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Architecting Intellectual Property Protection for the Fashion Industry by Ashlee Froese Gilbert’S LLP

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Architecting Intellectual Property Protection for the Fashion Industry by Ashlee Froese Gilbert’S LLP Fashioning Protection For Canada’s Most Fabulous: Architecting Intellectual Property Protection for the Fashion Industry By Ashlee Froese Gilbert’s LLP 1. Introduction Fashion matriarch Coco Chanel once famously stated that imitation is the highest form of flattery. I wonder if renowned shoe designer Christian Louboutin, who has been embroiled in trade-mark litigation in America and France for the last few years over his red-bottomed shoes, would agree. In the legal world, counterfeiting has long been acknowledged as a serious and costly piranha to the fashion industry. This is not the only hurdle facing the fashion designer. Less recognized yet arguably just as pervasive, fashion design piracy can be devastating to the livelihood of the fashion designer. This legal doctrine, however, has had slow traction in Canada. This paper examines the concept of fashion design piracy and provides strategies on how fashion designers can best protect their fashion designs within the confines of the Canadian intellectual property framework. 2. Canada’s Fashion Industry Canada’s roots are deeply entrenched in the fashion industry. Canada’s fur trade was the leading resource-based export for Canada during its inception, making it a foundation of the burgeoning economy. The fur trade continues to be a significant contributor to the Canadian economy.1 In fact, the Fur Institute of Canada estimates that the fur industry contributes $800 million to the Canadian 2 economy. 1 No animals were harmed during the writing of this paper. 2 Fur Institute of Canada “Canada’s Fur Trade at a Glance” http://www.fur.ca/files/fur_trade_at_a_glance.pdf 2 Perhaps more palatable to animal lovers, Canada’s fashion industry has become more well-rounded. The Ontario Business Report conducted an industry-specific study of the fashion industry’s economic impact to the province. This study found that in Toronto alone, 50,000 individuals are employed in the fashion industry, half of which are involved in manufacturing.3 Toronto’s 550 apparel manufacturers’ wholesale shipments account for $1.4 billion annually.4 Toronto’s semi-annual Fashion Week is the second biggest in North America, following New York Fashion Week, with an attendance of approximately 35,000.5 Toronto’s Fashion Week is anticipated to become an even greater player in the global fashion week circuit with the announcement that IMG Canada recently acquired ownership rights over the event. IMG owns and operates a number of well-reputed fashion events globally, including New York Fashion Week, Milan Fashion Week and London Fashion Week. Toronto is not the only beneficiary of the fashion industry. Annual and semi-annual fashion weeks are also held in Montreal, Vancouver and Ottawa, in addition to regional fashion weeks for the Atlantic and Western Canada regions. Recognizing the value of the fashion industry, the Quebec government announced that it would invest $82 million over a three year period into the province’s fashion industry to encourage its growth. Created in conjunction with the City of Toronto, Toronto’s Fashion Incubator, now in its 25th year, educates and supports emerging Canadian fashion designers launch their fashion businesses. Suffice it to say, Canada’s fashion industry is positioning itself to continue to grow. 3. Debating Fashion: Art or Necessity? A fundamental debate amongst fashion lawyers is whether fashion designs are creative or utilitarian. At its most basic level, clothing is inherently utilitarian: its function is to clothe the human body. But can this be said of all 3 “Ontario: In Fashion” Ontario Business Report http://www.ontariobusinessreport.com/en/ontario/articles/ontario_article_24.asp 4 Ibid 5 Ibid 3 fashion designs? There is an increasing awareness of the artistic qualities inherent in fashion designs. The Royal Ontario Museum is reinstalling a Costume and Textiles Gallery dedicated to the fashion industry. In 2011 the Montreal Museum of Fine Arts hosted an exhibit featuring Jean Paul Gaultier’s designs. Let’s not forget that the Bata Shoe Museum has been a staple of Toronto’s cultural scene since 1995. Museums solely dedicated to fashion abound in fashion capitals of the world, such as Paris, New York and London. The artistic community has embraced fashion as a legitimate form of art. Fashion designs are generally carved out into three categories, which can assist in differentiating whether a fashion design is functional or aesthetic. As fashion designs take on more aesthetic qualities, the possibility that intellectual property protection applies increases: $$$ Haute Couture (high fashion) $$ High Street (fast fashion) $ Basic Retailer (no fashion) Whereas haute couture designs are more likely to be inherently artistic and distinctive (walking art, some might say), a pair of jeans sold at your local super grocery store tend to be lackluster. Functionality is the name of the game at basic retailers (for example, t-shirts purchased at Wal Mart). Conversely, high fashion is oftentimes the pinnacle of creativity in the fashion world and fast fashion lies somewhere in the middle. 4 4. Fashion Design Piracy Fundamental differences exist between counterfeiting and fashion design piracy. Rooted in trade-marks laws, counterfeiting confuses consumers as to the source of the merchandise. Counterfeiters seek to sell merchandise bearing unauthorized trade-marks that are confusingly similar to brands owners. The consumer is misled into believing that the counterfeit merchandise is manufactured by, or in conjunction with, the brand owner. Under fashion design piracy, the fashion design in its entirety, or at least the most distinctive elements of the fashion design, is copied and subsequently marketed and sold by an entirely different company under a different brand. There is no confusion as to source. Today’s increasingly sophisticated digital technology and global supply chain assists in facilitating fashion design piracy: three-dimensional images can be e-mailed to overseas factories from the runways of Milan and New York in mere moments. Increased technology assists the factories to manufacture and deliver these pirated fashion articles within weeks to the high streets. Often times, the fashion design pirates are able to get the products to market at a higher rate than the original design house. Fashion design piracy is a hotly debated theory in the fashion law world, although the conversation has been limited in Canada. Some would argue that given the significant difference in the price points, the high street consumer and the haute couture consumer very rarely intersect. If the high street pirated fashion design does not divert the haute couture consumer, can there really be harm? In fact, increasingly luxury fashion designers are joining forces with high street fashion retailers for time-limited lines. Examples include Versace’s time- limited line created for fast fashion mecca, H & M or Jean-Paul Gaultier’s alliance with Target. Thus, in some instances the haute couture designer welcomes the blurred line. Some fashion theorists go a step further and believe that fashion design piracy actually assists the fashion industry. Fashion is innately trend- and/or 5 season-oriented. It is also inherently status oriented. As novel fashion designs trickle down the fashion pyramid to become staple clothing items, there is an impetus on fashion designers to create the next avant garde trend. Under this theory, fashion design piracy is actually advantageous in increasing fashion designers’ ingenuity. Underlying this theory is the belief that fashion is driven less by creativity and more by the desire to demonstrate status, which drives consumer purchasing behaviour. As fashion designs become more attainable or mainstream, their desirability at the high fashion segment decreases, thereby creating a need for more unique fashion designs. Under this doctrine, fashion design piracy is crucial to maintaining the economics of the fashion industry. Yet this type of reasoning is counterintuitive to the fundamental principles of intellectual property laws: to encourage and reward creativity by granting protection to distinctive creations, within a system of checks and balances. To discount fashion designs as simply utilitarian and unworthy of intellectual property protection undermines the beauty, originality and creativity inherent in some, but not all, fashion designs. Whereas some countries have a well-established history of protecting fashion designs, others are playing catch up. France, for example, has legislation that specifically protects fashion designs. The 1998 European Directive on the Legal Protection of Designs requires EU countries to adopt legislation that will afford fashion designs some protection. For the last few years, the fashion community in the US, including senators, academics, industry and practitioners, has been active in lobbying for the protection of ‘fashion designs’ via a legislative amendment to the Copyright Act. Debate persists in the US, even within the fashion industry itself, over whether such an expansive type of protection is necessary. Regardless of which side of the fence you are on in the debate, as a signatory to the TRIPS agreement, Canada has a requirement to protect aspects of the fashion industry: 6 “Each Member shall ensure that requirements for securing protection for textile designs, in particular in regard to any cost, examination or publication, do not unreasonably impair the opportunity to seek and obtain such protection. Members shall be
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