Selima’s lawsuit is likely just the first of many potential legal squabbles.
Julie Zerbo is the founder of The Fashion Law.