10 Judgements that changed the Fashion Industry

“I don’t design clothes. I design dreams.” – Ralph Lauren

In the present world of fashion driven social media where even socks dream of becoming stars and belts secretly aspire to hold more than just pants, these words of Ralph Lauren ring truer than ever. Fashion isn’t about a piece of clothing anymore, it’s about crafting stories as intricate as a perfectly knitted sweater, diving into fantasies wilder than the animal printed suits, and most importantly about daring to dream bigger than those oversized pants that seem too large for a single person.

But dreams don’t come as we see it, they come with challenges and behind every elegant dress and bejewelled blazer, there’s a saga as dramatic as Indian tele soap. Behind the glam fam lie the trademark tussles, where brands bump heads over logos, slogans, signature styles, and even colour. From Gucci’s double Gs to the Nike’s iconic swoosh, these trademarks aren’t mere symbols, they are embodiment of a brand’s identity, they are holy grail, the secret sauce and sometimes, the subject of some seriously funny legal showdowns.

The fashion industry isn’t just about laces and bows; it’s also a legal maze where creativity collides with legality and fierce catwalk can save one from the court drama. Over the years, several groundbreaking judgments have set precedents and transformed the fashion industry. Here are the ten landmark judgements, each has left its own unique imprint on the ever-changing canvas of fashion industry.

1. Chanel Ltd. v. Sunder Chemicals Agarbati Works (P) Ltd. and Anr.[1]

In this landmark judgement, Chanel, the undisputed queen of luxury, took on against the defendant’s using the mark “SHANELLE” for similar products. Chanel filed a suit seeing injunction based on the deceptive similarity between the marks. Chanel argued that its trademark “CHANEL” had been in use since 1925 and is globally well renowned entitling it to protection under Trademarks Act, 1999. Whereas the defendant argued that its use of the mark “SHANELLE” was bona fide and was not deceptively similar to Chanel’s mark. The court held that the defendant failed to provide reasonable justification for its adoption of the mark “SHANELLE” and that the marks were phonetically similar, likely to cause confusion among consumers. In the light of such observations, the court granted interim injunction in favour ofChanel. This groundbreaking judgement sent a message to the infringers everywhere: Cross Chanel and find yourself in legal threads. Talk about haute couture drama!

2. Gucci America, Inc. v. Guess?, Inc. Gucci Am., Inc. v. Guess?, Inc.[2]

This dispute was initiated by a global fashion company which is renowned as one of the largest luxury-products brands in the world, Gucci America, Inc. (Gucci) alleging Guess? Inc. (Guess), another well renowned brand, for trademark infringement and counterfeiting. Gucci levered several accusations against Guess, among others, that certain of Guess’s products had infringed and diluted different Gucci trademarks and trade dress, which included Gucci’s green-red-green stripe mark, repeating GG pattern and diamond motif trade dress, asserting that Guess’s actions amounted to an infringement of Gucci’s intellectual property rights.

After thorough examination and meticulously reviewing the evidence in hand, the court ruled in favour of Gucci. While awarding the damages, it was considered by the court that while Guess did infringe three of the alleged designs but did not infringe a fourth. Moreover while considering other claims of Gucci, the judge didn’t seem quite impressed, it seemed to the judge that Gucci had been aware of Guess’s infringement activities for several years. It was pointed out that such delay by Gucci in pursuing infringement claim along with had caused prejudice to Guess.

This judgement doesn’t only assert the protection of of intellectual property rights but also leaves a message that trademark holders must be vigilant and act promptly in safeguarding their trademarks when they sense infringement.

3. Campbell v. Acuff-Rose Music, Inc.[3]

The dispute began when Acuff-Rose Music, which held the rights to the 1964 Roy Orbison hit “Oh, Pretty Woman”, sued the rap group 2 Live Crew and its label over their own track, “Pretty Woman”. The trial court sided with the group and treated the song as a parody that qualified as fair use. The Sixth Circuit reversed, reasoning that a parody sold for profit was presumptively unfair. The Supreme Court disagreed. A commercial purpose, the justices said, is only one of several factors in the fair use analysis, and the appeals court had leaned on it far too heavily while ignoring how a parody transforms its source and how much of the original a parody legitimately needs to borrow. Profit alone cannot tip the scales against fair use, because it tells a court nothing about why the work was used or whether the new work harms the market for the old one.

This landmark case established the concept of transformative use in copyright law, allowing fashion designers to create transformative works inspired by existing designs without infringing on copyright.

4. Star Athletica v. Varsity Brands (2017)[4]

In this landmark judgment, LLC, Varsity, a company specializing in athletic clothing and accessories or say reigning champs of athletic apparel, filed a lawsuit against Star Athletica, LLC, alleging copyright infringement. Varsity accused that Star’s designs closely resembled their copyrighted designs used in cheerleading uniforms. Star counter argued that Varsity’s designs were not eligible for copyright protection because they were part of useful articles (uniforms) and were inseparable from their functional purpose, basically stating that something that’s just part of a practical, everyday outfit cannot be copyrighted. Both parties filed motions for summary judgment. The district court ruled in favor of Star, stating that the designs were integral to the uniforms’ functionality. However, the Sixth Circuit Court of Appeals reversed this decision, determining that the Copyright Act permits graphic features of a design to be copyrighted, even if they are not separable from a useful article.

The Court set out a two-step test for deciding when a design element on a useful article, such as a garment, can be protected by copyright. First, a person must be able to look at the element and see it as an artwork in its own right, flat or sculptural, apart from the article it decorates, with an aesthetic value that does not depend on what the article does. Second, if the element were lifted off the article and imagined on its own, or reproduced in another medium such as a canvas or a print, it would have to qualify as a pictorial, graphic or sculptural work that copyright already protects.

In the case of Kieselstein-Cord (KC) v. Accessories by Pearl (Pearl), Inc., the legal ramp was lit up with a serious debate over eligibility for copyright protection of belt buckles. KC filed suit against Pearl for copyright and trademark infringement along with unfair competition upon which Pearl filed summary judgment on ground the KC’s belt buckles are not copyrightable. The center issue was whether the decorative belt buckles in question could be protected under copyright law or whether they were deemed utilitarian items ineligible for protection under copyright law. Initially, it was ruled by the District Court as buckles are part of a useful article, they fail to meet the threshold of eligibility criteria for copyright protection. However, the Second Circuit overturned the judgement emphasising the artistic and ornamental aspects of the buckle thereby establishing their separability from the utilitarian function of the belt. It was acknowledged how these bejewelled buckles weren’t just hanging out on waistbands as showcased in prestigious venues like Met gala, indicating their versatility beyond their intended purpose. That’s when the new fashion mantra echoed, “Buckle up, buttercups, it’s Copyright Couture”.

5. Chanel, Inc. v. What Goes Around Comes Around, LLC[5]

Or should we say Haute Couture versus Vintage Chic? Chanel, the queen of fashion, spares no one. In 2018 the house sued What Goes Around Comes Around, LLC (WGACA), a New York vintage reseller, claiming the retailer had sold counterfeit bags along with Chanel items that were never authorised for sale. Its claims covered unfair competition, false advertising and trademark infringement.

The case ran for six years before reaching a jury. In February 2024, jurors in the federal court in Manhattan found for Chanel on every claim and awarded it $4 million. The verdict shows how seriously Chanel guards its image and the value of its trademarks, and it offers a lesson for the wider industry: brands that watch the resale market closely and act when they spot infringement are far better placed to protect their intellectual property and the integrity of their name.

6. Louis Vuitton v. Haute Diggity Dog (4th Cir. 2007)[6]

One may think what a fashion brand has to do with brand engaged in pet accessories but here’s the legal scenario where luxury meets puppy love. Louis Vuitton, the luxury titan found itself in a legal pawdicament when it took on Haute Diggity Dog, LLC, a company renowned for its whimsical pet toys. The bone of contention here was the launch of Haute Diggity Dog’s “Chewy Vuiton” line of dog toys as a playful parody of Louis Vuitton’s iconic designs. Louis Vuitton without taking a breath, unleashed its cry for legal rights alleging trademark infringement faster than one could say, “fetch”.

With wagging tails, Haute Diggity Dog argued that the toys were harmless playful things and nothing more than a playful nod to luxury fashion. The court considered that the Haute Diggity Dog’s products weren’t promoted, produced, or intended to rival against Louis Vuitton and hence refused to support the infringement claim. Despite Louis Vuitton’s futile attempt to argue that Haute Diggity Dog’s products posed a hazard to dogs, the court dismissed this assertion, affirming the District Court’s ruling in favour of Haute Diggity Dog on all claims.

This judgement underscored the importance of safeguarding parody as a form of free expression, while reminding fashion brands to carefully consider the implications of legal action on brand image. Haute Diggity Dog’s victory was a tail-wagging triumph for parody lovers everywhere, reminding fashion bigwigs that a little humour never hurt anyone’s brand image.

7. Hermès v. Rothschild[7]

The recent legal clash between luxury fashion and digital art, Hermès and Mason Rothschild over MetaBirkin NFTs, has emerged as a landmark judgement in application of trademark law to non-fungible tokens (NFTs). Intellectual Property Rights are meant to safeguard creator’s rights, but their application to NFTs remains the least discovered area, and the present case acts as a crucial step in the evolving route of intersection of intellectual property rights and NFTs.

The dispute between the luxury brand Hermès and artist Mason Rothschild was over the creation and sell of MetaBirkin NFTs. Hermès accused Rothschild trademark infringement, brand dilution, and cybersquatting over Rothschild’s NFTs, which depicted fur-covered versions of its iconic Birkin bags. The jury ruled in favour of Hermès in the check-list style, checking off all the accusations in the list or more like a legal version of Bingo, but only, Hermès shouting “Birkin!” instead of Bingo.

The judgement sets precedent for the cases involving application of trademark law to NFTs, by establishing that the creation and sale of NFTs could indeed infringe existing trademark rights for non-NFT uses.

8. Theriot v. Louis Vuitton North America, Inc.[8]

In 2022, a class action lawsuit was filed against Louis Vuitton North America for allegedly collecting consumers’ biometric data by way of a virtual try-on tool on its site, failing to obtain prior consent from the consumers. The virtual try-on tool has emerged as a popular tool, highly used by fashion and beauty brands to enhance the online shopping experiences for their customers which operates by collecting prospective consumers’s images and processing to show how a particular product of the brand would appear on their facial geometry. Likewise, the try-on feature by LVNA provided the opportunity to everyone to try in the latest shades and handbags. However, the plaintiffs hailing from Illinois argued that LVMA by failing to provide written notice regarding the collection of consumers’ face, the purpose of such collection, and for how long the data would be retained. Responding to the allegations, LVMA moved to dismiss the claim by contending that the facial recognition technology was developed by a third-party company and the same is responsible for collecting biometric information. The court here stated that the actual roles and responsibilities of the companies involved in the biometric data collection process constitutes factual question to be resolved in the later stages of proceedings. However, the court did dismiss one charge alleging that LVNA violated BIPA by failing to have a written biometric policy stating that the plaintiffs had failed to demonstrate a particularised harm from absence of such policy.

The ruling marks a significant improvement in the evolving nature of consumer expectations in the digital era where transparency becomes a matter of concern, emphasising the development in the legal scenario surrounding privacy rights and corporate responsibility, particularly in the context of e-commerce and online retail.

9. Industria de Diseño Textil, SA Inditex v European Union Intellectual Property Office (EUIPO) [9]

On 11 April 2019 the EU General Court ruled in Case T-655/17, Inditex v EUIPO, a dispute that shows how far a fashion brand’s reach can now extend beyond clothing. Inditex, which owns Zara, opposed an application to register the figurative mark “ZARA TANZANIA ADVENTURES” for services in classes 39, 41 and 43, covering travel and tourism, entertainment for tourists and travel agency work. It relied on two earlier EU word marks for ZARA: one registered in classes 25, 39 and 42, and another in classes 35 and 41. The Court sided with Inditex, finding that the Board of Appeal had not properly weighed the reputation of the ZARA marks. Why would a clothing company hold rights in travel classes at all? Because fashion houses increasingly act as lifestyle brands. Gucci and Ralph Lauren run restaurants and cafés, and designers such as Vivienne Westwood and Martin Grant have redesigned airline uniforms for major carriers. Fashion and travel have long shared the pages of glossy magazines, and now they increasingly share trade mark registers too.

The court ruled in the favour of Inditex, emphasising the importance of considering the strength of the brand’s earlier marks, reputation and their degree of distinctiveness in the market. The court asserted that the risk of unfair advantage cannot be ignored despite differences in goods and services, all relevant factors are to be considered to assess the potential risk.

10. Equal Employment Opportunity Commission V. Abercrombie & Fitch Stores, Inc.[10]

This judgment is a landmark in employment discrimination law. Abercrombie & Fitch had a “Look Policy” that banned “caps”, a term it never clearly defined, and on that basis it declined to hire Samantha Elauf, a practising Muslim who wore a headscarf to her interview. Two questions reached the Court: whether rejecting Elauf because of her hijab amounted to religious discrimination, which Title VII of the Civil Rights Act forbids, and whether an employer can be liable only if it actually knew the applicant needed a religious accommodation. The Court held that motive, not knowledge, is what counts: an employer that makes an applicant’s religious practice, confirmed or merely suspected, a factor in a hiring decision breaks the law, even if the applicant never asked for an accommodation. The ruling makes clear that employers must take religious practice into account in the workplace even when an employee or applicant has not raised it.

In the end, the lawsuit was amicably resolved by a Consent Decree which provided that Abercombie would pay $50 million to settle the present lawsuit along with two other private class actions. The Consent Decree also prohibited Abercrombie from engaging in discriminatory practices based on race, colour, national origin, sex, and ensured equal promotional opportunities for women and minorities.

This landmark judgement underscores the need for employers to review and potentially adjust their policies to comply with Title VII and to train their staff accordingly. This case set a precedent for protecting religious freedoms in the workplace and preventing discrimination based on religious attire or practices.

Abercombie & Fitch had had its exclusive moments, not exactly worthy of fashion spread. It has lived its fair share of scrutiny over its discriminatory practices based on race, gender, and even disability. But like phoenix, Abercombie has risen from the ashes, with each legal dispute being a lesson to evolution, not forgetting that this redemption demands hefty legal fees and settlement agreements.

In conclusion, these judgments highlight the importance of trademark protection and the need to safeguard against deceptive practices in the competitive world of commerce. From Chanel’s victory over SHANELLE’s phonetic hijinks to Crocs’ lesson in the complexities of design and trademark law, each case underscores the significance of preserving brand identity and consumer trust.

[1] 2003 (26) PTC 52 (Delhi)

[2] 831 F. Supp. 2d 723, 102 U.S.P.Q.2d 1225 (S.D.N.Y. 2011)

[3] 510 U.S. 569 (1994)

[4] 580 U.S. ___ (2017)

[5] Chanel, Inc. v. WGACA, LLC, No. 18-cv-2253 (S.D.N.Y.)

[6] 507 F.3d 252, 84 U.S.P.Q.2D (BNA) 1969

[7] 22-cv-384 (JSR)

[8] 1:22-cv-02944

[9] ECLI:EU:T:2019:241

[10] 575 U.S. 768, 135 S. Ct. 2028 (2015)

Author:

Sanjana Bishnoi, (Intern at Fashion Law Journal) a fifth-year law student at Bennett University, explores the intersection of law and fashion. With a hobby in art and craft and a keen interest in fashion, she delves into the legal landscape of the fashion world. With this article, she attend to bring the readers’ attention towards top ten landmark judgement that has shaped fashion industry.