Brand founders: Zudio is a fashion retail brand from the house of Tata Group’s retail arm, Trent Limited. It is owned by Trent Limited, which in turn belongs to the Tata Group. Founded by Jamshedji, the then-chairman of Tata Group Ratan N Tata, Trent’s early focus was on retail operations. It launched Zudio as a part of its far-reaching and all-encompassing strategy of providing stylish but affordable fashion.

Brand Productline: Zudio’s motive is to provide an end number of fashionable-trendy clothes at a very reasonable price, and it is a retail giant. As per this, the following catalogs are:

1. Clothing: kurtis, jeans, trousers, skirts, dresses, tops, t-shirts, crop tops, pants, athletic wear, tights, shirts, jackets, hoodies, sweatshirts, sweatpants.
2. Lingerie: bras, hipsters, briefs, boy shorts, nightwear dresses, camisoles, slips
3. Accessories: handbags, purses, totes, slings, rings, necklaces, bracelets, earrings, caps, sunglasses, scarves, stoles, hair accessories, belts, and socks.
4. Footwear: flats, flip-flops, heels, sneakers, boots, sandals, formal shoes
5. Makeup: eyeliner, eyeshadow, foundation, concealer, face powder, mascara, kajal, lipstick, brushes, makeup remover, lipliner
6. Home accessories: bedsheets, curtains, pillow covers, and festive decorations, Blush, highlighter, contour, and nail paint.

• Brand Marketing Strategies: The marketing campaign is mainly focused on trend-driven, affordable fashion. The brand focuses on value pricing and targets budget-conscious shoppers with a selection of clothing, shoes, and accessories for men, women, and children. When you combine the good location of stores with regular introductions of new collections, Zudio makes it a point that customers are always following up on all the latest materials. Cross-functional retail management but a more satisfying in-store experience through easy-to-shop stores with attractive visual merchandising effects. In addition, Zudio uses digital platforms and social media in its engagement by using targeted ads as well as an influencer partnership to reach a wide audience. Promotions and special offers build customer loyalty; infrequent sustainability promotions can rape eco-conscious consumers wants. In totality, Zudio follows the strategy of offering a mix of low-cost and fashion with aggressive marketing to reach out to price-sensitive customers.

• Brand selling methods (e-commerce, stores, aggregate): Zudio has a multi-channel sales strategy, allowing for the widest customer coverage in the most hassle-free manner. Here are the ways:

Brick and mortar stores

Zudio Tack Shop is a prominent brick-and-mortar retailer with active stores situated in prime places, mostly shopping centers and high streets. They have beautifully designed stores that provide a comfortable shopping experience, with layouts structured for different types of consumers, including men, women, and kids. The product sections are evident, and the merchandising is attractive throughout stores. They rely on in-store promotions, discounts, and seasonal sales to encourage foot traffic through their doors. Employees at the store are trained to help customers and advertise new collections along with deals that provide an appealing shopping experience.

E-Commerce

Zudio has managed to build a strong online presence through its focused e-commerce website and app. We aim to bring these features into our product pages by providing detailed descriptions of the products, high-resolution images in 360-degree view, and even adding size guides so that there is no second guessing on your side when making an order. Thanks to the mobile app, shopping is even more convenient, and users can place orders or access online-only deals. Digital Marketing: Zudio generates online traffic with search engine optimization (SEO) and pay-per-click ads. To create this somewhat two-way experience, brands use their social media marketing and email campaigns to keep customers up-to-date on new collections, special offers, seasonal sales, etc.

Marketplaces and Aggregators

To broaden its accessibility, Zudio collaborates with some of the biggest online marketplaces and aggregators. Zudio can now access these larger customer bases by selling on other websites and taking advantage of the existing marketing as well as the logistical infrastructure of these third-party sites. Listing their items on common e-commerce portals helps Zudio showcase its products in front of more potential buyers, making use of the collective customer traffic and diversified market presence.

Omni-Channel Integration

Zudio streamlines online and offline channels to ensure a uniform shopping experience. This can range from buying online and picking up in-store via click-and-collect (enabling the convenience of shopping anywhere with an immediacy akin to instant pick-up) all the way through to on-demand delivery today for same-day service. Single inventory management makes sure that stock levels remain consistent from one channel to the next, thus preventing out-of-stock or overstock problems, and can update in real-time. This integration creates a more satisfying experience for consumers, whether they are shopping in-store or online. Reducing the price as well as leveraging digital media. To fulfill this requirement, Zudio utilizes a combination of physical store presence as well as an e-commerce platform and online marketplaces like Flipkart, Tata Cliq, Amazon, etc. with integrated services such as Buy Online and Pick Up in Store.

• Legal Cases Involving Brands: There have been no highly publicized or major legal cases involving Zudio. But legal concerns with brands in the retail and fashion sectors could touch upon a number of different difficulties, like intellectual property disputes, intellectual property rights, contract disputes, consumer protection, and employment law.
• Brand Competitors: Zudio, being one of the players in retail and offering trends that are most affordable and fashionable, is a brand with undeniable matching fashion for men and women at low prices. Key competitors include:
• Pantaloons: It has a huge impact on the fashion retail market and offers a variety of apparel, accessories, and home products. It is also popular due to its wide variety and frequent sales.
• Reliance Trends: It offers multiple options of trendy and stylish clothing for people of all age groups. It is a direct competitor of Zudio due to its focus on affordable fashion.
• Max Fashion provides a comprehensive selection of clothes and accessories at affordable prices. They compete in the same customer segments as Zudio.
• Lifestyle: Lifestyle Retailing Business of Landmark Group. Operating its lifestyle retail business since 1999, Landmark Group is a pioneer in the vertical with various options in apparel, accessories, and home categories. It is competing with Zudio as its assortment spans both fashion and lifestyle products.
• H&M: An international fast-fashion brand, H&M provides fresh styles and trendy looks at a price you can afford. While it carries on on a more international scale, it fights Zudio in the high-low style sector.
• Forever 21: Forever 21 sells inexpensive and trendy fashion and views Zudio (strategically) as its competitor, as both cater to young, discretionary spending-minded consumers.
• Shoppers Stop: Although slightly higher priced, Shoppers Stop competes in the larger fashion and lifestyle markets due to its wide product range and multiple labels.
• Westside: Westside is operated by the Tata Group and offers a selection of affordable clothing and closer-to-home lifestyle options that cater to Zudio’s customer segment.
• They are major players in the Indian and international markets of fashion retail, each with their own unique positioning in products.
• Brands Target Audience: Zudio appeals to consumers across categories with its wide demographic profile. The target age group of the brand is broader; a typical customer could range anywhere from 15 to 45, for both men and women as well as kids. This is priced for middle-income customers, and its pricing strategy attracts such customers who are budget-conscious. Most customers of the brand are modern urbanites who want a hassle-free but affordable solution to their personal mobility needs. They typically have a casual, on-trend aesthetic and are shopping for fashionable pieces at their price point. Zudio has a wide appeal and is for working professionals, students, homemakers, etc. of all walks of life who want to look stylish without getting pinched in their pockets. It caters primarily to urban and semi-urban India. Zudio customers are typically value-conscious and fashion-forward, shopping for trendy appeal at competitive prices.

Author Name: Sania Syed

Chanel is famously protective over their products and has a 0-tolerance policy towards counterfeiting. Chanel over the past couple of years has been taking aggressive steps to protect themselves from counterfeiting by suing numerous companies like luxury reseller What Goes Around Comes Around. They were also able to block a trademark depicting “horizontal interlocking ‘S’ shapes in Europe” due to the similarity to their own C interlocking logo. So, it should come as no surprise Chanel decided to sue Amazon over counterfeits.

Chanel launched the lawsuit in April of 2017. Initially it sought 2 million dollars in compensation from each Amazon seller which would give them 30 million dollars in total. These sellers were selling fake copies of Chanel items with the iconic Chanel logo.

Many of the sellers tried to avoid litigation. One said they only made 48 dollars from the sale of allegedly counterfeit items like phone cases which was “mistakenly” uploaded to their Amazon Store. Another seller denied selling any fake Chanel. However, Chanel made active efforts to find out the truth. They hired private investigators to find out about the sellers activities on Amazon. The private investigators apparently ordered numerous items from Amazon stores which featured Chanel’s logo which turned out to be counterfeits.

In June of 2017 a California judge ruled in favour of Chanel and entered into a default judgement against approximately 30 sellers. The court awarded Chanel 100,000 dollars from each seller amounting to a total of 3 million dollars in damage.

The brand issues a statement to Fashion United stating “Chanel is satisfied by the outcome of this case which shows its strong and continuous commitment to the protection of its rights against counterfeiters,” “We hope this new decision will discourage others from harming our rights and our image. While of course we will continue to pursue this kind of action, we are calling for a reinforced collaboration from the Internet marketplace operators and all other intermediaries involved to take proactive, proportionate and effective measures to ensure traceability and prevent the promotion and distribution of counterfeit goods over the Internet and, in this manner, lower the risks for consumers.”

After this ruling Amazon permanently disabled the accused sellers and removed all images of trademark infringing products. Amazon also transferred any funds in the accounts of the sellers to Chanel. However, this did not halter Amazon’s plans to enter the fashion industry. They still launched the Echo Look, a clothing service for Amazon Prime customers which provided shopping advice and let them ‘document their wardrobes.’

Author: Dhwani Sharma

My Other Bag sells everyday canvas tote bags with drawings of various luxury brand handbags on one side and “My other bag” in large print on the other side. Louis Vuitton took offense at My Other Bag’s products that imitate a number of Louis Vuitton bag styles and commenced a lawsuit claiming, among other things, trademark infringement and dilution. The district court granted My Other Bag summary judgment on all of Louis Vuitton’s claims, holding that My Other Bag’s products are parodies and, as such, are not actionable sources of trademark infringement or dilution. In response, Louis Vuitton appealed the decision to the Second Circuit Court of Appeals.

The case took an interesting turn with an amicus brief (friend of the court) filed by law professors. Referencing the famous artwork “The Treachery of Images” which declares “This is not a pipe,” the professors argued that MOB’s bags function similarly. The inscription “My Other Bag” and the cartoonish design, unlike a photorealistic image or a direct copy of the LV pattern, create clear inconsistencies that any observant consumer would recognize as a joke, not a genuine Louis Vuitton product.

My Other Bag (MOB) won the initial court battle against Louis Vuitton (LV) for trademark infringement on their tote bags. LV appealed, but the higher court upheld the decision. Here’s why:

• Clearly a Parody: The court saw MOB’s use of the LV design as an obvious parody, not a straight-up copy. The cartoonish drawing and replacing LV’s logo with “MOB” made it clear MOB wasn’t trying to trick anyone.
• Different Markets: The judges considered the target audiences. LV’s expensive bags cater to luxury shoppers,while MOB sells affordable totes. This difference lessens the chance of consumers getting confused about the source.
• No Confusion Proof: Finally, LV couldn’t show enough evidence that people were mistaking MOB’s bags for genuine Louis Vuitton.

Even though Louis Vuitton argued their brand image was being weakened (dilution) by My Other Bag’s parody totes, the court still sided with MOB. Here’s the breakdown:

• Double Message is Key: A parody has to walk a tightrope – it needs to resemble the original but also clearly be a joke. The court found MOB’s totes achieved this. They mimicked LV’s design, yet the cartoon style, “My Other Bag” slogan, and overall casual feel made it obvious they weren’t trying to pass as real LV.
• Gentleness Doesn’t Disqualify: The parody didn’t need to be mean-spirited. The court even saw it as a possible compliment to LV’s brand recognition.
• Focus on Parody, Not Sales: Importantly, MOB wasn’t using the LV design just to sell their bags by tricking people. The parody of LV’s luxury image was the main purpose.

This ruling highlights that using a trademark for parody can be protected, even if it weakens the original brand slightly.

Protecting trademarks is crucial for brands to prevent damage from misuse like infringement, dilution, or unfair competition. However, going after every single potential case can be a waste of resources. Ignoring infringements entirely can weaken a brand’s trademarks over time.

The key lies in a balanced approach. When a potential infringement arises, brand owners should investigate. This includes considering the type of use, likelihood of confusion, and potential defenses like parody. Lawsuits are expensive, so prioritizing legal action based on these factors is wise.

This measured approach can help brands avoid losses like Louis Vuitton’s. It also helps them steer clear of the “Streisand Effect” – where legal action backfires and actually promotes the infringing product (My Other Bag in this case). This could even inspire copycats to make more parodies of the brand’s luxury image.

Author: Ayesha Imam, University of Delhi

Introduction

Louis Vuitton (LV) is one of the world’s leading international fashion houses, known for its luxury bags, accessories, and ready-to-wear clothing. This case study explores the psychological factors that drive consumer behavior towards Louis Vuitton products, focusing on brand loyalty, social status, and the consumer decision-making process.

Brand Background

– History: Founded in 1854 by Louis Vuitton, the brand has become synonymous with luxury, quality, and timeless style.

– Market Position: LV is a part of the LVMH group and stands as a symbol of prestige and exclusivity.

– Target Audience: High-net-worth individuals and aspirational buyers who seek status and recognition through luxury goods.

Psychological Evaluation

– Consumer Motivation:

  – **Status Symbol**: LV products are often purchased as status symbols. Ownership signals wealth, success, and a higher social standing.

  – Self-Concept: Consumers use LV products to enhance their self-concept. The brand is associated with sophistication, which consumers aspire to reflect in their self-identity.

  – Emotional Connection: The brand fosters an emotional connection through its heritage, craftsmanship, and the experience of luxury shopping.

– Brand Loyalty:

  – Perceived Quality: Consistent high quality and craftsmanship reinforce trust and loyalty among consumers.

  – Brand Experience: The exclusive in-store experience, personalized customer service, and after-sales support enhance consumer satisfaction and loyalty.

  – Cognitive Dissonance: High investment in LV products can lead to cognitive dissonance where consumers justify their purchase by overemphasizing the positive attributes of the brand, thereby increasing loyalty.

– Decision-Making Process:

  – Social Influence: Social proof and influence from celebrities, influencers, and peer groups play a significant role in purchase decisions.

  – Psychological Pricing: The high price of LV products contributes to their perceived value. Consumers often associate higher prices with superior quality.

  – Scarcity and Exclusivity: Limited editions and exclusive collections create a sense of urgency and exclusivity, driving purchase decisions.

 Marketing and Psychological Strategies

– Luxury Branding: LV leverages its heritage and legacy to create a narrative of timeless elegance and exclusivity.

– Visual Merchandising: Store layouts, window displays, and visual merchandising are designed to create an aspirational shopping environment.

– Celebrity Endorsements: Collaborations with high-profile celebrities and influencers enhance brand desirability and social proof.- Customer Experience: Personalized services, such as bespoke products and private shopping appointments, strengthen the emotional bond with the brand.

Case Analysis

– Success Factors:

  – Strong Brand Identity: LV’s clear and consistent brand identity reinforces its position as a leader in luxury fashion.

  – Emotional Appeal: The emotional appeal of owning an LV product plays a critical role in consumer loyalty and repeat purchases.

  – Exclusivity: Limited availability and high price points create a perception of rarity and exclusivity, which are crucial in luxury branding.

Challenges:

  – Counterfeiting: The prevalence of counterfeit LV products can dilute brand value and consumer trust.

  – Market Saturation: As the brand expands, maintaining exclusivity while reaching a broader audience can be challenging.

  – Changing Consumer Preferences: Adapting to changing consumer preferences, especially among younger generations, requires innovation while preserving brand heritage.

Discussion

The psychological strategies employed by Louis Vuitton highlight the importance of understanding consumer behavior in the luxury market. The brand’s ability to create an emotional connection, maintain exclusivity, and deliver consistent quality contributes significantly to its success. However, it must continually innovate to stay relevant and protect its brand image against challenges like counterfeiting and market saturation.

Conclusion

Louis Vuitton’s case illustrates the intricate relationship between luxury branding and consumer psychology. By leveraging psychological principles, LV effectively enhances brand loyalty, drives consumer motivation, and sustains its status as a luxury icon. Understanding these psychological dynamics is essential for luxury brands aiming to build long-term success and customer loyalty.

Author: Jeevan P A – Karnataka State law University, Bengaluru

1. Plaintiff: Hells Angels Motorcycle Corporation
2. Defendants: Alexander McQueen Trading Limited, Saks Incorporated, Zappos.com, and various retailers.

Facts-

The Hells Angels Motorcycle Corporation (HAMC) sued Alexander McQueen and various retailers, including Saks Incorporated and Zappos.com, for trademark infringement.

The lawsuit, filed on October 25, 2010, in the U.S. District Court for the Central District of California, revolved around the unauthorized use of the Hells Angels’ “Death Head” logo and other trademarks on Alexander McQueen’s clothing and accessories.

HAMC claimed that Alexander McQueen used their protected marks without permission, thereby infringing on their trademarks, diluting their brand, and engaging in unfair competition. The specific items in question included a knuckle-duster ring, clutch bags, and various clothing pieces that prominently featured designs similar to the Hells Angels’ iconic logos.

(Image Source)

At Alexander McQueen’s website one could see that not only is the word ‘Hells’ used on those items, but the entire phrase ‘Hells Angels,’ on a Jacquard dress and a pashmina scarf

(Image Source)                                                                                                                                (Image Source)

HAMC argued that the use of these trademarks on high-fashion items could lead to consumer confusion, falsely suggesting an affiliation or endorsement by the Hells Angels. The plaintiff sought to protect their trademarks from what they viewed as commercial exploitation that could tarnish their image and dilute their brand’s distinctiveness.

The lawsuit emphasized the potential for brand dilution and consumer confusion, key concerns in trademark law. The case was settled out of court in December 2010, with Alexander McQueen agreeing to cease the production and sale of the disputed items.

Decision-

According to Fritz Clapp, the Hells Angels’ attorney, the defendants have consented to remove from their websites and retail locations any items featuring references to the Hells Angels, such as clutches, knuckle-duster rings, the “Hells Angels Jacquard Box Dress,” and pashminas. Additionally, they have stated that they will burn any already-sold items as part of their recall[1].

The Hells Angels case relies on the history of their registrations in place since 1948[2] that prevent the death head from being replicated and used without authorization in jewellery, watches, clocks, earrings, key rings, and other goods[3].

Rationale-

Despite the fact that there was no court ruling because of the settlement, the case emphasizes the significance of the following legal precepts:

Probability of Confusion: The main issue in cases involving trademark infringement. The usage of the iconic HAMC emblems by an upscale clothing line such as Alexander McQueen may mislead shoppers into thinking that the Hells Angels are associated with or endorsing the brand, which is untrue.

Fame and Distinctiveness: HAMC was able to get protection against dilution due to the well-known and distinctive nature of its trademarks.

Unauthorized usage: Trademark infringement and unfair competition laws were directly affected by the marks’ unauthorized usage.

Legal Principles Involved (Indian Law perspective)-

Trademark Infringement

• To establish trademark infringement, the plaintiff must demonstrate:
  • Ownership of a valid and registered trademark.
  • The defendant’s use of an identical or deceptively similar trademark in a manner that is likely to cause confusion or deception among the public regarding the source, affiliation, or endorsement of the goods or services.
• Infringement also includes the unauthorized use of a trademark in advertising or trade that takes unfair advantage of, or is detrimental to, the distinctive character or repute of the registered trademark.

Trademark Dilution

• Trademark dilution protection extends to well-known trademarks, regardless of the presence of competition or likelihood of confusion.
• Dilution by blurring occurs when the unauthorized use of a well-known trademark reduces its distinctiveness, even if there is no direct competition or confusion.
• Dilution by tarnishment occurs when the unauthorized use of a well-known trademark harms its reputation or creates an adverse association, thereby diminishing its value.

Unfair Competition

Unfair competition involves any business practices that mislead consumers about the origin, sponsorship, or endorsement of goods or services, thereby causing economic harm to the rightful trademark owner.

• This principle encompasses acts of passing off, where one party misrepresents their goods or services as those of another, leading to potential damage to the trademark owner’s goodwill and reputation.

Implications for the Fashion Industry

The Hells Angels v. Alexander McQueen case highlights a number of significant trademark law and intellectual property rights ramifications for the fashion industry.

• Vigilance in Trademark Use:

Due Diligence: Before adding recognizable trademarks or symbols into their designs, fashion brands must carry out exhaustive trademark searches and obtain the required licenses. This procedure reduces the possibility of unintentionally violating already-registered trademarks.

Legal Compliance: Making sure trademark rules are followed helps brands stay out of expensive legal disputes and protect their reputations. Businesses should set up thorough internal procedures for reviewing new designs in order to spot and resolve any trademark disputes as soon as possible during the creation stage.

• Risk of Litigation:

Expensive Legal Battles: This case emphasizes the serious risks to one’s finances and reputation that come with trademark infringement. Legal challenges can lead to costly recalls and discontinuations of infringing items, as well as costly settlements, court costs, and possible damage judgments.

Precedent and Deterrence: Notoriety cases such as this one encourage other fashion brands to take trademark law seriously by acting as a deterrent. They emphasize how crucial it is to uphold intellectual property rights in order to steer clear of such legal dangers.

• Brand Protection:

Trademark Registration: In order to obtain legal protection and safeguard their rights against unlawful usage, fashion firms should proactively register their trademarks. A brand’s capacity to defend its intellectual property in court is strengthened by registration.

Monitoring and Enforcement: In order to protect their rights, brands need to keep a close eye out for any possible violations in the market and move quickly to stop them. This could entail filing lawsuits or delivering cease-and-desist letters to stop unauthorized usage of their trademarks.

• Collaboration and Licensing:

Strategic Alliances: The case emphasizes how crucial it is to sign appropriate license contracts before utilizing identifiable marks like logos or symbols. Well-known trademarks can be lawfully included into fashion designs through licensing agreements, which guarantee both parties’ benefits and legal protection.

Creative Collaborations: In order to develop exclusive lines that take advantage of the popularity of trademarks while maintaining compliance with intellectual property rules, fashion firms may want to consider working directly with trademark owners.

• Consumer Perception and Brand Integrity:

Brand Image: Unauthorized use of trademarks can damage a brand’s perceived exclusivity and legitimacy by confusing consumers. Respecting other people’s intellectual property is essential to keeping your brand integrity intact.

Market Trust: Fashion firms can establish and preserve consumer trust by abiding by trademark rules, which guarantees that their items are viewed as genuine and unique rather than copycat or infringing.

To sum up, the legal dispute between Hells Angels and Alexander McQueen highlights the significance of trademark defence and the possible legal ramifications for fashion labels who disregard intellectual property rights. The case emphasizes the necessity of using trademarks with due caution as well as the wider ramifications of trademark infringement and dilution in the fashion sector.

Author: Diya Kohli- O.P. Jindal Global University

[1] Charlotte Cowles, Alexander McQueen Settles With Hells Angels by Agreeing to Destroy Merchandise With Skull Logo dated- November 3, 2010 at https://www.thecut.com/2010/11/alexander_mcqueen_settles_with.html (Accessed on June 26, 2024)

[2] Author, The Hells Angels Settle Lawsuit Against Alexander McQueen, Saks, and Zappos.com dated- November 3, 2010 at https://www.nbcnewyork.com/local/thread-42/1901897/ (Accessed on June 26, 2024)

The case involves diamond engagement rings sold at Costco using the trademarked term TIFFANY. In November 2012, a customer alerted Tiffany to rings at Costco advertised as Tiffany’s,[i] prompting Tiffany to request removal of the mark from Costco’s display case signs.[ii] Costco also offered refunds for unsatisfied customers.[iii]

In February 2013, Tiffany filed a complaint against Costco for trademark infringement, counterfeiting and other violations under the Lanham Act and New York law.[iv] Costco responded by denying infringement and seeking a judgment to declare Tiffany’s mark invalid.[v] Costco also made counterclaims, including: (1) the TIFFANY mark was used just to describe the products, not as a trademark; and (2) the TIFFANY mark has become generic for a multi-prong, solitaire ring setting.[vi]

Tiffany replied, clarifying that its original complaint was about Costco’s use of the TIFFANY mark, not the term “Tiffany Setting,” emphasizing Costco’s signage used TIFFANY without mentioning “Tiffany Setting.” [vii] Eventually, both parties filed cross-motions for summary judgment.[viii]

In September 2015, the district court ruled for Tiffany, granting summary judgment and awarding $21 million in damages.[ix] Costco subsequently appealed the decision. The Second Circuit Court of Appeals determined that factual questions should have gone to a jury, not decided by the court.[x] It agreed with Costco that there were genuine issues of material fact regarding the trademark infringement and counterfeiting.[xi] Additionally, it held that Costco was entitled to present its fair use defense to a jury.[xii] As a result, the Second Circuit overturned Tiffany’s $21 million judgment, vacated the summary judgment in favor of Tiffany, and remanded the case for trial.[xiii]

District Court Sides with Tiffany

Filing a motion for summary judgment seeks a decision from the district court without the need for a full trial. At the summary judgment stage, the judge’s role is not to determine the truth or weigh the evidence, but to assess whether there is a genuine issue for trial.[xiv] If a jury could reasonably reach a different conclusion based on the evidence, a jury trial is necessary, and the judge cannot decide on that issue at the summary judgment stage.[xv]

Here, Tiffany filed for summary judgment seeking three outcomes: (1) a ruling on Costco’s liability for trademark infringement and counterfeiting, (2) the dismissal of Costco’s fair use affirmative defense, and (3) the dismissal of Costco’s counterclaim that the TIFFANY mark had become generic.

1. Costco Infringed Tiffany’s Mark

To win an infringement claim under the Lanham Act, the plaintiff must show (1) that it owns a mark that is legally protected, and (2) that the defendant’s use of the mark is likely to confuse consumers.[xvi]

With respect to the first prong of the test, Costco argued that the term “Tiffany” has become generic in the context of a specific style of pronged ring setting.[xvii] However, because Costco did not provide admissible evidence to challenge the validity and ownership of Tiffany’s marks, the court concluded that Tiffany made a prima facie showing of the mark’s validity, thus satisfying the first prong of the infringement test.[xviii]

With respect to the second prong of the test, the court concluded that Costco failed to offer any evidence raising a disputed issue of material fact regarding any of the following Polaroid factors.

1. Actual Confusion: Costco tried to discredit Tiffany’s evidence of customer testimonies and an expert survey by questioning the expert’s credentials and the methodology of his surve[i] However, Costco did not present any strong counter-evidence or its own survey proving that consumers were not confused by its use of the TIFFANY mark.[ii] Costco’s expert also failed to show Tiffany’s survey was inadmissible.[iii] To the court, Costco’s criticism of Tiffany’s evidence goes to the weight, rather than the admissibility, of Tiffany’s consumer confusion evidence.[iv] As a result, the court found that Tiffany’s evidence of consumer confusion was strong and unrebutted by Costco.[v]

1. Good Faith: Tiffany provided evidence of an email from a Costco employee wanting their jewelry boxes to look more like Tiffany’s and a deposition where Costco’s jewelry buyer admitted to customer confusion.[vi] Costco argued that it used TIFFANY generically to describe a pronged diamond setting, providing dictionary entries, a publication excerpt, an affidavit from a diamond buyer, and a declaration from an Assistant General Merchandise Manager.[vii] Moreover, Costco asserted that it extracted the word TIFFANY from vendor-supplied information where it is used in a purely descriptive sense.[viii] However, the court concluded that no reasonable person could find that Costco acted in good faith in adopting the TIFFANY mark.[ix]

1. Consumer Sophistication: Tiffany’s evidence relied on its expert’s survey of potential Costco diamond ring buyers.[x] Costco argued that diamond ring buyers are highly discerning and that Tiffany’s survey didn’t target the consumers with a present interest in buying a diamond ring.[xi] However, because Costco’s evidence only went to the weight that Tiffany’s evidence should be accorded, and Costco failed to provide its own evidence to counter Tiffany’s claims, the court found no genuine issue of material fact regarding consumer sophistication.[xii]

Applying these Polaroid factors, the court ruled in Tiffany’s favor, granting Tiffany’s motion for summary judgment regarding Costco’s liability for trademark infringement.[xiii]

1. Costco Counterfeited Tiffany’s Mark

To win a counterfeiting claim under the Lanham Act, the plaintiff must prove that the defendant’s mark is “spurious” and closely resembles a registered mark, and that its use is likely to cause confusion, to cause mistake, or to deceive consumers.[xiv]

Tiffany supported its counterfeiting claim with emails, photos, and deposition testimony showing Costco’s use of the Tiffany mark to imply authenticity.[xv] Tiffany also highlighted that Costco placed the Tiffany mark prominently on display case signs, where typically the manufacturer’s name would appear for other products.[xvi] Costco argued its use of TIFFANY was not deceptive, citing an expert who stated that its rings had non-Tiffany marks, packaging, and paperwork.[xvii]

The court was not convinced, highlighting that Tiffany had shown actual consumer confusion, that Costco used a mark identical to Tiffany’s, and that Costco acted in bad faith.[xviii] The lack of the Tiffany mark on the rings themselves was not dispositive. In addition, Costco did not prove that using generic marks reduced confusion.[xix]

Therefore, the court concluded that Costco has not raised any material issues of fact regarding these findings and granted Tiffany’s motion for summary judgment on Costco’s counterfeiting liability.[xx]

2. Costco’s Fair Use Defense is Rejected

Fair use defense requires demonstrating that the use of the mark was not as a trademark, was descriptive, and was done in good faith.[xxi] If a defendant successfully proves these elements, they may argue that their use of the mark should be protected under the fair use doctrine, even if it causes some consumer confusion.

Since the court has already determined that Costco did not act in good faith when adopting the Tiffany mark, Costco failed to satisfy a crucial element of the fair use defense.[xxii] Therefore, Tiffany was entitled to summary judgment, striking down Costco’s fair use defense.[xxiii]

3. Tiffany’s Mark is Not Generic but a Source-Identifier

A generic mark is a term that has become commonly used to describe a type of product or service, rather than to identify the source of that product or service. Generic terms are not protectable because they do not distinguish one source of goods or services from another. Hence, when a defendant asserts genericism in a trademark infringement case, they are essentially arguing that the term be invalidated as a federal trademark.[xxiv] In Tiffany’s case, it would allow any retailer to use the term TIFFANY in connection with rings.[xxv] In other words, this would mean the invalidation of a 184-year-old trademark and all the goodwill that has come to be associated with the brand.[xxvi]

Based on Tiffany’s expert report, 90% of potential jewelry buyers saw TIFFANY as a brand name when viewed alone, and 30% saw it as a brand name or both a brand name and descriptive term when seen in Costco’s context.[xxvii] Based on this, Tiffany argued that TIFFANY is seen by the public as a brand name and accordingly its mark cannot be considered generic.[xxviii] Costco countered with its own expert report criticizing Tiffany’s study methodology and suggesting that the term could be both a brand name and a descriptive term for a ring setting.[xxix]

The court was not convinced by Costco’s arguments. Costco’s criticism of Tiffany’s evidence pertained to the weight it should be accorded by the jury, rather than its admissibility.[xxx] Moreover, Costco provided no legal authority for the term TIFFANY to be both a registered mark and a generic word.[xxxi] The court acknowledged the Second Circuit’s “dual usage” doctrine, which allows a mark to start as a proprietary word and later become generic to some segments of the public.[xxxii] However, Costco did not address this doctrine or provide any factual evidence to support its dual usage, and the court chose not to explore this argument on its own.[xxxiii]

Moreover, the court pointed out that Costco did not present any evidence creating a material fact issue about whether the primary significance of the TIFFANY mark was as a “generic descriptor” or a “brand identifier.”[xxxiv] The court emphasized that determining the primary significance of the mark is essential for deciding if it is generic.[xxxv]

Therefore, the court ruled in favor of Tiffany, finding that Costco did not raise a material fact issue regarding the generic nature of the TIFFANY mark, and granted summary judgment against Costco’s genericism counterclaim.[xxxvi]

Second Circuit Appellate Court Sides with Costco

On appeal, Costco mainly challenged the district court’s evaluation of three factors: actual customer confusion, whether Costco acted in bad faith by using Tiffany’s mark, and whether the consumers were sophisticated enough to avoid confusion.[xxxvii] The appellate court determined that Costco had presented a triable issue on each of these points, which extended to the broader question of whether Costco’s actions likely caused customer confusion.[xxxviii]

1. Genuine Dispute of Trademark Infringement Exists

       a. Actual Confusion

The appellate court held that Tiffany did not conclusively prove customer confusion. Limited instances of confusion—only six out of over 3,349 purchases—might be seen as minimal by a reasonable juror.[xxxix] Costco further bolstered its case with expert testimony challenging Tiffany’s survey, arguing it was flawed because Tiffany surveyed consumers without a present interest in buying a diamond ring and used contrived and biased stimuli that did not reflect real-life point-of-sale conditions.[xl] Unlike the district court, the appellate court found that the weight given to Tiffany’s survey could determine whether Tiffany was entitled to summary judgment or if a jury could find a material fact favorable to Costco.[xli]  

      b. Good Faith

The appellate court found that Tiffany had not conclusively established bad faith on Costco’s part. While Costco aimed to emulate “useful, nonprotected attributes” of Tiffany’s products, this intent did not necessarily imply an intention to deceive customers about the jewelry’s origin.[xlii] The court noted that subjective matters like good faith are not suitable for summary judgment, suggesting that a jury could reasonably interpret Costco’s actions as inspired by Tiffany’s designs rather than intended to mislead.[xliii] Furthermore, Costco provided evidence that it extracted the word TIFFANY from vendor descriptions[xliv] and used TIFFANY as a generic style term to denote a type of pronged setting.[xlv] Costco also took steps to differentiate its products from those of Tiffany, such as using different branding and packaging.[xlvi] Hence, a jury could reasonably interpret Costco’s use of the term as not malicious but aimed at accurately describing the jewelry style to customers.[xlvii]

       c. Consumer Sophistication

The appellate court disagreed with the district court’s assertion that Costco failed to prove its customers were sophisticated enough to avoid confusion, viewing this as shifting the burden of proof onto Costco.[xlviii] Again, the appellate court reiterated that the weight of a piece of evidence can be determinative as to whether summary judgment is appropriate.[xlix] Costco’s expert even presented evidence that actual buyers are knowledgeable and discerning, likely recognizing that Tiffany did not produce Costco’s rings.[l] Therefore, a jury could reasonably conclude that the relevant consumers would understand this distinction.[li]

      d. Overall Likelihood of Consumer Confusion

The appellate court determined that Costco’s evidence collectively raised a genuine question about the likelihood of customer confusion.[lii] This conclusion was primarily based on two factors: Costco demonstrated that “Tiffany” is widely understood to describe a specific style of pronged ring setting, and it showed that consumers of diamond engagement rings are generally knowledgeable and discerning.[liii] A reasonable jury could therefore conclude that consumers would recognize Costco’s use of TIFFANY solely in a descriptive sense, not as an indication of origin.[liv] While Costco’s use of TIFFANY may have created a potential for confusion, given Costco’s evidence and Tiffany’s failure to show otherwise, the court declined to rule definitively that no reasonable jury could find Costco’s signs non-confusing.[lv]

2. Costco is Entitled to the Fair Use Defense

The appellate court held that Costco is entitled to present its fair use affirmative defense at trial.[lvi] At the trial court level, there was sufficient evidence to support all three elements of Costco’s affirmative defense.[lvii] However, having resolved the motion on the basis of good faith alone, the district court did not consider the other factors pertinent to the fair use defense.[lviii]

      a. First Element Satisfied: Use of the Mark Not as a Mark

 The appellate court found that a jury could reasonably conclude that Costco did not use the term TIFFANY as a trademark.[lix] Tiffany’s evidence showed that Costco typically places the trademark at the beginning of product labels, but none of the hundreds of engagement ring signs produced for this litigation began with TIFFANY.[lx] Instead, the term TIFFANY was displayed similarly to setting information for other rings.[lxi] Costco also provided evidence that the word TIFFANY did not appear on any of its rings or packaging, which instead bore the logo of a different manufacturer.[lxii]

      b. Second Element Satisfied: Descriptive Use of the Mark

The appellate court found that a jury could reasonably conclude that Costco used the term TIFFANY descriptively.[lxiii] Costco provided evidence showing that TIFFANY is widely understood to refer to a specific type of pronged diamond setting, separate from the Tiffany brand.[lxiv] Costco identified over a century’s worth of documents and included declarations from employees and vendors supporting this descriptive use.[lxv] Furthermore, Costco demonstrated that it used the term exclusively on signs for rings with a Tiffany setting, displaying consistent information across all engagement ring styles.[lxvi] This evidence supported the argument that TIFFANY has a descriptive meaning in the jewelry trade and that Costco’s use was in good faith: “There is nothing inherently absurd about a single word’s being both a source identifier and a descriptive term within the same product class.”[lxvii] For the appellate court, Tiffany’s lack of challenge to the terms “Tiffany set” or “Tiffany setting” may suggest an implicit recognition of some descriptive uses of its mark.[lxviii]

2. Tiffany’s Trademark Counterfeiting Claim is Dismissed

Since the appellate court deemed it inappropriate to hold Costco liable for trademark infringement at the summary judgment stage, and considering that counterfeiting is considered an aggravated form of infringement, it also vacated the district court’s judgment on the counterfeiting claim as well

Implications for the Fashion Industry

In July 2021, Tiffany and Costco have settled their long-running lawsuit.[lxix] However, its significant and lasting consequences persist for the fashion industry.

1. Genericization of “Tiffany”: Similar to terms like Escalator and Aspirin that have become generic, if TIFFANY becomes widely used to describe a specific type of pronged diamond ring setting, it may lose its trademark protection.[lxx] This could allow various retailers like Costco to use the term TIFFANY to describe such settings without facing infringement claims.[lxxi]

2. Dual Usage Doctrine: This case underscores the concept that a term can serve both as a trademark and have a legitimate descriptive function within the same industry. This dual usage may lead to more disputes over the protectability of descriptive terms.[lxxii]

3. Descriptive Fair Use Defense: Using a term descriptively rather than as a trademark may serve as a defense against counterfeiting claims.[lxxiii]

4. Good Faith Imitation: As the case demonstrated, imitation of unprotected product features does not automatically indicate bad faith.[lxxiv] This distinction is crucial for litigants to discern between protected and unprotected elements in trademark infringement cases.[lxxv]
5. Weight of the Evidence Matters: The Second Circuit’s emphasis on reviewing Polaroid factors anew could lead to stricter scrutiny in granting summary judgments.[lxxvi] This is because the weight of a given piece of evidence can be determinative of whether summary judgment is appropriate. District courts may thus exercise greater caution in granting summary judgment, particularly when the weight of evidence is contested rather than new evidence being presented.[lxxvii] This is of concern for companies with even the most aggressive of intellectual property practices.[lxxviii] Also, if a brand that serves a dual descriptive purpose within its industry sees its mark’s value diminish, the company could have less incentive to expend substantial costs associated with maintaining federal trade registrations and enforcing its intellectual property rights.[lxxix]

Author Bio: Seoryung Park

Seoryung Park is a New York licensed attorney with a certificate in IP. She earned her J.D. from the University of Connecticut School of Law, where she served as an associate editor for the Connecticut Journal of International Law. She holds a B.A. in criminology, sociology, and political science from the University of Toronto.

With a background in teaching, Seoryung has a passion for educating others about fashion law. She aims to write articles that merge international perspectives, cultural insights, and thorough explanations, making complex legal matters accessible and engaging for every reader.

[i] Id. at 12-13.

[ii] Id. at 13-14.

[iii] Id.

[iv] Id. at 14.

[v] Id.

[vi] Id. at 15.

[vii] Id. at 15-16.

[viii] Id. at 16.

[ix] Id.

[x] Id. at 19-20.

[xi] Id. at 19.

[xii] Id. at 19-20.

[xiii] Id. at 20.

[xiv] Id.

[xv] Id. at 21.

[xvi] Id.

[xvii] Id. at 21-22.

[xviii] Id. at 22.

[xix] Id.

[xx] Id. at 23.

[xxi] Id.

[xxii] Id. at 24.

[xxiii] Id.

[xxiv] Keene, supra note 9.

[xxv] Id.

[xxvi] Id.

[xxvii] Tiffany, No. 13CV1041-LTS-DCF, at 25.

[xxviii] Id.

[xxix] Id. at 25-26.

[xxx] Id. at 28.

[xxxi] Id. at 27.

[xxxii] Id.

[xxxiii] Id.

[xxxiv] Id. at 30.

[xxxv] Id.

[xxxvi] Id.

[xxxvii] Tiffany, 2020 WL 4556537, at 18.

[xxxviii] Id. at 18.

[xxxix] Id. at 21.

[xl] Id. at 20-21.

[xli] Id. at 21-22.

[xlii] Id. at 23-25.

[xliii] Id.

[xliv] Id. at 24.

[xlv] Id. at 27.

[xlvi] Id.

[xlvii] Id.

[xlviii] Id. at 29-30.

[xlix] Id. at 29.

[l] Id. at 29-30.

[li] Id.

[lii] Id. at 30.

[liii] Id.

[liv] Id. at 31.

[lv] Id. at 32.

[lvi] Id.

[lvii] Id. at 33-34.

[lviii] Id. at 33.

[lix] Id. at 34.

[lx] Id.

[lxi] Id.

[lxii] Id. at 35.

[lxiii] Id. at 36.

[lxiv] Id.

[lxv] Id.

[lxvi] Id.

[lxvii] Id. at 37.

[lxviii] Id. at 39.

[lxix] Keene, supra note 9.

[lxx] Edward Weisz & Keren Goldberger, The Price of Fame: Tiffany Settles 8-Year Lawsuit with Costco Over Use of Company Name in Ring Displays, TOTALRETAIL (last visited June 28, 2024), https://www.mytotalretail.com/article/the-price-of-fame-tiffany-settles-8-year-lawsuit-with-costco-over-use-of-company-name-in-ring-displays/.

[lxxi] Id.

[lxxii] McGuireWoods, Second Circuit Overturns Tiffany’s $21M Judgment Against Costco in Trademark Battle (Aug. 18, 2020), https://www.mcguirewoods.com/client-resources/alerts/2020/8/second-circuit-overturns-tiffany-21m-judgment-against-costco/.

[lxxiii] Id.

[lxxiv] Id.

[lxxv] Id.

[lxxvi] Id.

[lxxvii] Id.

[lxxviii] Kaitlyn Rodnick, Tiffany & Co. v. Costco Wholesale Corp.: Cut, Clarity, Carat, Color, and Costco?, Tul. J. Tech. & Intell. Prop. [Vol. 23], 232 (2021).

[lxxix] Id. at 233.

[i] Tiffany & Co. v. Costco Wholesale Corp., No. 13CV1041-LTS-DCF, at 3 (S.D.N.Y. Sept. 8, 2015).

[ii] Tiffany, No. 13CV1041-LTS-DCF, at 4.

[iii] Id. at 4.

[iv] Tiffany & Co. v. Costco Wholesale Corp.*, Nos. 17-2798-cv, 19-338, 19-404, 2020 WL 4556537, at 8 (2d Cir. Aug. 17, 2020).

[v] McDonnell et al., Tiffany & Co. v. Costco Wholesale Corp.: TIFFANY Mark Infringed by Costco’s Sales of “Tiffany” Rings, JDSUPRA (Dec. 7, 2015), https://www.jdsupra.com/legalnews/tiffany-and-co-v-costco-wholesale-corp-86983/%3E.

[vi] Id.

[vii] Id.

[viii] Id.

[ix] Celes Keene, Tiffany & Co. and Costco Wholesale Settle Trademark Dispute, KLEMCHUCK (Aug. 3, 2021), https://www.klemchuk.com/ideate/tiffany-costco-trademark-dispute-settles.

[x] Tiffany, 2020 WL 4556537, at 2, 12.

[xi] Tiffany, 2020 WL 4556537, at 12.

[xii] Id.

[xiii] Id.

[xiv] Id. at 17.

[xv] Id.

[xvi] Tiffany, No. 13CV1041-LTS-DCF, at 6.

[xvii] Id. at 7.

[xviii] Id. at 6-7.

HELD

Held: A feature incorporated into the design of a useful article is eligible for copyright protection only if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic, or sculptural work—either on its own or fixed in some other tangible medium of expression—if it were imagined separately from the useful article into which it is incorporated. That test is satisfied here.

FACTS OF THE CASE

1. Varsity Brands Inc. (respondents), herein referred to as “Varsity”, are manufacturer of cheerleading uniforms. Respondents have more than 200 copyright registrations for two-dimensional designs—consisting of various lines, chevrons, and colorful shapes—appearing on the surface of the cheerleading uniforms that they design, make, and sell.
2. Star Athletica (petitioners), herein referred to as “Star”, was selling and advertising designs of cheerleading uniforms for which Varsity had received a copyright registration.
3. Varsity sued Star for copyright infringement.
4. Star counterclaimed and asserted that Varsity had made fraudulent representation to the Copyright Office as the designs on “useful articles” (here the uniforms) are not copyrightable and both the parties moved for a summary judgment.
5. The District Court granted summary judgement in the favour of Star (petitioner). The trial court reasoned that the designs could not be “conceptually” or “physically” separated from the uniform and, hence, are ineligible for copyright protection.
6. The Sixth Circuit, i.e., the Appellate Court, reversed the judgement of the trial court giving the rationale that the cheerleading uniforms’ functionality and utility would remain unaffected by removing the stripes. They concluded that the graphics could be “identified separately” and were “capable of existing independently” of the uniforms under Section 101 of the Copyright Act.
7. Star appealed and the Supreme Court granted certiorari to hear the case.

ISSUES/CONTENTIONS

Test of seperability- whether the stripes of the cheerleading uniform are “seperable” or “capable of existing independently” and further, are they copyrightable? Do they qualify the test?

MAJORITY DECISION

The Supreme Court of US, in a 6-2 judgement, held that A feature incorporated into the design of a useful article is eligible for copyright protection only if the feature (1) can be perceived as a two- or three-dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic, or sculptural work—either on its own or fixed in some other tangible medium of expression—if it were imagined separately from the useful article into which it is incorporated. That test is satisfied here.

To answer the main question of controversy in this case – whether the stripes of the cheerleading uniforms are copyrightable or not, the court held that, it is absolutely necessary to apply the seperability test. The seperability test would help determine whether certain aesthetic features of the “useful article” are capable enough of existing independently or not. The court further stated the requisites of seperate-identification under Section 101 of the Copyright Act of 1976 which are as follows:

1. The decision-maker is able to look at the “useful article” and spot some three-dimensional or two-dimensional elements that appears to have pictoral, graphic or sculptural qualities.
2. To satisfy the independent-existence requirement, the feature must be able to exist as its own pictoral, graphic or sculptural work once is imagined apart from the useful article.

If the pictorial, graphic or sculptural element could not exist independently, it is one of the articles’ utilitarian aspects. And to qualify as a pictorial, graphic or sculptural work on its own, the feature cannot be a useful article or “an article that is normally a part of the useful article.”

To avoid any confusion in the future, the court decided to consider the literal interpretation of the words “pictoral” and “graphic” as mentioned statute. “Pictorial” or “graphical” designs are used to denote the two-dimensional features, such as pictures, paintings, or drawings. Thereby to protect “pictorial, graphical, and sculptural works” implanted or applied into the “design of an article,” which is considered helpful by a prudent person.

The court’s solution for the controversy was perfectly in consistence not just with the plain text of Section 101 but also the entire Act since sections 101, 106 and 113(a) state that a pictorial, graphic or sculptural design would receive copyright protection no matter if is fixed first as apart of a useful article or as a stand alone work.

On application of the principles laid down in the judgement, it leads to one conclusion that the designs on respondent’s cheerleading uniform are copyrightable:

1. The designs in question are two dimensional elements that appear to have pictorial and graphic qualities.
2. The stripes when imaginatively removed from the uniform and applied to another medium would not replicate the uniform itself. They will exist as their own graphic and pictorial work.

The court’s decision was also perfectly in alignment with the history of the statute as it did not contradict the judgement laid down in Mazer v. Stein. In Mazer, a case decided under the 1909 Copyright Act, the Court held that respondents owned a copyright in a statuette created for use as a lamp base. In so holding, the Court approved a Copyright Office regulation extending protection to works of art that might also serve a useful purpose and held that it was irrelevant to the copyright inquiry whether the statuette was initially created as a freestanding sculpture or as a lamp base. Soon after, the Copyright Office enacted a regulation implementing Mazer’s holding that anticipated the language of §101, thereby introducing the modern separability test to copyright law. Congress essentially lifted the language from those post-Mazer regulations and placed it in §101 of the 1976 Act.

CONCURRING JUDGEMENT

Justice Ruth Bader Ginsburg in her concurring judgement opined that seperability test was unnecessary to determine whether the designs were copyrightable or not. The designs on the useful material were already works of art which were simply reproduced on a useful article. Ginsburg pointed out that owning the copyright means you can use the design on products and stop others from doing the same without permission. She explained that the designs, although placed on items, should be viewed as standalone artistic works. Therefore, they don’t need to be separated from the products they’re on to deserve copyright protection. Ginsburg highlighted that these artistic designs can get their own copyright, ensuring they can be exclusively used on products.

DISSENTING OPINION

In the dissenting opinion penned by Justice Stephen G. Breyer, he concurred with the majority’s interpretation of the statute’s requisite test but contended that the designs in discussion did not pass this test. He argued that a design is not distinct from a useful article if removing the design necessitates duplicating the useful article in a different medium. The designs in question, which could only be expressed as images—or effectively duplicates—of the uniforms, did not possess the capacity to exist separately from the useful items. Drawing from the statutory language and relevant jurisprudence, Breyer concluded that the designs did not meet the second criterion for separability. Justice Anthony M. Kennedy echoed his dissent.

This dissenting viewpoint posits that cheerleading uniforms should not qualify for copyright protection because, if one were to separate the material from the design, what remains is merely a piece of fabric, with the designs still suggesting the silhouette of a cheerleading outfit. This approach, which uses the analogy of a two-dimensional artwork retaining the shape of its canvas, leans more towards practicality rather than focusing on the form of the item, counter to the separability test which evaluates the disassociated part of the item based on its ability to maintain an existence independent of the utilitarian aspects of the article.

Author: Purva Pushker, Dr. Ram Manohar Lohiya National Law University

The case of Fendi Adele S. r. l. v. Ashley Reed Trading, Inc. (2010) illustrates how relevant is the issue of trademark protection and the fight against counterfeiting in the field of fashion. The case highlights that luxury brands need to protect their trademarks very aggressively and act swiftly against imitators in a bid to protect the reputation of their brands and consumers. As such, the legal case presented in this paper may be cited as a guideline for future trademark litigation cases and counterfeiting of fashion brands, based on the legal remedies offered by applicable law. The case was prosecuted in 2010, and it mainly revolves around the questions of trademark and counterfeiting. Therefore, this case brings to light the need to safeguard luxurious brands against fake products and it outlines the legal measures taken for the protection of brands.

Background

 Fendi Adele S. r. l. (Fendi), an Italian luxury fashion industry specializing in high-end handbags, wallets, and accessories, found that the respondent Ashley Reed Trading, Inc. (Ashley Reed) was dealing in fake Fendi products. A luxury fashion house Fendi filed a case against Ashley Reed for giving an infringement to its trademark and copying the products also indulging in unfair competition.

Legal Issues

 The primary legal issues in this case include:

• Trademark Infringement: If the use of Fendi’s registered trademarks by Ashley Reed in the sale of bogus products constituted an infringement of the trademarks’ rights.
• Counterfeiting: If the products that Ashley Reed sold were counterfeit and hence infringed the Lanham Act.
• Unfair Competition: Whether Ashley Reed’s action was an unfair competition by tainting the Fendi brand and its reputation.

Court Proceedings

District Court

 The legal proceedings of the case were presided over the U. S. District Court for the Southern District of New York. Fendi offered documents that proved that Ashley Reed was operating in the sale of fake products with trademark belonging to the Fendi company. As much as it hurts the feelings of the average consumer, the court sided with Fendi holding that Ashley Reed had indeed counterfeited and infringed the trademark of Fendi.

Legal Principles

1. Trademark Infringement

 Lanham Act: Traditionally under the Lanham Act, trademark infringement is defined as the use by one of a mark identical or similar to a registered trademark in commerce and in a manner that causes confusion as to the origin or sponsorship or approval of the goods.

 Likelihood of Confusion: The court looked at whether the products that were labeled as fake were likely to cause confusion to the customers. Since the goods were similar and the use of Fendi’s protected trademarks both visually and verbally extremely similar, customers are at high risk to get confused between the two brands.

2. Counterfeiting

 Definition of Counterfeiting: Trademark counterfeiting is the creation and sale of either products that are truly as a registered trademarked product or goods that are very difficult to tell apart from the genuine product.

 Burden of Proof: Fendi came up with evidential proof of the items sold by Ashley Reed as counterfeit through production of independent research, comparison of the authentic Fendi item and that offered by Ashley Reed, as well as the testimony of Fendi’s experts.

3. Unfair Competition

 Unfair Competition: This means that they deceitfully engage in business practices that would negatively affect another business. Fendi contended that Ashley Reed was unfairly competing with Fendi by putting into market fake products, which deceived the customers and brought the reputation of Fendi down.

Court’s Decision

The court ruled in favour of Fendi, finding that:

• While examining the case, it is pertinent to note that Ashley Reed had deliberately incurred to the trademarks of Fendi while selling imitation goods.
• The fakes were even more synonymous looking like the Fendi line offering consumers no chance at all of distinguishing between them.
• From the analysis of the evidence, Ashley Reed committed unfair competition since he damaged Fendi’s brand and deceived consumers.

Remedies and Damages

The court awarded Fendi substantial damages, including:

• Monetary Damages: Damages for forgone profits and the prejudice to Fendi’s goodwill.
• Injunctive Relief: Ashley Reed shall be required to produce and deposit with the clerk of court US $ thousand instead of a bond for a permanent injunction to restrain the defendant, Ashley Reed, her agents, servants, employees, attorneys, predecessors in interest, and all persons acting in concert with her from selling counterfeit Fendi products in the future.
• Destruction of Counterfeit Goods: An order under this agreement directing Ashley Reed to confiscate and destroy all the counterfeit goods that were found and seized from him.

Recommendations for the Fashion Industry

1. Strengthening Trademark Protection

 This case rises to the occasion of asserting how effective trademark protection is especially for luxurious goods. It shows that there is recognition from the courts to protect trademark owners with more emphasis and several measures against counterfeits.

2. Deterrence Against Counterfeiting

 The large amounts that are usually awarded to the owners of the brands act as a base for discouraging anyone with intentions of counterfeiting. This has a clear signal that anybody who engages in selling fake products put him or herself on the wrong side of the law and stands to lose a lot of money.

3. Consumer Confidence

 Through the filing of legal cases against fake manufacturers, the luxury products such as Fendi products ensure that consumers have confidence in their products. Safeguarding the consumers’ right to receive genuine and quality goods remains a significant demand for the brands and reputations.

4. Legal Precedents

 This creates legal antecedents for any future case in trademark infringement and counterfeiting in the fashion industry. It gives some general guidelines as for how the courts may act in similar cases using the principles of equity for protection of a business’ image.

Conclusion

The case of Fendi Adele S. r. l. v. Ashley Reed Trading, Inc. (2010) illustrates how relevant is the issue of trademark protection and the fight against counterfeiting in the field of fashion. The case highlights that luxury brands need to protect their trademarks very aggressively and act swiftly against imitators in a bid to protect the reputation of their brands and consumers. As such, the legal case presented in this paper may be cited as a guideline for future trademark litigation cases and counterfeiting of fashion brands, based on the legal remedies offered by applicable law.

Author: Mrudula Kale, University of Mumbai

Background of the Parties: Harley Davidson, established in 1903, is a famous motorcycle manufacturer with a high luxury status in the market. Alongside motorcycles and vehicle parts, it sells jackets, clothes, and other wearable merchandise printed with its well-known brand logo. It also markets once-in-a-lifetime experiences and adventures as a part of its brand membership, promoting a sense of exclusivity for the brand, and building a community of passionate customers. Harley Davidson is headquartered in Milwaukee, Wisconsin.

Urban Outfitters is a global commercial retailer and manufacturer of fast fashion and trendy clothes, self-defined as a ‘lifestyle retailer’, with its headquarters in Philadelphia, Pennsylvania. The brand emphasises creativity and unique designs along with cultural understanding. Urban Outfitters sells clothes, shoes, accessories and merchandise for men, women, and children, with a diverse range of designs – from bohemian bodices to denim dresses and sleek swimsuits. It has over 200 outlet stores worldwide, as of 2023.

Facts: Harley Davidson filed a trademark infringement, trademark dilution, false advertising, and unfair competition lawsuit in the form of a civil action against Urban Outfitters under the Lanham Act 2015 U.S.C and under the state of Wisconsin’s common and statutory law. The action was filed on the 18th of March 2014 in the U.S. District Court, Eastern District of Wisconsin under the Milwaukee Division.

Harley Davidson sought an equitable remedy in the form of monetary relief from Urban Outfitters due to the violations of its following trademarks: The Harley Davidson Marks and the Harley Davidson Bar and Shield Logo.

Wrongful Act: Despite previously being served notice in the form of a cease-and-desist letter of this by Harley Davidson, Urban Outfitters is alleged to have continued the sale of the products that displayed the aforementioned trademarked logos. Harley Davidson also alleged that Urban Outfitters had altered, reconstructed, and recreated such products under its ‘Urban Renewal’ brand by cutting and shredding sleeves and necklines of the clothing apparel. Urban Outfitters had also taken off Harley Davidson’s tags from the apparel and affixed their own as a part of its efforts to market vintage and recycled products.

Trademark Rights: Harley Davidson believed that these undertakings by Urban Outfitters constituted false advertising and unfair competition, diluting its brand value due to not reaching its standards, and thus tarnishing and damaging the brand logo and marks. They also stated that Urban Outfitter’s actions would hurt Harley Davidson’s goodwill in the market as the altered products did not meet Harley Davidson’s standards. Harley Davidson’s trademarked logo and mark were of particular significance due to the brand’s historically established use of them to promote and market their products. The brand had spent millions of dollars over its years of business for this activity while setting a standard of quality with respect to its logos and marks, thus giving it a high brand valuation.

In the previous case of H-D Michigan LLC v. Bryan C. Broehm (2009), Harley Davidson’s aforementioned mark and bar-and-shield logo were expressly held to be trademarked symbols by the Trademark Trial and Appeal Board of the United States Patent and Trademark Office. Further bolstering Harley Davidson’s case, it owned federal and Wisconsin state trademark registrations for both, its name mark, and its bar-and-shield logo, pictured below. This was submitted as evidence of ownership of the mark.

Detailed List of Claims for Relief:

1. Trademark Infringement – Under Section 32(1) of the Lanham Act, 15 U.S.C. 1114(1).
2. Trademark Infringement, False Designation of Origin, and Unfair Competition – Under Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a)(1)(A).
3. Federal Unfair Competition Comprising False and Misleading Statements of Fact – Under Section 43(a) of the Lanham Act, 15 U.S.C. 1125(a)(1)(B).
4. Trademark Dilution – Under Section 43(c) of the Lanham Act, 15 U.S.C. 1125(c).
5. Trademark Infringement – Under Wisconsin Statute 132 et. seq.
6. Unfair Competition and Trade Practices – Under Wisconsin Statute 100.20.
7. Common Law Trademark Infringement, Unfair Competition and Misappropriation.

Harley Davidson requested relief with respect to these claims in the form of an injunction to stop Urban Outfitters from selling the altered apparel, demanding the destruction of these products, and claimed any and all profit from the previous selling of these products. They also asked for compensatory and punitive damages, and requested a Jury Trial.

Decision: The parties, Harley Davidson and Urban Outfitters, reached an amicable settlement in less than two months after the original lawsuit filing, that disallowed Urban Outfitters from selling any products or apparel displaying Harley Davidson’s logo or mark. The details of the settlement were not made available to the public.

Conclusion: The case of H-D USA LLC et al v. Urban Outfitters Inc (2014) affirmed Harley Davidson’s ownership and its trademark rights over its famous mark and bar-and-shield logo. The case provides a strong precedent to trademark violation cases, and establishes a basis for repercussions against brands and companies that violate, alter, or tarnish another brand’s federal or state trademark. This case is particularly significant under Intellectual Property Law, as it ensures the maintenance of the status and standards within the fashion industry, enabling consumers’ trust in the quality of a brand, based off its logos and marks. It provides luxury brands with a sense of relief that their identities and apparel will be protected by statute and common law in the United States, both, within state jurisdiction as well as federal law, emphasising the importance of the Lanham Act for fashion companies that would like to provide its consumers with a unique purchasing experience.

Further Developments: Despite this, in 2017, Harley Davidson filed another similar suit against Urban Outfitters for the same reason, this time due to the design of bodysuits and tops that the brand was promoting under its ‘Free People’ logo. This suit also ended with a settlement.

Author: Reva Naidu – The University of Law, London Bloomsbury

Since December 2014, the well-known musician Rihanna has been the Puma apparel and footwear brand’s women’s creative director. In this role, Rihanna has promoted Puma’s “Fenty” label as a brand ambassador. Puma limited the number and sales of the Fenty products because they were luxury goods. This helped to make the Fenty products and the Puma brand more desirable.

As a part of this footwear collection, Puma designed and released the Puma by Rihanna “Creeper” Sneaker in 2015. The “Creeper” stands out from other shoes on the market because to its overall design, which has suede uppers and a thick rubber outer sole with ridged tooling and a gritty feel. In April 2016, Puma launched the “Fur Slide” sandal in response to the “Creeper’s” success. The “Fur Slide” was replaced in March 2017 by the “Bow Slide.” Puma’s “Fur Slide,” “Bow Slide,” and “Creeper” sneakers—collectively referred to as the “Fenty Shoes”—have seen tremendous and noteworthy popularity. Significant unsolicited media coverage of the Fenty Shoes has also been obtained; it has appeared in Harper’s Bazaar, Vanity Fair, W Magazine, Allure, and Vogue.

Numerous intellectual property rights shield Puma’s Fenty Shoes. With a strong global enforcement mechanism, Puma safeguards its intellectual property in Fenty Shoes. Recently, Puma was able to get an injunction against Top Shop, a German shop, to stop it from selling imitations of Fenty shoes. Forever 21 took full advantage of the considerable goodwill of Puma, Rihanna, and the Fenty sneakers by openly copying, or “knocking-off,” each of these sneakers.
A range of shoes were released by Forever 21 under its brand name. Later in March 2017, Puma filed a lawsuit against Forever 21 in a Californian District Court, alleging that the shoe company’s designs were identical to Puma’s Fur Slide, Bow Slide, and Creeper Sneaker, all of which are part of the Fenty collection, which was created by well-known vocalist Rihanna Fenty. They had thereby violated Puma’s plan patent.

Issues

1. Should Forever 21’s motion to dismiss be granted?

Law

Puma sued Forever 21 for potentially violating several intellectual property laws:

• Trade Dress Infringement: This law protects the overall look and feel of a product, including its design, packaging, and color scheme. Puma argued that Forever 21’s shoes were too similar to their “Fenty Shoes” in appearance, likely confusing consumers.
• Copyright Infringement: Copyright protects original creative expression, potentially applicable to certain unique design elements of the “Fenty Shoes.” Puma might have claimed copyright protection over these aspects.
• False Designation of Origin: This law prohibits misleading consumers about a product’s source. Puma could argue that Forever 21’s shoes were designed to appear as if they were made by Puma or Rihanna, deceiving customers.

The lawsuit also mentions a design patent, but the facts clarifies it wasn’t granted. It’s possible Puma planned to pursue a design patent but hadn’t secured it at the time of the lawsuit.

Analysis

The Puma vs. Forever 21 case offers a nuanced look at fashion design protection and the challenges companies face. Here’s a deeper analysis beyond the initial breakdown:

Shifting Grounds for Denial:

The court’s initial dismissal of most claims, with the opportunity for Puma to amend, suggests the arguments were:

• Incomplete: Puma might not have presented all the evidence or legal arguments needed for a strong case.
• Technically Flawed: The way Puma framed their claims for trade dress, copyright, and potentially the patent, might have contained weaknesses.

Forever 21’s Counter-Strategy:

Their arguments likely focused on two key areas:

• Prior Art: They probably presented evidence of similar shoe designs existing before Puma’s, weakening claims of originality for trade dress, copyright, and potentially the patent.
• Questionable Authorship: By pointing out the discrepancy between Puma’s public statements about Rihanna’s design role and the lack of her name on copyright applications, Forever 21 might have cast doubt on Puma’s ownership of the intellectual property (IP).

Uncertainties and Implications:

The settlement leaves some questions unanswered:

• Would Puma’s amended claims have prevailed? It’s unclear if they could have addressed the weaknesses identified by the court.
• Was the design patent claim valid? Forever 21’s challenge to the patent’s originality remains unresolved.

Lessons Learned:

Companies can take away several valuable lessons:

• Strong IP Strategy: Developing a comprehensive strategy for protecting designs, including registration and documentation, is crucial.
• Clear Ownership: Ensuring clear ownership of IP rights, with proper attribution of designers or collaborators, avoids potential legal roadblocks.
• Gathering Evidence: Building a strong case with thorough evidence of originality and infringement strengthens the legal position.

The Evolving Landscape of Fashion IP:

This case reflects the ongoing debate about intellectual property protection in the fashion industry. As fast fashion companies like Forever 21 replicate trends quickly, established brands like Puma struggle to defend their designs. Finding a balance between protecting creativity and fostering innovation remains a challenge.

Judgment

Judge Phillip Gutierrez claims that although Puma openly states that Rihanna invented the sneaker at issue in this lawsuit, Rihanna was not included as an artist on Puma’s copyright applications or as an investor on Puma’s design patent. From this, he was able to derive two possible conclusions: either Puma misrepresented material facts to the Patent and Copyright office, submitting false information there, or they misrepresented to the public that Rihanna designed the shoes, misleading the courts into believing that her contribution lessens the exchange’s charitable nature.

Puma has agreed to a patent that will protect the shoe’s design from being used as the initial cause of action. It needs to exhibit the following:

assign blame for a patent; identify each party involved in the dispute; ask for the patent; describe the ways in which six parties are accused of infringement; and draw attention to the jurisprudential passages cited.
In addition, Puma claims Forever 21 plagiarized their strategy, despite Puma meeting all the standards and disputing ownership.

Additionally, Puma stated that the incursion of exchange clothing for all of the shoes listed above was the second cause for the action. “Exchange dress” describes how something seems in the entire image. In the case of an object or article of clothing, it could comprise shape, size, shading, and so forth. Forever 21 thus asserts that Puma has failed to demonstrate that the exchange dress is practical, and thus, the court dismisses the case.

Author : Jayani Banerjee, Christ (Deemed to be University)