One-Size Copyright Bill Doesn’t Fit All

Susan Scafidi in LA Business Journal, August 23, 2010

Media Source

By Alexa Hyland

Monday, August 23, 2010

A fight is flaring up between New York, known as the genteel center of high fashion, and Los Angeles, with its reputation as a gritty capital of quickly produced knockoffs.

A bill introduced Aug. 5 by U.S. Sen. Charles Schumer, D-N.Y., would for the first time extend copyright protection to “new, unique and distinguishable” apparel designs for a three-year period. Copyright law currently protects patterns on fabric but not the design of clothing.

Many in L.A.’s apparel industry not only believe the bill is aimed at tying them up with lawsuits, but some are particularly frustrated that both U.S. senators from California, Democrats Dianne Feinstein and Barbara Boxer, are co-sponsors.

“Boxer and Feinstein have signed on to the bill without knowing, caring or calling their constituents,” said Ilse Metchek, executive director of the California Fashion Association, which represents the state’s apparel and textile manufacturers, including Forever 21 Inc. and Guess Inc.

Metchek said her group wasn’t consulted on the bill, called the Innovative Design Protection and Piracy Prevention Act. The association hasn’t taken a formal position, but its members are set to meet this week to discuss the measure.

The California Fashion Association and local apparel makers believe the bill was pushed by the Council of Fashion Designers of America, a New York trade group that claims fashion creations made by its members, who include such high-end designers as Diane von Furstenberg, need to be protected from manufacturers making less expensive versions.

“It’s clear that the CFDA is very well mobilized,” said Kal Raustiala, a professor at UCLA School of Law who recently co-authored an op-ed in the New York Times criticizing the bill. “And the CFA clearly doesn’t have much sway as evidence by the fact that two California senators are sponsors of this bill – and they are aware of the concerns that local businesses have but didn’t heed them.”

Feinstein said in a statement to the Business Journal that the bill represents a compromise between representatives of fashion designers and the apparel industry.

“This compromise bill is narrowly written to set a high bar that protects the creativity of all designers while discouraging frivolous lawsuits,” Feinstein said in a statement.

Boxer spokesman Zachary Coile said the legislation was a compromise that “strikes the right balance” between the interest of designers and the ready-to-wear industry.

He also said Boxer’s office had no record of any letters, phone calls or meetings with Metchek or anyone else from the California Fashion Association.

Although Los Angeles is home to some designers that might be in favor of greater copyright protection, the backbone of the region’s apparel industry is composed of manufacturers that quickly produce budget-friendly versions of fashions inspired by those on the catwalks of New York; Paris; and Milan, Italy. Some derisively call the products knockoffs.

As a result, L.A.’s apparel makers fear they’ll be hit with a slew of costly lawsuits, which in turn could force them to raise the cost of their clothes or even put them out of business. They also believe the ability to protect fashion designs will stifle innovation and hamper growth of the industry, which has become increasingly fast-fashion-driven thanks to the Internet and new players such as H&M and Zara, two companies that quickly produce bargain-price versions of the latest fashions.

“We are the bull’s-eye for the very few egotistical designers that have put this forth,” Metchek said. “It is amazing that a government entity would get involved in an industry that’s revenue neutral to the government.”

Long-running efforts

Designers have been seeking to amend copyright law to cover cut and shape of a garment since 2007.

That’s when a push was launched by the Council of Fashion Designers of America. However, its proposed copyright amendment drew criticism from L.A.’s apparel industry and the American Apparel & Footwear Association, which represents apparel companies such as Calvin Klein and Michael Kors. The opponents said it was too broad and exposed too many companies to lawsuits.

About a year ago, the council and the association worked with Sen. Schumer’s office to craft a bill that addressed both group’s concerns. The bill is expected to go to the Senate Judiciary Committee in the fall.

But people in L.A.’s apparel industry believe their concerns were ignored during the negotiations. Metchek has harsh words for the American Apparel & Footwear Association, which now supports the amendment.

“The American Apparel & Footwear Association is completely out of touch with the California industry,” Metchek said. “They don’t speak for this industry and for them to make a backroom deal is an affront to the industry.”

Kurt Courtney, manager of government relations for the association, took a position similar to Feinstein’s.

“All sides have worked together and agree that the new legislation addresses all the concerns and goals of protecting truly unique fashion design, while simultaneously putting in place various measures that will prevent bad actors from engaging in frivolous lawsuits and legal intimidation,” Courtney said.

So, what would be protected under the bill, which covers fashion designs, and merchandise such as handbags, belts and sunglasses? One example is the 2007 Moon Dress from fashion house RM by Roland Mouret. It was worn by Victoria Beckham when her husband, soccer star David Beckham, made his press debut when he arrived in Los Angeles to play for the Galaxy. The tight-fitting pink dress featured fabric folded into origami-style details on the shoulders and neckline that could make it “new, unique and distinguishable” under the amendment. But at least one knockoff was made by U.K. apparel company Rare Fashion, and it flew off store shelves before the original version even made it to retailers.

Supporters of the piracy prevention act argue that a unique design such as the Roland Mouret dress deserves protection. They claim that the bill sets a high bar for litigation because it requires an explanation of why the design is protected, how the copied design is “substantially” identical to the original and evidence that the copying designer was aware of the original design.

“Someone who creates one gorgeous gown can’t sue everyone else who creates a one-shoulder red dress,” said Susan Scafidi, executive director of Fordham Law School’s Fashion Law Institute who helped write the bill.

But Steve Maiman, co-owner with Tony Litman of Stony Apparel Corp. east of downtown, doesn’t think the narrow standards will deter people from going to court. What’s more, he doesn’t believe that the garments his company sells at wholesale for less than $10, which then retail for about $25, hurt the bottom line of the high-end New York designers who’ve been pushing for copyright protection.

“In reality, there are people who like to sue others and they do,” said Maiman, whose clothes sell at department stores and specialty boutiques. “And they do it for ego and for profit, and it’s just not right.”

Maiman’s been an outspoken critic of previous efforts to protect fashion designs under copyright law, and he testified before the U.S. House of Representatives in 2008 on the Design Piracy Prohibition Act.

Once lawsuits are filed, critics argue that judges could interpret the bill’s language more broadly than intended.

“Language like ‘substantially identical,’ what does that mean?” said UCLA professor Raustiala. “It has to be litigated. And over time that will become more expansive.”

That could mean lengthy trips to court for L.A. apparel companies who have not seen the inside of a courtroom.

“Litigation generally costs you a couple of thousands of dollars to go to court,” said Lonnie Kane, president of downtown L.A. women’s apparel manufacturer Karen Kane Inc. “And, of course, it takes away your energy from your business if you’re spending time talking to lawyers.”

Some of L.A.’s larger apparel companies could get hit particularly hard.

ABS by Allen Schwartz, the downtown L.A. company best known for creating knockoffs of designer gowns– an ABS version inspired by Chelsea Clinton’s Vera Wang wedding dress is expected to hit stores by November – could have to change its business model because of the bill. That’s because most fashionistas aren’t going to want to buy ABS gowns that were inspired by dresses seen on the red carpet three years ago, when the statute of limitations on a protected design ends.

Forever 21, a downtown L.A. manufacturer and retailer that’s built a $1.7 billion fashion empire on low-cost trendy clothes and accessories, could be spending so much time fighting lawsuits that the company might also have to change its approach to fashion.

“Forever 21 is very trendy and fashionable,” Metchek said. “So they are the target and a very successful target at that.”

Representatives for ABS and Forever 21 did not return requests seeking comment.

Meanwhile, Kane, who serves as chairman of the California Fashion Association, and Metchek are looking at ways their concerns could be addressed. Metchek said the association could either be “unalterably opposed” to it, or ask for changes in the wording and substance of it.

For example, Metchek said she would want the term “substantially identical” changed to “identical.”

“‘Substantially,’ it’s a ridiculous word,” Metchek said. “What the hell does that mean?”

In addition, Metchek said she would like to see a designer or company that files a frivolous lawsuit pay penalties as high as the legal costs incurred by the plaintiff.

“If the changes are made,” she said, “we might not approve, but we won’t be opposed.”