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Jun 25, 2015

Copyright Infringement: Whose Design Is It Anyway?

Copyright infringement is a term all too familiar to apparel industry players. Hundreds of lawsuits alleging design infringement are filed, sometimes unjustifiably, each year in Federal Court downtown, a stone’s throw from Los Angeles’ fashion district. In fact, some law firms are notorious for filing scores of these cases on behalf of textile design companies against retailers and their vendors.  Since most retailers are indemnified, the vendors usually end up paying to defend and/or settle such lawsuits.  How is a company to know whether the claims against them are legitimate or not?

First, let’s start with America’s Copyright Act, which evolves from the U.S. Constitution and empowers Congress “to promote the useful arts and sciences.”  Our Constitution aims to protect creators of original works by giving them certain exclusive rights (such as the right to copy, modify and sell their works) for a certain number of years.  After that time period, the copyrighted work falls into the public domain for anyone to use.  Note that it does not matter if a design has been registered with the Copyright Office; under copyright law, an original design is automatically protected the moment it is created. Unfortunately, some textile companies attempt to embellish the purpose of copyright law by claiming it grants (anyone willing to fight) the right to common, unprotected design elements, often found in the public domain.

The combination of these aggressive embellishments and the inherent gray area in design and fashion leads to lawsuits.  For example, trendy new garments at MAGIC may include the same combined elements, such as geometric, floral and animal skin design patterns, that have been used for years.   Any design based on a prior copyrightable design that is not in the public domain may technically be an infringement, and so a judge and/or jury need to study elements to determine a case’s validity and avoid “throwing the baby out with the bath water.”

There are also times when claims are completely legitimate. For example, there is this terrible myth in the apparel industry that if you modify someone else’s design by at least 30% it is not an infringement.  This is not the law!  As a designer, anytime you modify someone else’s unique design you are creating a derivative work, which is copyright infringement.  Make sure your inspiration is not based on any one particular prior design.

Unfortunately it is not possible for a designer to search Copyright Office records to see which designs have been previously registered.  Consequently, legitimate designers with no intent to copy are being hit with infringement lawsuits since they have no way of knowing that others have claimed similar designs as their own brainchild.

Further, the current law provides too much copyright protection for anyone who registers even the most basic textile design.  As a result, certain textile design companies, often referred to as “trolls,” enforce copyrights and make litigation a significant revenue stream since many defendants don’t have the money or desire to defend cases, and the cost of settling is often cheaper than taking a case to trial.

So what can you do to limit your exposure and minimize the risk of being sued?

  • Whenever possible, create your own, unique designs.  Use elements in the public domain (you can look at books and websites to see many designs no longer protected under copyright).
  • Only acquire designs from reputable third parties, and obtain confirmation in writing that the third party owns the copyright or, at least, the right to resell the design for use by others.  Better yet, obtain something in writing that requires the source of those designs to indemnify you in the event of a copyright infringement claim or lawsuit.
  • Keep good records showing who created the designs, and how and when they were created.   Keep accurate records of sales and profit figures.  This information makes an attorney’s job much easier, translated to less expensive for you, when defending a case.
  • Check your insurance policies.  Oftentimes, copyright infringement claims trigger insurance coverage through an advertising injury policy provision. You also want to make sure your policy does not specifically exclude intellectual property claims. Here are some good Inside Counsel articles to read on insurance provisions.

Finally, make sure you inform your attorney as soon as you receive notice of a claim.  If you receive a cease and desist letter or a summons and complaint, let your attorney know how and when you were served. Those documents will determine your deadline to respond to the claim.  Also, tender a claim to your insurance carrier to trigger insurance coverage to the extent any may be available.

Jeff Kobulnick regularly litigates claims for copyright and trademark infringement, unfair competition, false advertising and related claims under both federal and state laws. He also has significant experience handling Internet-related intellectual property issues, such as domain name registration and dispute resolution, and the protection and enforcement of copyrights and trademarks on the Internet. In addition, Jeff extensively counsels and represents clients on the selection, clearance and registration of trademarks and service marks worldwide. He has been quoted extensively in Apparel News and The Los Angeles Times.

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