Fashion law is one of the niche areas in law which remain largely underdeveloped in the Indian framework. In this article, we look into some of the landmark case laws from this field:
Chanel, Inc. v. The RealReal, Inc. (2020)
Chanel is a French based luxury fashion house focused on women’s ready-made clothes, accessories and some other luxury goods whereas The RealReal (hereinafter referred to as ‘TRR’) is an online and brick-and-mortar marketplace for authenticated luxury consignment. TRR, after following a meticulous authentication process, enabled resale of luxury goods at a reasonable price. Such trade corporations in the market gave a second life to the luxury items. In fact, the resale market is booming nowadays primarily because of two reasons, firstly, consumers fulfil their desire of wearing/owning luxurious brand clothes or accessories in an affordable price which saves their money and secondly, the mechanism is environmentally-friendly as it promotes reuse of old clothes. These resale platforms collaborate with the luxury brands/ fashion houses in order to seek their permission for trademark use and to further avoid any likelihood of getting embroiled in a trademark infringement lawsuit.
Chanel v. The RealReal is one of the contemporary and most popular lawsuits of the fashion industry involving the violation of the Lanham Act, 1946, a US Federal statute akin to the Trademark Act of India regulating the trademark, service marks and unfair competition in the U.S. A gist of the case is as follows: –
- In 2020, Chanel filed a case against TRR in the U.S. District Court of New York alleging that TRR is selling counterfeit Chanel clothes and accessories and deceiving the customers by portraying that TRR has an affiliation or association with Chanel which is in contravention to Section-32(1) of the Lanham Act, 1946. It further alleged that TRR has infringed upon the elite and exclusive trademark of Chanel by using it non-consensually for the purpose of advertisement and marketing which is also a violation of Section-32(1) of the Lanham Act.
- While dismissing the claims of Chanel, TRR emphasised the fact that it authenticates every product rigorously that is being sold on its platform. Moreover, TRR took a shield under ‘First Sale Doctrine’, an American concept generally serving as a defence in the copyright and trademark infringement suits. This exceptional doctrine, in trademark aspect, allows the reselling of trademarked products after the trademark holder has placed the product in the market. It enables the consumers to exercise the right to resell, display or dispose of the trademarked product after the consumer purchased the product from the trademark holder[1]. Hence, if the consumers are giving their products to TRR platform for resale on their behalf and TRR is attentively verifying those products before reselling, the claims of Chanel would hit by the First Sale Doctrine and do not sustain, contents TRR in its defence. The case is still pending in the court.
- An analysis of the case shows that the two issues i.e. counterfeiting and reselling of trademarked products are entirely different. Considering the first one, if TRR is found selling counterfeit products, then the court would certainly impose a heavy penalty. As far as the second claim is concerned, probability is higher that Chanel’s claim would be barred by the First Sale Doctrine in order to prevent the rights of the consumers, smooth function of the resale market and to promote fair competition.
Steve Madden v. Yves Saint Laurent[2]
In this case, American shoe brand house Steve Madden filed a suit against French fashion house Yves Saint Laurent (YSL) alleging that YSL threatened the plaintiff to sue for a patent and design infringement of ‘YSL Tribute Shoe’. Steve Madden, proactively approached the court for a declaratory judgment with an intent to de-escalate and eliminate the likelihood of any prospective patent or design infringement case[3]. The plaintiff called upon the court to declare that it owned the ‘Sicilian’ design sandals and did not violate YSL’s high-heeled Tribute shoe. The plaintiff highlighted how a high-heeled shoe and a flat sandal could cause confusion among the consumers. It also contended that YSL is a luxury brand selling high cost products whereas Steve Madden offered products at an affordable price, therefore, no likelihood of confusion. However, a mutual settlement between the parties led to the voluntary dismissal of the lawsuit.
Adidas v. Skechers (2018)
The famous athletic-shoe and apparel manufacturer ‘Adidas’ sued another well-known athletic-shoe competitor ‘Skechers’ regarding the infringement of two styles of shoes. It alleged that the ‘Onix’ shoe of Skechers infringed the trade dress of Adidas’ ‘Stan Smith’ and another Skecher shoe ‘Cross Court’ infringed and diluted the ‘three-stripe’ trademark of Adidas. Adidas filed a case before the U.S. District Court of Oregon to seek preliminary injunction against the defendant brand Skechers under the aforesaid claims which was duly granted in favour of the plaintiff, prohibiting the defendant to continue the sale of two shoe styles i.e Onix and Cross Court in the marketplace.
Skechers, not being satisfied with the District Court’s decision, approached the Ninth Circuit (U.S. Federal court having appellate jurisdiction over District Court) and filed an appeal challenging the decision of District Court. The Ninth Circuit dealt both the shoe-style separately and sustained the decision in respect of Stan Smith whereas reversed in the cse of three-stripe trademark. The court took into consideration the exclusive use of Stan Smith trade dress by Adidas since the 1970s and held that Onix shoe style of skechers would cause irreparable damage to Adidas’ Stan Smith, thereby affirming the stand of the district court in granting preliminary injunction to Onix shoe style. However, the appellate court reversed the decision of preliminary injunction to the use of the ‘three-stripe’ trademark while rejecting the contention of post-sale confusion.
Car-Freshner Corporation v. Balenciaga
In this case, plaintiff i.e. Car-Freshner Corporation was a leading automotive air freshener company in the world, known for world-famous ‘Little Tree’ air fresheners whereas defendant i.e. Balenciaga was an iconic Spanish luxury fashion house (currently based in Paris). Plaintiff filed a suit in the US Federal Court of New York alleging that the defendant brand was creating key rings which resemble the design of Little Tree, owned by the plaintiff. It was further alleged that the defendant deliberately manufactured and distributed the infringed product based on the design of the Little Tree without any license and while being aware of the fact that the famous design belongs to the plaintiff. The plaintiff also contended that the defendant not only copied the design but even copied the specific colours associated with the freshners. The key rings were available in pink, blue and green colours identical to the colour shades in which the plaintiff’s Little-tree fresheners put up on the market. For this trademark infringement, Car-Freshener Corporation sought damages and the profit earned by Balenciaga with the unauthorised sale of the copied key chains[4].
In 2019, both the parties settled the dispute amicably with certain confidential settlement terms and agreed to withdraw their respective claims voluntarily.
Gucci v. Forever 21 (2017) ‘Three-stripes Case’
In 2017, Gucci sued Forever 21 for trademark infringement, trademark dilution and unfair competition and claimed that the meagre retailer Forever 21 wilfully used their trademark blue red blue and green red green stripes on its clothes and accessories. Forever 21 argued that many brands use that design and Gucci should not be able to have a monopoly on those color combinations and therefore, requested the court to cancel this trademark and some other trademarks which were being widely used in the fashion industry and were too common to be trademarked. Gucci stated that due to the infringed products of Forever 21, it suffered huge loss and that it would take further steps to put an end to the mass retailers’ blatant exploitation of Gucci’s trademarked colour combinations[5].
The court found the counterclaims of Forever 21 viable but before the trial began, both the parties mutually settled the dispute in November 2018.
Puma v. Forever 21 (2017)
Since 2014, the world famous singer, actress, businesswoman and fashion designer Rihanna Fenty served as the creative director of Puma clothing and footwear and as brand ambassador of ‘Fenty’ label shoe of Puma. In March 2017, Puma filed a lawsuit against Forever 21 alleging that it had blatantly copied the Puma’s Creeper, Bow Slide and Fur Slide under the Fenty style planned by Rihanna in order to capitalise in the name and goodwill of Rihanna and Puma brand[6]. Various shoes produced by the defendant brand were identical to those of Puma had infringed upon patents of Puma, contended the plaintiff. Forever 21, in its reply to the claims stated that the plans were not new to puma rather originated during the 1940s, hence, the accusation of patent plan violation was unfounded and unreasonable. However, the case was solved through an amicable agreement between both parties.
Chanel and Adidas v. Amazon Sellers
Chanel, the luxury powerhouse player, initiated a suit in the US District Court of California against thirty Amazon sellers accusing them of peddling knock-offs and selling various counterfeit Chanel products such as t-shirts, handbags, phone covers etc. emblazoned with the brand name through Amazon.com. It further alleged that the sellers were using the brand name in search engine optimization strategy which amounted to illegal and unfair trade practices[7]. The plaintiff sought damages of $2 million from each defendant seller and also asked for the permanent removal of these stores from e-commerce giant Amazon. The court granted the desired relief to Chanel but whittled the amount to $100,000 from each defendant totalling to a compensation of about $3million to plaintiff. Further, Amazon was directed to remove all the images of infringed Chanel products and take down such sellers from its website. Chanel was satisfied with the court’s decision and stated that these lawsuits were not about collecting damages but more about protecting our brand’s name, goodwill and reputation.
Adidas v. Nike (2016)
The sneaker and shoe war between rival brands Nike and Adidas have been popular for quite some time. Nike was enjoying a sort of monopoly in the genre of sneaker and shoe until Adidas’ arrival. Nike launched a comfortable athletic Flyknit technology shoe after which Adidas also introduced an identical shoe namely ‘Primeknit’. Nike instituted a lawsuit to prohibit Adidas from manufacturing and selling the Primeknit shoe which is infringed the patent of Nike’s Flyknit. In order to protect its market from Nike, Adidas instituted an appeal challenging Nike’s patent but the court upheld the patent thereby dismissing the claims of appellant.
H&M v. Forever 21 (2015)
Forever 21 has been at the epicentre of several lawsuits in the fashion industry and in this case, it was with H&M. The plaintiff i.e. H&M sued Forever 21 for ripping off its ‘Beach Please tote bag’. It alleged that the defendant committed copyright infringement, trade dress infringement, and unfair competition by introducing the tote bags that featured a row of palm trees with Beach Please written at the front side which actually belonged to H&M[8]. For this violation, the plaintiff demanded immediate cessation on production, manufacture, marketing and selling of those bags along with monetary relief but as usual, the matter was settled without the intervention of the court[9].
Gucci v. Guess (2009)
The very popular battle for the ‘G’ trademark began in 2009 between Gucci and Guess. The elegant fashion brand Gucci brought action against Guess, an American clothing brand alleging the infringement of Gucci’s G trademark logo, counterfeiting of Green-Red-Green stripes trademark and trademark dilution and unfair competition. For all these violations, Gucci sought cancellation of the 4G square repeating logo of Guess, permanent injunction preventing Guess from using the infringed trademarks and demanded a monetary relief of $221 million for all the damages. However, in 2012, the court awarded a relief of only $4.7 million to Gucci compensating all the damages upon which Gucci, being highly disappointed, filed multiple cases in China, Italy and France. Finally in 2018, the 9 year dispute came to an end with a settlement whose terms were not disclosed.
These disputes clearly demonstrate how the realm of fashion law, especially with respect to brand identity and intellectual property rights can be extremely tricky and challenging.
[1] Kassidy Michel, Chanel v. The RealReal: Luxury Meets Resale, UNIVERSITY OF CINCINNATI LAW REVIEW (Sep.20, 2021, 6:07 AM), https://uclawreview.org/2020/12/14/chanel-v-the-realreal-luxury-meets-resale/#_ftn17.
[2] 18-CV-7592 (VEC) (S.D.N.Y. May. 8, 2019).
[3] Steven Madden, Ltd. v. Yves Saint Laurent, CASETEXT (Sep.20, 2021, 5.34 PM), https://casetext.com/case/steven-madden-ltd-v-laurent?__cf_chl_jschl_tk__=pmd_Ki8XXwWKS0LbWQ0Q1RuzX.6ndmSG.KKrHjrNKr1JnAc-1632499688-0-gqNtZGzNAjujcnBszQol.
[4] Augusta Pownall, Balenciaga is being sued for copying tree-shaped car fresheners, DEZEEN (Sep.22, 2021, 9:28 PM), https://www.dezeen.com/2018/10/25/balenciaga-key-rings-little-trees-copyright/.
[5] Know All About Gucci versus Forever 21: Trademark Infringement Case, LATEST LAWS (Sep.21, 2021, 02:32 PM), https://www.latestlaws.com/intellectual-property-news/know-all-about-gucci-versus-forever-21-trademark-infringement-case/.
[6] Rhea Jain, Puma v. Forever 21 : case analysis of the copyright & design infringement, IPLEADERS (Sep.22, 2021, 3:15 PM), https://blog.ipleaders.in/puma-v-forever-21-case-analysis-copyright-design-infringement/.
[7] Kali Hays, Chanel Scores Win Against Amazon Sellers in Counterfeit Fight, WWD (Sep.22, 2021, 10:54 AM), https://wwd.com/business-news/legal/chanel-wins-against-amazon-sellers-in-counterfeit-lawsuit-10933598/.
[8] The many (law)suits of Forever 21, THE FINERY REPORT (Sep.22, 2021, 12:09 PM), https://www.thefineryreport.com/articles/2019/10/2/the-many-lawsuits-of-forever-21.
[9] Battle of the Brands: Top Ten Intellectual Property Fashion Lawsuits of the Decade, IP OSGOODE (Sep.22, 2021, 12:15 PM), https://www.iposgoode.ca/2020/01/battle-of-the-brands-top-ten-intellectual-property-fashion-lawsuits-of-the-decade/.
YLCC would like to thank Neha Gururani for her valuable inputs in this article.
