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Target: Fashionistas Benefit from Lax Copyright & Trademark Laws

By:  Lauren Metcalf

With the economy still on the rebound, more and more consumers are cutting luxury items out of their budgets and instead looking for ways to save on items that previously might have been a splurge. Discount retailer Target has attempted to attract thrifty yet style conscious buyers by offering designer-inspired clothing and home furnishings at the low prices its customers expect. But has the retail giant gone too far in copying designs of the luxury brands its customers covet?

In late September, luxury handbag and accessory designer Coach sued Target alleging that the retailer is selling handbags that copy two of its designs, the Ergo fold-over handbag and its Signature Patchwork line. Coach Services, Inc. v. Target Corp., No. 09 CV 8329 (S.D.N.Y. filed September 28, 2009). The lawsuit includes claims of trademark infringement and unfair competition. In its complaint, Coach claims the bags sold at Target are “exact and/or confusingly similar reproductions” of Coach designs.

The practice of copying original fashion designs and then selling the reproductions under a different label is known as design piracy. The practice is all too common, but unfortunately for the original designers, current U.S. intellectual property law offers only limited protection for fashion designs. For example, trademark law provides strong protection against the copying of distinctive company marks or logos but does little to protect against copying the design and style of a product. The theory behind the distinction is that company marks or logos are inherently distinctive and serve as a means to verify the product as authentic, whereas imitation of the design or style of a product is unlikely to result in customer confusion as to the origins of the item. See Louis Vuitton Malletier v. Dooney & Bourke, Inc., 454 F.3d 108, 116 (2d Cir. 2006). The test for trademark infringement developed by the Second Circuit, where a majority of lawsuits concerning fashion items are filed, requires (1) that the plaintiff’s mark is sufficiently distinctive to merit protection and (2) that defendant’s use of a similar mark is likely to cause consumer confusion. Gruner + Jahr USA Publ’g v. Meredith Corp., 991 F.2d 1072, 1075 (2d Cir. 1993). Trademark law’s narrow view as to which aspects of an item should be entitled to protection has made it difficult for designers to fight design piracy through trademark infringement claims.

Any claim for trademark infringement is commonly paired with a claim of unfair competition. The ultimate inquiry in both claims is the same – whether the consumer is likely to be confused as to the origin or authenticity of the product as a result of the similarity of the marks. However, a claim of unfair competition is broader in scope than a claim of trademark infringement. Under the Lanham Act, trademark infringement reaches only “reproduction, counterfeit, copy or colorable imitation of a registered mark.” 15 U.S.C. §1114(1)(a). When evaluating a claim of unfair competition, a court may also consider other factors which may cause confusion as to the origin of the product, including trade dress which may encompass product design. Wal-Mart Stores, Inc. v. Samara Bros., Inc., 529 U.S. 205 (2000). Thus, designers may have more luck protecting their designs through unfair competition than through trademark infringement.

While the designers continue to try to find ways to protect their designs from misappropriation, retailers like Target continue to capitalize on the sale of items bearing remarkable similarities to higher end brands. This lawsuit is just the most recent in a string of similar suits against Target. In 2002, shoe manufacturer adidas sued Target alleging trademark infringement and unfair competition for selling shoes featuring adidas’ trademark three stripe pattern. Adidas-Salomon AG v. Target Corp., 228 F.Supp.2d 1192 (D. Or. 2002). The suit was later settled, but adidas sued Target again in 2008 alleging that the retailer violated the settlement agreement by selling shoes with two and four parallel stripes.

In 2005, Vera Bradley, seller of high end handbags and other goods, sued Target for selling skirts and swimwear featuring designs that looked “substantially similar” to cloth designs copyrighted by Vera Bradley. The suit was later resolved out of court.

Target was sued by Lucky Brand Dungarees for copyright infringement in 2006 after the retailer began selling girls jeans with an embroidered floral design and rear pocket stitch design which Lucky claimed was “virtually identical” to the unique designs used on its own jeans. In the same year, Target was hit with another copyright infringement suit by Williams-Sonoma alleging that Target copied the designs of a number of their products including Christmas stockings and votive candle holders. The lawsuit claimed that quilted Christmas stockings sold at Target contained “every distinctive element” of Christmas stockings sold at Pottery Barn, a chain operated by Williams-Sonoma.

The vast majority of these suits are quietly dismissed or settled, but the large numbers of such suits raises questions as to whether Target and other discount retailers unfairly benefit from lax intellectual property law protection of fashion designs and other decorative items. For additional discussion of intellectual property law protection of fashion designs, see Biana Borukhovich, Fashion Design: The Work of Art That Is Still Unrecognized in the United States, 9 Wake Forest Intell. Prop. L.J. 155 (2009).