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The Madrid Protocol and the Absence of International Trademark Enforcement Mechanisms

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The Madrid Protocol and the Absence of International Trademark Enforcement Mechanisms NORTH CAROLINA JOURNAL OF INTERNATIONAL LAW Volume 45 Number 3 Article 4 2020 Haute Couture's Paper Shield: The Madrid Protocol and the Absence of International Trademark Enforcement Mechanisms Zachary Shufro Follow this and additional works at: https://scholarship.law.unc.edu/ncilj Part of the Law Commons Recommended Citation Zachary Shufro, Haute Couture's Paper Shield: The Madrid Protocol and the Absence of International Trademark Enforcement Mechanisms, 45 N.C. J. INT'L L. 645 (2020). Available at: https://scholarship.law.unc.edu/ncilj/vol45/iss3/4 This Article is brought to you for free and open access by Carolina Law Scholarship Repository. It has been accepted for inclusion in North Carolina Journal of International Law by an authorized editor of Carolina Law Scholarship Repository. For more information, please contact [email protected]. Haute Couture's Paper Shield: The Madrid Protocol and the Absence of International Trademark Enforcement Mechanisms Zachary Shufrot I. Introduction ............................................................... 646 II. Defining Trademarks in Context ............................... 649 A. Trademark Law's History.....................................651 B. Theories and Definitions.......................................652 1. Likelihood of Confusion ................................. 653 2 . D ilution ........................................................... 656 3. Trade D ress ..................................................... 658 III. International Trademark Framework.........................659 A. Early International Treaties .................................. 660 B. The New Intellectual Property Order....................663 IV. Fashion's Trademark Woes ....................................... 665 A. Trademark Squatting: The Hermbs Example ....... 666 B. Burberry's Challenges in China............................668 C. Chanel & the Double C.........................................669 D. Louis Vuitton & Generic Marks ........................... 671 E. Adidas & the Three Stripes...................................673 F. Louboutin: A Tale of Two Standards....................675 V . "Gray M arket" Sales..................................................677 A . A merican Law ...................................................... 679 1. The Lever Rule................................................680 2. Remedies Offered by U.S. Law ...................... 681 3. Unresolved Legal Issues ................................. 683 B. British & European Union Law ............................ 685 C. Chinese Law & the Laws of Other Jurisdictions..687 VI. Fakes & Confusion Risks .......................................... 687 t J.D. 2020, University of North Carolina School of Law; LL.M. Candidate 2021, New York University School of Law. Symposium Editor, North Carolina Journal of InternationalLaw. The Author thanks Alyssa Wright, Chandler Martin, Chelsea Pieroni, Professor Deborah Gerhardt, and Professor John Conley for their assistance, feedback, and revisions in the writing of this Article. The Author further thanks Julie Zerbo, whose legal reporting inspired the topic for this Article, and for whose extremely precise, thoughtful, and lightning-speed revisions the Author is extremely grateful. 646 N.C. J. INT'L L. [Vol. XLV A. Trade Dress Infringement Worldwide .................. 689 1. Loius Vuitton & Plada .................................... 690 B . "Legal" Fakes........................................................692 1. Supreme v. Supreme Italia..............................695 VII. Recommendations ..................................................... 698 A. Option I: Cooperation with the World Trade O rganization ........................................................ 700 B. Option II: Broad-Jurisdiction WIPO Dispute R esolution ........................................................... 704 C. Further Considerations..........................................705 V III. C onclusion ................................................................. 707 I. Introduction Burberry's Haymarket Check tartan. Louis Vuitton's Damier check. Louboutin's red soles. In the past decade, many prominent fashion houses have suffered losses in particularly high-profile trademark disputes that highlight their lack of protection under the current international trademark regime.' Courts in Asia, Europe, and North America have limited, modified, and revoked long- established and internationally-recognized trademarks, while providing little to no clarity for how these domestic judgments correspond to or modify international obligations.2 Trademark law occupies a precarious role internationally. As one of the three main species-or types-of intellectual property, trademark's existence is recognized worldwide and is enshrined in 1 See, e.g., Charlotte Alter, Burberry's Signature Design Copyright Reportedly Revoked in China, TIME (Nov. 27,2013), https://business.time.com/2013/11/27/burberrys- signature-design-copyright-revoked-in-chinal [https://perma.cc/VXD3-JZ2T]; Lauren D. Amendolara, Knocking Out Knock-Offs: Effectuating the Criminalization of Trafficking in Counterfeit Goods, 150 FORDHAM INTELL. PROP. MEDIA & ENT. L. J. 789, 809 (2015) [hereinafter Amendolara]; Julie Zerbo, Adidas Handed a Loss, as 3-Stripe Mark "Lacks Distinctiveness" in the European Union, Says Court, THE FASHION LAW (June 19, 2019), https://www.thefashionlaw.com/home/adidas-handed-a-loss-as-3-stripe-mark-lacks- distinctiveness-in-the-european-union-says-court [https://perma.cc/4JYZ-KN8R] [hereinafter Zerbo, Adidas Handeda Loss]; Julie Zerbo, Burberry Loses Trademark Rights in China, THE FASHION LAW (Nov. 25, 2013), https://www.thefashionlaw.com/home/burberry-loses-trademark-rights-in-china [https://perma.cc/B9JL-PLAW] [hereinafter Zerbo, Burberry Loses Trademark]. 2 See, e.g., Adidas Am., Inc. v. Payless Shoesource, Inc., 529 F. Supp. 2d 1215, 1222 (D. Or. 2007); Louis Vuitton Malletier v. Office for Harmonisation in the Internal Market ex rel Nanu-Nana Handelsgesellschaft mbH fr Geschenkartikel & Co. KG, 2015 E.C.R. I-215, 11; Zerbo, Burberry Loses Trademark, supra note 1. 2020 HAUTE COUTRE'S PAPER SHIELD 647 treaties and conventions dating back to the nineteenth century.3 Common law precedent on trademarks arrived in the Americas before the arrival of the Mayflower, as "[h]istory has generally honored Southern v. How, decided in 1618, as the first reported trademark case in Anglo-American law."4 Its international recognition notwithstanding, trademark is the most vulnerable form of intellectual property in domestic and international spheres. Trademarks are registered nationally and internationally, but trademark holders can lose their exclusive right to use and police unauthorized uses through abandonment, failure to register or to re- register with national and international authorities, or through adverse legal proceedings. In international commerce, the rights of a trademark holder, how those rights are earned, and how they are enforced can vary significantly from country to country.5 Most countries rely on a "first use in commerce" trademark system,6 3 See, e.g., Sidney Diamond, The HistoricalDevelopment of Trademarks, 65 TMR 265,267 (1975) [hereinafter Diamond] (outlining the history of trademark protection from prehistory through the twentieth century). 4 Keith Stolte, How Early Did Anglo-American Trademark Law Begin? An Answer to Schechter's Conundrum, 8 FORDHAM INTELL. PROP., MEDIA & ENT. L. J. 505, 507 (1997). While Southern v. How, Popham's Reports 143 (1618), 79 Eng. Rep. 1243 (KB. 1907), is traditionally considered the earliest reported trademark case, research in the 1990s uncovered an even earlier trademark case-the 1584 Sandforth's Case. Id. at 505- 06. See also Sandforth's Case, Cory's Entries, British Library MS. Hargrave 123, fo. 168r (1584). 5 For an example of the degree to which rights might vary by jurisdiction, see generally Julie Zerbo, What's In a Name? Chanel's Global Quest to Protect the Name of a Color, TH FASHION LAW (May 30,2019), https://www.thefashionlaw.com/home/whats- in-a-name-chanels-global-quest-to-protect-the-name-of-a-color [https://perma.cc/U7SU- DF53]. In 2008, Chanel "filed an application for registration for the word 'Beige' in connection with its perfume of the same name." Id. This registration was approved, and added to the United States Patent and Trademark Office ("USPTO") Principal Register. Id. However, the Israeli Registrar of Patents, Designs and Trademarks rejected an identical registration in 2019. Id. As commentator Julie Zerbo explains: The loss in Israel comes on the heels of Chanel's domestic struggle to register "Beige Label" for use on garments, handbags, jewelry, footwear, and eyewear almost two decades ago, only to be refused by the U.S. Patent and Trademark Office on similar descriptiveness (and thus, failure to function as a trademark) grounds, despite previously being granted a registration for the same mark in connection with the same goods in France. Id. As this commentator's discussion of this rejection concludes, "The differences in a party's rights among various jurisdictions is in line with the territorial nature of trademark law." Id. 6 The United States is one such country. See 15 U.S.C. § 1051(d) (2018). 648 N.C. J. INT'L L. [Vol. XLV while others grant the exclusive rights to the first party to register his or her mark with the relevant trademark body.7 While there are several international treaties governing the registration of international trademarks, international
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