The Federal Trade Commission said last week that it has taken initial action against influencers and celebrities, sending a shockwave through the fashion industry, which is rife with FTC guidelines-abusing brands and influencers.
Meanwhile, My Other Bag and Louis Vuitton’s battle over parody bags is winding down but not without a fight over legal fees and some potential reputation damage to the world’s most valuable luxury brand. Speaking of Louis Vuitton, the brand’s parent company has found an enemy in shareholder PETA.
FTC Takes on Influencers
The Federal Trade Commission made headlines this week after sending more than 90 letters to fashion industry influencers, celebrities and athletes for running afoul of its disclosure guidelines. While the FTC has long required advertisers and endorsers to disclose their material connections so consumers can be made aware and make purchasing decisions accordingly, it has only recently revealed that it will be actively watching advertisers and influencers alike on social media platforms, namely, Instagram.
The agency’s announcement on Wednesday did not establish that the FTC has taken any formal investigatory action against any of the companies or individuals involved in out-of-bounds advertising activity. Instead, the letters put the entities on notice. The FTC may choose thereafter to launch formal investigations and it is within the power of the organization to fashion permanent injunctive relief, which would bar the advertiser and influencer from engaging in such activity in the future, and to disgorge them of any profits in connection with undisclosed advertising.
As such, the letters are merely the first step in the FTC’s battle against the widespread disregard for truth in advertising laws by influencers and brands. It must now find a way to enforce its guidelines for the benefit of consumers, who stand to be further misled in terms of the nature of ad campaigns and/or sponsored content (note: the FTC has explicitly stated that “sponsorship”/a material connection could be a business or family relationship, monetary payment or the gift of a free product) absent proper disclosures.
“My Other Bag” Case Is Winding Down
The three-year-long battle between My Other Bag and Louis Vuitton, in which the Paris-based brand alleged that My Other Bag’s canvas totes infringe its famed trademarks and copyrights, is winding down. One final matter is before the court: My Other Bag is asking for Louis Vuitton to pay its nearly $1 million in legal fees. The Los Angeles-based brand — which was handed the ultimate victory in February when the Second Circuit Court of Appeals confirmed that its bags bearing cartoon imagery of Louis Vuitton copyrights and trademarks, are, in fact, protected by the parody defense — alleges that the case is “exceptional” and thus, it should be awarded legal fees.
My Other Bag used its filing as yet another opportunity to criticize the Paris fashion brand, noting, “Louis Vuitton took advantage of its huge size and litigation budget to try to grind a much smaller company into submission.” It further alleged that attorneys’ fees are warranted due to the “need for greater deterrent to the bringing of weak cases because ‘aggressive and bullying enforcement tactics.’”
The case itself has been an interesting one as it represents the predicament in which luxury brands, in particular, find themselves in their efforts to police their intellectual property rights. It is the well-established duty of a trademark holder, such as Louis Vuitton, for instance, to police unauthorized uses of its marks. This is not only because such use stands to confuse consumers in the short term but maybe more importantly, inaction by trademark holders threatens to rob such marks of their distinctiveness and source-identifying power.
Due to the truly enormous value embodied in their intellectual property rights, luxury brands have been markedly vigilant in their fights against alleged infringers. Like Louis Vuitton, which was repeated criticized by the plaintiff and the court in this case for being a “trademark bully,” Chanel, Hermès and others have come under fire in the past — namely by way of bad press — for aggressive enforcement efforts.
Such bad press routinely comes with the initiation of litigation. Given that the world’s top luxury brands continue to vigilantly file infringement suits, whether it be against My Other Bag or a middle American hair salon named Chanel’s Salon, it suggests that their attempts to protect their intellectual property rights is more advantageous than any press is damning.
PETA v. LVMH?
After allegedly being shut out of LVMH Moët Hennessy Louis Vuitton’s annual shareholder meeting last week, People for the Ethical Treatment of Animals, known as PETA, has said it is exploring potential legal action against the Paris-based luxury conglomerate. The animal rights group, which is best known for its controversial awareness-raising tactics, purchased a single share in the luxury group earlier this year specifically in order to attend its shareholder meetings and fight its companies’ use of animal skins for their accessories collections.
According to a statement from PETA, “Upon arriving at LVMH’s annual meeting, PETA’s representative was refused entrance to the main meeting room and denied the opportunity to ask board members a question about the company’s appalling use of exotic-animal skins. Companies will go to great lengths to avoid confrontation about the suffering that animals endure at their hands. Although PETA is disappointed by LVMH’s rebuff, we remain steadfast in our efforts to advocate for change.”
LVMH is the fourth luxury group that PETA has targeted in the past several years. It acquired a small stake in Prada in April 2016. PETA purchased a single Hermès share for $360 in 2015 in order to attend the brand’s meeting, and its spokeswoman Isabelle Goetz asked Hermès chief executive officer Axel Dumas about its plans to stop using the skins of mistreated animals for its pricey bags at the company’s meeting in May 2016. Most recently, PETA bought into Canada Goose’s March 2017 initial public offering in order to protest the outerwear brand’s use of down feathers and fur.
LVMH did not respond to a request for comment.
Julie Zerbo is the founder of The Fashion Law.