Not all is lost for Style.com, as Condé Nast admitted defeat this week and paired with Farfetch to salvage the project after spending a reported $100 million to turn the former fashion news site into a shopping destination.
Meanwhile, Ivanka Trump is not only not settling the copying lawsuit that Italian footwear brand Aquazzura filed against it, the brand is playing hardball with its star witness. And while brands and celebrities do not seem to be taking the Federal Trade Commission’s advertising disclosure guidelines seriously, Instagram is.
While Style.com’s revamp may not have gotten off the ground in any grand way, Condé Nast has managed to package up some of the most valuable assets of the fashion-news-site-turned-failed-e-commerce-venture in order to salvage at least some of its investment — and reputation. As reported this week, a partnership of sorts with e-commerce giant Farfetch has been born, and Condé Nast has off-loaded some of Style.com’s trade secret-protected information — including its customer database — and various other forms of intellectual property, such as the Style.com trademark.
In this way the deal is not terribly unlike the many retail-related bankruptcies that have come before it, which have emphasized the interest that e-commerce businesses and intellectual property rights, in general, can attract, no matter the success of the underlying brand or business, and the value that such assets can garner.
Intellectual property was one of the key takeaways in the bankruptcy deals involving The Limited, American Apparel and Nasty Gal, in which outside parties vied for the companies’ IP assets, namely, their still very valuable trademarks (and associated branding, from which most fashion brands garner their appeal with consumers, after all). Also in the mix: Trade secret information, such as consumer and supplier lists, marketing techniques and other proprietary intelligence.
It is here that Style.com likely holds most of its value, as well — with decades of trademark goodwill under its belt and no shortage of potential consumer information collected during its years of operation as one of the industry’s most heavily visited fashion sites — albeit one that perennially struggled financially. So even if the site could not cut it as an e-commerce powerhouse, that does not mean it doesn’t stand to bring value to the Farfetch empire because of these assets.
Aquazzura vs. Ivanka
Ivanka Trump is apparently not looking to settle the trade dress and design patent infringement lawsuit filed against her brand by Aquazzura anytime soon. After filing a counterclaim of its own, seeking a ruling from the court that the Aquazzura shoes in question are not subject to trademark protection (and therefore, Ivanka Trump and its licensee Marc Fisher can continue to sell them without fear of future litigation from the Italian footwear brand), the First Daughter label is continuing to play hard ball.
According to the legal team for industry darling Aquazzura, Trump’s lawyers are making it impossible for her to take part in a deposition, as requested by the other side. “We are having trouble scheduling Ivanka Trump’s deposition,” Aquazzura’s lawyer John Margiotta told a New York federal court judge earlier this week during a telephone hearing. “On Friday, we were notified that they are not in fact willing to produce Ms. Trump at all.”
Ivanka Trump’s counsel, Darren Saunders, “said she shouldn’t be forced to testify because she doesn’t have any relevant information about the shoes” and she “was not involved in the design, promotion or sale of the shoe.” These are interesting claims considering that Trump was very vocal in the press prior to her father’s election about how hands-on she was with her brand. And this is something that Aquazzura’s counsel reminded U.S. District Judge Katherine Forrest.
Even though Trump announced that she was stepping away from her label in January, she is being plagued with no shortage of bad press nonetheless (as is her father). It can prove difficult to escape liability — either legally and/or purely in terms of media attention — when the brand at issue bears an individual’s own name, regardless of his/her actual level of involvement.
Therefore, Trump is being dragged through the mud for consistent issues regarding her brand — whether it be the labor standards (or lack thereof) being employed by its suppliers, allegations that the brand is intentionally profiting from the press that comes with the Trump Administration, or the seemingly unending claims of copying, including but certainly not limited to the case with Aquazzura.
As for whether Trump will actually be able to avoid testifying under oath for a deposition, it might be somewhat likely. Forrest said she will decide this upcoming week whether Trump will be required to be deposed. Either way, Forrest stated that she hopes the parties “can find a way to limit the questioning” of Trump by first taking testimony from Abigail Klem, president of the Ivanka Trump brand. “There’s no doubt that Ms. Trump has a second job right now,” Forrest reportedly told the two sides’ attorneys.
Instagram Steps in, FTC Stays Mum
Celebrities, influencers and fashion brands continue to blatantly disregard federal truth in advertising laws and it appears that Instagram wants no part of any potential liability that could come its way at some point. The social media platform — which plays host to a truly significant amount of undisclosed or improperly disclosed sponsored content — has taken the Federal Trade Commission’s recent warnings into account and is in the process of rolling out a feature to enable users to easily indicate posts that are sponsored, as well as a “branded content” policy with which its users will have to abide.
The FTC has long required that advertisers and endorsers “clearly and conspicuously” disclose any material connections they have in regard to content posted online or in print. The trend to date, however, has been for the industry’s most visible and influential brands and influencers to flout the FTC’s guidelines, leading the commission to take a small amount of action over the years, which most recently saw it sending letters to 90 brands and celebrities in order to educate them about its disclosure rules.
Instagram says the move is a step towards transparency. It seems to me that the social media platform is making a smart legal decision here in hopes of potentially sidestepping secondary liability claims that may come its way if the FTC decides to go after more than just the brands and influencers.
Julie Zerbo is the founder of The Fashion Law.