WWD Law Review, a new feature, identifies some of the recent developments in litigation and legislation that stand to impact the inner workings of the fashion industry.
This week brought the conclusion of at least some tensions in connection with the U.S. Presidential election with Donald Trump securing victory in the Electoral College. It also saw the conclusion of an array of legal matters. Marc Fisher — the footwear licensee of Gucci vs. Guess fame (https://wwd.com/accessories-news/footwear/judge-reduces-marc-fishers-payout-to-gucci-5976170) – managed to resolve its copying-centric lawsuit with Aquazzura. American Apparel also settled its latest legal battle, one centering on the 250,000 pounds of un-dyed textiles being “held hostage” by an outstanding creditor-supplier.
Also, the Second Circuit Court of Appeals decided that My Other Bag’s designer logo-bearing tote bags really amount to parodies, as opposed to mere infringements attempting to profit from the well-established appeal of the Louis Vuitton brand. Currently under way: The international probe into the allegedly widespread price-fixing practices among the world’s most reputable modeling agencies.
Louis Vuitton (Still) Cannot Take a Joke, Says Court
Louis Vuitton seemingly cannot avoid scrutiny in its trademark infringement and dilution, and copyright infringement lawsuit against My Other Bag, the manufacturer of inexpensive designer-inspired “parody” canvas totes. The Paris-based design house filed to appeal a strongly worded ruling from Judge Jesse M. Furman of the Southern District of New York. Early this year Furman held that My Other Bag’s “use of Louis Vuitton’s marks in service of what is an obvious attempt at humor is not likely to cause confusion or the blurring of the distinctiveness of Louis Vuitton’s marks.”
He further took the opportunity to criticize what he deemed to be a lack of a sense of humor on Louis Vuitton’s behalf, stating: “In some cases, it is better to ‘accept the implied compliment in [a] parody’ and to smile or laugh than it is to sue. This is such a case.”
In the latest round, the Second Circuit Court of Appeals yet again failed to take kindly to the luxury goods brand, which My Other Bag has painted as an overly litigious trademark bully. In oral arguments earlier this month, Lynch spoke to the nature of My Other Bag’s tote bags, some of which bear Louis Vuitton’s trademark and copyright-protected monogram logos and distinctive bag shapes, telling Vuitton’s counsel, “This is a joke. I understand you don’t get the joke, but it’s a joke.”
On Thursday, the court tossed out the trademark suit in its entirety, affirming the lower court’s holding that its canvas totes are protected by trademark’s parody defense.
Marc Fisher, Aquazzura Resolve Footwear Lawsuit
Aquazzura and Marc Fisher have managed to resolve an until-recently pending copying lawsuit out of court. Fisher filed suit against Aquazzura in the Southern District of New York in June after the Italian designer brand allegedly served Fisher with a number of cease and desist letters in connection with Aquazzura’s Marilyn shoe — known for the tassels and the tear drop-shaped cutouts that adorn the heel of the shoe. In its declaratory judgment complaint, Fisher asked the court to pronounce that Aquazzura lacks legal rights in the shoe design at issue, and therefore, does not have a legal basis to sue.
As indicated by the Southern District of New York’s docket, Fisher filed to voluntarily dismiss its case against Aquazzura, signaling that the parties were able to settle the matter. But the two are not rid of one another just yet. Aquazzura is still embroiled in legal battles against Steve Madden and Ivanka Trump in connection with trade dress lawsuits it filed against the brands earlier this year for copying its best-selling styles, including the fringe-adorned Wild Thing. As Trump’s footwear licensee, Marc Fisher was named as a defendant in the lawsuit against the president-elect’s daughter brand. Those cases are still pending in New York federal court.
Having finally shaken off its controversial founder, Dov Charney, and identified a potential buyer in Canadian manufacturer Gildan Activewear, it appeared as though things may have finally begun to look up for American Apparel. The Los Angeles-based company, which once boasted the title of the largest T-shirt manufacturer in America, recently hit another snag in its turnaround efforts. According to court filings last week, supplier Tri-Star Dyeing & Finishing Inc. refused to turn over nearly 250,000 pounds of raw fabric due to an array of outstanding invoices that it issued before the retailer’s second bankruptcy filing last month.
According to an American Apparel spokesperson, as of Monday, it was able to come to a “consensual resolution” with the fabric dyeing company thereby “enabling the parties to continue to work together.”
In the meantime, American Apparel got the go-ahead from the U.S. Bankruptcy Court in Wilmington, Del., to close nine of its stores, including locations in New York, Atlanta, Seattle and Washington, D.C., by the end of the year and set Jan. 12 as the date to auction an array of its assets, including intellectual property rights. As of now, the only offer comes from Gildan, which has lodged a $66 million stalking horse bid.
Modeling Agencies Continue to Be Targeted, Fined in Price-Fixing Probes
Five of London’s top modeling agencies and their trade association have been slapped with a 1.5 million pounds, or $1.9 million, fine by Britain’s market regulating body for allegedly colluding and fixing prices for jobs, including magazine and advertising campaign photoshoots. FM Models, Models 1, Premier, Storm and Viva have denied the U.K. Competition and Markets Authority’s findings that they sought to achieve higher prices from clients by colluding instead of competing and confirmed that they will appeal the government regulator’s decision.
The investigation and subsequent action sheds light on a much larger industry crackdown. The British probe comes on the heels of a similar investigation in Italy, which resulted in the Italian Competition Authority fining eight modeling agencies and their trade association, ASSEM, 4.5 million euros, or $4.7 million, for alleged price collusion in November. It also follows the September imposition of a 2.4 million euro, or $2.5 million, fine on 37 modeling agencies and their main trade association, the Syndicat National des Agences de Mannequins, by the French Competition Authority in connection with widespread and illegal price-fixing practices.
The American modeling industry was rocked by similar claims beginning in 2002 when Ford Models, Wilhelmina, Next Model Management and Elite Model Management, among others, were named in a civil antitrust suit filed by former models in a New York federal court. A $22 million settlement was approved by the court in 2005, with the agencies agreeing to forgo discussing fees with each other.
Julie Zerbo is founder of The Fashion Law.