In order for the turnover of styles and inventory to be profitable for fast-fashion retailers, costs must be cut somewhere. As such, intellectual property (IP) law and labour law issues have become increasingly ubiquitous for fast fashion brands and have drawn condemnation in the court of public opinion. For example, fast-fashion retailers, such as H&M, are increasingly facing scrutiny with respect to their .

Furthermore, international fast fashion retailer, , is no stranger to IP law disputes.

This time, Zara has set its sights on the innovative and contemporary clothing brand ACRONYM and has debatably copied its famous “functional strap” outerwear. Is it fair for Zara to copy a design that costs ACRONYM a significant amount of time and to produce?

As noted by the Toronto-based style law blog , which was co-founded by myself and IPilogue colleague Alessia Monastero, Zara’s repeat offences do not go unnoticed. In fact, two of Zara’s most notable IP disputes involve ACRONYM and .

In this case, ACRONYM founder, , has been selling its impeccably made coats for over 10 years. In fact, it has become known for its high-quality garments that are made to last. These designs feature a “functional strap” on the insides of the coats and contain a label that reads: “Interior crossbody strap allows wearer to carry over their shoulder.”

: ACRONYM, : Zara's Imitation Label

Aside from its creative designs, ACRONYM also uses a unique advertising plan, which markets the brand almost exclusively to fashion enthusiasts. For example, unlike mainstream brands, such as Chanel and Louis Vuitton, ACRONYM does not advertise on television, does not heavily seek out celebrities as ambassadors, nor aggressively use social media for promotion and marketing. Nevertheless, many have slowly started to become aware of the label due to Hugh’s partnerships with Stone Island and Nike.

The aim of copyright law, generally, is the protection of copyright owners to disallow others to copy one’s work without permission. The promise of this protection promotes creativity and the orderly exchange of ideas. However, it seems as though Zara does not entirely care about such protective mechanisms, since it is to copyright infringement. Perhaps, the revenues from selling copied designs en-mass offsets their litigation costs, though this is just speculation.

ACRONYM is protected by its , which was filed and published in 2003. Under this , ACRONYM “has the right to prevent third parties from making, selling or importing articles bearing or embodying a design which is a copy, or substantially a copy, of the protected design, when such acts are undertaken for commercial purposes.” Zara’s functional strap certainly meets all of these criteria.

The United States Court of Appeals in , stated, “[I]f, in the eye of an ordinary observer, giving such attention as a purchaser usually gives, two designs are substantially the same, if the resemblance is such as to deceive such an observer, inducing him to purchase one supposing it to be the other, the first one patented is infringed by the other.”

Since the primary difference between the ACRONYM and Zara products is the quality of the material, an “ordinary observer” can very easily mistake the two labels since a reasonable shopper normally does not spend a lot of time examining the nuances of product quality. In essence, the products appear “substantially the same”.

Zara’s defence relies on a “sufficient distinction” between the two products. However, as seen in , the threshold for this is quite high. What constitutes as “sufficiently distinct” is often an additional part to the product or a substantial difference in the overall look. Given that Zara’s imitation does not, in fact, make a significant change to the original ACRONYM design, it is unlikely that a court will view it as being “sufficiency distinct”. Even if the court does find a distinction, it may decide to look at the prior art to ensure that no confusion will take place with respect to the product.

It nevertheless seems unfair that Zara is able to provide its consumers with a product that looks very similar to one that is being sold for almost 6 times its price point. However, since the onus remains on the party alleging the infringement to bring the issue forward, some labels may think that the cost of litigation –both time and effort– does not present a valuable trade-off.

Take ACRONYM, for example, with designs that are incredibly well made. While ACRONYM takes a detail-oriented approach to the quality, style, and longevity of their products, Zara’s research mostly consists of the latest trends and looking at the designs of other labels. As such, Hugh is not bothered by the copycats that have set their sights on the label, especially the fast fashion retailers that focus solely on style and very little, if at all, on quality. This is because Hugh does not feel as though he is losing the customers who prefer to purchase Zara’s cheaper imitation for the look as opposed to the quality. In fact, when asked his opinion on Zara’s imitation of the signature jacket, Hugh reportedly  with a simple: “LOL.”

Well played.

Saba Samanian is an IPilogue Editor and a JD Candidate at Osgoode Hall Law School.

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          (H & M Hennes & Mauritz AB)                                    (Forever 21, Inc.)

There is no doubt about it – there is a stark similarity between the designs.

H&M, which professes to be the second largest global clothing retailer, first sold its BEACH PLEASE tote bag in the US in April 2014. As of July 2015, it sold thousands of BEACH PLEASE tote bags globally. H&M formalized its copyright to the design by securing a copyright registration, which was granted on June 12, 2015. H&M alleges that Forever 21 subsequently commissioned a Chinese-based manufacturer to produce infringing designs, which were sold globally. H&M has reason to believe that Forever 21 has profited substantially from sales of the BEACH PLEASE tote bag.

H&M is seeking the following relief:

• Forever 21 be enjoined from:
  • creating, importing, purchasing, distributing, displaying, selling or offering to sell tote bags that infringe H&M’s BEACH PLEASE tote bag
  • using H&M’s intellectual property rights regarding the tote bags;
  • inducing others to commit infringing acts.
• An accounting of Forever 21’s profits derived from the advertising, promoting, marketing, purchasing, distributing, selling or offering of the infringing products
• Damages
• Costs of litigation

H&M bases its complaint on 5 grounds:

• H&M's graphic is subject to copyright protection. Forever 21’s graphic is substantially similar, if not virtually identical, to that of H&M, thereby constituting copyright infringement.
• The graphic is non-functional, inherently distinctive and has acquired secondary meaning. As such H&M asserts that the BEACH PLEASE design functions as trade dress; Forever 21’s unauthorized use of the BEACH PLEASE logo constitutes trade dress infringement.
• Forever 21’s unauthorized use also constitutes a false designation of origin.
• Moreover, Forever 21’s unauthorized use constitutes an attempt to pass off its products, constituting statutory and common law unfair competition against H&M.

What is interesting to the fashion law community is that H&M and Forever 21 are notorious defendants in the fashion industry. In fact, H&M takes note of this trend with respect to Forever 21 stating in the Complaint: “[Forever 21] has also been accused of copyright violations in the past”. So to a large extent, we have the kettle calling the pot black. However, it is interesting that they are now warring amongst themselves. Perhaps it is karma; perhaps it is just business. Nonetheless, in this instance the magnifying glass is focused on Forever 21. In the fashion law community, Forever 21's disregard for intellectual property rights and propensity to resolve matters outside of litigation has some wondering whether this is all a part of its business strategy. It may simply be cheaper to pay an undisclosed settlement sum to the designer rather than sourcing new designs or paying licensing royalties. It would not be shocking if this case settled, but it sure would be interesting if it did not!

Ashlee Froese is a partner at Fogler, Rubinoff LLP. She runs the website . Follow her at @brandfashionlaw.

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