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

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

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

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

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

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.