ACCESSORIES MANUFACTURERS TAKE UP ARMS AGAINST DESIGN PIRATES

Byline: AMANDA MEADUS

NEW YORK — The accessories industry is battling a growing epidemic of knockoffs.
Accessories makers, as well as members of the legal community, point to the practice of design pirating — violations of copyright, trademark or something known as trade dress — as a growing trend that is becoming as troublesome in the Nineties as accessories counterfeiting was in the Eighties.
Unlike counterfeiting, in which a product such as a handbag is passed off as authentic and violates both trademark and copyright, what is becoming prevalent now, vendors say, is the illegal use of a design concept. In these instances, the knockoff handbag may look extremely similar to one done by a well-known company, but doesn’t bear that company’s name.
To fight against knockoffs, vendors can sue for either copyright or trademark infringement. A firm can also sue for trade dress violation, in which the knocked-off piece bears the same distinctive, though not copyrightable, design elements as the original piece, but this type of case, attorneys say, is much more difficult to prove.
Whatever the remedy, Robert Tucker, an attorney here who specializes in copyright, trademark and patent law, observed: “Design-pirating activity is definitely on the rise.”
Among Tucker’s clients are accessories designer Barry Kieselstein Cord and handbag firm MCM.
According to Tucker, the big names in accessories have cracked down on counterfeiting enough to bring that offense under tighter control than it was about five years ago.
“But the business is so profitable that often the people who get busted for counterfeiting just keep making the goods without the names on them and think that’s not something they’re going to be penalized for,” he said. “It’s sort of the ‘second generation’ of counterfeiting.”
Cartier Inc. is typical of the fine jewelry companies that were preyed on by counterfeiters in the Eighties and are now falling victim to design pirates.
Neal Gordon, vice president and general counsel for Cartier, said his company has seen a growing number of these cases in the last three or four years, particularly with its copyrighted and trademarked Love Bracelet — a slim bangle decorated with screw head motifs.
“We’ve been seeing mostly design knockoffs lately, as opposed to counterfeits,” Gordon said. In the past year, he added, Cartier has sued 24 retailers here, as well as 33 in Puerto Rico, in infringement cases involving the Love Bracelet.
“More people are trying to associate themselves with a product that’s doing very well,” said Beth Frenchman, an attorney with Gibney Anthony & Flaherty here, which is legal counsel for Louis Vuitton.
Frenchman said she handled a case last October involving Louis Vuitton and T. Anthony, a leather goods retailer here. T. Anthony was selling a line of handbags made from a printed material that Louis Vuitton contended was extremely similar to its own trademarked print.
Though the bags in question used the initials “TA” rather than “LV,” Louis Vuitton felt the two prints were similar enough to constitute a trademark violation, Frenchman said. The case ended up being settled out of court, she noted, with T. Anthony paying a cash settlement and destroying all of the offending inventory.
“T. Anthony was selling the bags at lower prices and even promoting them as Louis Vuitton look-alikes,” Frenchman said. “And both stores attract a similar type of clientele and were, at that time, right around the corner from each other.”
Michael Anthony, president of T. Anthony, declined comment.
Designers who have established themselves with distinctive signature looks have also had to step up their design protection efforts.
“We spent $1.5 million on legal action last year alone,” said Barry Kieselstein Cord, who is recognized by many in accessories as a leader in design protection. The designer, based here, brought his first infringement case in 1980, and charged belt manufacturer Accessories by Pearl with the illegal use of two of his copyrighted buckles.
When asked about that suit, Pearl Degenshein, owner of Accessories by Pearl, said, “It cost me $105,000 to defend myself for doing something that everyone in the fashion business does.”
She added that it was the only such case in which her company has ever been involved.
“We’re extremely aggressive when it comes to protecting our designs,” Kieselstein Cord added. “In the last two or three years, we’ve brought more than 100 infringement suits just in the belt part of our business, and this year we’re also starting to focus more heavily on the handbag and jewelry divisions, as well.”
Currently, Kieselstein Cord said, he employs five lawyers, three in the U.S. and two in Europe. He is planning on adding a sixth, probably in Europe.
“As fashion keeps growing in importance and profile, I think these cases are only going to become more commonplace and the situation worse,” Kieselstein Cord noted. “Those who are in the business of making knockoffs tend to target the industry leaders, the ones that are the most successful.”
Designer Robert Lee Morris, who said he has been bringing an average of six to eight infringement lawsuits a year for the last several years, expressed a similar sentiment.
“The amount of knocking off seems to have grown proportionately to how much my own business has grown,” Morris said. “In some ways, when the knocking off slows down, I start to get a little worried.”
The knockoff plague isn’t necessarily confined to status-oriented and designer accessories. Midprice manufacturers and smaller vendors are also seeing copies of their designs showing up everywhere from flea markets to national retail chains.
“The flood of knockoffs in the accessories business is distressing and presents a problem for the whole industry,” said Roberta Karp, vice president and general counsel for Liz Claiborne Inc. “In fact, we have been faced with this issue several times in recent years and have successfully resolved the matter through dialog with the offender, or legal action.”
In one such victory several years ago, Liz Claiborne sued handbag company B.H. Smith for pirating two of its handbag designs. The suit contended that B.H. Smith’s Sahara Springs handbag line was extremely similar in design to Claiborne’s Sierra Springs handbags, a line that did $14 million in wholesale volume in its first year alone.
A spokeswoman from B.H. Smith declined comment on the suit.
For some smaller companies, the cost of bringing a full-blown lawsuit can be daunting.
“The case would have to be pretty darn good in order for me to spend the money to sue,” said Dayne Duvall, an accessories designer here. Duvall noted that he did have one incident about a year ago with Ann Taylor, which was selling a wire-wrapped cross pendant that looked very much like one he had done, although it was not a design he had copyrighted.
“My attorney sent them a letter explaining the situation, and within a month we had gotten a letter back from them stating that the merchandise had been removed from all the stores and sent back to the vendor,” he said.
Ann Taylor did not respond to requests for comment on the situation or its policy of dealing with knockoffs.
One major retailer, though — Kmart Corp. — did explain its policy.
“One aspect of our policy is that we require all of our vendors to furnish us with non-infringing merchandise,” said Mike Lisi, treasurer and vice president-legal counsel for the chain. “This is actually stated as part of our purchase-order terms and conditions, as is the stipulation that if a claim does arise, the vendor is required to defend us.
“The reasoning here is that, as a retailer, our stores typically carry 80,000 or more different items at any given time,” Lisi added. “So it’s the responsibility of the vendor, who is in the industry and should know what the competition is doing, to know if a design is infringing on someone else’s copyright.”

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