Canada Fashion Law

Will The Canadian Trade-marks Office Get Its Groove On?

2012-03-01T08:02:00.000-08:00

Ever eager to keep our readers in tune with the latest developments, CanadaFashionLaw is excited to share some red hot news. (Ok – yes it’s about trade-marks law, but it’s still pretty interesting!) Last week, the Canadian Trade-marks Office issued a notice that it has launched a consultation period aimed at amending the Trade-marks Regulations. Yawn? Maybe yes, maybe no.

What caught our attention is the possibility that the Canadian Trade-marks Office may be ready to accept sounds as trade-marks. To date, Canada has taken a hard line position that in order to be recognized as a trade-mark, the trade-mark must be visual. Based on this threshold, slogans, logos, three-dimensional shapes, etc., can all function as trade-marks. But what about sound, smell or touch? Nope. These cannot yet function as trade-marks in Canada. Is this inline with modern day branding? Arguably no. Is Canada’s trade-marks system lagging behind those of other countries? Arguably yes.

Always wanting to show trade-marks at work in the real world, CanadaFashionLaw has provided some fun examples of what could possibly qualify as a sound mark:

Example Numero Uno

You’re at a movie (I’m setting a scene – go with it).

It’s a first date.

The lights dim. The popcorn is too salty.

A lion’s roar startles you.

Chances are you’re at a movie produced by Metro-Goldwyn-Meyer Lion Corp.

Example Numero Duo

Frustratingly, your date’s phone rings in the middle of a gripping scene of the movie.

The phone’s ring has a very distinctive 4 note descending tune.

Could it be that your date is using a NOKIA phone?

Example Numero Trio

Ok. The date is clearly not going well.

Not only is your date taking calls, but you hear the clicker clacker of typing.

You hear a long drawn out southern drawl “YAHOOOOOOOOOOOOO”.

Could it be that your date is IM’ing via YAHOO?
The date ends early.

A number of other countries have had a far more liberal view than Canada of what could constitute a trade-mark by allowing non-traditional trade-marks to be capable of registration. Now that Canada is finally thinking about stepping up its game, it will be interesting to see how this will all play out.

In the consultation paper, the Canadian Intellectual Property Office is eager to hear from stakeholders, both large and small, on their perspective. Should Canada venture further into non-traditional trade-marks? If yes, what should be the threshold for registration? Should the applicant be required to prove acquired distinctiveness in order to gain trade-mark rights to a sound? Should specimens be included in the application?

The deadline to provide this input is April 23, 2012. It’s likely that the heavy hitters such as INTA and IPIC will put in their submissions. Law firms have also been known to draft up submissions on behalf of their clients.

CanadaFashionLaw is interested to hear your thoughts…

Birds of a Feather Do Not Flock Together

2012-02-27T14:00:00.000-08:00

International Clothiers Inc. is getting well-acquainted with Canada’s Federal Court. Previously, CanadaFashionLaw advised of Target’s aggressive strategies prior to actually launching in Canada, which involved International Clothiers Inc. Now they are on the receiving end of another alleged trade-mark infringement case. This time it’s Canada Goose that's spreading its wings.

Canada Goose recently issued a Statement of Claim against International Clothiers Inc. alleging trade-mark infringement of its trade-marks. Canada Goose alleges that not only are the trade-marks confusingly similar, but the trade-mark placement and certain design elements of the apparel themselves are also confusingly similar.

In its Statement of Claim, Canada Goose states that it has incurred significant money in marketing its products and brand throughout North America, which has significantly paid off as its notoriety has spread throughout the continent.

Given the alleged sub-standard quality of the apparel sold by International Clothiers Inc., Canada Goose believes that its reputation and goodwill is becoming tarnished by International Clothiers.

As of today’s date, International Clothiers Inc. has yet to file its Statement of Defence. This should be an interesting Canadian battle – stay tuned to CanadaFashionLaw for developments!

Don't Exploit Me Because I'm Beautiful

2012-02-08T12:12:00.000-08:00

When we see models saunter down the runway or captivate us on the glossy magazine covers, our first thought may not be "woe is them". But should it be? This is an interesting issue that is being posed by a non-profit organization, The Model Alliance.

With the vast majority of models starting out their career in their early teens, it is possible that these young darlings may not be well-prepared to look out for themselves in the big bad world. Enter The Model Alliance. Founded by Sara Ziff, a ten year catwalk veteran, The Model Alliance seeks to advocate against "...the modeling industry's systematic abuses of its workforce". Heavy hitting issues such as child labour, eating disorders and sexual abuse in the workplace are high priorities on the agenda.

The Model Alliance has caught the attention of some heavy hitters in the fashion industry. The Fordham Law Institute at Fordham Law School have supported the organization. Also, if you're looking for a Canadian connection, Canada's own Coco Rocha is on the Advisory Board.

Some may scoff at the need for such an organization, but The Model Alliance is quick to point out that there are a number of unions that protect young actor and actresses in the US. There is no such organization for fashion models.

The Model Alliance recently released a draft Bill of Rights that sets out model's rights in the workplace, which addresses issues that vary from transparent accounting practices to not requiring under 17 year old models to pose nude or semi-nude to helping models report work-place harrassment. Unfortunately, the Bill of Rights will only be as strong at its support. Fingers crossed it gets some significant buy in from the industry.

E-Gold Mine Rush?

2012-01-27T12:31:00.000-08:00

As the internet becomes an increasingly pervasive marketing tool for fashion companies, it’s hard (and not very business savvy) to ignore developments on the internet. Previously, CanadaFashionLaw gave our fashionista readers a head’s up on looming developments with the internet.

Well, the future is here!

(Technically the application period has only recently opened…so it’s still early days.)

Let’s not get ahead of ourselves:

The future is drawing near!

ICANN (the organization that basically runs the internet) has now opened the application process for parties that wish to run their own generic Top Level Domain (“gTLD”) registry. (Read CanadaFashionLaw's previous article to get your internet geek on so you understand what a gTLD is). The application process opened on January 12, 2012 and will close on April 12, 2012.

What does this mean?

At this point, we’re not quite sure; literally the sky is the limit! With some companies openly stating that ICANN’s extension is not warranted, we’re not quite sure if companies will change their online branding strategies or how extensive they will be. But putting on our cautious (and fabulously bedazzled) lawyer’s hat, we do know that there will be at least some changes:

Will we see fashion brand owners run their own gTLD:

www.website.GUCCI

Perhaps.

Do you think that fashion brands will join forces:

www.website.FASHION

Peut-etre.

Or, do think that industries will unite for a global domain name registry:

www.website.LUXURY

Maybe baby.

What’s the draw back?

There’s a possibility that the expansion of the internet could create cybersquatting on steroids! Prudent and proactive brand owners can monitor the new gTLD applications on ICANN’s website to determine if any third party proposed new gTLDs will infringe on their brand and/or trade-mark portfolio. Thankfully, an objection option has been incorporated into the application process to afford brand owners the opportunity to “X” the proposed new gTLD.

Renting the Lifestyles of the Rich and Famous

2012-01-23T13:08:00.000-08:00

Here at CanadaFashionLaw, we love legislative and case law developments that affect the fashion industry but we also love looking at new business models within the fashion industry. We love outside the box thinking!

At the recent Annual General Meeting for the Toronto chapter of Fashion Group International, I was fortunate to break bread with Lisa Delorme, co-founder and CEO of Rent Frock Repeat, a new player in the Canadian fashion world. From a business-model perspective, Rent Frock Repeat is interesting on two counts: first is that it introduces the concept of renting evening wear to Canada (something that is well-established in the US and European markets); second, it throws out the traditional brick and mortar model and is making its mark in the e-commerce world. Online dress rentals - who would have thought! Ever eager to learn more about the fashion industry, CanadaFashionLaw took this opportunity to interview Rent Frock Repeat on their experience in their launch into the Canadian fashion world. We hope you enjoy!

Walk us through Rent Frock Repeat’s inception and development.

Kristy Weiber and I were invited to a wedding and simply did not want to put out money AGAIN for a dress that would be worn once or twice and then take up precious real estate space in our closet. We came across a US website that rented cocktail dresses and we thought it was a brilliant solution to our dilemma but quickly found out they didn’t ship to Canada. We had always been thinking of opening our own business but we didn’t know exactly what and this seemed like the perfect fit for us. This was in May of 2010, by August of the same year we were incorporated and May 23rd 2011 we launched www.rentfrockrepeat.com

The business model is largely internet based. What challenges are specific to the e-commerce world, as opposed to the brick and mortar model?

For our merchandise specifically it still comes down to women wanting to touch and feel the clothes or simply try them on. When we sat down to map out exactly how we would overcome this challenge we asked ourselves how we could not only provide peace of mind about the fit challenge but provide even better service than a regular bricks and mortar store. Our solutions included sending a second size for free, letting women narrow their selection by body shape, showing the dress on models that are not only different sizes but different shapes (pear, straight and narrow, hourglass, apple…) and providing pictures of how a woman could style the dress in different ways (classic, edgy, bohemian, feminine).

What challenges are the same?

Whether you are operating an online business or have a chance to meet your customers face to face the challenge is to earn your business. We love this particular challenge because it all comes down to service. Are you really listening to your customer’s challenge? Are you giving them what they need and not what you think they should buy (or rent)? Are you solving a problem or filling a need? At the end of the day you need to make a profit and that is why we spend so much time on the business model and scale but we also know we can’t get there if we are not all about service.

You’re a relatively new company and yet you’ve had some fantastic exposure. What’s the secret to your success?

We are fortunate enough to have a product that is visually appealing (who doesn’t like to see pictures of beautiful women in gorgeous dresses), a business model that is fairly unique and have provided a product that may have been financially or geographically out of reach. This story resonates with the fashionista who lives in a rural area and currently does not have access to high fashion and with the fashionista student that currently does not have the financial means to shop the designer lines she would like to wear. It is fashion democracy and I think people (including the media) like the idea that we can now all be on the same playing field when it comes to fashion.

Who is your target audience? Has this changed from what you first imagined?

Our target audience is women who have a busy social calendar and are less concerned with having to own things and are more focused on looking and feeling their best.

In simple terms your company rents dresses but in reality it encapsulates more than that – it’s a vehicle to create Cinderella moments for your clientele. Have there been some standout moments for you?

Yes, and as excited as we are about being able to attend NY and Toronto Fashion Weeks, meeting directly with many of the designers and being surrounded by beautiful dresses (we must admit, it has been a plus to be able to go into the RfR closet if we need something fabulous to wear to an event), we are most excited about the stories we hear from our customers. We have received countless Thank You notes in our return packages with comments like “I never thought I would ever be able to wear a designer dress, thank you!”, and “I fit right in on the red carpet and didn’t have to choose between paying the bills or a new dress to do so.” But, our favourite story to date was the evening we dressed the winners of the Dr. Roz’s Healing Place “Victory Over Violence” Gala. These three women had experienced a rough start to their lives but were being recognized for making the brave first step of reaching out to Dr. Roz and eventually implementing the tools they were given during their time at the centers. On the night they were recognized publicly all three were wearing RfR dresses and they told us this was their Cinderella moment. We were thrilled to be a part of it!

Why do you think that Canada has been such a receptive audience to your company?

Unfortunately our small population in Canada makes it difficult for us to have as many options as others do when it comes to shopping. Just think of the options Americans have with Neiman Marcus, Saks, Bloomingdales, Barney’s, Lord and Taylor, Macy’s (I could go on and on and this is just their department stores). We see all the commercials and so we are exposed to so much but we don’t have many options ourselves and need to think about the duty and delivery charges we would incur to have things shipped to us (and that is if they even offer the service). So when a new company makes the items we want available in our own country we get excited. We have to admit that we are pretty stoked about Target coming to Canada. We want the new Jason Wu darling day dresses he is putting out too!

Your company has a program that raises money for the charities. Can you elaborate on this?

Our motto is “Rent the dress, Donate the rest” and the good news is that this is open to anyone who is throwing a black-tie or gala event to raise funds. We provide the charity with a unique promo code that they provide to their guests and for every dress rented with that code we will take 10% and give it back to the charity. What is even greater is that we are hearing women are now able to attend more events because they aren’t spending as much money as they normally wear on their wardrobe (which can be the most expensive part of the evening). We also recently donated 5% of every rental from November 25, 2011 to January 2, 2012 to the YWCA Rose Campaign.

What do you love the most about being an enterpeneur in Canada’s fashion industry? What has proved most frustrating?

Kristy and I have always been weekend warriors when it comes to fashion. We worked our regular jobs during the week (and sometimes through the weekend) and then read fashion magazines and went shopping in our spare time. So when we landed in NYC for our first round of buying we had to pinch ourselves. Honestly, for anyone that loves fashion how can that not get your heart racing? As for frustrating… not to sound like a Pollyanna but nothing. Sure there are aspects of our jobs we like more than others like our buying trips over paying the bills and boxing the shipments but nothing that frustrates us. We are thrilled and over the moon that this is what we get to do every day.

Would Clothes By Any Other Name Smell as Sweet?

2012-01-05T11:55:00.000-08:00

Last year Liz Claiborne Inc. sold its brand to J.C. Penney for a cool $288 million (US). The naming rights also jumped ship as part of the transaction. Now that Liz Claiborne Inc. is no longer Liz Claiborne, it’s time to unveil the new brand name. As of May 15, 2012, the old Liz Claiborne will be known as Fifth and Pacific Companies. Its brands Juicy Couture, Kate Spade and Lucky Brand will continue to exist. According to Liz Claiborne Inc.’s recent press release, the rationale behind the new brand name is that it encompasses its New York roots and pays respect to its Californian and Asian presence. It is hopeful that under this new brand along with some adjustments, the company will be able to re-emerge as a viable fashion house that appeals to a sophisticated audience. It also marks a departure from largely serving the department store market to focusing on direct consumer retail.

As a self-professed trade-marks law geek, this is interesting. Changing an established company’s brand involves more than simply changing the name on the letterhead. Trade-marks are critically important to a company in terms of public recognition and generating consumer loyalty. Through the trade-mark there is an unspoken dialogue between the consumer and the company. The trade-mark signifies the quality, reputation and expertise of the business, its products and/or services to the consumer. The value of this unspoken dialogue (commonly referred to as “goodwill”) is figuratively priceless. In reality, branding is big business. The value of each of the world’s favourite brands can reach into the tens of millions and in some instances billions of dollars. The trade-mark is the foundation of the brand. So it’s always interesting when established companies trade in their goodwill and start from scratch again in building public recognition and consumer loyalty.

Bonne chance Fifth and Pacific Companies!

Wrapping Up 2011

2011-12-31T12:54:00.000-08:00

As the bottle of bubbly chills in the fridge in anticipation of the annual 10 second countdown, here at CanadaFashionLaw we’d like to take some time to reflect on this year in fashion.

Taking a look at our behind the scenes diagnostics of online traffic (no, we don't wear glasses), here’s a list of the top 5 stories provided by CanadaFashionLaw:

1. Beware There's a New Target Coming to Town

Interest was piqued in how Target was positioning itself for its launch into Canada.

2. Fashion Industry Takes a Stand Against Counterfeiters

This article examines how fashion players are combatting counterfeiting.

3. Louboutin Continues to See Red and Tiffany is Blue in the Face

Fashion law wouldn't complete without a look at Christian Louboutin and his friends.

4. Ready, Set, Design: Toronto's FDCC's LG Fashion Week Returns

Here we look at Canada's biggest fashion week, which also happens to be North America's second biggest fashion week after New York Fashion Week.

5. Sting Like a Bee: Federal Court Awards $2.5 Million for Trade-mark and Copyright Infringement

Louis Vuitton and Burberry combine forces to make counterfeiters pay in a landmark decision.

CanadaFashionLaw has been delighted and flattered by all of the opportunities that have emerged in 2011, below are some of the highlights:

profiled by Osgoode Hall Law School,
participated in a variety of interviews on fashion law from a Canadian perspective
featured in Flare magazine,
being elected as a board member and co-chair of the Sponsorship Committee of the Fashion Group International – Toronto chapter,
syndicated by Lexis-Nexis,
invited to speak at a national intellectual property lawyers conference in Fall 2012 on fashion law,
providing commentary for an internationally published book on the fashion design industry.

CanadaFashionLaw would like to extend a huge thank you to all of its loyal readers for their support this year and for all the opportunities that have surfaced.

Happy new year all – enjoy your champers!

Buns O’ Steel? Maybe yes, maybe no.

2011-12-20T11:48:00.001-08:00

Here’s a little legal stocking stuffer…

Want to walk your way to a higher, tighter A$$? Who doesn’t?! But be careful what you promise. Reebok may be getting itself in trouble with its claims that its footwear EASYTONE leads to toned and tightened leg muscles...and a tighter tooshie!

A class action is seeking certification against Reebok in the Quebec Superior Court on the basis of false, misleading and unsubstantiated advertising claims. A class action suit has already been launched in the US.

What advertising claims are at issue?

Walking in the Reebok engineered shoes will tone and tighten more than walking in regular shoes.

What’s the beef?

The studies conducted to support the advertising claims did not substantiate the advertising claims;

What’s at stake?

Damages equal to the purchase price amount.
And let’s not forget a PR nightmare.

Elle’s Creative Director Joe Zee Talks Fashion Business with CanadaFashionLaw

2011-12-03T12:24:00.000-08:00

If you know Elle magazine or the spin-off reality TV show, The City, you probably know Joe Zee. Amicable, knowledgeable and dynamic, Joe Zee has launched a new reality TV show, “All On The Line”. The second season airs in Canada on Sundance Channel Tuesday nights at 8 p.m. EST. Season one will air Mondays at 8 p.m. EST beginning January 2 on CosmoTV.

In “All On The Line” Joe Zee acts as a fashion guru consultant to help struggling designers save their business. Here at CanadaFashionLaw, we love the business and law of the fashion industry and so this TV show is of great interest to us. With a spring in our step and a shimmer from our newest bubble gum pink lip gloss, CanadaFashionLaw was delighted to be invited for a one-on-one talk with the guru himself. We hope you enjoy the interview:

You’re no stranger to reality TV, what kind of impact has it had on your personal brand and that of Elle magazine’s?

I think that reality TV is a genre. Although it was probably a dirty word when it first launched on air, it has become a really big component of television broadcasting. It is going to open up the parameters of who you are. From a personal brand perspective, I think that a lot more people understand what I do, who I am and what I can contribute. For Elle, it certainly helps us expand to a broader market - to people who may not just be reading magazines but to those who love fashion and watch it on TV.

How did All On The Line come about?

Sundance Channel and the production company, Authentic Entertainment, came to me with the idea of the show. I wasn’t entirely sure what it was so we all sat down and talked about it and shaped it into something that I was so proud and happy with because it was genuine and authentic. It’s something that I feel has never been done on television. We’re not portraying Devil Wears Prada or Ugly Betty. It’s not red carpet and glitz and glam. It’s really about the nitty-gritty, hard, blood sweat and tears tough day in day out aspects of what being a fashion designer is about. Yes you can have that dream – but it comes at a price. It’s not easy. There are a lot of things on television that make it seem easy. People don’t understand that there is so much “business” involved.

How do you offer grounded criticisms without stifling the designer’s creativity?

Being honest! If you watch the show, I’m brutally honest. I’m not going to be their mother and sugar coat something. They have people in their lives to do that – they don’t need me for that. They have to understand what it is that they are doing and if you miss the mark just a little bit, you may as well stop doing it. It’s a very crowded industry. You’ve got to be able to service it. I’m never mean (I don’t think), I just want to be honest in a critical way that will help them.

One of the biggest self-induced hurdles that I see as a fashion lawyer helping emerging or established fashion designers is that they do not view themselves as a business from early on. Do you agree?

Absolutely!! There are so many fashion students that have been so attached to the show and are now starting to realize that they need to have some sort of business training. They can’t just draw, drape, cut and sew. Once you’ve done that, what’s next? You have to understand the business aspect. We don’t live in a world where you can sketch designs from your ivory tower and think that your dress will end up in every store. You’ve got to figure out how to make that work. This show is starting to help people re-evaluate. Being a designer means being a business person. People haven’t thought that before.

And the designers don’t think to outsource that business acumen either. If you’re going to focus on the creative aspects, at least surround yourself with trust-worthy people that have a good business aptitude, be it from a financial, legal or consulting background

Yes. But they have to get “you”. They can’t just be a good business person. They have to know how to take the creativity of who you are and make it into something successful.

On one of your episodes, there was a successful business person backing the designer, but the business person had no knowledge of the fashion industry itself. How necessary is it for the financial/business/legal minds to educate themselves on the nuances of the fashion industry?

It happens ALL the time. I think that there are designers who don’t understand the nuances of the fashion industry. It’s hard – how can anyone entering into the industry know the nuances of everything going on. So they have to learn but unfortunately, there’s not a lot of time for the learning curve. You have to make your business successful and it has to happen right now. You don’t have seasons and seasons to try. That’s the problem with all these designers.

Is it a “learn on the job” situation or are the fashion education institutions geared towards helping the designers appreciate the practical business aspects of the fashion industry?

I think that for a lot of them, it is a “learn on the job” scenario. That’s why I recommend designers take apprenticeships and be designers for bigger companies to see how that all works.

Do you think that there is opportunity in Canada for fashion designers or is brain drain to NYC, Milan or London necessary to be successful?

I think that’s what the fashion world gravitates to. If you want to have global representation, then you have to be in those markets because that’s where all the international editors and retailers are going to be. It’s very hard to get global representation in smaller markets because you are just not going to get the eyeballs. This is for no other reason than the editors, buyers and retailers can’t be all over the world every day. But that’s not to say that Canada can’t have a fashion scene and develop really great talent here and put Canada on the map. But that needs to be done in a consolidated way within the country.

With the Asian markets emerging as a dominant player in the fashion industry – how is this going to affect the business of fashion and influence fashion designs?

Asia is big for the luxury brands. They are all expanding there like rapid fire because they want to be there first. Asia’s not the place that’s bringing in the heavy dollars yet but it is the place that will bring in the heavy dollars soon. Everyone wants to be there when it does. I think it’s going to change the world of fashion because we’re going to see the designers in the world of luxury shift their focus to target that market. Everything trickles down from the luxury market so if the Louis Vutton’s, Prada’s and Dior’s are doing something to target the Asian market, we’re going to see that trickle down effect throughout the fashion market.

Why do you think the luxury goods market has not been as negatively affected during this recession?

They have held their own, but they are also a small percentage of the business. If you really think about it, luxury ready to wear consumer products is really under 10% of the business. They really deal in everything else: accessories, fragrance, licensing, beauty. They have held their own because the people who are true consumers of those luxury brands are not the people that have been affected by the recession. While shopping may not have happened as aggressively, it certainly has still happened.

What are your thoughts on the US’ move to amend the copyright act to protect fashion designs – what will be the effect?

I haven’t been following it as closely, but I know that it’s a fight that has been going on and it’s a fight worth fighting.

Christian Louboutin Secures "Exclusivity" North of the Border

2011-11-22T13:21:00.000-08:00

Just a quick update from CanadaFashionLaw on what is happening north of the border in respect of the Christian Louboutin v. Yves Saint Laurent. (This stems back to two previous articles on CanadaFashionLaw.)

At the outset on the Christian Louboutin v. Yves Saint Laurent debacle, Christian Louboutin owned a US trade-mark registration for the red lacquered soled shoes. The Canadian trade-mark was pending. Although there was an opportunity for Yves Saint Laurent to go on the offensive via opposition proceedings, it chose (or neglected) to do so. As such, Christian Louboutin is now the proud owned of a Canadian trade-mark registration for red lacquered soled shoes. Why didn’t Yves Saint Laurent go on the offensive? We don’t know. But check out CanadaFashionLaw’s previous article that looked at business factors affecting multi-jurisdictional litigation.

Trade-marks Heavy Hitter Comes Out Swinging for Christian Louboutin

2011-11-16T14:44:00.000-08:00

Not only has Tiffany thrown in its hat into the Christian Louboutin v. Yves Saint Laurent show down, a trade-marks law international heavy hitter is also tossing its hat into the ring. That’s right: INTA has also filed an amicus brief supporting Christian Louboutin. Now for legal fashionistas, INTA means something. For CanadaFashionLaw’s fabulous non-lawyer fashionistas, let’s provide some context. Here’s a description of INTA from its own submissions:

“Founded in 1878, INTA is a not-for-profit organization dedicated to the support and advancement of trademarks and related intellectual property concepts as essential elements of trade and commerce. INTA has over 5,700 in more than 190 countries. Its members include trademark owners, law firms, and other professionals who regularly assist brand owners in the creation, protection and enforcement of their trademarks. All of INTA’s members share the goal of promoting an understanding of the essential role trademarks play in fostering informed decisions by consumers, effective commerce and fair competition.”

CanadaFashionLaw has been a committee member of INTA for a number of years and can vouch that in the intellectual property law world, it is a highly respected and influential organization. So, the fact that INTA is raising the stakes in this case and getting involved is worthy of a glass of pino grigio! It’s juicy.

Why is INTA getting involved?

Straight from the branded horse’s mouth:

“[INTA is] interested in the development of clear, consistent and fair principles of trademark and unfair competition law…As an independent organization dedicated to the advancement of trademark law, INTA is uniquely qualified to aid the Court in its determination of this important matter”.

Translation: it also believes that the court’s decision in respect of the rejection of Christian Louboutin’s request for a preliminary injunction against Yves Saint Laurent is wrong. As wrong as neon-colored leggings!

What’s the problem?

First of all, INTA’s submissions are very narrow. It only specifically relates to the court’s comments on the validity of Christian Louboutin’s trade-mark registration. INTA does not comment on the issues of trademark infringement or dilution.

Here’s INTA’s beef:

a) In contemplating Christian Louboutin’s trademark rights, the court took an overly broad interpretation: red on fashion articles. The real issue to consider should have centered on lacquered red on soles of footwear.

b) The court found that the trade-mark registration was invalid as the color had functional qualities, relying on the doctrine of aesthetic functionality. INTA holds that the judge did not properly apply the correct analysis for a finding under this doctrine. Rather than narrowing in the effect that Christian Louboutin’s trade-mark registration would have on the luxury shoe industry, the court looked at the effect it would have throughout the fashion industry.

What does INTA have to say for itself?

Here’s a summary of INTA’s position:

a) The court appeared to start with the assumption that Christian Louboutin’s trademark registration was invalid, which flies in the face of the presumption of validity when obtaining a trademark registration.

b) The court unilaterally broadened Christian Louboutin’s trademark claims to encompass all shades and tones of red, rather than specifically dealing with the color at hand: lacquered red on the sole of footwear.

c) The court then construed a hypothetical situation to consider the ramifications of granting an entity a monopoly over a color, rather than analyzing the particulars of this specific scenario.

d) The court failed to recognize the substantive work provided by the US Patent and Trademarks Office in ensuring the registered trademarks are valid trademarks that are worthy of the rights conferred onto registered trademarks:

“Registration is not merely clerical, but rather the result of a substantive examination process and opportunity for interested parties to be heard.”

e) The trade-mark registration granted by the US Patent and Trademarks Office was entirely consistent with established US trademarks law and, therefore, Christian Louboutin’s trade-mark registration is valid and worthy of recognition.

f) The Court’s discussion of Monet’s use of blue in his water lily series was flawed as it was never the subject of a trade-mark and, therefore, falls entirely outside the scope of the matter at hand.

g) In determining whether the color was functional (thereby negating the trade-mark protection), the Court wrongly applied the doctrine of aesthetic functionality. INTA provides a useful summary of the purpose of this doctrine:

“The bedrock of the doctrine is the legitimate need of competitors to use a utilitarian feature that is less expensive, of better quality, or more efficient to manufacture. By ensuring that competitors remain free to copy useful product features, the doctrine prevents trademark law from undermining its own and the patent law’s pro-competitive objectives.”

h) The doctrine of aesthetic functionality is a controversial principle, which INTA has lobbied against in past amicus briefs. Not only does INTA guard against employing this doctrine, but if the Court does adopt this doctrine it should do so correctly. Overall, INTA maintains that the doctrine of aesthetic functionality has absolutely no application to this case.

In a united stand with Tiffany, INTA rounds out its submissions by stating:

“If the District Court’s opinion stands uncorrected, it will have far reaching consequences for brand owners and consumers alike. Rights granted as a result of the careful examination process of the Federal trademark registration system could be upended arbitrarily, making it easier for third parties to use the well-recognized brand of others, damaging brand owners and increasing the potential for consumer confusion.”

Tiffany Throwing Rocks

2011-11-08T07:15:00.000-08:00

Christian Louboutin, Yves Saint Laurent and Tiffany, oh my! This well-dressed litigation is becoming increasingly more complex. (CanadaFashionLaw has been following this case extensively – click here for a full rundown).

In lending a well-jeweled hand to Christian Louboutin in the fight to assert his trade-mark rights to red-bottomed soled shoes, Tiffany throws its iced-out rocks against the most recent decision denying Christian Louboutin injunctive relief against Yves Saint Laurent. CanadaFashionLaw was happy to get its hands on a copy of Tiffany’s Amicus Brief.

Although seemingly unrelated (jewelry v. shoes), Tiffany and Christian Louboutin are united in their stand that trade-marks can be comprised of one color (robin’s egg blue and red lacquer).

Why is Tiffany getting involved in Christian Louboutin v. Yves Saint Laurent case?

It’s a luxury house of cards.

In the recent decision rejecting Christian Louboutin’s request for a preliminary injunction, the judge called into question the registrability of Christian Louboutin’s trade-mark (red soled shoes) on the basis that a single color cannot act as a trade-mark in the fashion industry. Relying on the robin’s egg blue as a distinctive part of its branding, Tiffany’s trade-mark could also be susceptible to attack under the same line of reasoning. Tiffany did not hold back:

“Tiffany files this amicus curiae brief because the District Court’s opinion in this case adopted a sweeping and unprecedented per se rule against granting trademark protection to any single color that is used on any fashion item, even where the color has achieved ‘secondary meaning’ and is associated with a single brand. Amicus curiae respectfully submit that adoption of such a blanket rule was unnecessary to a resolution of the preliminary injunction motion below and should be rejected by this Court.”

Here’s a summary of Tiffany’s position:

a) Ownership of a trade-mark registration is prima facie evidence of the validity of the trade-mark. If that trade-mark registration is to be invalidated, the onus is on the defendant (in this case Yves Saint Laurent) – not on the plaintiff (Christian Louboutin) to prove its validity.

b) It is established in trade-marks law that a single color can function as a trade-mark, especially when it has acquired secondary meaning. In the decision, the judge repeatedly acknowledged how infamous Christian Louboutin’s red bottomed soles have become. Ultimately, the judge made a sweeping exception for the fashion industry.

c) Rather than making sweeping generalizations about whether established trade-mark law principles apply to the fashion industry as a whole, the judge should have examined the issue at hand:

“The proper inquiry is whether the particular mark at issues has been registered with the (US Patent and Trademarks Office) and whether the particular mark has secondary meaning”

d) US trade-mark legislation does not carve out trade-mark principles as applicable to some industries and not applicable to others. Any such sweeping generalizations are contrary to fundamental principles of trade-marks law.

e) The judge called into question whether Christian Louboutin’s was a valid registration on account of color being a function of fashion and therefore incapable of being a trade-mark. Tiffany called into question this rationale:

“A design feature of a particular product is essential to the use or purpose of the product only if the feature is dictated by the functions to be performed; a feature that merely accommodates a useful function is not enough’.

A shoe is a shoe, regardless of the color of its bottom sole. There is no function to a red bottomed shoe.

f) Tiffany then called into question the judge’s reasoning that the red bottomed sole increased production costs, thereby justifying an inflated retail price, which is indicative of the functionality of the trade-mark. Tiffany argued that this rationale is topsy-turvy. If the trade-mark decreases the production cost, thereby increasing the profit margin, then there is functionality.

Stay tuned to CanadaFashionLaw as this case unfolds!

Louboutin Continues to See Red and Tiffany is Blue in the Face

2011-10-26T18:51:00.000-07:00

Any fashionista worth her Prada knows that Christian Louboutin and Yves Saint Laurent have turned New York courtrooms into their stomping ground over their right to use red bottom soled shoes.

CanadaFashionLaw has been covering this case with interest and reporting on all the developments. It’s been a busy (and interesting) couple of months.

If you’re fashionably late to the courtroom drama, CanadaFashionLaw provided an overview of what is at stake between the parties. CanadaFashionLaw also provided a detailed summary and analysis of the court's decision that declined Christian Louboutin’s request for a preliminary injunction.

As predicted, Christian Louboutin did not take very kindly to the rejection and has issued an appeal against the judgment.

Looking to 'up the legal ante', Tiffany has also put in its two cents and made submissions to the Court supporting Christian Louboutin’s position. No need for a poker face here, we know that Tiffany is concerned that about the possible domino effect that the decision could have for Tiffany’s protection of its color trade-mark (robin egg blue for jewelery boxes). And with that, I’ve run out of poker analogies. Let the legal games begin!

CanadaFashionLaw, remind me again about the decision that Christian Louboutin is appealing?

OK. Quick run through. Christian Louboutin is well-known for its red bottom-soled shoes. In fact, Christian Louboutin obtained a trade-mark registration in the US for it, which gives them nation-wide exclusivity. Yves Saint Laurent started to incorporate this red bottom-soled shoe in its footwear line. Christian Louboutin came back with “on no you didn’t!” and commenced a legal action against Yves Saint Laurent for trade-mark infringement. Christian Louboutin sought an order from the court requesting that Yves Saint Laurent cease from selling these shoes in the meantime until the court made a final decision. The court came back and said – nah, Yves Saint Laurent, go ahead, go on with your bad self. In fact, Christian Louboutin, you may not even have the right to exclusivity after all. Christian Loubouin was not happy with this at all.

Here’s a run down of the major points made by the Court in denying Christian Louboutin’s request:

1. The judge recognized that color can be protected as a trade-mark, but there is a functionality bar.

2. In some industrial markets, products are so standardized in shape, design and general composition that color can be a key distinguishing feature. But, the judge held that the fashion industry is a different beast that should not be given the same benefits.

3. Because color is so integral to the fashion industry, whose whole mandate is ornamental and aesthetic, color takes a more prominent role. It defines seasons, trends and tastes.

4. In the fashion world, according to the judge, color advances expression of ideas through fashion more so than to identify the source of the design, which is a fundamental tenet of trademarks law.

5. The judge recognized that there are instances when color can play a greater role in a fashion brand’s life, citing Louis Vuitton and Burberry as examples. Yet, in his opinion, these cases are different as the famed Louis Vuitton and Burberry are comprised of different colors in a design configuration. Christian Louboutin’s claimed trade-mark is comprised of only one vaguely described color “lacquered red”.

6. The judge seemed to put a fair amount of emphasis on the artistic nature of the fashion industry, thereby differentiating from other consumer products industry, using terms such as “fanciful business” and then launched into an analogy between artists and fashion designers (Monet and Christian Louboutin are, apparently, one and the same), which is a little outside the scope of the matter at hand.

7. The trade-mark registration covers “lacquered red soles” for women’s high fashion designer footwear. The judge felt that this is an ambiguous color claim and could have significant ramifications for competition.

8. Ultimately, the judge questioned whether a color in the fashion industry can be functional and, therefore, not eligible for trade-mark protection. The judge also stated that the color was functional because adding the lacquer to the shoe increased the cost of production for the shoe, which validated the increased retail price.

Let’s Break Down Christian Louboutin’s Appeal

Christian Louboutin is seeking to overturn this decision by bringing it to the attention of the Court of Appeal, a higher level of court. Christian Louboutin posed three questions to the Court of Appeal:

The judge agreed that Christian Louboutin’s red bottomed soles were world famous, which are the subject matter of a US trade-mark registration. How then can the judge ignore his own findings and that of the US Trademarks Office by stating that Christian Louboutin's red bottomed soles cannot act as a trade-mark in the fashion industry?

Did the judge make an error in stating that a single color could not act a trade-mark in the fashion industry based solely on the doctrine of aesthetic functionality?

Did the judge exercise a little too much discretion in reaching its decision by ignoring fundamental trade-mark law principles and evidentiary proof?

What Did Christian Louboutin Have to Say for Himself?

CanadaFashionLaw read through the 100+ page submissions. Here’s a look at the themes:

Christian Louboutin is world renowned,

J-Lo has immortalized the trade-mark by creating a song about Christian Louboutin shoes,

Christian Louboutin shoes are the fifth character of Sex and the City, and

Christian Louboutin is not a painter.

But let’s get serious for a second. If this decision stands, it could have serious implications for Christian Louboutin. Christian Louboutin has built its business on the red bottomed soled shoes. It’s an integral part of its brand. If any Yves, Saint or Laurent can use the red bottomed soled shoes, then the most recognizable component of Christian Louboutin’s brand is now up for grabs for anyone.

Not good new for Christian Louboutin. But this may also have bigger implications beyond Christian Louboutin.

What’s With Tiffany Getting Involved?

As the holiday season approaches, what girl isn’t having visions of little blue boxes dance in her head? Was everyone thinking of Tiffany jewellery boxes? Thought so. A that's because that blue color applied to those jewellery boxes is an integral feature of Tiffany's brand.

If this decision stands, it basically means that:

A single color may not function as a trade-mark;

If color is applied to a utilitarian article, it may not function as a trademark;

If the color is aesthetically appealing, which draws consumers to the product, it may not function as a trade-mark;

If the cost of applying the color increases the production costs on a high priced item, the color has functional qualities and therefore cannot function as a trade-mark.

Now, for the non-legal fashionista reader, you may be scratching your head wondering, "CanadaFashionLaw what are you talking about". The diatribe above was the essence of the judge’s rationale about why Christian Louboutin may not have rights to its trade-mark. And to a large extent it flies against the well-established rationale of allowing a color to function as a trade-mark. If a company consistently uses color as part of its trade-mark to the point that it becomes a distinguishing feature to the consumer, ta dah - trade-mark! But this does not stand true if the color is functional - this green army fatigues. In that instance, the color is functional because it acts as camoflague. But red on the bottom sole of a shoe and blue on a jewellery box? There's no rationale or functional reason.

If this decision stands, it could have wide-reaching implications beyond Christian Louboutin. If a single color cannot function as a trade-mark, could Tiffany’s blue box trade-mark also be in jeopardy? It’s not something that Tiffany is interested in finding out. As such, in a survival of the fittest move, Tiffany has thrown its well-jewelled hat into the ring by submitting an amicus curiae brief to the court. This allows Tiffany, who is not a party in the legal dispute, to put in its two cents for the judge’s consideration. This ensures that the Court of Appeal will consider the far-reaching implications that upholding the decision will have on non-related parties.

Women Helping Women Through Clothes

2011-10-17T07:42:00.000-07:00

As Toronto's LG Fashion Week kicks off this week, CanadaFashionLaw eagerly clasps her fashion week industry passes in anticipation of a week full of runway shows. (I love my job!) But before the festival of fabulousness commences, CanadaFashionLaw wants to pause for a cause. CanadaFashionLaw recently became aware of a great organization, Dress For Success, that aims to help women launch their career through the gift of clothes. In the interview below, CanadaFashionLaw hopes to tap into the season of giving a little early.

Tell us about your organization and what it aims to achieve.

The mission of Dress for Success Toronto is to promote the economic independence of disadvantaged women by providing professional attire, a network of support and the career development tools to help women thrive in work and in life.

Our programs include the Suiting Program, which outfits women in professional attire for job interviews and employment; the Dress Rehersal Program where clients go through a mock interview and feedback session and can get assistance with resume/cover letter writing; and the Profesional Women's Group, which offers women ongoing support as they successfully transition into the workplace.

How has the response been in Toronto?

The response in Toronto has been extremely positive. Dress for Success Toronto serves job-ready women by referral only through our community partnerships with over 300 non-profit organizations. Clients come to us from domestic violence agencies, homeless shelters and job-training programs. We work together with our referring agencies to provide delivery of services designed to elevate the lives of low income women and their families.

The concept goes way beyond clothes. Women helping women really seems to be a central theme. Can you share any success stories?

Latoya was introduced to Dress for Success Toronto in 2009 by a government employment centre. She came to use our services and was encouraged to sign up for mentorship, assistance with resume writing and once she landed a job, she was invited to join the Professional Women’s Group, a group for newly employed women that have used our services that offers monthly workshops, networking and support. When I asked Latoya about what this organization means to her, this is the response she gave:

“A suit will last a year a two but it’s the lessons and support we receive that will last a life time and help us to better integrate and become successful in our lives and career. Dress for Success is a driving force in my career development. Getting a job is just the beginning, you have to start over, re-qualify and work your way up. This can be very demanding, difficult and challenging at times. I am better able to balance both personal and work life and cope with a new culture through the workshops and support I receive at Dress for Success. This is more than just about suits; it is part of my survival. I may have received suits on my first visit but it’s the encouragement, support, joy and fulfillment that I receive that keeps me coming back.”

What are the biggest challenges that your organization has faced?

Our biggest challenge is that people think we're just about the suits! The Suiting Program is an important part of what we do; however, our other programming is also essential to helping women become self-sufficient by addressing their social and economic needs in relation to work. For example, the Professional Women's Group offers women ongoing support as they successfully transition into the workforce, build thriving careers and prosper in the mainstream workplace. Funding to support all the other programming we do is essential in order for us to fulfill our mission. We can't run our quality programming on clothing donations alone.

There is a lot of buzz about your organization’s Fundraising Gala on November 2, 2011 at the Bata Shoe Museum. Can you give us the scoop?

It is Dress for Success Toronto’s inaugural Fundraising Gala! The theme of the night is “Most Memorable Shoes” while guests are having a “Heel of a Good Time!” Attendees will enjoy refreshments and hors d’oeuvres while watching a fashion show featuring the EDIT by Jeanne Beker denim collection and Ron White Shoes, complemented by the original fashions of GISH (Girls in Skirts), Sarah Stevenson Designs and MINK, talented local Toronto designers.

There will be signature cocktails, and “innovative interactive entertainment” for guests to enjoy. We also have a special guest appearance and book signing by internationally renowned Canadian fashion icon, Jeanne Beker!

More information about the event, including ticket sales, can be found on our website: www.dressforsuccess.org/toronto

How else can people roll up their sleeves and help out?

Dress for Success Toronto has several opportunities for individuals to get involved.

We take donations of new and gently used professional attire at our 188 Lowther Avenue location in Toronto. Individuals interested in donating to us can go to our website for more information (www.dressforsuccess.org/Toronto) or e-mail us at donate@dressforsuccesstoronto.org.

We also have several ways an individual can volunteer! Volunteer roles include stylists, merchandisers and career services. Anyone interested in volunteering with us can e-mail volunteer@dressforsuccesstoronto.org. With the help of our volunteers, we can continue to have a positive impact on the lives of low income women, their children and future generations.

Through a $100 donation, you can give one woman access to the whole suite of Dress for Success programs. We all know how good it feels to put on the right outfit when headed out to a big meeting or event - first impressions are key, so imagine if you didn't have this ability! Your $100 donation can make this difference. Holiday season is just around the corner and helping one individual take the steps back into the workforce can make this a happy holiday season with hope for the future. Donations can be made online through our website (www.dressforsuccess.org/toronto)

More Opportunities Abound in Toronto for Fashion Designers

2011-10-11T12:34:00.000-07:00

One week before the launch of Toronto’s LG Fashion Week for the 2012 Spring-Summer collection, it was announced that the TFI New Labels competition has been given a face-lift.

The Toronto Fashion Incubator has teamed up with note-worthy Toronto-based fashion players, TNT and Suzanne Rogers.

Who is eligible? Canadian fashion designers who have been in the business for three years or less.

What’s at stake?

First, there is an opportunity to win a cash prize of $25,000 for the Suzanne Rogers Award for Most Promising New Label.

Second, TNT will sponsor a design studio for 1 year at the Toronto Fashion Incubator.

Third, Flare magazine will run a full one page editorial feature on the designer.

Fourth, an opportunity to show the collection at Toronto Fashion Incubator’s TFI New Labels, which is a fashion show aimed at highlighting Canada’s emerging designer. Attracting between 500 and 1,000 industry professionals, TFI New Labels is a great opportunity for these designers to showcase their talent.

Who are these players? CanadaFashionLaw has previously introduced you to both Toronto Fashion Incubator and TNT. Suzanne Rogers is a philanthropist who has married her love for fashion with her ability to raise funds for charities with finesse. Rogers’ most recent noteworthy endeavor was her exclusive and private fashion show and dinner attended by Toronto’s most fabulous, wherein Marchesa was brought back to the runway. Flare magazine is one of Canada's pre-eminent fashion magazines, which is reported to have over 1.5 million monthly subscribers.

All in all, it’s great to see Toronto’s own helping to pave the way for Toronto’s own.

See you at TFI New Labels on May 3, 2012!

There's a New Retail Sheriff in Town

2011-10-06T13:44:00.000-07:00

As the days get colder, the nights get longer and our cravings for hot chocolate with Baileys and whipped cream heighten, so does our need to find a good book. Thanks to a recent event hosted by Fashion Group International’s Toronto chapter, CanadaFashionLaw need look no further.

This week, CanadaFashionLaw eagerly attended a presentation by Robin Lewis, hosted by FGI-Toronto. Robin Lewis, author of the book “The New Rules of Retail”, is a retail consultant and former vice-president and executive editor of Women’s Wear Daily. In “The New Rules of Retail”, Robin looks at the transformation of retail and what it means to the fashion and consumer products industries.

This book is a must-read if you are:

in the fashion industry,
involved in the consumer products chain,
are a marketing professional or
just want to be an informed consumer.

In his presentation, Lewis provides an oversight of his theories. In a nutshell, the shift to consumer power, coupled with rampant globalization and significant technological developments have been retail game changers. According to Lewis, there has been a 3-part evolution in retail. At first, the producers called the shots. Retail outlets were few and far between and mostly centered in urban areas. With the shift to urbanization, the producer’s power diminished. This period was marked by an increase in malls, specialized retail outlets and big box stores. As media became an ever-increasing force, the onus shifted to retailers to create demand for products. In the current stage, globalization and technological advances have taken the retail market to a whole new level. Effective mass global manufacturing and distribution networks have created an unprecedented surge in supply, thanks to the proliferation of retail outlets or e-commerce websites.

We live in a globalized, mass marketed, consumer hungry society.

We know that.

But what does this mean for the business of retail?

Consumer value has shifted, going beyond the desire of quality and fair pricing. Consumers want experiences – they want to emotionally connect to their retailer. Lewis even went so far as to discuss the consumer’s neurological connection being tied to their retail experience. Customization is key; conformity is out. Democratization of trends is in; exclusivity is out. Community is utmost. Sustainability is a way of business and no longer a marketing tool. Survival of the fittest is not sufficient. Retailers must excel in every aspect.

CanadaFashionLaw urges you to run as fast as your stiletto-clad, pedicured feet will go to pick up a copy of Robin Lewis’ “The New Rules of Retail”.

Silently in the Night…Canada Gets its ACTA Together

2011-10-04T13:53:00.000-07:00

Did you know that this past week Canada become a signatory to the international treaty the Anti-Counterfeiting Trade Agreement (or “ACTA”, if you want to flex your legal prowess)? Chances are you don’t and you’re not alone, but CanadaFashionLaw does and is eager to share! Sharing is caring, after all!

What is the Anti-Counterfeiting Trade Agreement?

The Anti-Counterfeiting Trade Agreement is an international treaty that was cooked up by Japan and the US in 2006 in a joint effort to combat counterfeit products on a global scale. In 2007, Canada joined the negotiations but did not become a signatory until very recently.

ACTA attempts to create international standards to facilitate a cohesive global attack on counterfeiting between countries.

Why Do We Need a Global Agreement for Counterfeiting?

Perturbed that you may not be able to get your designer purse for a fraction of the cost? Too bad, so sad! Counterfeiting is a serious issue that needs to be addressed. CanadaFashionLaw previously tackled the great ramifications of counterfeiting to Canada (click here to hone up on this issue).

Canada’s Foreign Affairs and International Trade department endorsed the necessity of bolstering Canadian intellectual property laws:

“The emphasis on innovation as a measure of global competitiveness as well as the growth in participation of the Canadian economy in global trade have made the international dimension of intellectual property policy increasingly important.”

Why All the Secrecy?

Some of the countries that participated in the negotiations (cue fake cough “US”) classified the negotiations as secret. Thus, although the Canadian government has been involved in the negotiations for a number of years, the Canadian public was not allowed access to any of the information. There was essentially no information available on Canada’s position on ACTA. At one point, a well-reputed Canadian intellectual property law professor submitted an access to information request to the Canadian government. Rumour has it that in response to the request, the Canadian government only confirmed the name of the act. Of course, this type of secrecy does not sit well with many stakeholders.

What Does ACTA Entail?

ACTA can be broken down to a 3 prong plan of attack:

Improving international cooperation between countries;
Establishing best practices for enforcement;
Architecting a more effective legal framework for enforcement.

An interesting aspect of ACTA, which will directly benefit Canada, is the focus on border controls. Going back to CanadaFashionLaw’s previous article dealing with the issue of counterfeiting, Canada’s ability to enable borders patrol to actively participate in the war against counterfeiting is critical. It is critical in controlling the import of counterfeit products into Canada and it is also critical in ensuring that Canada is a player in the international trade market.

Who RSVP’d to the Party?

So far, Australia, Japan, Mexico, Morocco, New Zealand, Korea, Singapore and the US have endorsed ACTA, along with

Canada

So What Next?

Probably, we wait. Ratification of legislation is one thing, implementation is another.

Taking on the World...Taking Your Brand Global.

2011-09-21T11:25:00.000-07:00

After attending a fabulous intellectual property law conference in Chicago last week, I started thinking about Canadian designers who are looking beyond our borders for success. What information can CanadaFashionLaw bring to these designers? Today, we’re thinking global!

In the fashion world, it’s a global world. Surprisingly, the luxury goods market has been buoyed despite the crumbling economic climate in Europe and North America, thanks to the increasing middle class’ purchasing power in emerging markets such as India and China. Perhaps if you think global you’ll (hopefully) benefit from the different economic climates throughout the global economy.

But taking your brand globally can be expensive. The maze of distributors, suppliers, real estate, tax planners etc. expands. And so do their fees! Unfortunately, law is no different. From a brand protection standpoint, intellectual property protection is granted on a country-by-country basis. (Obtaining trade-mark protection in Europe is slightly different and can be obtained on a regional basis). Once your fashion line goes global, the Canadian trade-mark registration that you diligently obtained will only protect you in Canada. Not in the US, not in Europe, not in Japan. I think you get the point. But if you’re operating in these countries, you should contemplate seeking trade-mark protection in each of those countries. Yes it’s cumbersome, complicated and cher, but it is necessary to ensure that your company’s brand, which is the major (if not, most important) asset, is protected.

Think strategically.

Think sensibly.

Be budget conscious.

Do your research!

Does the market justify launching in that country?

Is there long-term growth potential in that country?

Has there been positive response to your clothing line?

Where there is potential for market presence in a country, adopting a legal brand protection strategy in that country makes sense.

Now, these are all factors to consider when taking proactive steps to protect your brand.

What happens when you have a global brand and “it” hits the fan?

Do you come out like a well-dressed John Wayne ready to sheriff your brand on a global scale? Likely not. Litigation is not cheap! A custom-made fur jacket lined with raw silk is likely a bargain compared to the cost of global litigation! (I do not have or condone wearing a fur jacket and no animal was harmed in the writing of this article).

One of the seminars at the Chicago conference looked at managing multi-jurisdictional litigation. Universally, the speakers agreed: the cost of litigating in every country that a company has a market presence is not a smart business decision. Take, for example, the Christian Louboutin v. Yves Saint Laurent case. Both companies are global brands, yet the case is based in the US. Why?

Behind every legal action taken by a company, there is a business rationale.

What are the budgetary constraints of the company?
How much does litigation cost in a country?
Which country is a symbolic power-house?
Which country does the brand have the strongest market presence?
Administratively, which country’s legal system has the quickest turnaround for the judge to render the final decision?
Which countries have the strongest enforcement or damages awards?

Think business. Think budget. Think global. Think long term.

Swimming Against The Tide: Wisdom from Canadian Swimwear Designer, Reyhan Sofraci

2011-09-12T17:38:00.000-07:00

CanadaFashionLaw has a passion for fashion and for laws that assist the fashion industry. We'll take any opportunity to learn more about the fashion industry. From attending industry events to understanding the challenges the designers face to looking at the less-sexy legislation, regulatory regimes and case law that affect the fashion industry, CanadaFashionLaw aims to get a full understanding of the fashion industry. In this article, we learn from Montreal-based swimwear designer Reyhan Sofraci, owner of the swimwear lines Aqua di Lara and Qiss Qiss.

CanadaFashionLaw first became acquainted with Reyhan through an interview she conducted with the television show In Fashion a few years ago. Feeling the U of T alumni connection and impressed with Reyhan's hootz-pah to launch a swimwear collection without any formal fashion design training, CanadaFashionLaw has been watching Ms. Sofraci go from success to success.

In this interview, we get Reyhan's take on getting past the development stages in the fashion industry to becoming a noteworthy contestant in the niche luxury swimwear industry. Enjoy!

You were recently featured in Miami’s Fashion Week. How did it go? What was the inspiration behind this season?

The inspirations this season were:

Quartz - marble and natural influences

Farrah - 70’s inspired prints and silhouettes

Ecdysis - Snake prints

Golden Lights - Gold accent weaved and net prints

It went very well. this was our third season presenting and it was a blast as usual.

You have two swim wear lines: Qiss Qiss and Aqua di Lara. Why? How are the different? Does your merchandising and marketing strategy change for each line?

Aqua Di Lara is a trend-forward line catering to an older audience between the ages of 18 and 35 who appreciates originality and style and function. We market this to more independent woman who possess a strong dominating personality and who are financially secure. The items are made in limited quantities in order to ensure that the customer feels special.

Qiss Qiss is our junior line that caters to girls between 14-25 and is fun, flirty and sexy. It is more on trend and changes every season to suit what girls who love fashion seek in the market. It's trendy with a twist. We market Qiss Qiss at various events catered to the high school and freshman university crowd. Bikinis dominate the collection and its all about eclectic fashion.

Is the swimwear market a niche market that requires special skills to navigate through – or do the same principles apply throughout the fashion industry?

Swimwear is extremely seasonal.

You have one presentation per year versus the 3-4 that clothing companies provide. If people don’t like your collection in a year, you have to basically wait until the next one to get their attention again. So it is a yearly cycle versus the monthly that most clothing companies face and can be extremely challenging.

There are also similar expectations that have extended into the swimwear market in respect to style. People are seeking more coordinating looks and strive to achieve the complete ensemble. Many swimwear manufacturers including us are now offering items to better merchandise your look. Runway fashion is definitely becoming more desired and acceptable on the beach and in the pool scene.

When you were an emerging designer and business owner, what were the significant or most surprising challenges you faced? How did you overcome them?

People copying our designs was a huge one.

The worst was it was big companies that took advantage of our designs and promoted them as if it was their own. I find this the hardest as they have a huge network and blast the item everywhere and people associate the look with them when it was clearly yours from the start. Lacking the funds to do anything is always discouraging.. I guess there is flattery in being copied..but unfortunately it is also followed with a financial loss, as well as loss of recognition. I am very sensitive to this matter and always try to ensure our designs are as new as possible. If anything slipped through the cracks I would always do my best to ensure that credit is given where it is due.

Now as an established designer and business owner, what are your challenges?

The web - it can be extremely beneficial in some respects and a huge detriment in others.

We present our collections in July and items are not in stores for months later. Bigger commercial companies see the suits and prints online the very next morning, sometimes even instantly. With their weekly turn around time, they copy them and the suits are out in stores at a fraction of your prices. So by the time you get your items to the shelves, they seem old to the eyes of the consumer.

What kind of financial, business or support resources/services were/are available to you either through the government or the fashion industry? How did they help you?

The most helpful was Promode and the Career Focus Program. These two are fantastic ways that the government offers support. One thing is important to note though, there are a lot of support programs when you first start and have not yet done anything and then again once you achieve a hefty amount of sales. There are no services provided to the most challenging parts in between these times. So you have to be strategic on when to apply for help.

You have been featured at Montreal, Toronto and Miami fashion week. How fundamental have these shows been in establishing your company? In what way?

They are important for branding. They are also somewhat of a bikini bible for media to gauge what trends are coming up for the next season as well as a good guide for pulls for photoshoots.

Your swimsuits were featured in marketing campaigns for the Next Top Model franchise – how did this happen? How has this exposure helped your company?

It was a great opportunity to be featured in both Canada’s and America’s Next Top Model. When featured in anything, it is very important to do your own PR and send out your own press releases. It does not say anywhere that those suits belong to us so it is important for the company to ensure the public is aware of where those suits came from. Exposures like this help a lot as they put your name out into the public eye. The most flattering part is that they have so many items to choose from and if they picked yours at the end, it must be because they felt it was something special.

As your business grows, are you focusing on the Canadian market or looking abroad? Why?

The US and the Canadian market are the areas in which we would really wish to keep expanding. The US market is huge and most areas have a warmer climate so that helps swim sales. Also Australia and Europe are areas we are selling in and wish to acquire more market presence. Australia has opposite seasons and Europe, well its Europe! Definitely a great market to be in.

What has surprised you the most about your journey to success?

How much time, money and energy one must invest when they start as a nobody. I had no fashion background and did not know anyone in this industry. It takes a lot of time to meet great people and I am blessed that I had the pleasure to do so. Support from your loved ones keeps you going; mental and emotional support is key.

Your official title at your company is “Creative Director”. In developing your business, did you always just focus on the creative aspects, or were you involved in the business side of developing the business. At what point were you able/or feel comfortable solely focusing on the creative side?

In all honesty, I still take care of the business side too. I always loved the arts and the maths and sciences so I thrive on focusing on these different aspects of the business. If I had a choice however Marketing and Design would be my fortes.

From creating to manufacturing to marketing and, finally, sales – what has been the most interesting aspect of the business and why? Which has been the most challenging?

It is the same cycle every year. The funny thing is with designer brands like ours at times when we attempt to sell, some of our suits are not picked up by stores as they fear it is too different and are concerned that they will not be able to sell it. The irony is that these suits get featured in many publications months later or become the trend for the following year and the consumers are breaking down doors trying to find them... and well, that is when the stores come back to us with phone lines ringing off the hook and they say I’ll take that one!

What advice would you give the emerging designer?

Be realistic.

Follow your dream but always be aware that if you opt to start a business of your own you need to be prepared. Either partner up with someone who is business minded so you can focus on your strengths and passions or educate yourself to be able to do it on your own.

Life is full of challenges, and a business has those challenges ten-fold.

Where can we find your product lines

You can buy our brands at many swimwear boutiques in your neighbourhood or can go online and purchase them at the following online retailers:

www .swimwearboutique .com

www .swimwearworld .com

www .mollybrownsswimwear .com

Hate Will Cost You

2011-09-08T12:12:00.000-07:00

As New York’s swells with the fashionable due to New York Fashion Week, the dark side of fashion is also getting some media attention. You may recall in the beginning of this year, famed fashion designer John Galliano caught the world’s attention with his erratic outburst one evening in Paris when he hurled racist insults at a couple at a restaurant. A legal and public relations minefield erupted soon after. CanadaFashionLaw provided a run-down of the event previously. Well, the hammer has officially come down on Galliano.

Galliano was charged with “public insults based on origin, religious affiliation, race or ethnicity”.

A court in Paris has ordered Galliano to pay a fine of 6,000 Euros for his rant, a nominal payment to each victim and to 5 anti-racist organizations, and also the plaintiffs’ legal costs.

The prosecutor did not seek jail time for Galliano, despite the offence carrying a 6 month maximum term of imprisonment.

Without a doubt, the biggest cost has been to Galliano’s career. Galliano was almost immediately released from his position at Christian Dior and also from his own namesake label. Only time will tell whether he can bounce back from this embarrassment.

Toronto Gets Fashionably Savvy

2011-09-06T10:21:00.000-07:00

With Labour Day come and gone and our whites neatly folded away, it's time to get serious. Serious about Toronto's upcoming fabulous season: Fall! The Toronto International Film Festival (TIFF) is already here and LG's Fashion Week is only around the corner.

Canada's fashion industry is also getting serious. Various different organizations and businesses are hosting several events around Toronto that highlight the business-side of the fashion industry. Here's a quick hit list of great fashion events coming up in Toronto during September:

"Trend Report Fall 2011" hosted by The Bay

Hosted on-site at The Bay's flagship store on Queen Street, Fashion Director Suzanne Timmins will provide an inside look at what trends and colors we can expect to see in Fall 2011.

"Discover Innovative Ground Breaking Ideas by WSGN" hosted by the Toronto Fashion Incubator.

Also held on September 22, 2011, TFI members will get valuable insights from WGSN, a leading fashion trend researcher and analyst. This is market intelligence at its best.

"Trendsetters: Discover Your Success in Style" hosted by the Young Women of Influence"

On September 22, 2011, the Young Women of Influence welcomes Joanna Track, Co-Founder and CEO of Dealuxe (a Canadian-based online retail portal) to discuss how she successfully started up an online fashion business in Canada.

"The New Rules of Retail" hosted by Fashion Group International - Toronto Chapter

On October 4, 2011, FGI welcomes Robin Lewis, retail specialist, author and former VP and executive editor of Women's Wear Daily, to discuss the transformation of retail in today's technology-driven, recession-depressed and competition-saturated market.

All in all, September is shaping up to be a fabulously busy month...

Getting the Skinny on Models’ Health in the Fashion Industry

2011-09-01T11:57:00.000-07:00

Jacob, one of Canada’s high street fashion brands, is working in conjunction with another Canadian heavy-hitter in the fashion industry, Coco Rocha. In Jacob’s most recent advertising campaign, this dynamic duo proudly takes a stand against “photoshopping” of models in the fashion industry.

Apparently, what you see is what you get. There is no engineering of the photograph to enhance Coco’s cleavage, lengthen her leg, brighten her teeth, smooth out her blemishes, etc.

This is a welcome change – I applaud it!

(Of course, let’s be realistic! Coco Rocha is one of Canada’s most coveted models. Long, lean, light. It’s doubtful that she would really need any photoshopping. Nevertheless, I appreciate what Jacob and Coco are doing.)

We all know that the fashion industry applauds the skinny model: Kate Moss and Twiggy are infamous for their waif looks. Models on the catwalk can be disturbingly skinny. Being able to count all of a model’s ribs can be a distraction from the clothes that hang off her skeletal frame. And this isn’t just contained to the catwalk models. Next time you’re in a store, take a look at the size of the clothes the mannequin is wearing. Oftentimes it’s the smallest size possible. And even then the clothes are pinned onto the mannequin as the clothes may be a little loose. This is irritating. (Don’t get me started on hiring pre-pubescent children as models for women’s clothing.)

So, thank you Jacob and thank you Miss Rocha for this new collaboration.

CanadaFashionLaw also wants to give a shout out to the Council of Fashion Designers of America (“CFDA”). In January 2007, CFDA, concerned with the proliferation of child models and anorexic models in the fashion industry, launched an initiative (the CFDA Health Initiative) looking into the health of models. Creating guidelines, workshops and industry awareness campaigns on creating health work environments, CFDA has had some success in creating a dialogue and an awareness.

Earlier on this year, CFDA went a step further and launched the CFDA Health Initiative Ambassador Program. Getting buy in from top model agencies such as DNA Model Management and IMG Models, this program looks to recruit healthy and successful models to mentor the new fresh faces of the fashion industry. The program also educates the next generation of models on healthy lifestyles, relying on the expertise of nutritionist and eating disorder therapists.

All in all, these are positive steps forward.

Protect Your Brand As The Internet Goes X-Rated

2011-08-29T14:18:00.000-07:00

ICANN, the non-profit organization that governs the internet, has approved the launch of a new generic top-level domain (“gTLD”) on the internet: “.XXX”.

Obviously, this gTLD is geared specifically toward the adult entertainment industry, but brand owners in other industries, such as the fashion industry, can block their online brand from becoming x-rated.

Fashion houses that don't want to be associated with the porn industry should take advantage of this opt-out provision in the launch of the “.XXX” gTLD.

To give some background, a gTLD is the last component of a domain name (i.e. ‘dot-com’, ‘dot-net’, ‘dot-org’). Until recently, there were 21 gTLDs. With over 1.6 billion internet users, and every indication that this number will increase exponentially, ICANN became concerned that the internet highway would cease to be limitless. The approval of the “.XXX” gTLD is the first step in creating more options for internet users. CanadaFashionLaw previously explained the full ramifications for the launch of new gTLDs.

There is a priority period for registering new “.XXX” domain names, which also enables brand owners to block their trade-marks from becoming part of a 3^rd party “.XXX” domain name.

This sunset period spans September 7, 2011 until October 28, 2011 and will be available in 2 phases, after which the “.XXX” domain names will be available on a first-come, first-serve basis.

SUNSET PERIOD FOR REGISTRATION
Phase	Available to:	Comments
A	Brand owners in the adult entertainment industry	This allows companies in the adult entertainment industry to reserve their online space with the .XXX gTLD extension.
B	Brand owners outside of the adult entertainment industry	An opportunity is given to brand owners to block their trade-marks from being used with the .XXX gTLD extension by any party.

In order to qualify to block your company’s brand from becoming an x-rated website, the following are required:

a) The brand owner must own a trade-mark registration for the proposed domain name;

b) The trade-mark cannot be in the application stages;

c) The trade-mark must be registered in a jurisdiction that the brand owner conducts substantial business or bona fide commerce;

d) If a brand owner is seeking to “opt-out” (i.e. those is Phase B), the “opted-out” domain name must be identical to the trade-mark.

In addition to fulfilling the above requirements, filing fees are also incurred.

It is important to note that if a brand owner not in the adult entertainment industry successfully blocks the x-rated domain name, it is only valid for 10 years. Domain name dispute proceedings are applicable.

Act quickly if you want to ensure that your company’s brand does not become x-rated!

Increased Cost of Doing Business in Canada Felt by the Consumers

2011-08-24T13:30:00.000-07:00

The summer has been good to Toronto’s fashionistas. First, J. Crew takes its first steps to expand internationally, using Toronto as its guinea pig. Second, Intermix follows suit. Third, Ryan Gosling plays the bad boy in Crazy Stupid Love. And the cherry on top? The Toronto International Film Festival announces that Ryan Gosling will be in town for the debut of his movie, Ides of March. As much as we love Ryan Gosling, let’s focus on what’s happening with J. Crew and Intermix.

Cashing in on J. Crew’s US halo effect with vacationing Canadian consumers, along with a surge of online Canadian consumers, J. Crew found Toronto to be a natural extension. There was great anticipation over J. Crew’s launch of its first non-American location, which occurred last week. Crowds swarmed the Yorkdale Mall location. However, there was some back-lash. J. Crew raised its merchandise prices by about 15% over its US prices. The prices soared even higher for the online consumer in Canada, with an increase of over 50% compared to the

website. There was significant criticism from the Canadian consumer, which J. Crew has advised will take under consideration.

Despite a surge in the Canadian dollar, the price difference between Canada and the US seems to be increasing. US retailers justify the increased retail prices in Canada on the higher cost of conducting business in Canada: import duties, higher taxes and the cost of expanding the business internationally. Unfortunately, the Retail Council of Canada is not surprised by this, citing that retailers normally raised retail prices by an additional 12% to 25% in Canada. Given the geopolitical differences in

Canada

, there are fewer economies of scale, creating higher costs to distribute products, which is reflected in higher retail costs.

Given Intermix’s already steep prices, it will be interesting to see whether Intermix consumers in Canada will have the same experience as J. Crew consumers. If yes and the Canadian consumer is turned-off by the inflated prices, this may be good news for Canadian competitors such as Aritzia and TNT. (If you're interested in learning more about TNT and pearls of wisdom from its owner, feel free to read this article).

By the way, Intermix has announced that it will officially open its Bloor Street location this Friday. See you there!

Big Blow to Christian Louboutin

2011-08-17T14:14:00.000-07:00

This is a long one, feel free to grab a glass of wine.

If you’re in the fashion world, unless you’ve been under a rock, you’ve likely heard about the rumblings between Christian Louboutin and Yves Saint Laurent. CanadaFashionLaw has been covering this matter step-by-step with interest.

In a recent decision by US District Judge Victor Marrero, Christian Louboutin was given a hard blow.

What is the Decision Deciding on?

Christian Louboutin was seeking a preliminary injunction against Yves Saint Laurent, which essentially means that Christian Louboutin was asking the court to ban Yves Saint Laurent from continuing the make the allegedly infringing shoes in the mean time until the court had made its final decision.

In order to obtain a preliminary injunction in the US against Yves Saint Laurent, the onus is on Christian Louboutin to establish:

a) irreparable harm; and

either,

b) a likelihood of success on the merits,

or,

c) sufficiently serious questions going to the merits of its

claim to make them fair ground for litigation

(try saying that three times fast!)

In a Nutshell, What was the Decision?

No, Christian Louboutin was not granted the preliminary injunction. Yves Saint Laurent can continue to market its red-soled shoes in the meantime until the court makes its final decision.

What Did the Judge Have to Say?

The decision started off very complimentarily to Christian Louboutin. It was almost novel-like:

“Sometime around 1992 designer Christian Louboutin had a bright idea.”

“Whether inspired by a stroke of original genius or…copied from King Louis XIV’s red-heeled dancing shoes, or Dorothy’s famous ruby slippers in “The Wizard of Oz”…Christian Louboutin deviated from industry custom.”

“Over the years, the high fashion industry responded, Christian Louboutin’s bold divergence from the worn path paid its dividends.”

“When Hollywood starlets cross red carpets and high fashion models strut runways, and heads turn and eyes drop to the celebrities’ feet, lacquered red outsoles on high-heeled, black shoes flaunt a glamorous statement that pops out at once.”

“For those in the know, cognitive bulbs instantly flash to associate: ‘Louboutin’.”

It was at this point that I thought I was reading the sequel to The Devil Wears Prada…

And then, the judge goes on to discuss how intellectual property laws are created to reward innovation:

“The law, like the marketplace, applauds innovators. It rewards the trend-setters, the market-makers, the path-finding non-conformists who march to the beat of their own drums.” (Who knew intellectual property could be so sexy?!)

“To foster such creativity, statutes and common law rules accord to inspired pioneers various means of recompense and incentives. Through grants of patents and trademark registrations, the law protects ingenuity and penalizes unfair competition.”

Such innovation, such recognition, such media attention!…and, yet, ultimately in this decision the judge questions whether Christian Louboutin’s registered trade-mark is even viable.

Huh, Come Again?

Here’s a summary of the judge’s reasoning:

1. The judge recognizes that color can be protected as a trade-mark, but there is a functionality bar. If the color has attained ‘secondary meaning’, whereby the color identifies and distinguishes a brand, it is protectable.

2. In some industrial markets, products are so standardized in shape, design and general composition that color can be a key distinguishing feature. Doesn't the sole of a shoe fits under this analogy? But, the judge held that the fashion industry is a different beast that should not be given the same benefits.

3. Because color is so integral to the fashion industry, whose whole mandate is ornamental and aesthetic, color takes a more prominent role. It defines seasons, trends and tastes.

4. In the fashion world, according to the judge, color advances expression of ideas through fashion more so than to identify the source of the design, which is a fundamental tenet of trademarks law.

6. The judge seems to put a fair amount of emphasis on the artistic nature of the fashion industry, thereby differentiating from other consumer products industry, using terms such as “fanciful business” and then launches into an analogy between artists and fashion designers (Monet and Christian Louboutin are, apparently, one and the same), which is a little outside the scope of the matter at hand.

7. Moreover, emphasis is placed on the transient, trend-obsessed nature of the fashion industry: “it is susceptible to taste, to idiosyncrasies, and whims and moods…”. Yet, Christian Louboutin consistently uses his red-soled shoes regardless of the whether red, white or pink is the new black.

8. Again, the judge states that color plays an important and unique role in fashion – its ornamental nature draws the consumer’s attention. But isn’t this the same with any other widget that employs color are part of its branding?

9. The trade-mark registration covers “lacquered red soles” for women’s high fashion designer footwear. This is an ambiguous color claim and could have significant ramifications for competition. Should any company be precluded from using any shade of red on any type of shoe. Would a welly-boot sold from Wal-Mart be an infringement of Christian Louboutin’s trade-mark rights? This is a valid point. I wonder if Christian Louboutin had pin-pointed the shade of red or the type of shoe, would the judge have reasoned differently?

10. Ultimately, the judge questions whether a color in the fashion industry can be functional and, therefore, not eligible for trade-mark protection. Christian Louboutin admitted that there were reasons for choosing red. It’s a flirty, sexy, engaging, eye-catching color. But just because there is a rationale for choosing a color, does that mean that it’s functional? Would an anti-anxiety tablet that was blue, because of the color’s soothing qualities, not qualify for trade-mark protection on account of the color’s functionality? The judge also stated that the color was functional because adding the lacquer to the shoe increased the cost of production for the shoe, which validated the increased retail price. But wouldn’t the affixing of any trade-mark likely increase the production cost? Nike’s swoosh mark is embroidered into its t-shirts. The thread is an increased production cost. Does this make the trade-mark functional because it enables Nike to increase its retail price?

I Wonder…

Would this decision have been different if Christian Louboutin had obtained a slightly different trade-mark registration, eradicating the general nature of the statement of wares and color claim. If “footwear” read “high heels” and “lacquered red” was a specified Pantone color, would the judge have been persuaded that Christian Louboutin’s trade-mark rights were valid?

What Can we Expect?

Appeal, appeal, appeal. First, let’s remember that this is not the final decision in the matter. (Although, it’s not looking good for Christian Louboutin). But, it’s likely that Christian Louboutin will appeal this to higher courts – he’s got a lot riding on this case.

Is Canada a Counterfeiting Safe Haven?

2011-08-09T08:32:00.000-07:00

A very savvy, stylish and respected fashion journalist recently posed an interesting question to CanadaFashionLaw:

“Why is Canada a counterfeiting safe haven?”.

Being a bit of a fashion geek, this question got my fashion legal “mojo” going. Wearing my prudent lawyers’ hat, let’s just say…there’s room for improvement.

Counterfeiting is big business in Canada. In fact, studies indicate that the market value of counterfeiting is in the $20 to $30 billion range. This is a shockingly significant amount. Moreover, given the intrinsic clandestine nature of counterfeiters, these may be conservative estimates. Some consumers may take the position:

“So what?

Louis Vuitton makes enough money from those Bloor street babes.

What does it matter if I buy a knock-off?”

But this is narrow sighted. The implications of counterfeiting goes well beyond the brand owners’ purse strings:

1.        There are health and safety risks with using counterfeit products.
2.         There is a loss of sales revenue throughout the fashion industry chain. Not only do the brand owners lose out, the distributors, importers and retailers of legitimate product are also impacted.
3.         Less revenue throughout the fashion industry chain, means less jobs in the fashion industry.
4.         The government is also negatively impacted: less sales revenue equals less sale tax revenue.
5.         Counterfeiting is also largely associated with organized crime and even terrorists groups.
6.         In a bigger sense, counterfeiting also affects Canada’s reputation internationally. Some countries or international brands may be less willing to trade with Canada, if they believe that counterfeiting is rampant in Canada.

Unfortunately, the last point is poignant for Canada. The US Trade Representative issues an annual report examining its trade partners. The US Trade Representative has consistently ranked Canada as a country to watch. In fact, Canada is up there with other noteable counterfeiting hotspots countries, such as China.

So why is America perturbed by

Canada

’s counterfeiting situation?

Canada is not known as a great manufacturer of counterfeit product.

Canada is known as a great importer of counterfeit product.

Canada has a history of perceiving counterfeiting as a private civil matter: the negative effects of counterfeiting are constrained to the brand owner. Therefore, it is up to the brand owner to act as its own police force. But, as we have seen above, there are wide-reaching ramifications to counterfeiting.

Although there are criminal sanctions possible for counterfeiting, the RCMP is oftentimes less involved in the combat against the importation of counterfeit goods. There are limited financial resources and a lack of specialization in identifying counterfeit products and prosecuting against counterfeiters. All in all, counterfeiting is a lesser priority for the RCMP. And when the RCMP is involved, it targets the large scale importers, distributors and manufacturers.

So it is largely up to the brand owner, in conjunction with the Canadian Border Services Agency (“CBSA”), to police the Canadian borders. The CBSA processes the importation of goods into Canada. You would think that this would be a key player in combating the importation of counterfeit goods into Canada. Unfortunately, the CBSA is a bit of a sitting duck. It is has not been given the unilateral right or authority to detain counterfeit product. The process to block counterfeit goods from entering into Canada is somewhat involved:

The brand owner must obtain a court order allowing the CBSA to detain the goods for the brand owners’ inspection.
In order to obtain a court order, the brand owner must compile significant evidence about the incoming shipment to Canada – not an easy task.
The court may require the brand owner to post security (basically a deposit with the court) for possible storage/handling charges relating to the detainment of the counterfeit goods.
Once the detention order is granted, the CBSA can intercept the shipment and hold the goods for inspection by the brand owner.
The brand owner must inspect the goods within 14 days and commence an additional legal action to determine the validity of the counterfeit products.

As you can imagine, this process is financially and administratively cumbersome for the brand owner.

Compare this process with other countries that allow brand owners to proactively register their intellectual property with the border controls, who are allowed to unilaterally act upon this information, you can see that Canada’s border control system could use a little work.

I am not a doom and gloom kind of girl. I do not think that Canada’s intellectual property law system is a failure; it works and it’s operable. But, Canada’s border controls are running at half steam and, let's face it, everything could use a little “nip and tuck” once in a while.

Lessons Learned: Harvey Nichols & Co. loses Trade-mark Rights in Canada

2011-08-05T12:22:00.000-07:00

I am a London girl at heart (born and raised) so when I came across a recent Canadian decision about Harvey Nichols, it caught my attention. (Visions of a glass of bubbly at Harvey Nichols’ rooftop café danced in my head). I digress.

I was not shocked by the decision: Harvey Nichols does not operate in Canada (tell me something I don’t know!) and, therefore, its Canadian trade-mark registration is not valid. But the decision is useful in illustrating the importance of use in acquiring (and maintaining) trade-mark rights in Canada. So, we shall file this case under “lessons learned”.

The Facts

Harvey Nichols & Co. (the famed high-end London department store) was granted a trade-mark registration for HARVEY NICHOLS in association with a wide range of clothing, toiletries, jewellery and luggage and also retail department store services.

The Canadian Trade-marks Office, on the behest of a third party, issued a Section 45 expungment notice, requiring Harvey Nichols & Co. to demonstrate that it is using its trade-mark in Canada in order for the trade-mark registration to remain valid.

What is an Expungement Proceeding?

Canada

is a “use it or lose it” jurisdiction. In order to have trade-mark rights in Canada, you have to use the trade-mark in Canada. (It does not have to be immediate use. If you are seeking a trade-mark registration, you can base the application on proposed use – but there has to be use of the trade-mark in Canada at some point before it registers). Use is also critical in maintaining rights to the trade-mark in Canada. If you stop using the trade-mark, you stop having rights to the trade-mark: “use it or lose it”.

Three years after your trade-mark registers, it is possible for “any interested party” to lodge a request with the Canadian Trade-marks Office to seek evidential confirmation that you are continuing to use the trade-mark in Canada. This is an expungement proceeding. It is then up to the trade-mark owner to provide appropriate evidence to demonstrate that the trade-mark has been used in Canada. If the evidence does not satisfy the Canadian Trade-marks Office, then it is possible that the trade-mark registration will be “expunged” (essentially, deleted).

How did Harvey Nichols & Co. React?

Dutifully, Harvey Nichols & Co. filed affidavit evidence attesting to the continued use of the trade-mark HARVEY NICHOLS in

Canada

. The evidence was largely based upon its online store, which is facilitated through its website. The affidavit included evidence that gift vouchers and Christmas hampers are bought online from Canadian consumers. Moreover, there was evidence of online traffic from Canadian IP addresses and purchases by credit cards owned by Canadians.

Where did Harvey Nichols & Co. Go Wrong?

First, evidence was produced with respect to Christmas hampers and gift vouchers – yet neither of these were itemized in the trade-mark registration. The screenshots of Harvey Nichols & Co.’s website did not display pictures of the Christmas hampers, nor was the evidence of delivery of these Christmas hampers to Canada. Thus, there was no evidence of use of the trade-mark with any of the wares listed in the Canadian trade-mark registration.

In today’s digital age, the Court recognizes stores do not have to have a “brick and mortar” presence to be using a trade-mark in Canada. Online retail stores can satisfy the use requirement. However, in reviewing Harvey Nichols & Co.’s website, there was no information that was pertinent to Canadian shoppers. There was no Canadian pricing, no Canadian contact information, no shipping policy directed to Canadian deliveries etc. Moreover, there was no evidence submitted that proved that Canadians bought merchandise from Canada for delivery to Canada.

Lessons Learned

First, carefully draft the trade-mark application to fully reflect all of the wares and services that the trade-mark will be used with. Then, regularly conduct audits of your trade-mark registrations. Has your product line/business plan changed? Perhaps additional trade-mark registrations should be obtained.

Second, if you are going to operate an online retail component to your business, include an explicit Canadian presence.

Third, keep accurate and comprehensive evidence of use of your trade-mark in Canada.

Desperately Seeking Salvation: Louboutin Makes Last Ditch Effort to Save Red-Sole

2011-08-02T11:13:00.000-07:00

The Christian Louboutin v. Yves Saint Laurent debacle has caught the attention of the fashion law world. These are heavy hitters in the fashion industry that are scrapping it out over the infamous red-soled shoe (or generic - depending on whose team you are on). CanadaFashionLaw has looked at this matter indepth: click here and also here for summaries.

Pleadings have been plead, submissions have been made, evidence has been compiled (and ripped apart) and Christian Louboutin's counsel is ensuring that it gets the final word in. In fact, Christian Louboutin's counsel recently submitted an "after the fact" letter to the court confirming its position. To be honest, a lot of the details are redundant. Here's a quick snapshot of Christian Louboutin's position:

Christian Louboutin's are notorious and iconic.
If the court does not grant a preliminary injunction against Yves Saint Laurent, it will create a flood gate for other infringers, thereby further diluting Louboutin's brand. (If you're interested in learning about injunctions from a Canadian perspective, I give a quick explanation here).
Christian Louboutin's trade-mark registration covers red on the bottom of the sole. There is no requirement under the US Trademarks Office's guidelines to specify exactly which shade or tone of red the registration covers. It is up to competitors to sufficiently differentiate themselves from that color to avoid confusion in the marketplace.
Christian Louboutin's trade-mark registration is valid - there is no evidence that challenges the enforceability of the trade-mark registration.
The fact that Yves Saint Laurent largely started use of the red sole in relation to its shoes after Christian Louboutin demonstrates infringement, rather than happenstance or competitive necessity.

Stay tuned - I expect there will be more movement with this case. Is anyone else reminded of a cat fight between Krystle and Alexis in Dynasty, or have I just dated myself?

Beware: There’s a New Target Coming to Town

2011-07-27T12:33:00.000-07:00

Bargain hunters must be thrilled with news that the US’ coveted Target stores are set to launch in Canada. Other brand owners are not as thrilled, specifically

Canada

’s clothing conglomerate that houses Fairweather Ltd. and International Clothiers Inc. The parties have been embroiled in a series of legal proceedings over the trade-mark TARGET. Here’s a breakdown of what’s been happening:

The Parties

Target Brands Inc., as we all know, is a US retail department store that operates under the TARGET and bull’s eye trade-marks. It has a significant market presence in the US, with over 1740 stores in 49 states. Its revenue exceeds $65 billion (US) annually. Target Brands Inc. does not currently operate in Canada or ship purchases to Canada. Nevertheless, Target Brands Inc. maintains that it is well-known by Canadians due to significant cross-border advertising and the number of Canadians visiting the

stores. Target Brands Inc. is looking to enter into the Canadian market with a tentative launch date in 2013.

Fairweather Ltd. and International Clothiers Inc. (we’ll call them “Fairweather” from now on) are related companies that sell private label clothing and accessories. In 2001, Fairweather bought the trade-mark TARGET APPAREL from another clothing company that went bankrupt (Dylex Limited). As of 2003, Fairweather operated a clothing store in Toronto under TARGET APPAREL. Since 2009, Fairweather rolled out a series of stores under the TARGET APPAREL brand across

Canada

Legal Proceedings

It is clear that Target Brands Inc. is not happy with the TARGET APPAREL brand as it has made a number of attempts to oust TARGET APPAREL from the Canadian marketplace.

The first attempt was to invalidate the TARGET APPAREL trade-mark registration on the basis of no use in the marketplace (this is commonly referred to in Canada as a Section 45 expungement proceeding). Ultimately, Fairweather was able to show that it had continued to use the trade-mark TARGET APPAREL and Target Brands Inc.’s attempt to invalidate the trade-mark registration was unsuccessful. (In fact, the decision was appealed all the way to the Federal Court of Appeal – but that’s another story). Not happy with this decision, Target Brands Inc. is trying again and the proceeding is underway.

What’s On Deck This Time?

Target Brands Inc. also took a more aggressive approach and is seeking a permanent injunction and damages. Also, Target Brands Inc. brought a motion for an interlocutory injunction. It’s pretty clear that Target Brands Inc. is not messing around with this and has some money to throw at the problem.

(If you’re scratching your head over injunctions – here’s a quick rundown. An injunction is a court order to stop someone from doing something. A permanent injunction stops them from doing something forever. An interlocutory injunction stops that them from doing it until the final decision is made – basically until the final court decision has been issued.)

Can Fairweather Continue to Use TARGET APPAREL in Canada?

Yes, for now.

But, keep in mind that this decision only deals with the interlocutory

injunction (or the “in the meantime” injunction).

The court still has to decide whether it will grant the permanent injunction

which will mean that TARGET APPAREL can no longer be used in Canada.

Target Brands Inc. has taken the position that Fairweather is trading off of its reputation and goodwill associated with its TARGET brand. Even though Target Brands Inc. has not started trading in

Canada

, it believes that the TARGET APPAREL brand does not provide the same level of service and will tarnish Target Brands Inc.’s reputation.

Fairweather, on the other hand, believed that if the court granted the interlocutory injunction it would be tantamount to granting a permanent injunction. Fairweather would be required to pay significant money to re-brand “in the meantime” until the final decision was rendered.

The court was convinced that even though Target Brands Inc. was not yet operating in Canada, it had developed significant goodwill in Canada and its brand was at risk. Overall, the court took a pragmatic approach. Given that Target Brands Inc. will not officially enter the Canadian marketplace until 2013 and that the trial for the permanent injunction was scheduled for November 2012, the coincidental timing didn’t warrant the granting of an interlocutory injunction.

Reaching Out Through Toronto Fashion Incubator

2011-07-25T06:46:00.000-07:00

CanadaFashionLaw is delighted to be asked to participate in Toronto Fashion Incubator's Meet and Mingle event tonight. I have a great amount of respect for this organization and how supportive it is of upcoming designers. So, I decided to help spread the word.

The Toronto Fashion Incubator is a non-profit organization that launched in 1987. At that time the fashion industry was booming in Canada and was a significant employer in Toronto, which some believed warranted special consideration. The City of Toronto supported the creation of a business incubator targeted toward the fashion industry and, thus, the Toronto Fashion Incubator was created.

Funded largely in part from government grants, the Toronto Fashion Incubator seeks to encourage, educate and support emerging Canadian fashion designs launch their fashion lines. Here fashion designers learn about the business of fashion: marketing, sales, export, manufacturing, accounting, law and strategic business planning. The Toronto Fashion Incubator also offers the opportunity for designers to rent workshop space and design studios to assist with starting up the business.

The Toronto Fashion Incubator hosts a wide variety of events, one of which is today's event that I have been asked to participate in: Meet & Mingle. This event is geared toward enabling fashion designers exchange information in an informal setting. The Toronto Fashion Incubator provides many substantive events as well as networking opportunities such as Trend Forecasts, and Press and Buyers Breakfast. Arguably its most notorious event is the TFI New Labels show, which showcases emerging Canadian talent.

Updates on Christian Louboutin v. Yves Saint Laurent

2011-07-22T08:16:00.000-07:00

There have been some interesting developments in the Christian Louboutin v. Yves Saint Laurent case (first reported here). Hold on to your seat because it turns into a bumpy ride.

Louboutin is claiming trade-mark infringement and seeking an injunction and damages against Yves Saint Laurent’s use of red shoes with red soles.

Yves Saint Laurent has come back hard seeking to cancel Louboutin’s trade-mark registration upon which the trade-mark infringement claim is based. Yves Saint Laurent is claiming that Christian Louboutin’s trade-mark registration was fraudulently obtained. Yves Saint Laurent claims that as part of the trade-mark registration process Christian Louboutin included a false statement that its use of red soled shoes was substantially exclusive. Yves Saint Laurent claims that this was a false and misleading statement, given that the marketplace demonstrates that other companies use the red soled shoe.

Christian Louboutin sought to dismiss Yves Saint Laurent’s counter-claim to cancel Christian Louboutin’s trade-mark registration on the basis of fraud.

Christian Louboutin then proceeded to seek to obtain a preliminary injunction against Yves Saint Laurent. (A preliminary injunction is a court order that restrains a party from continuing its questionable conduct until the case has been decided. In this matter, Christian Louboutin is asking the court to force Yves Saint Laurent from selling its allegedly infringing shoes until the case has been decided).

As part of its submissions to obtain the preliminary injunction, Christian Louboutin took an interesting position. Christian Louboutin concedes that it is not claiming a monopoly over the color red for soles of shoes, but rather exclusivity over “lacquered red” soles:

“Louboutin’s trademark covers a specific red for outsoles, not the broad spectrum of red hues. Many shades of red and other colors are available for use by any party who wants to produce a shoe, “monochrome” or otherwise, without infringing [Christian Louboutin’s] Red Sole Mark. Even Louboutin’s red color is available for competitors on other, more visible, parts of the shoe”.

This is interesting as Christian Louboutin seems to paint its circle of exclusivity very thinly.

Christian Louboutin also maintains that its red lacquered soles are well-known in the marketplace and have acquired significant secondary meaning through its substantially exclusive use in the marketplace for 19 years and extensive media coverage and celebrity endorsement. Christian Louboutin maintains that competitors in the marketplace that also use red soled shoes are “copyists”, that should not be recognized as legitimate actors that diminish the success of Christian Louboutin’s trade-mark.

Ultimately, Christian Louboutin is pressing the court to grant a preliminary injunction as it sees this case as a possible “flood gate” for other infringers:

“Louboutin actively polices the Red Sole Mark to shut down copyists. This task will become impossible if competitors can copy the Red Sole Mark at will, as YSL has done here. Already another competitor has signaled its intent to follow suit. A flood of red soles in high fashion women’s footwear creates the danger that Louboutin’s goodwill, market prominence and fame will be destroyed, thus threatening its entire goodwill.”

Christian Louboutin has a lot riding on this case. It will be interesting to see how this case will unfold. Stay tuned to CanadaFashionLaw.com for regular updates.

Update From The IDPPPA Trenches: Interview with US Fashion Attorney Charles Colman

2011-07-20T11:36:00.000-07:00

The US is looking to revise its copyright act to extend copyright protection specifically to fashion designs, which has been a lengthy and somewhat controversial process. CanadaFashionLaw.com previously provided a summary of the latest attempts at legislative reform. The IDPPPA hit parliament hill in July for a congressional hearing, which caused a flurry of commentary from the fashion community.

Meet Charles Colman, who is a Manhattan-based fashion lawyer. Charles serves as the Co-Chair of the Fashion Design Legislation Subcommittee at the American Bar Association and recently sponsored the creation of a Fashion Law Committee at the New York City Bar Association. I wanted to get the inside scoop from Charles on what is happening with the IDPPPA and fashion law in the US. Here's what he had to say:

1. You have participated in the Fashion Design Legislation Subcommittee of the American Bar Association. What were the major themes of debate between the advocates of legislative change and those that objected?

In true lawyer form, I’m going to begin my answer with a disclaimer: that I’m not authorized to speak on behalf of the ABA, or any subdivision thereof. The ABA’s official resolution on the Innovative Design Protection and Piracy Act should be released to the public fairly soon. In the meantime, however, I can say that the Intellectual Property Section of the ABA has actually been on the record as supporting some type of additional IP protection for fashion designs since 2008, when the industry and its lawyers were focused on the now-defunct “Design Piracy Prohibition Act.” As a result, when I first became involved with the ABA in late 2010, my Fashion Design Legislation Subcommittee wasn’t starting on a blank slate; in other words, it was no longer a question of whether legislative change in this area was desirable or not – though it’s certainly a discussion many others are still having. Rather, the Subcommittee engaged in a more granular evaluation of the merits and flaws of specific provisions in the latest iteration of the protection-for-fashion bill, the “Innovative Design Protection and Piracy Prevention Act.” To give you some sense of our discussion, certain Subcommittee members felt it was important to provide further clarification on the scope of immunity for “innocent retailers” under the proposed law. Some members were troubled by language in the bill – “likely to be mistaken” – that seemed to pull the infringement inquiry back toward trademark law, contrary to its apparent purpose. We also spent a lot of time examining what might be considered the “core” language of the bill – the threshold requirement that a qualifying design display “a unique, distinguishable, non-trivial and non-utilitarian variation over prior designs” – and whether that requirement was too stringent… or not stringent enough.

2. I understand that there was initially some serious objection from some within the fashion industry (i.e. the American Apparel and Footwear Association). Why? How were their concerns addressed?

I wasn’t involved in the debate at that time, but my understanding is that the AAFA was primarily concerned about frivolous lawsuits. (Of course, this is a point of controversy anytime proposed legislation would create a new cause of action.) The bill’s advocates eventually managed to get the AAFA on board, in large part by changing the required showing for liability from “substantial similarity” (the standard applied in copyright infringement lawsuits) to a higher standard that would require a plaintiff to prove that an alleged knockoff is “substantially identical” to her design.

3. How do you think the protection of fashion designs under copyright law will impact the fashion industry in the US? How will it impact the consumer? Will we see any impact to the economy?

I wish I could answer that question with any degree of certainty. But as I’ve said in the past, I think it’s very difficult to make predictions about the impact of the bill – either on the industry or on consumers. With that said, I have to imagine the law would have some prophylactic effect on unabashed knockoffs of original designs. This could be very beneficial for small designers, who frequently can’t make the necessary evidentiary showing to prevail in so-called “trade dress” lawsuits. But of course, even if the bill passes, it will be just as expensive to bring a lawsuit as it is now, so startup designers may remain vulnerable, even if they have a meritorious claim.

Some feel the impact of the law will be minimal, speculating that the required showing for liability has become so demanding that only a trivial number of designs will qualify for protection. Interestingly, this point has been made by both advocates and opponents of the bill: at a House of Representatives subcommittee hearing last Friday, the CFDA (a longtime champion of additional IP protection for fashion designs) and its allies simultaneously stressed that the proposed law is desperately needed and that relatively few designs – only those “that are truly original” – will receive protection, even if the bill passes. As some observers have pointed out, there’s an interesting tension there.

4. You recently championed the creation of a fashion law committee within the New York City Bar Association. Why was this necessary? What is the role/function of this committee?

Every bar association has a trademark law committee, a copyright law committee, a real estate law committee, and so on. But I felt that a central forum was needed for practitioners serving fashion industry clients to come together and share their expertise on fashion-specific issues arising in distinct legal realms. To illustrate, the pending, highly controversial Christian Louboutin v. Yves Saint Laurent lawsuit raises legal issues that are, at least arguably, unique to fashion. So the members of a conventional trademark law committee would have little reason to devote extensive time and attention to the case, while every self-professed “fashion lawyer” is watching it like a hawk. The new Fashion Law Committee can explore and evaluate legal developments of particular concern to fashion industry clients in a way that a more general committee never could. Because the Committee is still in its infancy, I don’t think anyone knows for sure what it will evolve into, but for now, it is – at the very least – an excellent forum for discussion.

5. Are there any key cases/developments in the US that we should be watching for?

The most important issue on the legislative agenda right now, at least for IP-oriented practitioners, is the “Innovative Design Protection and Piracy Prevention Act,” discussed earlier. For decades, it’s been gospel that items of apparel are, by and large, “useful articles” and thus ineligible for copyright protection in most instances. So any change to this legal landscape, even if the real-world impact does turn out to be minimal, would represent a major doctrinal shift.

Certainly the most “colorful” fashion-related case being decided right now is the Louboutin v. YSL dispute mentioned above. But for reasons I’ve delved into on my blog, the case could also have major repercussions for the fashion industry at large. YSL seems to have taken the position that trademark protection is never appropriate for “a single color on a portion of an article of apparel.” If the district court agrees with this argument, there will undoubtedly be an appeal – perhaps all the way to the Supreme Court – and the outcome could be very significant for fashion design and branding.

While less accessible than the Louboutin case, many intellectual property lawyers are closely watching a case called Omega v. Costco Wholesale, currently pending in California federal court after a torturous round of appeals. This case involves “gray goods” – here, luxury watches – that are sold outside the United States through authorized channels, but find their way back into the U.S., where they are often sold for far less than the brand would like to charge American customers. The case made it all the way up to the U.S. Supreme Court on a fairly esoteric copyright law issue involving the “first-sale doctrine,” where the Court was poised to declare whether brand owners can exercise border control over gray goods on the basis of copyright. But the Court ended up in a 4-4 tie (Justice Kagan having recused herself), so we don’t yet have a definitive answer on the crucial issue. Because Costco lost at the Ninth Circuit (a federal appellate court) on the copyright issue, it’s now pursuing a different argument on remand: that Omega’s use of copyright to control the importation of otherwise non-copyrightable goods is a form of “copyright misuse”. It will be interesting to see how this specific dispute plays out, and also to see whether other appellate courts side with the Ninth Circuit on the first-sale question. Though the relevant issues are quite “legalistic” and inaccessible, their resolution has major ramifications for the fashion industry (and many other industries, as well.)

Banking on Patriotism to Help Launch Your Brand?

2011-07-19T15:04:00.000-07:00

Emerging Canadian designers oftentimes target the Canadian market before venturing off into more lucrative international pastures. Pulling on the patriotic heartstrings of Canadian consumers can be a useful marketing strategy: “support Canadian talent, buy Canadian fashion”. This is all fair and valid…but it is important to know that the Canadian Competition Bureau is watching you.

The Competition Bureau is an independent law enforcement agency that governs competition in the marketplace. It wants to make sure that everybody is playing fair. The Competition Bureau has taken it upon itself to ensure that Canadian product claims are valid. Last year the Competition Bureau issued guidelines (“Made in Canada Claims” and “Enforcement Guidelines Relating to ‘Product of Canada’”). These guidelines kick in only when you start to claim and promote that your merchandise is from Canada. If you don't make any country of origin claims, these guidlines do not apply. Also, these guidelines only relate to non-food products.

There are two possible patriotic claims, “Made in Canada” and “Product of Canada”, which have different thresholds to satisfy.

Made in Canada:

The requirements to make this claim are easier to satisfy:

a) the last substantial transformation of the goods must have occurred in

Canada

; and

b) at least 51% of the costs of producing or manufacturing the goods have occurred in Canada.

If you claim that your product is “Made in Canada”, a qualifying statement must also be included. For example: “Made in

Canada

with imported materials”.

If you do not expressly include the term “Made in Canada”, the Competition Bureau may interpret suggestive marketing ploys to insinuate that the product was Made in Canada, such as pictures of the Canadian flag or the maple leaf. Thus, these criteria apply.

Product of Canada:

This claim has a higher threshold to satisfy:

a) again, the last substantial transformation of the goods must have occurred in Canada; and

b) at least 90% of the costs of producing or manufacturing the goods have occurred in Canada.

Breaking This Down

The “last substantial transformation” means that the goods are fundamentally changed in form, nature or appearance so that they appear new.

“Costs of producing or manufacturing” includes labour costs and costs to produce the materials. It generally does not include overhead costs.

What Happens if you Don’t Comply?

The Competition Bureau can enforce the guidelines. If you insinuate that your product is Canadian when it does not comply with these guidelines, the Competition Bureau can look to the Competition Act for enforcement. False or misleading representations in relation to product advertising can elicit substantial monetary fines and, in some instances, criminal liability.

eBay Irony: Liability in Europe, Anti-Counterfeiting Guru in America

2011-07-18T09:35:00.000-07:00

In an ironic twist, the same week that eBay announces its joint anti-counterfeiting awareness and advocacy campaign with the Council of Fashion Designers of America, it was also held to be responsible for facilitating the sale of counterfeit merchandise on its website www.e-bay.co.uk in Europe. Here’s a summary of the decision.

The case is interesting as eBay plays an interesting role in the dissemination of counterfeit product globally.

The Parties

L’Oreal SA and its subsidiaries launched a proceeding against individual defendants and eBay Inc. and its subsidiaries with regards to the sale of L’Oreal products on the website www.e-bay.co.uk, without L’Oreal’s consent.

The Facts

L’Oreal is the owner of a number of UK trade-mark registrations and Community Trade-mark Registrations, which grants Europe-wide trade-mark protection, for a myriad of products. The individual defendants were selling counterfeit L’Oreal products, as well as products intended for markets outside of Europe and products not intended for sale at all, on e-Bay.

L’Oreal took issue with e-Bay’s capacity of facilitating the sale of counterfeit and unauthorized product in Europe. Moreover, L’Oreal maintains that e-Bay’s sale of keywords and sponsored links further facilitated the sale of counterfeit product.

Judgment

Given that e-Bay is online, its reach is global. The Court was clear that just because a website is accessible globally that may not be sufficient to impose liability. If the website is targeted toward a specific geographic region, and the plaintiff has trade-mark rights in that country that are being infringed, it is appropriate to bring an action against the operator of the website. In this instance, it was very clear that the website was targeted toward Europe and L’Oreal had trade-mark rights in Europe.

The Court also held that as L’Oreal had clearly marked some of the product as “samples” or “not for sale”, it was clear that L’Oreal had specifically withheld its consent to allow these products from being sold in the marketplace.

Some of the products available, although they may not have been counterfeit, were sold without the appropriate packaging. The court held that especially in respect of perfumes and cosmetics, the packaging of the product is an integral component of the product branding. The removal of the packaging negatively affects the goodwill and reputation of the brand. Moreover, there are safety concerns as the packaging oftentimes contains important use guidelines.

eBay, by selecting search words that corresponded to L’Oreal’s trade-marks to those counterfeit or unauthorized products, elevated the opportunity to buy those products. The court held that eBay’s actions placed it as an advertiser of the online marketplace, which places eBay in an intermediary position, rather than as a passive by-stander. I wonder if this decision would have been different if eBay did not provide the opportunity to buy sponsored links or keyword advertising.

European Union and Louis Vuitton Pledge to Break Through Gender Glass Ceiling

2011-07-14T09:42:00.000-07:00

On March 1, 2011, the European Union Justice Commissioner issued a challenge to publicly traded European businesses in an effort to create gender equality:

increase women's presence on corporate

boards to 30% by 2015 and to 40% by 2020

Companies can support this initiative by voluntarily signing the "Women on the Board Pledge for Europe". Acknowleding the influence that government guidance (or intervention, depending on your political leanings) has on encouraging (or mandating) gender equality in the workforce, the Commissioner also saw great value in encouraging companies to voluntarily institute programs to facilitate gender equality. This Board Pledge is the first step.

The Commissioner advised that she would use the 2012 International Women's Day as a marker for progress. If there has not be sufficient progress relying on the corporate world's initiative, she would be happy to intervene in a regulatory capacity.

Frankly, the facts are a little depressing and there is room for improvement. Today, only 12% of board members are women and 97% of the time, the board is chaired by a man.

Louis Vuitton is the most signatory to the Pledge, which is reflective of its corporate policy to support gender equality in the corner offices.

LVMH: je voudrais dire, merci!

Fashion Industry Takes a Stand Against Counterfeiters

2011-07-07T14:49:00.000-07:00

As Canada's largest anti-counterfeiting damages awards was issued this month (reported here), we are reminded that counterfeit products are rampant in the market.

In addition to pursuing legal protection, as demonstrated by Louis Vuitton and Burberry, it is also interesting to see how the fashion industry is taking matters in to its own hands to combat counterfeiting.

Here are a couple of anti-counterfeiting campaigns out there that are note-worthy:

1. Harper's Bazaar's "Fakes are Never in Fashion" Campaign

This powerhouse magazine has turned its mind to educating consumers about the perils of anti-counterfeiting. There is more at stake when buying a counterfeit purse than shoddy workmanship and cheaper prices. Although the Fakes are Never in Fashion campaign focuses almost exclusively on the American industry, the impact is astounding. The global loss of sales to companies is in the hundreds of billions of dollars. The economic loss is not constrained to businesses, loss of tax revenue is also a significant economic burden, in addition to the loss in employment opportunities. The impact also extends beyond money. Anti-counterfeiting revenue helps to fund criminal activities and even terrorism.

The Fakes are Never in Fashion campaign's website is very comprehensive, providing updates and news that touch upon the counterfeiting world. Also, the Fakes are Never in Fashion campaign hosts annual anti-counterfeiting conferences. In its 7th year, the focus was on the impact of the internet on global counterfeiting.

2. Christian Louboutin's Stop Fake Campaign

Christian Louboutin has has launched its own anti-counterfeiting campaign, which is an interesting comparison to other brands that are happy to have their anti-counterfeiting activities conducted behind closed doors.

At the close of its one year anniversary, Christian Louboutin proudly boasts that it has shut down 180,000 auctions selling counterfeit shoes, conducted numerous successful raids of counterfeiting factories, exploited customs seizures, tackled unauthorized domain names and launched a number of actions protecting its red sole (click here for a summary of Christian Louboutin's attack on Yves Saint Laurent).

Interestingly, Christian Louboutin publicly sets out its plan of attack to execute its zero-tolerance policy against counterfeit products, identifying both collaborators and avenues of legal attack. Such full disclosure is not often seen outside of corporate and law offices.

3. CFDA and e-Bay combine forces

The Council of Fashion Designers of America, along with e-Bay, recently launched a joint venture: "You Can't Fake Fashion".

CFDA member designers, such as Diane von Furstenberg, Tommy Hilfiger, Tory Burch, Jason Wu, Kenneth Cole etc., have each designed one-of-a-kind tote bags emblazoned with the slogan "You Can't Fake Fashion", in an effort to raise awareness of the perils that counterfeiting poses to the fashion industry.

It is interesting to see e-Bay so publicly involved as this medium has oftentimes been criticized as being a key vehicle of distribution for counterfeit product.

Opportunity for Yves Saint Laurent To Go On Offensive

2011-07-06T19:52:00.000-07:00

A previous article by CanadaFashionLaw discussed the pending trade-mark infringement case in the US between Christian Louboutin and Yves Saint Laurent.

To quickly recap, Christian Louboutin, a luxury brand notorious for its shoes that have red soles on the exterior of shoes, is suing Yves Saint Laurent in New York for trade-mark infringement, based upon Yves Saint Laurent inclusion of red shoes with red soles in a fashion show earlier this year. At the time the action was commenced, Christian Louboutin was the owner of a registered trade-mark in the US for the red soles, however, trade-mark applications were still pending in Canada and Europe.

Interestingly, Christian Louboutin's trade-mark application has progressed in Canada to the advertisement stage, which signifies the start of the opposition period.

This is significant as it may provide an opportunity for

Yves Saint Laurent to go on the offensive and attack the registrability

of Christian Louboutin's trade-mark.

In Canada, in order for a trade-mark to register, the trade-mark application is subjected to a rigorous and lengthy process. At first, the trade-mark is filed with the Canadian Trade-marks Office. The trade-mark application is examined by the Canadian Trade-marks Office for substantive and administrative issues. Substantive objections may be raised at this point, for example the trade-mark may be "clearly descriptive or deceptively misdescriptive", the trade-mark is confusingly similar and therefore conflicts with a previously registered third party trade-mark etc. Once (or if) the trade-mark application moves beyond the examination stage, the application is then advertised in the Canadian Trade-marks Journal. This signifies the start of the opposition period.

The opposition period places the onus on other brand owners to protect their own brand as it affords "any interested party" the opportunity to police third party trade-marks that may register in Canada. If a brand owner wishes to contest the registrability of the trade-mark, it may oppose the trade-mark application. An opposition is essentially a tribunal that has been set up within the trade-mark registration process. It is akin to court in that pleadings are submitted, evidence is compiled, arguments are put forth. There is also an opportunity for cross-examinations and oral hearings. The Trade-marks Opposition Board determines whether the trade-mark application is registrable or not. It can pose a significant obstacle to the trade-mark applicant.

There a number of possible grounds of opposition identified in the Trade-marks Act. Yves Saint Laurent may be most interested in the following:

a) the trade-mark is not registrable; and/or

b) the trade-mark is not distinctive.

If Yves Saint Laurent wishes to act, it must do quickly. A statement of opposition must be filed with the Canadian Trade-marks Opposition Board within two months of the date of advertisement of the trade-mark application. (However, there is always the possibility of requesting a limited extension of time).

It will be interesting to see whether anything will materialize or is Christian Louboutin's exclusivity over its red soles will be statutorily recognized in Canada.

Below is a summary of Christian Louboutin's Canadian trade-mark application:

Trademark	App. No. & Date	Wares	Description
	1,469,797 February 17, 2010	Footwear namely shoes, ballet flats, boots, ankle boots, thigh boots, pumps, sandals, sneakers, clogs	The trade-mark consists of the colour red applied to the entire outer surface of the sole, as shown in the drawing.

Crunching Numbers on Ontario's Fashion Industry

2011-07-01T11:19:00.000-07:00

On today, which is Canada Day, let's reflect on the Canadian fashion industry. Or, more importantly, what does it mean to Canada's purse strings?

The Ontario government released a report that looks at the economic contributions of the fashion industry to Ontario's economy. Here's a quick look:

- Toronto's fashion industry employs more than 50,000.

- Fashion designers generally live where they work: a survey indicates that 73% live in Toronto.

- Toronto is home to 550 apparel manufacturers that bring in $1.4 billion annually.

- Shopping opportunties abound in Toronto. There are 4,600 retail stores in Toronto, which generate $2.6 billion in revenue.

- Toronto's LG Fashion Week draws crowds. Almost 35,000 people attended the fashion week that debuted Fall 2011 fashion lines. Given that the LG Fashion Week occurs twice annually, that's a lot of tourism.

- A survey indicates that Canada's fashion industry will need to hire 7,000 more people over the next 2 years.

Makes you proud to be a Canadian, eh?

Sting Like a Bee: Federal Court Awards $2.5 million for Trade-mark and Copyright Infringement

2011-07-01T09:53:00.000-07:00

On June 27, 2011, Canada’s Federal Court issued the largest anti-counterfeiting damages award for trade-mark and copyright infringement $2.5 million, in Louis Vuitton Malletier S.A. et al. v. Singga Enterprises (Canada) Inc.

The Players

Louis Vuitton Malletier S.A. and Burberry Limited, the intellectual property owners and only authorized manufacturers and distributors of Louis Vuitton and Burberry products, respectively, along with their exclusive Canadian distributors, Louis Vuitton Canada, Inc. and Burberry Canada Inc., combined forces to launch a suit for trade-mark and copyright infringement.

The defendants are a mélange of corporations and individuals whose illegal activities were interwoven throughout Canada. Singga Enterprises (Canada) Ltd., along with the officer and director and principal, operated a warehousing, importation distribution and online business that imported, sold and distributed counterfeit goods from Burnaby, B.C.

Altec Productions, along with its directing minds, operates out of Markham, Ontario. Singga referred customers interested in bulk purchase to Altec for a commission.

Carnation Fashion Company, along with its owner, also operates out of Burnaby, B.C. Although no direct connection was found between Carnation and the remaining defendants, Carnation operated a warehouse that was located directly behind Singga.

The Sting

Louis Vuitton and Burberry became aware that from at least as early as January 2008 that Singga manufactured, imported, advertised and sold counterfeit products throughout Canada on a large scale. The plaintiffs hired a private investigator who posed as as interested bulk buyer. Compiled evidence indicated that the defendants imported the counterfeit products from China and warehoused them throughout Canada (Vancouver, Edmonton, Toronto and Halifax). The defendants preferred to deal in bulk orders and also made the products available for sale online. On several occasions the defendants acknowledged that the products were counterfeit. The defendants even offered up services to custom-make counterfeit goods, as long as a photograph of the original product was provided.

The Decision

Without a doubt, the evidence demonstrated that the defendants knowingly infringed the plaintiffs’ intellectual property rights. The defendants’ sale of substantially inferior quality products caused irreparable harm and damage to the plaintiffs’ goodwill and reputation.

The plaintiffs were awarded injunctive relief, delivery up, damages for both trade-mark and copyright infringement, statutory damages, punitive and exemplary damages and costs on a solicitor and client basis via a summary trial.

The court found that the individual defendants were culpable and could not use their respective corporations as a shield from liability. There were individually fined, in addition to their companies.

All in all, cumulatively the defendants were ordered to pay $2.5 million to the plaintiffs.

How Did it Reach $2.5 Million?

Allocating damages awards in anti-counterfeiting cases is challenging because of the unknowns:

How can you quantify the depreciation of goodwill?

Do the diverted profits to the counterfeiters actually reflect lost profits for the brand owner?

Is it likely that the plaintiffs and the defendants would have the same consumers?

Is it possible to obtain evidentiary documentation that supports all of the anti-counterfeiting activities, sales and profits?

Bottom line: accurate quantification of damages in anti-counterfeiting cases is difficult.

In 1997 the Federal Court devised a scale of quantification that could be applied in determining damages awards in anti-counterfeiting cases to overcome the quantification hurdles: $3,000 for flea markets, $6,000 for retail stores and $24,000 for manufacturers/distributors for each single count of infringement. Recently the court has adjusted these amounts to account for inflation.

In this instance, the court recognized that the infringement was on a large scale, was well-orchestrated, continued over a long period of time and involved the importation of counterfeit goods from China. The court determined that the damages needed to be considered at a high level. Moreover, damages should be awarded to each plaintiff individually.

The court held that damages should be assessed at the importer/distributor level and, accounting for inflation in 2009, an award of $30,384.11 should be granted per each trade-mark infringing activity to each of the four plaintiffs.

The court determined that the defendants’ conduct demonstrated that they were dismissive of the rule of law and clearly could benefit from deterrence, which is the goal of awarding statutory damages. As such, the court also awarded statutory damages for copyright infringement at the highest end of the scale for each instance: $20,000.

Deeming the defendants’ conduct egregious, outrageous, reprehensible, the court did not shy away from awarding punitive and exemplary damages.

Solicitor and client costs were also awarded.

Osgoode Hall Law School Takes Note of CanadaFashionLaw

2011-06-29T12:42:00.000-07:00

I continue to be amazed and flattered by the support within both the legal and fashion community that CanadaFashionLaw is receiving.

Osgoode Hall Law School, a top tier Canadian law school, sets itself apart in the intellectual property community with its creation of IPOsgoode, an intellectual property law and technology program. IPOsgoode "cultivates interdisciplinary, comparative and transnational research, collaboration, policy-thinking and practice".

CanadaFashionLaw.com was recently featured on IPOsgoode. Below is the excerpt:

CanadaFashionLaw Debuted by Osgoode Alum, Ashlee Froese

by Andrew Baker

Ashlee Froese, Osgoode Hall Law School alum of 2006 and IPilogue contributor, has launched CanadaFashionLaw, which has garnered immediate attention from both the fashion industry and the legal community, receiving over 500 unique hits in its first three days.

CanadaFashionLaw covers the business and legal issues surrounding the fashion industry by not only exploring contemporary legal issues, but also by providing commentary on the existing policy framework of intellectual property within the fashion industry.

In her third post, Froese explains how Canada’s poor performance in the The Office of the United States Trade Representative’s 2011 National Trade Estimate Report on Foreign Trade Barriers presents obstacles for the Canadian fashion industry with regards to US willingness to trade. She goes on to explain that other countries, such as France and Italy, have specifically drafted domestic intellectual property laws for fashion design, which provide greater legal clarity. The US is also considering specific protections for the fashion industry as it reforms its copyright law.

CanadaFashionLaw has also covered two interesting cases in Canada and the US, respectively. Froese has reviewed the recent Supreme Court of Canada trademark case, Masterpiece Inc v Alavida Lifestyles Inc. 2011 SCC 27, explaining that the decision demonstrates the usefulness of conducting trade-mark availability searches (the Masterpiece case was also reported on by co-counsel for Masterpiece in the IPilogue). The blog is also following a pending suit by Christian Louboutin against Yves Saint Laurent for allegedly copying its distinctive red-soled shoe design trade-marked in 2008.

Already, CanadaFashionLaw has caught the attention of the legal community with NY State Attorney, Vincent Lotempio, recently interviewing Froese on his blog. The interview discusses fashion industry-specific policy solutions within the framework of trade-mark law thereby highlighting many of the unique and interesting problems arising at the intersection of fashion and law.

Guide to Canada's Fashion Weeks

2011-06-29T07:56:00.000-07:00

Think fashion only happens south of the border? You would be wrong. Here's a quick reference guide to Canada's various fashion weeks:

LG Fashion Week

Dates: March 28 to April 1, 2011; October 17 to 22, 2011

Location: Toronto

Overview: This is Canada's biggest fashion week. In its 12th year, LG Fashion Week brings together media, industry, consumers and buyers.

Rogue Fashion Week

Dates: Simultaneous to LG Fashion Week

Location: Toronto

Overview: Not satisfied with staying within the confines of LG Fashion Week, Rogue Fashion Week sees designers take matters into their own hands.

Toronto Alternative Arts and Fashion Week

Dates: April 26 to 29, 2011

Location: Toronto

Overview: This fashion week looks at emphasizing the interplay of fashion with arts, photography and music.

Frugal Fashion Week

Dates: July 21 to 24, 2011

Location: Toronto

Overview: This charitable initiative seeks to profile and support local retail and design communities.

Montreal Fashion Week

Dates: February 7 to 10, 2011; September 6 to 9, 2011

Location: Montreal

Overview: Ce défilé de mode est probablement le plus grand compétiteur de LG Fashion Week.

Vancouver Fashion Week

Dates: April 12 to 17, 2011

Location: Vancouver

Overview: Reflecting Vancouver's international flare, west-coast based designers share the spotlight with foreign designers from Korea, China and India, for example.

Western Canada Fashion Week

Dates: March 24 to 31, 2011; September 22 to 29, 2011

Location: Edmonton

Overview: This fashion week celebrates the fusion of art, design and musical culture for a unique collaboration of the creative minds.

Atlantic Fashion Week

Dates: June 13 to 19, 2011

Location: Halifax

Overview: Entering into its 5th season, this fashion week is determined to let the rest of Canada and the world know what the eastern provinces are made of.

Eco Fashion Week

Dates: February 22 to 25, 2011

Location: Vancouver

Overview: This green machine celebrates environmental sustainability and eco-friendly industry practices.

Ottawa Fashion Week

Dates: March 18 to 20, 2011

Location: Ottawa

Overview: This fashion week looks at talent in the nation's capital.

Alberta Fashion Week
Dates: May 19 to 21, 2011
Location: Alberta
Overview: This fashion week highlights fashion designers from throughout Canada.

Tips on Reaching Toronto’s Fabulous: Toronto Fashion Incubator and TNT Host Event

2011-06-28T20:25:00.000-07:00

I was fortunate to recently attend an event co-hosted by the Toronto Fashion Incubator and TNT Boutique.

First, some context.

Toronto Fashion Incubator (“TFI”) is a non-profit organization that is dedicated to helping emerging Canadian fashion designers become viable businesses. Established in 1987, TFI focuses on educating and supporting emerging designers on the business aspects of the fashion industry. Critical topics like marketing, sales, business planning, exports and strategic business planning are addressed through a variety of programs (mentorship, seminars, private consultations).

TNT is one of Toronto’s meccas for the fashionable (and wealthy). TNT, which celebrated its 20th anniversary, is proud to cater to 4 generations. With several stores in Toronto and Montreal (one of which spans 14,000 square feet in Toronto’s prestigious Yorkville area), TNT serves its clientele with notably high quality and highly demanded fashion lines (Diane Von Furstenberg, Alexander Wang, Theory, Elizabeth & James). On several occasions Nicole Ritchie has attended TNT to launch her line, House of Harlow.

More than cocktails - the event was informative and inspiring...

TFI and TNT joined forces as Arie Assaraf, owner and buyer of TNT, shared his insight on what it takes to be a designer selling in his stores (an enviable and coveted feat). Here’s a summary of what Arie had to say:

- Think of your fashion line as a closet. Augment your closet with some trends, but don't forget about the classics.

- Each retailer has its own philosophy that attracts a different client base. Keep that in mind when you are shopping your fashion line around. Is there a natual fit?

- Success in the fashion industry is not based on luck. You have to be knowledgable and you have to be constantly aware of what is happening in the industry. There is no room for ego or a sense of entitlement. A passion for your craft and an ability (and willingness) to change is key.

- Avoid creating a fashion line that is overly nichey in terms of demographic, price point, style, or trend. Don't carve yourself out of the main market.

- Be creative but be realistic. Don't bite off more than you can chew. Have long terms goals, but keep them attainable.

- One of the biggest downfalls of fashion designers is that they fail to think of themselves as a business from day one. If you don't have the legal, business or financial acumen, outsource it. Surround yourself with professionals so that you can focus on your creativity.

Overall, the event was a great success. Arie graciously provided his insights, which the designers devoured. As a successful businessman, Arie's advice spans well beyond the fashion industry and can be applied to any entrepreneur.

The New Online Bounty Hunter: Canada’s Anti-Spam Legislation

2011-06-28T07:10:00.000-07:00

In December 2010 the Fighting Internet and Wireless Spam Act (“FISA”) was passed by the Canadian federal government. It is expected to come into effect in later this year. FISA’s goal is to:

“promote the efficiency and adaptability of the Canadian economy by regulating commercial conduct that discourages the use of electronic means to carry out commercial activities”.

Translation: no more spam e-mails!!

FISA prohibits the sending of electronic communications (such as e-mails, instant messaging) unless consented to by the recipient. If an electronic communication is sent, the sender’s information must be disclosed and there must be a mechanism to unsubscribe. FISA also extends to computer programs that are installed to cause electronic communications to be sent without the recipient’s consent.

The Canadian Radio-Television and Telecommunications Commission (“CRTC”) oversees compliance with FISA and has been granted broad powers. For example, the CRTC can obtain warrants to enter individual or business premises to ensure that there has been compliance. The CRTC can also issue notices for individuals or businesses to produce documentary evidence of compliance.

But, the CRTC is not the only sheriff in town. Individuals have also been granted a private right of action.

The cost of contravention is steep. An individual that does not abide by FISA can be charged up to $1,000,00; a corporation can be charged up to $10,000,000.