[House Hearing, 109 Congress]
[From the U.S. Government Publishing Office]
A BILL TO PROVIDE PROTECTION FOR
FASHION DESIGN
=======================================================================
HEARING
BEFORE THE
SUBCOMMITTEE ON COURTS, THE INTERNET,
AND INTELLECTUAL PROPERTY
OF THE
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED NINTH CONGRESS
SECOND SESSION
ON
H.R. 5055
__________
JULY 27, 2006
__________
Serial No. 109-138
__________
Printed for the use of the Committee on the Judiciary
Available via the World Wide Web: http://judiciary.house.gov
______
U.S. GOVERNMENT PRINTING OFFICE
28-908 WASHINGTON : 2006
_____________________________________________________________________________
For Sale by the Superintendent of Documents, U.S. Government Printing Office
Internet: bookstore.gpo.gov Phone: toll free (866) 512-1800; (202) 512�091800
Fax: (202) 512�092250 Mail: Stop SSOP, Washington, DC 20402�090001
COMMITTEE ON THE JUDICIARY
F. JAMES SENSENBRENNER, Jr., Wisconsin, Chairman
HENRY J. HYDE, Illinois JOHN CONYERS, Jr., Michigan
HOWARD COBLE, North Carolina HOWARD L. BERMAN, California
LAMAR SMITH, Texas RICK BOUCHER, Virginia
ELTON GALLEGLY, California JERROLD NADLER, New York
BOB GOODLATTE, Virginia ROBERT C. SCOTT, Virginia
STEVE CHABOT, Ohio MELVIN L. WATT, North Carolina
DANIEL E. LUNGREN, California ZOE LOFGREN, California
WILLIAM L. JENKINS, Tennessee SHEILA JACKSON LEE, Texas
CHRIS CANNON, Utah MAXINE WATERS, California
SPENCER BACHUS, Alabama MARTIN T. MEEHAN, Massachusetts
BOB INGLIS, South Carolina WILLIAM D. DELAHUNT, Massachusetts
JOHN N. HOSTETTLER, Indiana ROBERT WEXLER, Florida
MARK GREEN, Wisconsin ANTHONY D. WEINER, New York
RIC KELLER, Florida ADAM B. SCHIFF, California
DARRELL ISSA, California LINDA T. SANCHEZ, California
JEFF FLAKE, Arizona CHRIS VAN HOLLEN, Maryland
MIKE PENCE, Indiana DEBBIE WASSERMAN SCHULTZ, Florida
J. RANDY FORBES, Virginia
STEVE KING, Iowa
TOM FEENEY, Florida
TRENT FRANKS, Arizona
LOUIE GOHMERT, Texas
Philip G. Kiko, General Counsel-Chief of Staff
Perry H. Apelbaum, Minority Chief Counsel
------
Subcommittee on Courts, the Internet, and Intellectual Property
LAMAR SMITH, Texas, Chairman
HENRY J. HYDE, Illinois HOWARD L. BERMAN, California
ELTON GALLEGLY, California JOHN CONYERS, Jr., Michigan
BOB GOODLATTE, Virginia RICK BOUCHER, Virginia
WILLIAM L. JENKINS, Tennessee ZOE LOFGREN, California
SPENCER BACHUS, Alabama MAXINE WATERS, California
BOB INGLIS, South Carolina MARTIN T. MEEHAN, Massachusetts
RIC KELLER, Florida ROBERT WEXLER, Florida
DARRELL ISSA, California ANTHONY D. WEINER, New York
CHRIS CANNON, Utah ADAM B. SCHIFF, California
MIKE PENCE, Indiana LINDA T. SANCHEZ, California
J. RANDY FORBES, Virginia
Blaine Merritt, Chief Counsel
David Whitney, Counsel
Joe Keeley, Counsel
Ryan Visco, Counsel
Shanna Winters, Minority Counsel
C O N T E N T S
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JULY 27, 2006
OPENING STATEMENT
Page
The Honorable Lamar Smith, a Representative in Congress from the
State of Texas, and Chairman, Subcommittee on Courts, the
Internet, and Intellectual Property............................ 1
The Honorable Howard L. Berman, a Representative in Congress from
the State of California, and Ranking Member, Subcommittee on
Courts, the Internet, and Intellectual Property................ 2
The Honorable Bob Goodlatte, a Representative in Congress from
the State of Virginia, and Member, Subcommittee on Courts, the
Internet, and Intellectual Property............................ 3
The Honorable William D. Delahunt, a Representative in Congress
from the State of Massachusetts, and Member, Committee on the
Judiciary...................................................... 5
WITNESSES
Mr. Jeffrey Banks, Fashion Designer, on behalf of the Council of
Fashion Designers of America
Oral Testimony................................................. 8
Prepared Statement............................................. 10
Mr. David Wolfe, Creative Director, The Doneger Group
Oral Testimony................................................. 13
Prepared Statement............................................. 15
Ms. Susan Scafidi, Visiting Professor, Fordham Law School,
Associate Professor, Southern Methodist University
Oral Testimony................................................. 77
Prepared Statement............................................. 78
Mr. Christopher Sprigman, Associate Professor, University of
Virginia School of Law
Oral Testimony................................................. 85
Prepared Statement............................................. 87
APPENDIX
Material Submitted for the Hearing Record
Prepared Statement of the Honorable Howard L. Berman, a
Representative in Congress from the State of California, and
Ranking Member, Subcommittee on Courts, the Internet, and
Intellectual Property.......................................... 195
Prepared Statement of the Honorable Maxine Waters, a
Representative in Congress from the State of California, and
Member, Committee on the Judiciary............................. 196
Prepared Statement of the United States Copyright Office,
Washington, DC................................................. 197
Prepared Statement of the American Free Trade Association, Miami,
FL............................................................. 220
A BILL TO PROVIDE PROTECTION FOR FASHION DESIGN
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THURSDAY, JULY 27, 2006
House of Representatives,
Subcommittee on Courts, the Internet,
and Intellectual Property,
Committee on the Judiciary,
Washington, DC.
The Subcommittee met, pursuant to notice, at 9:13 a.m., in
Room 2141, Rayburn House Office Building, the Honorable Lamar
Smith (Chairman of the Subcommittee) presiding.
Mr. Smith. The Subcommittee on Courts, the Internet, and
Intellectual Property will come to order.
I don't know what the distraction was out to my left, but
we are all going to come to order this morning. After our
opening statements, then we will introduce our witnesses and
proceed with our hearing.
In just a moment, I will announce we are going to be going
out of order in one way, and I am going to go into greater
explanation in regard to that in just a second. I recognize
myself for an opening statement.
The topic of today's hearing is not the usual for our
Subcommittee. That our audience is unusually well attired may
well reflect the subject.
The legislation we are considering today would create a new
intellectual property right for fashion designers. H.R. 5055
amends chapter 13 of the Copyright Act to extend design
protection for articles of clothing, as well as watches,
handbags, sunglasses and other fashion accessories.
Currently, articles of clothing are considered useful
articles and are generally ineligible for copyright protection.
The design of a useful article is protected under copyright,
``only if and only to the extent that such design incorporates
pictorial, graphic or sculptural features that can be
identified separately from and are capable of existing
independently of the utilitarian aspects of the article.''
For the first time under this bill, fashion design would be
protected by copyright law and copies that are found to be in
``appearance in the whole of the protected design would be
prohibited.''
Design protection legislation has been introduced in
Congress since 1914. Previous bills took one of two forms:
changes to copyright law or relaxation of the restrictions
placed on design patents. They were based on the limited
protection available to useful articles under the patent,
copyright and trademark laws.
Advocates of H.R. 5055 say that under current law, fashion
designs are generally ineligible for any type of protection, so
designers, especially new designers entering the field, easily
become victims of those who wish to copy their designs and
profit from them. Others have expressed concerns that the
legislation is too broad and would prohibit the ability of
designers and retailers to replicate current trends and styles,
something on which the fashion industry thrives.
This Subcommittee must carefully weigh the competing
interests and the consequences of establishing such a
precedent. Our Subcommittee follows the mandate of the
Constitution to protect the intellectual property rights of our
citizens and those who fairly deserve to reap the benefits of
their creativity and inventions.
At the same time, we must also make sure that intellectual
property legislation does not have an adverse impact on
economic growth. When we allow goods to be taken out of the
marketplace and assign ownership rights to a certain creator,
we should look at the fairness of doing so and also the impact
it will have on the market. The economic impact of expanding
designer protection for fashion designs and the potential
burden to the Copyright Office of a large increase of
registered designs both need to be explored.
Because the bill mandates that a court, and not the
Copyright Office, settle disputes over registration of designs,
the impact of the bill on the Federal court system also needs
to be examined.
We will look forward to discussing these issues and ask
some questions on these subjects during the hearing today.
I will now recognize the Ranking Member, Mr. Berman, for
his opening statement, then we are going to move very quickly
to the opening statement of the mover of this legislation, the
gentleman from Virginia, Mr. Goodlatte.
Mr. Berman. Along with Mr. Delahunt.
Thank you, Mr. Chairman.
H.R. 5055 would extend copyright protection to fashion
designs. I am open-minded about this issue and see that the
Copyright Office in their written testimony has raised the core
question for discussion today.
[The written testimony of the U.S. Copyright Office is
published in the Appendix.]
Mr. Berman. Is there a need for this legislation? And what
evidence is available for quantifying the nature and extent of
the harm suffered by fashion designers due to the lack of legal
protection for their designs?
The global fashion industry is said to have revenues of
$784 billion annually. According to the NPD group, total U.S.
apparel sales reached $181 billion in 2005. California alone
produces over $13 billion in apparel products and employs
204,000 direct employees, 59,000 indirect workers, and put me
through college and law school.
Reportedly, apparel and footwear losses due to
counterfeiting have been estimated to be $12 billion annually.
The fashion designers are seeking this protection in order to
prevent the rampant piracy of their fashion designs, as well as
to maintain the incentive for designers to continue to develop
new, original fashion designs. This protection would last only
3 years, allowing original designers sufficient time to recoup
the expenses incurred in designing and developing their fashion
works.
Current copyright law only provides protection to those
design elements of a useful article that are separable and
independent of the utilitarian function of the article.
Therefore, fashion works have traditionally been denied
copyright protection on the ground that they are considered to
be useful articles. Fashion designers do have access to some
other intellectual property rights both in trademark and patent
law.
However, trademark law protects the elements of a design
that indicate the source of the product, but does not provide
general protection for designs. In patent law, there is the
potential for design patents, but this route of protection
often is not practical for designers because of the length of
the time it takes before the patent issues, as we know,
combined with the typical lifespan of a fashion design, which
is only a single season, maybe 3 to 6 months.
Further, the design patents require a level of novelty and
originality that has generally been held to be higher than that
which is achieved by fashion works. The fashion industry is
unique in that it epitomizes the ultimate paradox of
intellectual property protection. The arguments I have heard
illustrate both sides of the debate. Is a high level of
protection necessary to promote innovation? Or does the lack of
a high level of protection for fashion designs actually spur
increased creativity in the fashion industry?
Furthermore, in part as a result of the great speed with
which fashion trends come and go, new fashions are available in
the high-end designer stores and in the low-end retail outlets,
making these fashions available to virtually all individuals
regardless of their income level. Will an increased level of
protection for designers be at the detriment of the retailers
and the public?
In the past, Congress has demonstrated a flexibility in
expanding copyright laws. For example, providing design
protection for buildings through the Architectural Works
Copyright Protection Act, and providing protections
specifically for semiconductor mask works and boat hulls.
Should we be extending copyright protection to fashion designs
or are there other areas that we should also consider extending
protection to, such as for example the furniture and auto parts
industries?
I look forward to understanding the extent of the problem
of fashion design knockoffs and what the impact is on the high-
end market. For example, is there a fear of lost sales in this
market as a result of production in retail stores?
In addition, I would like for the witnesses to describe
what constitutes a design that is substantially similar. Is it
an exact copy? Is it a mere inspiration of a current trend? And
how does one determine if it is something in between?
I yield back, Mr. Chairman.
Mr. Smith. Thank you, Mr. Berman.
The gentleman from Virginia, Mr. Goodlatte, is recognized
for an opening statement.
Mr. Goodlatte. Mr. Chairman, thank you very much for
holding this important hearing on the Design Piracy Prohibition
Act, which I was pleased to introduce with my good friend and
colleague, Congressman Delahunt of Massachusetts, and also
Congressman Coble, Congressman Wexler and Chairman
Sensenbrenner.
Article I, section 8 of our Constitution lays the framework
for our nation's copyright laws. It grants Congress the power
to award inventors and creators for limited amounts of time
exclusive rights to their inventions and works. The founding
fathers realized that this type of incentive was crucial to
ensure that America would become the world's leader in
innovation and creativity. This incentive is still necessary to
maintain America's position as the world leader in innovation.
Most industrialized nations provide legal protection for
fashion designs. However, in the United States, the world's
leader in innovation and creativity, fashion designs are not
protected by traditional intellectual property protections.
Copyrights are not granted to apparel because articles of
clothing, which are both creative and functional, are
considered useful articles, as opposed to works of art. Design
patents are intended to protect ornamental designs, but
clothing rarely meets the criteria of patentability.
Trademarks only protect brand names and logos, not the
clothing itself. And the Supreme Court has refused to extend
trade dress protection to apparel designs. Thus, if a thief
steals a creator's design, reproduces and sells that article of
clothing, and attaches a fake label to the garment to market
it, he would be violating Federal law.
However, under current law, it is perfectly legal for that
same thief to steal that same design, reproduce and sell the
article of clothing if he does not attach a fake label to it.
This loophole allows pirates to cash in on other's efforts and
prevent designers in our country from reaping a fair return on
their creative investments.
Furthermore, the production lifecycle for fashion designs
is very short. Once a design gains popularity through a fashion
show or other event, a designer usually has only a limited
number of months to effectively produce and market that
original design. Further complicating this short-term cycle is
the fact that once a design is made public, pirates can now
virtually immediately offer an identical knockoff piece on the
Internet for distribution.
Again, under current law, this theft is legal unless the
thief reproduces a label or trademark. Because these knockoffs
are usually of such poor quality, these reproductions not only
steal the designer's profits, but also damage his or her
reputation. It is simply common sense that these creators'
works be protected.
Chapter 13 of the Copyright Act offers protection for the
designs of vessel hulls. The Design Piracy Prohibition Act
protects designers by amending chapter 13 of the Copyright Act
to include protections for fashion designs. Because the
production lifecycle for fashion designs is very short, this
legislation similarly provides a shorter period of protection
that suits the industry, 3 years. This legislation further
establishes damages for infringing a fashion design at the
greater of $250,000 or $5 per copy.
This legislation has broad support among those in the
fashion and apparel industries. While concerns have been
expressed by some about the scope of the legislation, my office
has been engaged in discussions with interested parties to
ensure that the bill does not prohibit designs that are simply
inspired by other designs, but rather targets those that are
more significantly similar.
In addition, the Copyright Office has weighed in with
testimony saying that almost all of their suggestions have been
incorporated into this legislation and that it provides a sound
basis for balancing competing interests.
I look forward to hearing from our expert witnesses today.
As America's fashion design industry continues to grow,
America's designers deserve and need the type of legal
protection that are already available in other countries. The
Design Piracy Prohibition Act establishes these protections.
Again, thank you, Mr. Chairman, for holding this important
hearing.
Mr. Smith. Thank you, Mr. Goodlatte.
The gentleman from Massachusetts, Mr. Delahunt?
Mr. Delahunt. I won't take 5 minutes, Mr. Chairman.
Mr. Smith. The gentleman is recognized for an opening
statement.
Mr. Delahunt. I thank the Chair for inviting me.
As you well know, I have served on this Subcommittee during
my first 3 terms here in Congress. I just want to underscore
some of the statistics that the Ranking Member, Mr. Berman,
referred to in his opening remarks: $12 billion in terms of
losses because of piracy to the American economy just in this
particular segment of our American economy.
We are all aware that in a significant way our competitive
advantage in the new world of electronic commerce is at risk
because of piracy. So what I would suggest is that in addition
to fairness to the creative community, this is even in a more
significant way about whether we are going to protect our
economy.
I would suggest that one only has to review the trade
deficits that we have experienced in a consistent way through
the course of the past 10 years, that I would suggest support
the passage of this particular legislation.
I would just associate myself with the remarks of Mr.
Goodlatte.
Mr. Smith. Thank you, Mr. Delahunt.
Let me ask the witnesses to stand, if you would, so you
could be sworn in, and then we will begin.
[Witnesses sworn.]
Mr. Smith. Thank you. Please be seated.
I mentioned a while ago that we were going to proceed out
of order. We are actually going to do something today that has
never been done, to my knowledge, at this Subcommittee or any
other Committee. It is with the agreement of the Ranking Member
that we do so, and that is to allow Mr. Goodlatte to actually
ask questions before you all give your testimony.
That is not to say your testimony is not important. It is
to say that Mr. Goodlatte has a hearing and a markup of the
Committee that he chairs, the Agriculture Committee, which
begins in 3 minutes. So in an effort to accommodate him because
he is the author of the bill, along with Mr. Delahunt, we are
going to have Mr. Goodlatte ask his questions now. That is, of
course, with the witnesses' indulgence, and then we will hear
your testimony and the rest of us will ask questions at that
point.
So Mr. Goodlatte is recognized for his questions. But I
want to add one caveat, and that is to say that we are not
setting a precedent by doing this. This is going to be an
exception to the general rule.
Mr. Goodlatte is recognized for his questions.
Mr. Goodlatte. Thank you. Mr. Chairman, I am deeply
indebted to you and Congressman Berman for this forbearance. It
is highly unusual, and I respect that. If it were not for the
fact that the other hearing and markup in my Committee is
something that is of great importance to the Agriculture
Committee, I would not impose in that fashion. But since you
have been so kind as to hold the hearing, I welcome the
opportunity to ask a few questions of the witnesses before they
testify.
Mr. Wolfe, welcome. I read two interesting things in your
testimony. One, you thanked and acknowledged Public Knowledge,
well represented by GiGi Sohn behind you, for the contribution
to your efforts to prepare your testimony; and also that you
have fashion designers as clients. So I was interested in
noting that, and I wonder if you think that any of your client
designers have ever created anything unique or original that
would be worthy of protection.
Okay. Now, let me ask you this question. You mentioned in
your testimony, in fact, I would say the main focus of your
testimony is protecting trends in the fashion industry. You
want trends to be able to move fluidly, and we do, too. In
fact, the CFDA has repeatedly told me and other policymakers
that they are not interested in protecting trends. So I have
been looking at language to include in the bill to make it
clear that trends are not included.
Would that be an improvement from your perspective?
Mr. Wolfe. I think there is a difficulty in defining what
is a ``trend.'' Is a trend an item, or is a trend an idea, or
is a trend just an attitude? That is one of the major problems
about the bill, frankly. I think the whole fashion concept is
so ephemeral that trying to nail down specifics becomes
impossible.
Mr. Goodlatte. Mr. Sprigman, not by way of impeachment
prior to your testimony, but you have a long record of opposing
measures passed by the Congress that have originated in this
Committee, including the Copyright Renewal Act of 1992, the
Sonny Bono Copyright Term Extension Act, the Copyright Act of
1976, the Bern Convention Implementation Act. I think I am
correct in saying that you have not been supportive of any of
those.
I also note your view of Congress's copyright policy
expertise is that, ``The copyright clause is framed as a
delicate balance between creation and dissemination,
intellectual property and free speech. Congress and the court
have now sawn off one arm of that balance.'' You have also said
that, ``While the fair use doctrine may still exist, however,
it has been crippled by the Digital Millennium Copyright Act,''
something that I was very much engaged in the crafting of.
Those are some rather strong views. I have heard from
others as well about every intellectual property protection,
including protection for music and movies. They say it will
stifle innovation and that consumers will suffer because there
will be fewer choices. I would appreciate it if you would
explain your views further on that.
Mr. Sprigman. Well, that is too broad a question for me to
address, except to say that I am not old enough to have a long
record of opposing those bills, because a lot of them I was a
child when they were passed. I will just say that I have a
record of noting some constitutional problems with some of
these bills, and I am involved in some litigation that focuses
on those constitutional problems.
Mr. Goodlatte. Challenging the constitutionality of those
statutes?
Mr. Sprigman. Challenging the constitutionality of the
Uruguay Round Agreements Act; challenging the constitutionality
of the removal from the copyright scheme of formalities. That
is a matter of public record. I am involved in that litigation.
I am a lawyer representing clients in that litigation.
Mr. Goodlatte. Okay.
Mr. Sprigman. In terms of the general desirability of
copyright laws as a system, I am also on the record as saying
that copyright is a boon to the United States. It is a boon to
the economy. It is Congress's responsibility to get the balance
that the framers put into the Constitution right, and that
balance is a balance between creating innovation incentives for
authors and inventors, and allowing people access to ideas and
to expression.
That is the important balance, and it doesn't behoove us to
ignore where Congress strikes that balance. We should
constantly be reexamining whether Congress has struck that
balance correctly because I would note that technology moves
along and a balance struck at one point in one technological
world may be perfectly appropriate, and it may later become
somewhat inappropriate when technology evolves and makes things
possible that weren't possible before.
I am not the only one to notice this. Every major copyright
scholar has noticed this.
Mr. Goodlatte. Based on that comment, let me then follow up
with this question, similar to the one I asked Mr. Wolfe. If we
included language in the bill to make it clear that it only
protects against copies that are significantly similar and not
those merely inspired by other designs, would that be an
improvement from your perspective?
Mr. Sprigman. I think this bill is unnecessary and I think
it is unwise. I think the substantial similarities standard in
this bill----
Mr. Goodlatte. You are going to get to testify in a minute.
Mr. Sprigman. Right. And I am going to answer your
question.
Mr. Goodlatte. You get the last word.
Mr. Sprigman. Absolutely.
Mr. Goodlatte. But if you could answer the question?
Mr. Sprigman. Yes, I think the ``substantial similarity''
standard that is in the bill now, as I teach my students, would
reach designs that are inspired as well as those that are
copied. I think it would be better if the bill were clearly
limited only to those garments that are point-by-point copies
of existing garments, but I don't think that is necessary
either, even though it would clearly be better than what we
have now.
Mr. Goodlatte. Thank you, Mr. Sprigman, Professor.
Mr. Chairman, I have other questions, but I will submit
those in writing, if I may. I thank you very much again for the
forbearance.
Mr. Smith. Thank you, Mr. Goodlatte.
That reminds me, I am going to have questions to submit to
the witnesses as well. We will ask you to respond to those
questions within a week, if you can.
We will now return to regular order. Let me introduce the
witnesses officially.
Our first witness is Jeffrey Banks. Mr. Banks is an
internationally known fashion designer. His design credits
include Ralph Lauren and Calvin Klein, as well as his own
successful menswear label. With 30 years of experience in the
fashion industry, Mr. Banks has served as a senior boardmember
of the Fashion Institute of Technology and currently sits on
the executive board of directors of the Council of Fashion
Designers of America. Mr. Banks is a graduate of the Parsons
School of Design.
Our next witness is David Wolfe. Mr. Wolfe is creative
director of Doneger Creative Services, the Doneger Group's
trend and color forecasting and analysis department. His views
have appeared in such publications as The Wall Street Journal,
Women's Wear Daily, Vogue, Glamour and Forbes.
Mr. Wolfe has worked in the fashion industry for over 35
years and began his career in a small-town department store. He
later moved to London where he established himself as a fashion
artist, published in Vogue, Women's Wear Daily, and the London
Times. Mr. Wolfe is a graduate of the Cleveland School of Art.
Our third witness is Susan Scafidi. Professor Scafidi is a
member of the law and history faculties of Southern Methodist
University, where I went, and a visiting professor at Fordham
Law School. She is the author of a book entitled, ``Who Owns
Culture?'' and numerous articles on intellectual property, as
well as a Web site dedicated to I.P. and fashion design called
``Counterfeitchic.com.''
Professor Scafidi has taught intellectual property law for
over 10 years at institutions including Yale and Georgetown.
She is a graduate of the University of Chicago, Duke University
and Yale Law School.
Our final witness is Chris Sprigman. Mr. Sprigman is an
associate professor at the University of Virginia Law School
where he teaches intellectual property. Mr. Sprigman has served
as appellate counsel in the Antitrust Division of the U.S.
Department of Justice, and is a former partner with the
Washington, D.C. office of King and Spaulding, LLP. Mr.
Sprigman graduated from the University of Chicago Law School
and the University of Pennsylvania.
Welcome to you all. We have your written statements.
Without objection, they will be made a part of the record. As
you know, we hope that you will keep your testimony to 5
minutes.
Mr. Banks, we will begin with you.
TESTIMONY OF JEFFREY BANKS, FASHION DESIGNER, ON BEHALF OF THE
COUNCIL OF FASHION DESIGNERS OF AMERICA
Mr. Banks. Good morning, Chairman Smith and Members of the
Subcommittee.
I am pleased to testify on behalf of the Council of Fashion
Designers of America. I come to speak to you with over 30 years
experience in the United States fashion industry, including
working for Ralph Lauren and Calvin Klein, before starting my
own menswear business at age 22.
Much in fashion has changed since then. Fashion generates
approximately $350 billion in the United States annually and is
no longer only based in New York. It is now also centered in
such diverse places as L.A., Dallas, Chicago and Atlanta. The
American fashion industry is made of thousands of small
businesses who live on the hope of designing something that
will capture the imagination of consumers.
Success in our studios grows opportunities in many sectors,
from publishing to trucking to retail all across the country.
As the Internet has transformed our sister creative industries
like music, books and motion pictures, creating opportunities
as well as problems, it has transformed fashion, and not always
for the better. Runway fashions can now be sent around the
world and copied in the blink of an eye.
Fashion design piracy has become a blight that affects all
who depend on the fashion industry. The U.S. is conspicuous in
that unlike Europe and Japan, it does not protect fashion in
its laws. H.R. 5055 provides 3 years of protection for original
designs registered with the Copyright Office. This is less than
the life-plus-70 granted to other copyrighted works, less than
the 10 years granted to vessel hull designs, and less than the
protection provided in Europe and Japan.
Because of the unique seasonality of the fashion industry,
this is enough time for the designer to recoup the work that
went into designing and marketing his collection. We believe
that the passage of design protection would be a powerful
deterrent to the pirates.
I question how many lawsuits for infringement would ever be
filed. Since registration of designs under H.R. 5055 is
mandatory and only original non-commonplace designs can be
protected, I believe that designers will register very
selectively.
Retailers have told us that if fashion design piracy was
illegal, they wouldn't buy copies. The law would have a
powerful and much-needed deterrent effect on the market.
As a movie and music aficionado, I would never dream of
buying an illegal DVD or CD. You recently passed a law to
combat counterfeiting. Counterfeiting starts with design
piracy. You can't make a counterfeit bag without first copying
the bag's design. Both counterfeiting and piracy must be
addressed, or else a small designer with no brand recognition
will be left defenseless to the problem of piracy.
Copying today through technology is instantaneous. Although
a designer can spend tens of thousands to mount their runway
show to reveal their new lines, they frequently don't even
recoup their investments. Their designs are stolen before the
applause has faded; software programs develop patterns from
photographs taken at the show and automated machines then cut
and stitch copies of designers' work from those patterns.
Within days, the pirates in China are shipping U.S. consumers
tons of copies before the designer can ever even get his
originals into the store.
American design and designers add a value in the world
marketplace. Design innovation is the reason for this. It
enables fashion houses to provide more choices for consumers,
more competition and growth, and it won't occur simply by
everybody distributing identical product around the world. In
the long term, lack of protection will shrink American
businesses and mean a loss of American jobs.
Designers want to make their designs available at a variety
of prices in a variety of stores. In the past few years, we
have seen a proliferation of American designer partnerships
with large American retailers, even discounters like Target,
Wal-Mart, J.C. Penney, Kohl's and Payless. Design innovation is
an absolutely critical part of the economy. Designers can't
compete if low-cost countries copy our designs. If we don't
protect American fashion design creativity, we deprive
consumers of the fashion choices they have enjoyed with the
growth of the industry, and workers of their jobs.
The wealthy will still be able to buy the designs
originating out of Europe and Japan, where protection exists.
The rest of America will be left buying the cheap knockoffs
from Europe. I urge you to pass this important legislation.
And I thank you very much, and I look forward to your
questions.
[The prepared statement of Mr. Banks follows:]
Prepared Statement of Jeffrey Banks
Good morning Chairman Smith, Ranking Member Berman, Representatives
Goodlatte and Delahunt and other Members of the Subcommittee. I am
pleased to be here today on behalf of the Council of Fashion Designers
of America. The CFDA is a not-for-profit trade association of America's
fashion and accessory designers. The CFDA works to advance the status
of fashion design as a branch of American art and culture and to help
elevate this important American industry.
I got started in the fashion business at the age of 15, working
right here in Washington, where I was born and raised, as a salesman at
the menswear store Britches of Georgetown. Sadly, Britches is no longer
in business, but for those of you who have been here for a time, you'll
remember that it was once a Washington icon. Back then, I was probably
one of the only high school students in Washington with subscriptions
to Daily News Record and Womens Wear Daily but even as a young teen,
fashion was my passion. I left DC three weeks after graduating high
school, began working as Ralph Lauren's assistant, and started college
that fall. I graduated from the Parsons School of Design and after
working with Calvin Klein for one year, I opened my own menswear label
at the age of 22. I come to speak to you today with over 30 years
experience in the United States fashion industry.
Much in fashion has changed during those 30 some years. For one,
fashion has grown into a very significant and important US industry,
generating approximately $350 billion in the United States each year
and supporting the printing, trucking, and distribution, advertising,
publicity, merchandising and retail industries as well. And of course,
all the industries which support the production and dissemination of
men's and women's fashion magazines. Although New York is often thought
of as the U.S. fashion capital because fashion is the 2nd largest
money-making business in the city, after the stock market, with the
exponential growth of America's fashion and design industries other
fashion centers have come into existence across the country--Los
Angeles, Dallas, and Atlanta come to mind. That wasn't the case 30
years ago, when most of the fashion in the United States was copied
from the European fashion centers of Paris and Milan. Back then there
weren't multitudes of talented young American designers generating
their own original designs as there are today. The fashion industry in
the last few years in America has become a very significant influence
in trends and the way the fashion industry is perceived by consumers.
American style. American design. It has meaning. And it has value.
This wonderful home-grown industry is really made up of thousands
of American small businesses. We're all entrepreneurs who pursue our
fashion with the hope of designing something that will catch on and
capture the imagination of U.S. consumers. Success that starts in all
of our individual design studios, grows opportunities all across the
country . . . there are fabric manufacturers, printers, the people who
produce paper for making patterns, the shippers who ship the
merchandise, the truckers who truck, design teams, fabric cutters,
tailors, models, seamstresses, sales people, merchandising people,
advertising people, publicists, those who work for retailers. In short,
this is a big employment business today.
The other most significant change in the industry in the past
decade is technological. Just as the internet has transformed our
sister creative industries like music, books and motion pictures,
creating opportunities as well as problems, it has transformed fashion
and not always for the better. In the blink of an eye, perfect 360
degree images of the latest runway fashions can be sent around the
world. And of course, they can be copied. And that copying, coupled
with the importance of the fashion industry to America, is the main
reason that I sit before you today.
Fashion design piracy has become a blight that affects all who
depend on the U.S. fashion industry. It robs American workers of their
livelihood, which is why the CFDA is working in an alliance with
industry partners such as Harper's Bazaar and eBay, among others, to
raise the profile of this massive problem. Other countries have
recognized the problem and provided protection for fashion design to
help counter design piracy. The United States is the only developed
country that does not protect fashion in its laws. We want to thank
Representatives Goodlatte and Delahunt for recognizing this inequity
and introducing H.R. 5055, the Design Piracy Prohibition Act, to remedy
it. We also want to thank Chairman Sensenbrenner and Representatives
Coble and Wexler, among others, for cosponsoring the measure.
H.R. 5055 would provide three years of protection to those
designers who register their ORIGINAL designs with the Copyright
Office. That is far less than the life of the author plus 70 granted to
other copyrighted works. However, because of the unique seasonality of
the fashion industry, we agree with Congressmen Goodlatte and Delahunt
that a shorter term of protection is reasonable. That allows the
designer time to recoup the work that went into designing the article
and develop additional lines of ready-to-wear, etc. I will note,
however, that in Europe most member states protect fashion for a term
of 25 years, with registration. In Japan, it is 15.
We believe that passage of design protection would be a powerful
deterrent to the pirates. In fact, I question how many lawsuits for
infringement would actually ever be filed. Since registration of
designs is mandatory in order for design protection to be granted, and
only original, noncommonplace designs can be protected, I believe that
designers will register very selectively. And retailers have told us
that if the practice of fashion design piracy was illegal, they
wouldn't engage in it. A law would have a powerful and much-needed
effect on the market.
THE ADVERSE IMPACT OF PIRACY ON AMERICAN DESIGNERS
I have heard some question whether fashion piracy actually harms
the industry. A few have even suggested that it may help designers to
have their works knocked off. I would like to respond to those
questions with an emphatic ``yes it does hurt the designer and the
industry!'' And no, far from helping the designer, design piracy can
wipe out young careers in a single season. The young designers are the
ones who are creating the new designs, which they have to have some way
of protecting. Copying is stealing. As a movie and music aficionado, I
would never dream of buying an illegal DVD or CD on the street. I
respect the film and music industries much too much, and all of the
people that work in them. Piracy is taking somebody's design,
replicating it quickly, doing it so that nobody would know the
difference between yours and theirs unless you are an expert at it, and
sending it out as your own. That's clearly wrong and American law must
address it.
The Congress has passed laws to protect against counterfeits. One
in three items seized by U.S. Customs is a fashion counterfeit. Just
this year, you made it illegal to traffic in the labels that are used
in counterfeit goods. But a copy of a design is really a counterfeit
without the label. If no design piracy existed, there would be no
counterfeiting. Both must be addressed or else the small designer with
no brand recognition is left defenseless to the problem of piracy,
leaving only famous brands protected, and then only if the label is
taken.
The fashion business is a tough business. With each new season,
designers put their imagination to work, and they put their resources
at risk. When I started my business, I started with a five thousand
dollar loan from my family. You never would do that today. It takes
tens of thousands of dollars to start a business. And every season when
you go out to create, if you're creating original prints, original
patterns, original samples that you have to go through trial and error,
you are talking about thousands and thousands of dollars. Then if you
go to put on a show, you can spend anywhere from fifty thousand dollars
to a million dollars just to put on a show to show buyers and press
what you're creating for that season. So, before you have even received
your first order, you've spent thousands and thousands and thousands of
dollars. Whether you are an accessory designer or a star designer
creating men's, women's, children's lines, you spend many thousands of
dollars before you see your first order.
Some designers make their names in haute couture, where they sell a
very small number of rather expensive designs. While the designs are
high priced, the designer frequently doesn't even recoup investment
costs for the designs because he or she sells so few garments.
Designers are able to recoup their investments when they offer their
own ready-to-wear lines. They can lower the prices at which their
designs are sold because they sell more of them. It's all based on
volume. Design piracy makes it difficult for a designer to move from
haute couture into ready to wear.
The Council of Fashion Designers of America is all about mentoring.
We partner with Vogue to run a mentoring program for young designers--
offering on-going technical advice and business grants. A documentary,
Seamless, was even made about it. (We are reaching out to you as much
for the young designers as anyone else). The CFDA received tons of e-
mails after the bill was introduced, saying, ``thank you, I've been
pirated.''
PIRACY FUELED BY TECHNOLOGY
Copying, years ago, would take anywhere from three to four months
to a year or more. But as I said, all that changed with new technology.
So once a designer spends the thousands and thousands and gets to that
runway show and then reveals a new and original design--it can be
stolen before the applause has faded thanks to digital imagery and the
internet. Today, there are even software programs that develop patterns
from 360 degree photographs taken at the runway shows. From those
patterns, automated machines cut and then stitch perfect copies of a
designer's work. Within days of the runway shows, the pirates at the
factories in China and other countries where labor is cheap are
shipping into this country those perfect copies, before the designer
can even get his or her line into the retail stores. Since there is no
protection in America, innovation launched on the runway--or the red
carpet--is stolen in plain sight.
The famous designer with an established and substantial business
might be able to withstand that assault, but it can absolutely derail
the career of a young designer. Let me show you a few examples of the
type of copying that I've been describing--these photos are included in
my testimony. At this year's Golden Globes, Desperate Housewives star
Marcia Cross wore a stunning coral gown designed by young designer Marc
Bouwer. Within days a famous manufacturer renowned for its copying of
dresses of the stars had shipped an exact copy to stores across the
nation. This dress became that particular manufacturers' most popular
selling prom dress of the year.
At the Academy Awards Felicity Huffman wore a black gown created by
designer Zac Posen, a 25 year old designer from Manhattan who
manufactures all of his designs there in the city. This time, a
different manufacturer sold exact copies of the design and was bold
enough to use the fact that Huffman wore the gown in his advertising.
That's completely legal in the United States. And it prevents Marc
Bouwer or Zac Posen from being able to develop the affordable ready-to-
wear line of their own designs. They can't gain the volume to allow
them to compete against the company that pirated their creations. And
it dilutes their haute couture brands because nobody will spend
thousands for a gown when it is available for hundreds in a department
store. Without a law that makes it clear that design piracy is illegal,
these pirates base their marketing strategy on all the free advertising
they receive--based on how good they are at copying! This is an example
of the growth of one type of American fashion on the back of small
business. That's just wrong, but it's all perfectly legal under U.S.
law.
THE IMPACT OF FASHION PIRACY ON CONSUMERS
Some have argued that protecting fashion will drive up costs,
accessibility and ultimately harm consumers. I am deeply offended by
this argument. In fact the same could be said for the protection of
music, movies, software and books. If these works weren't protected by
copyright, if new technologies weren't protected by patents, wouldn't
prices come down for consumers? In fact, some of the very proponents of
eviscerating protection for copyrighted works and limiting the
copyright laws are now arguing against protecting fashion design.
If the fashion business is going to grow and provide more choices
for consumers, we must understand that design innovation is the real
leverage point for American companies--both big and small. More
competition and growth won't occur simply by everybody distributing the
identical product around the world because copying isn't illegal.
Growth won't occur because somebody can steal designer's creation and
then go sell it for a third of the price. In the long term, lack of
protection will shrink American businesses and mean the loss of
American jobs.
Designers want to make their designs available at a variety of
prices in a variety of stores. In the past few years we have seen a
proliferation of partnerships between American designers and large
American retailers--even discount retailers. American designers are
collaborating with retailers who realize the enormous benefit of an
Isaac Mizrahi at Target, a Mark Eisen at Wal-Mart, or a Nicole Miller
at JC Penny. Kohls is reported to be negotiating to sign Vera Wang.
These stores have all seen the value of making the works of American
designers available in their stores through licensing deals so that
these designers get paid for their innovation and creativity. This
proves that the real growth of American fashion is in the lower to mid
price range.
Other retailers have gone a different path, not licensing, not even
hiring in-house designers. They are skipping the use of their own
designers in order to copy the work of others and make it available
more cheaply--this is done on the backs of the original designers. But
design innovation--in fact brands as we know them--is an absolutely
critical part of a free American economy. With extra labor expenses in
the West, designers can't compete if low cost labor countries copy our
designs. We have an investment in those designs--they don't. We can't
compete against piracy so the creativity and innovation that has put
American fashion in a leadership position will dry up. Innovation is an
investment but we can't innovate without protection against copying.
If we don't protect American fashion design creativity, we're going
to lose all the advantages we've gained in the last ten years by now
becoming a global industry, by now working side by side with Milan and
Paris. There won't be any more L.A. Style which has become so hot
around the globe. No Texas style. The wealthy will still be able to buy
the designs originating out of Europe and Japan where protection
exists. The rest of America will be left buying the cheap knockoffs of
those European designs made in China and other places in Asia where
labor is cheap. That will be bad for consumers who have enjoyed the
growth of fashion choices in the U.S. And it will be sad for the
workers employed by U.S. fashion industry when they no longer have
jobs.
I ask that you not let that situation take place. Please pass a law
to protect the creativity and innovation of American fashion design
just as this subcommittee has done for America's other creative
industries. Europe grants designs 25 years of protection. Boat hulls in
this country receive 10. We only ask for three. Please pass the Design
Piracy Prohibition Act this year. I thank you for your time and look
forward to your questions.
Mr. Smith. Thank you, Mr. Banks.
Mr. Wolfe?
TESTIMONY OF DAVID WOLFE, CREATIVE DIRECTOR,
THE DONEGER GROUP
Mr. Wolfe. Thank you, Chairman Smith, Ranking Member Berman
and Members of the Subcommittee, for inviting me to speak to
you today on the proposed copyright for fashion design. I am
David Wolfe. I am creative director of Doneger Creative
Services.
I analyze men's, women's and youth apparel and accessories
markets, as well as big-picture developments in style, culture
and society. The fashion industry is thriving in America and it
has for the past century because of, and not in spite of, a
lack of copyright protection for fashion designs.
The fashion industry is like a balanced ecosystem of an
ocean reef. It exists because all the various symbiotic
elements of design are inspired and they feed off each other.
It is successful because it achieves an independent blend of
originality, creativity, and yes, copying, and like a reef, the
ecosystem would collapse completely in the absence of any one
of those elements.
H.R. 5055 and the creation of the three monopolies over
design would disrupt this delicate balance and devastate a
flourishing industry. Copyright law in this country is premised
on protecting originality, but finding and defining originality
in fashion is an extremely difficult, if not impossible, task.
Fashion is a craft, not a science or an art. Fashion is a
long tradition of crafts-people working with the same
materials, tools, and concepts, which is what makes it
difficult for someone to design something that has not been
done in a similar or same way before. Current fashion is the
product of generations of designers refining and redeveloping
the same items and ideas over and over.
Copying and appropriation in fashion isn't just about
creating a $200 knockoff of $2,000 dresses. It is about
incorporating influences from all around. Trends don't always
work from the top down, from the exclusive studios of couture
to the sales rack in the shopping mall. Often, they work from
the bottom up.
Because it is so difficult to determine what is original
about a particular fashion design, it would be equally
difficult to enforce a copyright fairly. Defining and
determining originality is difficult enough for those of us who
work in and study the fashion industry.
It would be nearly impossible for a court or Government
agency. If a court cannot determine the originality, then how
could it fairly determine whether one design infringes upon
another, or whether a design is substantially similar or
whether a design is sufficiently original to qualify for
copyright protection?
I have a few examples with me to illustrate how unfair a
copyright would be and how difficult it would be to enforce.
Okay?
Mr. Smith. I see we have a visual assist here.
Mr. Wolfe. We have visual assistance.
This is almost an original jeans jacket. It is not from
Levis or the Gap. It is from Gloria Vanderbilt.
Flip it around, please.
Okay. Does this make it an original? All of these are jeans
jackets. Where does the originality strike? Who thought of
putting jeweled buttons on?
Okay, thank you.
Fashion design is about creating compilations of elements.
Mr. Smith. I think we ought to give Mr. Banks an
opportunity to have a fashion show if you are going to present
that. [Laughter.]
Mr. Wolfe. Copyright would stifle the fashion industry when
certain design elements that were otherwise available in the
public domain for all to use, like jeweled buttons, would be
rendered off-limits. Not only will copyright create litigation,
injunctions and licensing that will slow the pace of producing
new designs, but fashion designers will have a limited array of
design elements available to create new designs.
Finally, I would like to point out that fashion designers
already have protection for their brands through trademark law.
By opposing a copyright for fashion, I am not suggesting
condoning piracy in any way. Designers already have legal
remedies if a another designer or manufacturer uses their
trademark and confuses the consumers as to who made the goods.
But copyright for fashion design doesn't make sense because it
is a craft that is dependent on building from the past, ideas
that came before. It is evolutionary.
I urge you to oppose H.R. 5055 and any legislation that
would create a copyright for fashion design.
Thank you. I look forward to your questions.
[The prepared statement of Mr. Wolfe follows:]
Prepared Statement of David Wolfe
ATTACHMENT
Mr. Smith. Thank you, Mr. Wolfe.
Ms. Scafidi?
TESTIMONY OF SUSAN SCAFIDI, VISITING PROFESSOR, FORDHAM LAW
SCHOOL, ASSOCIATE PROFESSOR, SOUTHERN METHODIST UNIVERSITY
Ms. Scafidi. Thank you. Good morning, and thanks to
Chairman Smith, Representative Berman, Congressman Delahunt,
and all of the Members of the Subcommittee for inviting me to
speak to you about intellectual property and fashion design
this morning.
Fashion designer Coco Chanel is sometimes quoted as having
said, ``Protecting the seasonal arts is childish.'' However,
most people who repeat that statement seem to ignore the fact
that in the 1930's Coco Chanel herself joined fellow designers
as a plaintiff in a landmark French lawsuit that shut down a
notorious copyist and helped Chanel build the house that still
bears her name. In other words, Coco Chanel was a smart
businesswoman who knew how to tell the public what it wanted to
hear, while using the law to protect her intellectual capital.
This is the constitutional intent of copyright law, to
promote and protect the development of creative industries by
ensuring that creators are the ones who receive the benefit of
their own intellectual investments. Of course, fashion
designers create without the benefit of copyright law, but so
would poets and songwriters if there were no copyright. It is
what humans do. It is also the case that trends in fashion
exist in every creative industry, including those supported by
copyright.
The problem today is that, as in other industries like
music and film, the digital era has made pursuing a creative
business without copyright protection even more difficult. Even
Mr. Sprigman just admitted that technology changes things. A
digital photograph of a new design can be uploaded to the
Internet and sent to a knockoff artist halfway around the world
before the model even reaches the end of the runway, as Mr.
Banks pointed out. It used to take months to copy a new style.
Now it takes mere hours. That ecosystem has been upset.
Creative design at all price levels is vulnerable to
copying. H&M, a popularly priced chain that distributes trends
to the mass market and is sometimes cited as an example of
indifference to copying, was itself knocked-off and brought
action last year under E.U. unregistered design protection.
The United States should no longer be a pirate nation with
respect to intellectual property, as we were in our early
years. We are a global superpower and we work with fellow
members of the G-8 group, the WTO, the World Intellectual
Property Organization at their bilateral trade negotiations to
promote I.P. protection, except in the area of fashion design.
This is particularly surprising in light of those concerns
that Congressman Goodlatte mentioned about counterfeit
trademarks. After all, those fake trademarks have to be affixed
to something, often goods created through design piracy.
At this point in our history, America should not be a safe
haven for copyists. The failure to protect fashion design is
both inconsistent with our international policy and a
disadvantage to our own creative designers, especially the
young designers who represent the future of the American
industry and who are particularly vulnerable to copying.
Consider the example of Ananas, a 3-year-old handbag label.
Its cofounder is a young wife and mother working from home,
actually here in the Washington suburbs, and she has been
successful in promoting her handbags, which retail between $200
and $400. Earlier this year, however, she received a telephone
call from a buyer canceling the wholesale order. When she asked
why, she learned that the buyer had found virtually identical
bags in a cheaper material at a lower price.
Shortly thereafter, the same designer looked on the
Internet and discovered a post on a message board from a
potential customer who had seen one of her bags in a major
department store, thought about buying it, but went home and on
the Internet found a cheaper bag, a look-alike in lower-quality
materials, which she not only bought but recommended to others.
So Ananas is still in the business at present, but that loss of
those wholesale and retail orders is a huge loss to a small
business.
As a law professor with a particular interest in
unprotected areas of creativity, I have kept a file on I.P. in
fashion design for almost a decade. I have a Web site, as you
mentioned, thank you, dedicated to the subject. I also
frequently speak with young designers who have been copied or
who would like to proactively protect their work.
One of the most difficult things to explain to those young
designers is that U.S. law doesn't consider fashion design to
be worthy of protection. I hope instead to one day have the law
behind them to deter copying in the first place and to protect
them against design piracy when the need arises.
So H.R. 5055, with its short-term, narrowly tailored
protection for the fashion industry is, I think, a
groundbreaking example of how copyright law can be narrowly
tailored, and carefully designed to serve the creators and the
public interest.
In fact, this kind of short-term protection is exactly the
model of copyright suggested by some law professors who have
opposed this Subcommittee's actions on other bills. I am
surprised and disappointed that various individuals don't
believe that the fashion industry deserves even a minimal
amount of protection when compared with other forms of creative
expression.
So I would like to thank and congratulate the Subcommittee
on taking the issue of fashion design seriously and holding
this hearing, and I look forward to your questions.
Thanks.
[The prepared statement of Ms. Scafidi follows:]
Prepared Statement of Susan Scafidi
Chairman Smith, Representative Berman, and members of the
Subcommittee, thank you for this opportunity to address the issue of
intellectual property (IP) protection and fashion design.
INTRODUCTION AND EXECUTIVE SUMMARY
Historically, American law has ignored the fashion industry. While
trademark law protects designer logos and patent law occasionally
applies to innovative design elements, the Copyright Office has held
that clothing design in general is not subject to protection. As a
result of this legal and cultural choice, the United States has been a
safe haven for design piracy. Creative fashion designers over the past
century have been forced to rely instead on social norms and makeshift
means of defending themselves against copyists.
Today, global changes in both the speed of information transfer and
the locus of clothing and textile production have resulted in increased
pressure on creative designers at all levels, from haute couture to
mass market. Digital photographs from a runway show in New York or a
red carpet in Los Angeles can be uploaded to the internet within
minutes, the images viewed at a factory in China, and copies offered
for sale online within days--months before the designer is able to
deliver the original garments to stores. Similarly, e-commerce is both
an opportunity and a danger for designers, who must battle knockoff
artists with ready access to detailed photographs and descriptions of
their works. Young designers who have not yet achieved significant
trademark recognition, and must instead rely on the unique quality of
their designs to generate sales, are particularly vulnerable to such
theft.
Despite America's role in promoting the international harmonization
of intellectual property protection, the U.S. has not joined other
nations in addressing the issue of design piracy and its effects on the
fashion industry. The U.S.T.R. has repeatedly targeted the rising
global trade in counterfeit trademarked goods, including apparel, but
copies of a garment rather than its label remain beyond the reach of
American law. H.R. 5055 is a measured response to the modern problem of
fashion design piracy, narrowly tailored to address the industry's need
for short-term protection of unique designs while preserving the
development of seasonal trends and styles.
I. HISTORICAL LACK OF PROTECTION AND CHANGED CIRCUMSTANCES
The lack of protection for fashion design under U.S. law is an
anomaly among mature industries that involve creative expression. This
exclusion of fashion from the realm of copyright was not inevitable,
but was instead the result of deliberate policy choices. Examining the
historical and cultural reasons for the differential treatment of
fashion design is thus important to understanding the changed
circumstances that indicate a greater need for some form of protection
today.
A. Theory and Reality: The Historical IP/Fashion Divide
1. Fashion design is part of the logical subject matter of
copyright.
While in the early days of U.S. copyright only books and maps were
eligible for registration, the scope of protection has since increased
to include painting, sculpture, textile patterns, and even jewelry
design--but not clothing.
Why has clothing been excluded from protection? The problem lies in
a reductionistic view of fashion as solely utilitarian. Current U.S.
law understands clothing only in terms of its usefulness as a means of
covering the body, regardless of how original it might be. Surface
decoration aside, the plainest T-shirt and the most fanciful item of
apparel receive exactly the same treatment under copyright law. In
fact, a T-shirt with a simple drawing on the front would receive more
protection than an elaborate ball gown that is the product of dozens of
preliminary sketches, hours of fittings, and days of detailed stitching
and adjustment before it is finally complete. The legal fiction that
even the most conceptual clothing design is merely functional prevents
the protection of original designs.
Fashion, however, is not just about covering the body--it is about
creative expression, which is exactly what copyright is supposed to
protect. Historians and other scholars make an important distinction
between clothing and fashion. ``Clothing'' is a general term for
``articles of dress that cover the body,'' while ``fashion'' is a form
of creative expression.\1\ In other words, a garment may be just
another item of clothing--like that plain T-shirt--or it may be the
tangible expression of a new idea, the core subject matter of
copyright.
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\1\ Joanne B. Eicher, Clothing, Costume and Dress in 1 Encyclopedia
Clothing and Fashion 270 (2005); Valerie Steele, Fashion, in 2
Encyclopedia of Clothing and Fashion 12 (2005).
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Copyright law, of course, has a mechanism for dealing with
creations that are both functional and expressive, although it has not
been consistently applied to fashion designs. It is conceivable--and
perhaps inevitable in the absence of specifically tailored
legislation--that a court could invoke the doctrine of ``conceptual
separability'' to distinguish between the artistic elements of a new
fashion design and its basic function of covering the human body.
Recent judicial treatment of a Halloween costume design follows
essentially this course, noting that elements of a costume like a head
or tail are at least in theory separable from the main body of the
garment and thus potentially subject to copyright protection.\2\ It
would require only a small step to find that the uniquely sculptural
shape of Charles James' famous 1953 ``four-leaf clover gown'' or Zac
Posen's 2006 umbrella-sleeve blouse are conceptually independent of the
human forms beneath them and thus copyrightable. Visual artists, too,
have blurred the distinction between art and fashion by designing
unique works of art in the shape of clothing.\3\
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\2\ Chosun Int'l., Inc. v. Chrisha Creations, Ltd., 413 F.3d 324
(2d Cir. 2005).
\3\ See, e.g., Poe v. Missing Persons, 745 F.2d 1238 (2d Cir.
1984).
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In short, fashion design is a creative medium that is not driven
solely by utility or function. If it were, we could all simply wear our
clothes until they fell apart or no longer fit. Instead, the range of
new clothing designs available each season to cover the relatively
unchanging human body--and the production of specific, recognizable
copies--demonstrates that designers are engaged in the creation of
original works.
From the perspective of theoretical consistency, then, the
relationship between copyright law and fashion design is ripe for
change. However, relying on the courts to take this step would be a
lengthy and uncertain process, one that might ultimately require a
Supreme Court decision to sort through conflicting precedents. The
judiciary, moreover, does not have the authority to tailor intellectual
property law to the specific needs of the fashion industry and the
public, as would H.R. 5055 (discussed further in Section IV infra), but
can only apply existing law. The most efficient and reflective way to
secure copyright protection for the creators of fashion designs would
be an act of Congress.
2. U.S. law does not support the economic development of
the fashion industry.
Despite the importance of creative fashion design to the global
economy, and to many local economies within the United States, it still
operates without the benefits of modern intellectual property
protection.
In historical terms, the pattern of industrial development in the
U.S. and more recent emerging economies often commences with a period
of initial piracy, during which a new industry takes root by means of
copying. This results in the rapid accumulation of both capital and
expertise. Eventually the country develops its own creative sector in
the industry, which in turn leads to enactment of intellectual property
protection to further promote its growth. This was the pattern followed
in the music and publishing industries, in which the U.S. was once a
notorious pirate nation but is now a promoter of IP enforcement.
In the case of the American fashion industry, however, the usual
pattern of unrestrained copying followed by steadily increasing legal
protection is not present. This situation has led to multiple
inefficiencies in the development of the U.S. fashion industry. In the
legal realm alone, creative designers have borne the costs of a
decades-long effort to craft protection equivalent to copyright from
other areas of IP law, particularly by pressing the boundaries of
trademark, trade dress and patent law. While each of these areas of
intellectual property law offers protection to some aspects of fashion
design, most notably logos used as design elements and famous designs
that have developed sufficient secondary meaning to qualify for trade
dress protection, the majority of original clothing designs remain
unprotected. Even design patents, which can in theory protect the
ornamental features of an otherwise functional object, are seldom
useful in a seasonal medium like fashion. The result is a legal
pastiche that is confusing, expensive to apply, and ultimately unable
to protect the core creativity of fashion design.
Current U.S. IP law thus supports copyists at the expense of
original designers, a choice inconsistent with America's position in
fields of industry like software, publishing, music, and film. The most
severe damage from this legal vacuum falls upon emerging designers, who
every day lose orders--and potentially their businesses--because
copyists exploit the loophole in American law. While established
designers and large corporations with widely recognized trademarks can
better afford to absorb the losses caused by rampant plagiarism in the
U.S. market, very few small businesses can compete with those who steal
their intellectual capital. In fashion, America is still a pirate
nation; the future direction of the industry will be directly
influenced by the absence or presence of intellectual property
protection.
B. Cultural Explanations and Changed Circumstances
The differential treatment of fashion relative to other creative
industries with extensive legal protection is the result of specific
cultural perceptions and historical circumstances, many of which have
now changed. While it is beyond the scope of this testimony to address
the entire cultural history of the fashion industry, several recent
developments are particularly important to understanding why a change
in the law is appropriate at this time.
1. Fashion design is now recognized as a form of creative
expression.
The origins of copyright law date back to the Enlightenment era, a
period that also articulated the Western distinction between art and
craft. As copyright developed and extended to include various forms of
literary and artistic works, it continued to maintain the division
between legally protected, high status ``fine art'' and mere
``decorative arts'' or handicrafts. The design and manufacture of
clothing, which for most families was a household task, did not rise to
the level of creative expression in the eyes of the law.
Even after fashion design became increasingly professionalized
during the nineteenth century, with the development of both haute
couture and ready-to-wear sectors, the U.S. failed to recognize its
creative status. Contributing to this low valuation was fashion's
association with women rather than men, a shift influenced by the
Industrial Revolution. By the end of the nineteenth century, American
sociologist Thorstein Veblen famously linked fashion with ``conspicuous
consumption,'' concluding that the role of the female was ``to consume
for the [male] head of the household; and her apparel is contrived with
this object in view.'' \4\ Both the feminizing of fashion and the
intellectual attention to consumption rather than production prevented
the legal recognition of fashion as a serious creative industry.
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\4\ Thorstein Veblen, The Theory of the Leisure Class 132 (1899;
Random House 2001 ed.)
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Modern attitudes toward fashion design as a creative medium,
however, have changed dramatically. Institutions from the Smithsonian
to Sotheby's take fashion seriously, and organizations like the
National Arts Club and the Cooper-Hewitt National Design Museum have
recently added fashion designers to their annual categories of
honorees. Even a Pulitzer Prize for criticism was awarded for the first
time this year to a fashion writer, Robin Givhan of the Washington
Post. It is inconsistent with this cultural shift for copyright law to
deny fashion's role as an artistic form.
2. Creative design now exists at all price levels.
For most of the history of the fashion industry, a small group of
elite, Parisian fashion designers dictated seasonal trends, and the
rest of the world followed as best they could. The privileged few were
measured for couture originals, the relatively affluent bought licensed
copies, and the majority settled for inexpensive knockoffs or sewed
their own garments at home.
With the recent democratization of style, creative design
originates from many sources and at all price levels. Fashion is now as
likely to flow up from the streets as down from the haute couture, and
reasonable prices are no guarantee against copyists. Some of the most
aggressively copied designs are popularly priced; consider this
summer's popular Crocs ``Beach'' style shoe at $29.99 and its battle
with copies sold for as little as $10.00.
In addition, within the past few years high-end designers have
shown an increasing desire to reach a wider audience and to collaborate
with mass-market producers. Fashion houses are seeking to experiment
with new ideas in their runway collections, then to provide customers
with affordable versions in their diffusion lines, and finally to adapt
the looks for a broad range of consumer needs and budgets. This trickle
promises to become a flood, as Isaac Mizrahi's designs for Target are
joined by Chanel designer Karl Lagerfeld's line for H&M, Mark Eisen's
sportswear for Wal-Mart, and many others.
As a result of these changes, it is no longer necessary for the
general public to turn to knockoffs in order to purchase fashionable
apparel, as it might have been in past decades. Some creative work is
simply affordable; in addition, creators of more expensive designs are
now finding ways to enter the mass market as well. A change in
copyright law to incorporate fashion would facilitate designers'
ability to disseminate their own new ideas throughout the market, much
the way copyright law allows book publishers to first release hardcover
copies and then, if the book is successful, to print paperbacks.
3. The internet era calls for new strategies to protect
creativity.
Creative fashion designers in earlier periods fought copyists by
relying on strategic measures like speed and secrecy, the social norms
of the industry, and perhaps patterns of consumer behavior. In the
absence of copyright protection under U.S. law, these extralegal
mechanisms were an important part of the fashion business.
Today, however, the same speed and accuracy of information transfer
that affects the music and film industries is also having an impact on
fashion. Would-be copyists no longer have to smuggle sketch artists
into fashion shows and send the results to clients along with
descriptions of color and fabrication. Instead, high-quality digital
photos of a runway look can be uploaded to the internet and sent to
copyists anywhere in the world even before the show is finished, and
knockoffs can be offered for sale within days--long before the original
garments are scheduled to appear in stores. Fifty years ago, design
houses may have been able to impose somewhat successful embargoes on
the press; now, such efforts are futile.
Similarly, the claim that knockoffs enhance demand for ever-newer
luxury goods among status-seeking consumers, an economic argument
dating back to at least 1928,\5\ fails to take into account the modern
speed of production. Once upon a time it may have been that the
adoption of a new luxury item by affluent trendsetters was imitated
first by wealthy consumers, then by the middle class, and then in form
of knockoffs by everyone else, at which point the fashion-forward would
abandon the item and demand the next new thing--which producers were
happy to provide. Today, however, this ``fashion cycle'' scenario is
rendered obsolete by the fact that poor quality knockoffs can be
manufactured and distributed even more quickly than the originals,
leaving creative designers little opportunity to recover their
investment before the item is already out of style. Even if the fashion
cycle were ever sufficient to support the design industry, that is no
longer the case.
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\5\ See Paul H. Nystrom, ECONOMIcs of Fashion 18-54 (1928).
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As in other areas of creative production, the digital age should
provoke a reexamination of the legal protection available to fashion
design.
4. The future of American fashion is in creativity, not
low-cost copying.
Textile and clothing manufacturing have historically played an
important role in the American economy, driving the Industrial
Revolution and supporting thousands of jobs. With the increased
harmonization of global markets and the January 1, 2005, dismantling of
import quotas in this sector, however, it has become apparent that the
U.S. can no longer compete with China and other centers of low-cost
production on price alone. No matter how inexpensively the U.S. can
produce knockoffs, other countries can manufacture much cheaper
versions.
Instead, the future of the U.S. economy will rest on the ability to
develop and protect creative industries, including fashion design.
America leads the world in industries like music, film, and computer
software, but our history as a pirate nation in the field of fashion
has limited our influence in this area. Creative fashion design is a
relatively young industry in the U.S., albeit one in which there is
growing interest among students choosing their careers. If this
industry is to reach its full potential, now is the time to consider
the impact of government policies, including intellectual property law.
II. EFFECTS OF DESIGN PIRACY
The lack of copyright protection for fashion design negatively
affects both individual designers whose expressions are copied and the
intellectual property system as a whole. As a law professor with a
website dedicated to IP and fashion, I frequently receive messages from
young designers whose work has been stolen or who hope to prevent the
copying of their designs. It is with regret that I must repeatedly
explain that while that law can protect designers' trademarks against
counterfeiters, in the U.S. the actual designs are fair game for
copyists.
A. Impact on Designers
Creativity is an intrinsic part of human nature, not a byproduct of
the intellectual property system. Poets would continue to write,
musicians to sing, and fashion designers to sew even if all copyright
protection were eliminated tomorrow. While the concept of intellectual
property is only a few hundred years old, archaeologists have recently
discovered 100,000-year-old shell necklaces, which they interpret as
the first evidence of human symbolic thinking.
The goal of the IP system, however, is not merely to ensure that
authors put pen to paper or needle and thread to fabric, but to
encourage and reward individuals so that they can continue to develop
their ideas and skills in a productive manner. In other words,
intellectual property law ideally serves as a tool for harnessing and
directing creativity. For this reason, the Constitution empowers
Congress ``[t]o promote the progress of science and useful arts.'' It
is this ``progress'' over time that is hindered by the lack of legal
protection for fashion design.
Young designers attempting to establish themselves are particularly
vulnerable to the lack of copyright protection for fashion design,
since their names and logos are not yet recognizable to a broad range
of consumers. These aspiring creators cannot simply rely on reputation
or trademark protection to make up for the absence of copyright.
Instead, they struggle each season to promote their work and attract
customers before their designs are copied by established competitors.
Over the past century successive waves of American designers have
entered the industry, but few fashion houses have endured long enough
to leave a lasting impression comparable to the influence of French
fashion. While it is difficult to quantify or even identify designers
who give up their businesses, particularly for reasons of piracy, there
is strong anecdotal evidence that design piracy is harmful to the U.S.
fashion industry. Consider just two representative examples, one a
historical snapshot from an early attempt to develop American fashion
and the other from this year.
In 1938 Elizabeth Hawes wrote a best-selling critique of the
fashion industry entitled Fashion is Spinach.\6\ In it, she chronicled
her start working for a French copy house, the only job in the fashion
industry available to a young expatriate American in the 1920s; her
return to New York to design her own line; and her ultimate
disillusionment with the tyranny of mass production and the ubiquity of
poor quality knockoffs that undercut her own designs. She ultimately
closed her business in 1940, but not before leaving a record of the
perils of the industry for a creative designer.
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\6\ Elizabeth Hawes, Fashion is Spinach (1938).
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From a legal perspective, little has changed in almost seventy
years. Handbag designer Jennifer Baum Lagdameo co-founded the label
Ananas approximately three years ago. A young wife and mother working
from home, Jennifer has been successful in promoting her handbags,
which retail between $200 and $400. Earlier this year, however, she
received a telephone call canceling a wholesale order. When she
inquired as to the reason for the cancellation, she learned that the
buyer had found virtually identical copies of her bags at a lower
price. Shortly thereafter, Jennifer discovered a post on an internet
message board by a potential customer who had admired one of her bags
at a major department store. Before buying the customer looked online
and found a cheap, line-for-line copy of the Ananas bag in lower
quality materials, which she not only bought but recommended to others,
further affecting sales of the original. While Ananas continues to
produce handbags at present, this loss of both wholesale and retail
sales is a significant blow to a small business.
Copying is rampant in the fashion industry, as knockoff artists
remain free to skip the time-consuming and expensive process of
developing and marketing new products and simply target creative
designers' most successful models. The race to the bottom in terms of
price and quality is one that experimental designers cannot win. Nearly
every designer or even design student seems to have a story about the
prevalence of copying, a situation that makes the difficult odds of
success in the fashion industry even longer.
B. Design Piracy and Counterfeiting
Not only does the legal copying of fashion designs harm their
creators, it also provides manufacturers with a mechanism for
circumventing the current campaign against counterfeit trademarks. If
U.S. Customs stops a shipping container with fake trademarked apparel
or accessories at the boarder, it can impound and destroy those items.
If, however, the same items are shipped without labels, they are
generally free to enter the country--at which point the distributor can
attach counterfeit labels or decorative logos with less chance of
detection by law enforcement. I have personally witnessed the
application of such counterfeit logos to otherwise legal knockoffs at
the point of sale; after the consumer chooses a knockoff item, the
seller simply glues on a label corresponding to the copied design. The
continued exclusion of fashion designs from copyright protection thus
undermines federal policy with respect to trademarks by perpetuating a
loophole in the intellectual property law system.
III. COMPARATIVE IP REGIMES AND FASHION DESIGN
While the U.S. has deliberately denied copyright protection to the
fashion industry over the past century, other nations have incorporated
fashion into their intellectual property systems--and have consequently
developed more mature and influential design industries.
France in particular has treated fashion design as the equivalent
of other works of the mind for purposes of intellectual property
protection. French laws protecting textiles and fashion design date
back in their earliest form to the ancien regime; these laws were
subsequently updated and clarified in the early twentieth century. As a
result, Parisian fashion designers have been able over the course of
their careers to develop and protect signature design repertoires,
which even after the departure of the founding designers can serve as a
form of brand DNA for their design houses. The formal recognition of
fashion design as an art form has thus helped maintain the preeminence
of the French fashion industry and augmented the lasting creative
influence of both native designers and those who have chosen to work in
France.
The association between strong intellectual property protection and
a successful creative industry has not been lost on other countries
that sought to support their domestic design industries. As long ago as
1840 a British textile manufacturer wrote, ``France has reaped the
advantage of her system; and the soundness of her view, and the
correctness of her means, are fully proved by the results, which have
placed her, as regards industrial art, at the head of all the nations
of Europe, in taste, elegance, and refinement.'' \7\
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\7\ James Thomson, quoted in J. Emerson Tennent, A Treatise on the
Copyright of Designs for Printed Fabrics (1841).
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While modern French law still offers the most extensive protection
to fashion design, Japan, India, and many other countries have
incorporated both registered and unregistered design protection into
their domestic laws. In addition, E.U. law has since 2002 provided for
both three years of unregistered design protection and up to 25 years
of registered design protection, measured in five-year terms.
The global legal trend toward fashion design protection has
rendered the U.S. an outlier among nations that actively support
intellectual property protection, a position that is both politically
inconsistent and contrary to the economic health of the domestic
fashion industry. Congress should take these factors into account when
considering a reasonable level of legal protection for fashion design.
IV. THE ROLE OF H.R. 5055
When analyzed in light of the goals of the intellectual property
law system, current challenges to the U.S. fashion industry, and
international legal developments, H.R. 5055 is a carefully crafted
legal remedy to the inequities resulting from the exclusion of fashion
design from copyright law. The bill is narrowly tailored to achieve a
balance between protection of innovative designs and the preservation
of the extensive public domain of fashion as an inspiration for future
creativity. Perhaps most importantly, it is a forward-looking measure
that lays the groundwork for the future development of a robust,
creative American fashion industry.
The fashion industry's decision not to seek full copyright
protection, but instead to request only a limited three-year term, is
particularly appropriate to the seasonal nature of the industry. This
period will allow designers time to develop their ideas in consultation
with influential editors and buyers prior to displaying the work to the
general public, followed by a year of exclusive sales as part of the
designer's experimental signature line, and another year to develop
diffusion lines or other mass-market sales. While many legal scholars
have aptly criticized the full term of copyright protection as
excessive when viewed solely in light of an incentive-based rationale,
a three-year term chosen after careful analysis of the relevant
industry is exactly the sort of scheme that ``low protectionist''
activists have endorsed for copyright as a whole. Such a short term of
protection will simultaneously encourage designers to facilitate
affordable access to cutting-edge design and contribute to the ongoing
enrichment of the public domain.
The choice to amend the Copyright Act, rather than to modify the
design patent system or devise a sui generis scheme involving prior
review, is also well suited to the needs of the fashion industry. The
bill appropriately recognizes that the short lifespan of new fashions
is inconsistent with burdensome legal formalities. Indeed, I would
suggest that unregistered protection would be even more consistent with
the U.S. copyright system, existing European design protection, and the
needs of the industry, particularly inexperienced designers.
Nevertheless, the establishment of registered design protection is an
improvement over the current state of the law.
The language of H.R. 5055, particularly if amended to clarify that
only ``closely and substantially similar'' copies will be considered to
infringe upon registered designs, is likewise well crafted to both
promote innovation and preserve the development of trends. As with
other forms of literary and artistic work, copyright law is clearly
capable of protecting specific expressions while allowing trends and
styles to form. From a legal perspective, a fashion trend is much like
a genre of literature. Granting copyright to a John Grisham novel does
not halt the publication of many similar legal thrillers, nor does the
protection of Dan Brown's DaVinci Code prevent a spate of novels
involving Mary Magdalene or the Knights Templar from appearing in
bookstores. When an author writes a bestseller, imitators of his or her
style tend to follow--but they are not permitted to plagiarize the
original. Copyright in this sense is merely a legal framework that
supports an existing social norm; neither reputable authors nor
creative fashion designers engage in literal copying of one another.
The level of generality at which fashion trends exist, moreover, is
far too broad to be affected by the proposed bill. To paraphrase next
month's Vogue magazine, currently on the newsstand, red will still be
the new black following the passage of H.R. 5055. In the same way,
common trends such as wide neckties in the 1970s or casual Fridays in
the late 1990s were not dependent on the presence or absence of design
protection, nor would such nonspecific ideas ever be subject to
intellectual property protection.
In addition to the protective benefits of H.R. 5055, the
legislation may have a beneficial effect on creativity in the industry
as a whole. Former copy houses, no longer able to legally replicate
other designers' work, will be forced to innovate or at least transform
their work so that it no longer substantially resembles the original
products. This in turn can be expected to lead to more jobs for design
professionals and more reasonably priced choices for consumers.
At present, the bulk of design-related litigation tends to invoke
federal trademark and trade dress as well as state unfair competition
claims in order to mimic the protections that would be offered by H.R.
5055, with limited success. To the extent that fact-based disputes
regarding copying continue to arise, the new legislation will permit
parties to engage in more straightforward, simpler litigation. Not only
will this avoid the unnecessary distortion of trademark and trade dress
law, but it will also clarify the parameters of what constitutes
protected design. As in other creative industries governed by
intellectual property law, an equilibrium will arise and manufacturers
will find it in their best interests to offer retailers innovative
rather than infringing work.
H.R. 5055 promises to remedy a historical and theoretical imbalance
in the copyright system and to offer protection to the many young
American designers whose work is currently vulnerable to knockoff
artists. For these reasons, I encourage you to seriously consider this
reform.
Mr. Smith. Thank you, Ms. Scafidi.
Mr. Sprigman?
TESTIMONY OF CHRISTOPHER SPRIGMAN, ASSOCIATE PROFESSOR,
UNIVERSITY OF VIRGINIA SCHOOL OF LAW
Mr. Sprigman. Yes, hi. I am Chris Sprigman. I am associate
professor of law at the University of Virginia.
My research focuses on innovation and how innovation
relates to intellectual property rules. I have been doing this
research as an academic and I have been working in this area
when I was with the Department of Justice with the Antitrust
Division. I am here to try to convince you that H.R. 5055 is
both unnecessary and potentially could do harm to this
industry.
Now, the first thing I just want to remind you of is
something that no one has disagreed with, which is that the
fashion industry is thriving. We have an industry probably in
the U.S. around $200 billion. We have U.S. firms participating
in an industry that is approaching $1 trillion around the
world. Never in our 217-year history of copyright has Congress
extended copyright or copyright-like protections to the fashion
industry.
So we have a 217-year tradition of no copyright in this
area. We have the enormous growth and flourishing of a
competitive, innovative, vibrant industry. Before we go and
change that, we should have more than a few anecdotes about
harm. We should have some robust, formal, methodologically
rigorous studies of this industry.
My colleague, Kal Raustiala, who teaches at the UCLA law
school, and I have begun to try to approach this through an
article that we have written called ``The Piracy Paradox:
Innovation and Intellectual Property in Fashion Design.'' This
article will be published in the Virginia Law Review. Many of
my comments today will refer to that article, and in fact I
have submitted it along with my written testimony.
So my first point is that this legislation is entirely
unnecessary. If you look at the way the fashion industry
innovates, that will become clear to you. We are talking about
copying, but what the fashion industry does is occasionally
copies point-by-point, right? It takes a garment and makes a
facsimile.
But mostly what the fashion industry does is it
recontextualizes it, reinterprets. It takes a design and it
adds inspiration to it and makes something recognizably
similar, but new; substantially similar, so it would be reached
under this bill and be unlawful, but new.
The way the industry creates, the way it creates trends,
the way it induces people to treat clothing as something that
they buy seasonally, rather than waiting until it wears out,
this is the very thing that would be potentially under attack
by this bill as currently written.
Okay. Some of the proponents of this bill have said, well,
Europe has this protection. If Europe has this protection, why
don't we? Professor Raustiala and I have looked closely at
Europe. And when you look at Europe, you find that, yes, in
fact there is an E.U.-wide rule protecting fashion designs, but
virtually nobody uses it.
If you look in the registry, it is true, and it reflects
what Mr. Banks predicts, very few registrations and virtually
no major firms register anything, and virtually no litigation.
It is not as if, in Europe, fashion firms are not copying. In
fact, some of the biggest copyists are European: H&M, Zara and
Topshop, these retailers, and European fashion firms that copy
and that reinterpret and that recontextualize and that create
derivative works and do all the things that fashion firms do.
So what do we see in Europe? We see regulation that
basically hasn't affected the way the industry actually works.
It is unnecessary.
Okay. You might ask, well, if we see a situation in Europe
where we regulate, but basically the industry goes on as it has
always gone on, why shouldn't we just do this in the States?
You know, it might not do any good, but it might do any harm.
Well, we are not Europe.
Unlike in Europe where there is a weak civil litigation
system, here in the States we have a very powerful civil
litigation system and we are a society teeming with lawyers,
including obviously a class of litigation entrepreneurs that
accesses the Federal courts. I fear that they will take a look
at H.R. 5055 and then they will take a look at the way the
fashion operates, and they will sense a very nice payday coming
their way.
So what we fear is this bill will lead to litigation that
breaks up, as Mr. Wolfe has described it, the fashion
industry's creative ecosystem that prevents the fashion
industry from creating trends and inducing demand for new
clothes, but makes the fashion industry a less competitive,
less innovative place, that results in higher prices for
consumers, that results in less variety being available to
consumers, and that takes a very good situation and makes it
worse.
So I would encourage you to think hard about this. I would
encourage you to do no harm until someone comes to you with a
compelling study of the harm that we see in the industry from
lack of protection, which I don't think exists.
[The prepared statement of Mr. Sprigman follows:]
Prepared Statement of Christopher Sprigman
My name is Christopher Sprigman; I am an Associate Professor at the
University of Virginia School of Law. In my role as a law professor,
and before that in my career as a lawyer with the Antitrust Division of
the United States Department of Justice and in private practice, I have
focused on how legal rules--especially rules about intellectual
property--affect innovation. Over the past two years, along with
Professor Kal Raustiala of the UCLA School of Law, I have spent a
considerable amount of time studying the fashion industry's
relationship to intellectual property law. Professor Raustiala and I
have written an academic article on the topic, entitled The Piracy
Paradox: Innovation and Intellectual Property in Fashion Design. This
article, which I am submitting along with my written testimony, will be
published in December in the Virginia Law Review. The comments I'll
make here today will refer to the findings of that article.
In brief, for reasons I will explain, Professor Raustiala and I are
opposed to H.R. 5055. The Framers gave Congress the power to legislate
in the area of intellectual property. But for 217 years Congress has
not seen the need to extend IP rules to cover fashion designs. During
that period the American fashion industry has grown and thrived, and
American consumers have enjoyed a wide range of apparel offerings in
the marketplace. We are skeptical that Congress ought to begin
regulating fashion design now, given the success of the existing
system.
We oppose H.R. 5055 for 3 principal reasons:
1) The fashion industry is not like the music, motion picture,
book, or pharmaceutical industries. Over a long period of time,
it has been both creative and profitable without any IP rules
protecting its original designs. Unlike in many other creative
industries, copying does not appear to cause harm to the
fashion industry as a whole.
2) Fashion design protection has been tried in Europe and has
had little effect. Design firms across the Atlantic copy
others' designs just the way they do here in the U.S.
3) We fear that a primary effect of H.R. 5055 will be
extensive and costly litigation over what constitutes
infringement. As such, H.R. 5055 is a lawyer-employment bill,
not a fashion-industry protection bill.
In my brief time here let me expand on these 3 points.
Our first point is that this bill is an unnecessary and unwise
intervention in the marketplace. The American fashion industry has
become a powerhouse in the decades since World War II. The industry
does business in excess of $180 billion per year, and U.S. firms play a
substantial role in a global fashion industry worth almost $1 trillion
annually. In 2005, the fashion industry grew more quickly than the
economy as a whole, and the industry's strong recent growth reflects
its robust long-term performance. According to recent data from the
Bureau of Economic Analysis, sales of apparel and shoes have registered
uninterrupted annual increases between 1945 and 2004, growing during
this period more than twenty-fold. So we see growth and profit in the
fashion industry, and we also see vibrant competition. New designers
and companies regularly rise to prominence and compete for the public's
attention with innovative new designs. The fashion industry produces a
huge variety of apparel, and innovation occurs at such a pace that
styles change rapidly and goods are produced for consumers at every
conceivable price point. In short, the fashion industry looks exactly
as we would expect a healthy creative industry to look.
The important point here is that all of the fashion industry's
growth and innovation has occurred without any intellectual property
protection in the U.S. for its designs. Indeed, never in our history
has Congress granted legal protection to fashion designs. From the
industry's beginnings copying has been very common both in the U.S. and
abroad. Designers and fashion commentators were talking about design
copying back in the 1920s and 1930s. Unsurprisingly, this is not the
first time that Congress has considered extending the IP laws to
fashion designs. But Congress has always refrained from making this
change to our tradition--wisely, in our view. Unlike in the music,
film, or publishing industries, copying of fashion designs has never
emerged as a threat to the survival of the industry.
Why is that? In our article, Professor Raustiala and I explain how
copying and creativity actually work together in the fashion industry.
This argument is grounded in the fact that fashion is cyclical and
driven by popular trends. Styles come and go quickly as many consumers
seek out new looks well before their clothes wear out. This is not new:
as Shakespeare put it in Much Ado About Nothing, ``The fashion wears
out more apparel than the man.'' But the result is that for fashion,
copying does not deter innovation and creativity. It actually speeds up
the rate of innovation. Copying of popular designs spreads those
designs more quickly in the market, and diffuses them to new customers
that, often, could not afford to buy the original design. As new trends
diffuse in this manner, they whet the appetite of consumers for the
next round of new styles. The ability to be copied encourages designers
to be more creative, so as to create new trends that capture the
attention of consumers. The existing legal rules also help the industry
communicate these trends to consumers. In order for trendy consumers to
follow trends, the industry has to communicate what the new fashion is
each season or year. The industry as a whole does this by copying and
making derivatives that take features of a popular design and add new
features--this is one of the important ways in which trends are
established.
In sum, it is the preference of consumers for change in clothing
designs that incentivizes creativity in the fashion industry--not
intellectual property rules. Copying simply accelerates this process,
intensifying consumers' desire for new styles, and increasing
consumers' willingness to spend on the industry's next set of design
innovations. Congress does not need to step in to alter the market and
protect producers. Indeed, if Congress acts to hinder design copying,
it may succeed only in depressing demand for new styles, slowing the
industry's growth, and raising prices for consumers.
Our second point pertains to the E.U.'s experience, which suggests
that design protection does not affect copying. In 1998 the European
Union adopted a Directive on the Legal Protection of Designs. European
law provides extensive protection for apparel designs, but the law does
not appear to have had any appreciable effect on the conduct of the
fashion industry, which continues to freely engage in design copying.
Some may argue that since Europe has design protection legislation,
the U.S. should have regulation too. But the European experience
suggests precisely the opposite, for two reasons. First, fashion
designers have not used the E.U. law very much. We have looked closely
at the E.U. registry of designs, and very few designers and design
firms have registered their designs--an act that is a prerequisite for
protection under the E.U. law, and would also be required for
protection under H.R. 5055. Second, copying of fashion designs is just
as common in Europe as it is here in the U.S. Indeed, many large
fashion copyists, including large retail firms such as H & M, Zara, and
Topshop, are European. The law in Europe has had little or no effect on
copying, or on innovation in the industry. While the E.U. prohibits
fashion design copying, the industry continues to behave as it always
has--copying and making derivative works.
Although we find the E.U. law has had little effect, we fear that a
similar law in the U.S. may actually have a harmful effect. This brings
me to our third and final point.
Our third point is that while H.R. 5055 is unlikely to do much
good, it potentially could cause significant harm. Unlike most
countries in Europe, which have relatively weak civil litigation
systems, we Americans are, for better or worse, accustomed to resolving
disputes through the courts. As a result, the U.S. is a society teeming
with lawyers--including, unlike in Europe, a class of litigation
entrepreneurs who turn to the federal courts readily to seek leverage
in competitive industries.
Given our significant differences from Europe in this regard, we
fear that H.R. 5055 might turn the industry's attention away from
innovation and toward litigation. We foresee extensive litigation over
the standard of infringement in the proposed bill. Drawing the line
between inspiration and copying in the area of clothing is very, very
difficult and likely to consume substantial judicial resources. But
however the lines are drawn, the result will be a chilling effect on
the industry. Every designer and every firm will be obliged to clear
new designs through a lawyer. Individual designers and small firms will
be particularly disadvantaged--they are the least likely to be able to
afford the lawyers' fees that will be the new price of admission to the
industry. Over time, the fashion industry might begin to look more like
the music and motion picture industries--i.e., dominated by a few large
firms. It is hard to imagine an industry re-configured in this way
producing the same rich variety of new designs that today's healthy,
competitive fashion industry yields. We believe that the end result of
H.R. 5055 could be less consumer choice, fewer opportunities for young
designers and small firms to break into the industry, and reduced
consumption across the board of fashion goods.
In conclusion, the fashion industry thrives by rapidly creating new
designs. Via this continuous re-definition of what is ``in style,'' the
industry sparks demand by consumers for new apparel. This process
results in consumption of fashion goods at a level above what would
otherwise occur. It also permits many apparel items to be sold at lower
prices than would be possible were fashion design protected by the
intellectual property laws. To remain healthy, the fashion industry
depends on open access to designs and the ability to create new designs
that are derivative of them. The industry has thrived despite the lack
of design protection; we are very hesitant to interfere with such
success.
But we also fear that H.R. 5055 may cause harm. In sum, were it
necessary to impose design protection rules to protect the American
fashion industry, we would support amending the U.S. Code for the first
time in our history to include fashion design. But our research
suggests that it is not necessary, that we have had the right rule for
the past 217 years, and that Congress should be content to leave the
industry to get on with the business of creating innovative new
fashions.
ATTACHMENT
Mr. Smith. Thank you, Mr. Sprigman.
Mr. Banks, let me direct my first question to you. You have
just heard Mr. Sprigman say, and we have heard others say as
well, that there is a concern about the increased litigation
that would come, and the difficulty of determining what is
original, shall we say.
It occurred to me, and I have a couple of slides I want to
put up in a minute, but it occurred to me that what is to
prevent someone from, for instance, seeking to copyright men's
striped shirts and just changing the width of a stripe or the
distance between the stripes a centimeter or less, and
copyrighting every manner of striped shirt?
And also, I want to put, if you can, I think we are
prepared to do so, put up a couple of visual aids here. You
have, for lack of another word, let me call it a polka-dot
dress. You have the real thing on the left and the knockoff on
the right. Here you have a difference in the size of the
diameter of the polka-dots, for example.
How are you going to copyright something that can be
replicated but not exactly duplicated? Is that not going to
lead to an excess in litigation?
Mr. Banks. Well, first of all, Mr. Chairman, if you look at
the slides of the two dresses that were shown, they are not a
copy of each other. The one dress by Diane von Furstenberg has
a cap-sleeve. It is a wrap-dress. The other dress is a slip-
dress silhouette. The size of the polka-dot is different. In
fact the space between the dots is different. It is a different
bracket print. They are both similar polka-dots, but they are
not the same.
Mr. Smith. Suppose the polka-dots on the knockoff, just
like the striped shirt I described, were a millimeter smaller
in diameter. Would that present a problem?
Mr. Banks. Well, first of all, you would be talking about
prints, and you can already register a print. That is an
original design that already you can register. Prints in the
home furnishings area, prints in the fashion design area are
textiles that can be copyrighted. So we are not really talking
about that with this bill. We are not talking about commonplace
design either. The jean jackets that David showed us, that is
something that is commonplace.
Mr. Smith. So the striped shirt would be considered to be
commonplace, for example?
Mr. Banks. Exactly. Anything that went before, that went on
in fashion before this bill would not be represented, whether
it is a white buck shoe or seersucker suit or a spaghetti strap
dress.
Mr. Smith. In the case of the polka-dot dress or even a
striped shirt, wouldn't a court find that they are
substantially similar and therefore a violation of copyright,
or not necessarily?
Mr. Banks. I don't think they would necessarily do that.
Mr. Smith. Okay.
Mr. Wolfe, you decried sort of the lack of originality. In
one sense that is easy to say because I certainly could not
design anything that I have seen, and therefore I would
consider someone who could to be designing something very
original. Why do you not think at a design can in fact be
original if we haven't seen it before?
Mr. Wolfe. I think because the materials involved have been
around for centuries. We are talking about fabrics, scissors,
needle and thread encasing the human body. Oscar de la Renta
once said something to me that I think is worth repeating. He
said, ``All we can do is go in and out and up and down over and
over and over.'' I don't think anyone in this room is wearing
anything that we cannot trace through fashion history and find
its derivation.
Mr. Smith. But they would say they are not trying to
copyright trends, and you are talking about trends.
Mr. Wolfe. Oh, no, I am talking about just the reality of
the fact that it is impossible to create a new design. It is
possible to create a new textile, a new print, but la new
design is almost impossible because all we are doing in
creating a new one is putting together existing elements in a
different way.
Mr. Smith. It sounds as if you are saying there is nothing
new in the world. That reminds me of someone who said at the
turn of the century that everything that had been invented had
already been invented, or all the patents had already been
filed. You don't think someone could come up with something
that is not a result of prior effort?
Mr. Wolfe. Not in terms of garment design that human beings
wear made out of fabric, needle and thread. When we move to
spray-on clothes, great. [Laughter.]
And we may.
Mr. Smith. Thank you, Mr. Wolfe. Okay, I appreciate it.
Ms. Scafidi, you mentioned I believe in your written
testimony, but not necessarily in your oral testimony, that you
thought this legislation might be too broad in some of its
wording. Would you go into that in a little bit more detail as
to how it might be narrowed to better achieve the task that it
tries to accomplish?
Ms. Scafidi. Certainly, Mr. Chairman. I think that we are
all in favor of trends. I think that it is marvelous that Mr.
Wolfe is in the business of identifying and selling trends, and
therefore de-emphasizing the originality of his clients so that
they will keep buying his trends.
I think that it is important, therefore, in this
legislation for the industry in general to continue protecting
trends. I understand that Congressman Goodlatte has proposed
language suggesting that we say that only closely and
substantially similar garments will be infringing, those that
in their overall appearance are closely and substantially
similar to one another. I think that is a wonderful idea.
Mr. Smith. Do you think that that is a narrow enough
definition itself? I can see a lot of courts coming out with
different results from that definition.
Ms. Scafidi. I think it echoes what we do in copyright
generally. I think that a court asked to compare two paintings
or two sculptures would engage in a similar process. I don't
think we should go as far as Mr. Sprigman suggested would be an
improvement, although not a recommendation of his, and say that
only line-for-line copies should be protected, the reason being
a clever copyist can move one button or raise a hemline and
claim that it is an entirely new garment.
Mr. Smith. You are not saying Mr. Sprigman sees the world
in black and white instead of color, are you? [Laughter.]
Ms. Scafidi. I wouldn't presume to comment on Mr.
Sprigman's eyesight. [Laughter.]
But no, I do think that that language, ``closely'' and
``substantially similar,'' is perfectly consistent with the
rest of copyright.
Mr. Smith. Okay. Thank you, Ms. Scafidi.
Mr. Sprigman, you say in your testimony that copying does
not cause substantial harm, and yet it seems to me that the
damage done by knockoffs can be quantified. Perhaps it is $12
billion or perhaps it is some other figure, but why don't you
believe that knockoffs actually do create harm, do cost the
originators profits, and undercut the market?
Mr. Sprigman. Sir, the question with knockoffs is always
not is someone harmed. Someone is harmed. The question is
whether the industry in the aggregate benefits. The paradox
here, the reason we titled the article The Piracy Paradox, is
that the same thing that causes individualized anecdotal harms
causes systemic, economy-wide benefits.
It is the way the ecosystem works. In every competitive
ecosystem, and of course in this country we prefer competition,
right? We view competition as the mainspring of our economy. We
introduce IP rights when we think there is a problem with
innovation, and we need to incent innovation.
But there is no problem with innovation here. The ecology
that we have, the creative system that we have in the fashion
industry, incentivizes innovation. There are many more fashion
designers entering this business than there are new record
companies or new film studios. This is a much more competitive
and open industry.
Mr. Smith. Let me go back. Did you say the industry you
felt was harmed, but the economy was helped?
Mr. Sprigman. No, I don't think the industry is harmed. I
think the industry is helped.
Mr. Smith. But aren't individuals harmed if their profits
lower as a result of the knockoffs?
Mr. Sprigman. Individuals are harmed by point-by-point
knockoffs. Individuals may be harmed or helped by
reinterpretations depending on whether those reinterpretations
reflect well on their original design. It is a mix. But the
industry as a whole depends on this ability to create trends,
and by creating trends, that is how they sell so much fashion.
So there is a huge benefit, huge benefit to the way we do
things now and the way the industry does things now. Before you
put that huge benefit at risk, I would want to know whether
this $12 billion has anything to do with design copying or
whether this is in fact trademark infringement for which we
already have remedies.
Mr. Smith. Okay. Thank you, Mr. Sprigman.
The gentleman from California, Mr. Berman, is recognized
for his questions.
Mr. Berman. Well, it is obvious for anyone with good
eyesight, fashion and style is not my strong suit. I am trying
to, I looked at the picture of those two dresses up there and
apparently no one says that would infringe, the knockoff, if
that is what it is, it looked to me sort of like two different
types of dresses.
Mr. Sprigman. I say it.
Mr. Berman. Yes?
Mr. Sprigman. I say it. It would potentially infringe if
you pass this law. The substantial similarity standard in the
law potentially would make the second an infringement of the
first.
Mr. Berman. And why is it substantially similar?
Mr. Sprigman. In my copyright classes, I spent a long time
on this with my students. The substantial similarity standard
is not limited to copying.
Mr. Berman. I need the Cliffnotes.
Mr. Sprigman. Yes, the Cliffnotes is that any substantial
use of an element of the original design could result in a
finding of infringement. So think of it in the music context.
Do you know the song, ``He's So Fine''? Right? Well, the George
Harrison song, ``My Sweet Lord'' was determined to be
substantially similar to ``He's So Fine.''
If you know these two songs, it doesn't immediately pop
into your head that those are copies. George Harrison wasn't
copying. He was hearing something in his head and he was
recontextualizing it, and it came out a completely different
song, but that is substantially similar because of those five
notes that are appropriated.
If you look at visual cases and film cases, substantial
similarity standard proscribes, prohibits, makes unlawful
small----
Mr. Berman. Was there an infringement in that music case?
Mr. Sprigman. Yes. And that was considered to be an easy
case. So the substantial similarity standard, as it has
developed in the courts, has nothing to do with exact copies.
It has to do with taking inspiration, which is what the fashion
industry does. This bill addresses and makes unlawful what they
do.
So where this is going to end up, I mean, I can't tell you
that this is going to wreck the fashion industry, but it puts
their creative process under threat. You know, to see in color,
you have to see the complexity of the creative process. And the
complexity of the creative process has resulted in a big
thriving industry.
Mr. Berman. Well, I would like to hear the other witnesses,
Mr. Banks and Professor Scafidi perhaps, address this question.
In books and music, maybe not so much as I would think, but
in books and music you could talk about words and notes and the
extent to which they are the same. But with fashion design,
what aspects, assuming this is law, what aspects must be
compared? Is it simply if the appearance is similar? Do you
look at the type of fabric, the type of stitching?
It seems to me if it is as narrow as exactly the same, then
you simply reward the person who puts the zipper or something
in a slightly different place, and you really don't get
anything from the bill, but when you start getting these more
general standards, what is the analysis a court is going to
take in looking at this?
Mr. Banks. Well, Mr. Berman, I would think a perfect
example of blatant out-and-out copying is something that I
think almost everybody in this room would be very familiar
with.
Mr. Berman. Even me?
Mr. Banks. Even you.
Mr. Berman. Okay.
Mr. Banks. In the springtime, there is something called the
Academy Awards, which is also known as the greatest fashion
show in the world because we spend an inordinate amount of time
in front of our television sets, maybe for an hour before the
Academy Awards starts, watching the actors and the people who
are associated with the film business coming in on the red
carpet and seeing what they are wearing, and having different
interviewers, Joan Rivers, et cetera, asking, whose dress are
you wearing?; who made that for you?; where did you get that
dress?
Within days, usually 2 days after the Oscars, you can turn
on Good Morning America or the Today Show and you can see
interviewers with manufacturers in this country with line-for-
line copies, and they credit the designer who designed those
dresses. This is the Zac Posen dress, or this is the Bill Blass
dress. But they have line-for-line copies at a fraction of the
cost of the original, which they will be shipping to department
stores in this country by the end of that week.
Now, the designer who designed that dress, whether he is a
European designer or she is a European designer or an American
designer, is not benefiting from that. The only person who is
benefiting from that is that copyist.
Mr. Berman. Let me just challenge that for a second,
because I bet those designers at least have their assistants
watching those shows hoping that their name will be mentioned
by whoever is on that morning show 2 days later talking about
it. I mean, there is something about being mentioned that is
worth something.
Mr. Banks. There is something about being mentioned, but
that doesn't sell that dress.
Mr. Berman. That business we are in.
Mr. Banks. That doesn't sell your dress. That sells your
personality as a designer, but that doesn't sell your dress.
Mr. Berman. But it may make your next design more valuable.
Mr. Banks. It might. It might. Case in point, a few years
ago a totally unknown designer named Olivier Theyskens designed
a coat for Madonna to wear to the Oscars. Now, people came up
to her and said, whose dress is that? And she said Olivier
Theyskens. They had never heard of that designer. He was a
young kid, 22, 21 years old.
Yes, that made him, that made him as a designer, and he was
able to get from that, you know, a very interesting contract
with a big French house. But having that garment knocked off
when he couldn't even get it made in time to sell to stores
does not help his cause.
Mr. Berman. Am I out of time?
Mr. Smith. The gentleman is recognized for an additional
minute, both to finish his question and to yield me time when
he finishes.
Mr. Berman. Okay. The displacement issue, the very close
copy that appropriately would be covered by this kind of a
bill, maybe not what we saw on the screen, but something else.
First, will the people who could afford the outfit, the
coat that Madonna wore, will they be buying those? Like, maybe
the reason they could afford Madonna's coat is because when
they have a chance to buy something like that coat for 10
percent of the price, they buy it, and that is how they get
rich.
In other words, what are the economics of the displacement?
Are all those knockoffs creating a whole new world of buyers
and giving some prestige to the designer without any loss to
the designer?
Mr. Banks. I wouldn't say there was no loss to the
designer. I definitely don't feel that if the designer is just
getting the credit for having designed the dress, when the
designer can't even get the dress made, shown to his buyers in
time, and through the manufacturing process of creating
something that is original----
Mr. Berman. Is that what is going on? Is that what is going
on?
Mr. Banks. Yes.
Mr. Berman. The knockoff is coming out so quickly that the
designer never gets the much more expensive dress for the much
more expensive stores even made because those stores know that
that knockoff is going to be----
Mr. Banks. And they would be reluctant then to buy the
dress if it has already been knocked off.
Mr. Smith. Would the gentleman yield?
Mr. Berman. Sure.
Mr. Smith. I want to return, Ms. Scafidi, to a subject that
we talked about a while ago, and run a phrase by you. We talked
about some phrases that have been suggested as a standard.
If we used, instead, ``virtually identical'' as a way to
describe the item or copyrighted item or a knockoff, would that
be a better test because that has a history in copyright law
already that has been somewhat established? Obviously, it is a
little bit more narrow definition, but wouldn't that help solve
some of the problems that we confront?
Ms. Scafidi. Chairman Smith, I would be very uncomfortable
with the idea of using the phrase ``virtually identical.'' Mr.
Berman suggested that a clever copyist could just move a zipper
a little bit and thus be outside any kind of reach of this law.
I worry that that is exactly where ``virtually identical''
would take us.
I would also remind you all, with respect to the
``substantially similar'' standard, which I have been teaching
for about a decade now, which is a really long time now that I
think about it, that it is not as flexible and as extreme as
Mr. Sprigman would suggest. In fact, the music industry has not
been destroyed by cases like that one, and in Europe the
fashion industry has not been destroyed by the application of
similar standards.
Mr. Smith. Okay. Thank you, Ms. Scafidi.
We made an exception a few minutes ago and allowed Mr.
Goodlatte, for the reasons explained, to ask question out of
order. We are going to make another exception, and I am going
to recognize the gentleman from Massachusetts, Mr. Delahunt,
for some questions, even though he is not a member of the I.P.
Subcommittee, but because he is an original cosponsor of the
legislation. This is a one-time-only exception to the general
rule and not setting a precedent.
He will be recognized for his questions.
Mr. Delahunt. I thank the Chairman.
I have a number of questions, and some I will submit in
writing, again with the forbearance of the Chair.
I would like to pose some questions to Professor Scafidi.
Mr. Sprigman is concerned about the lawyers and a subculture,
if you will, that will see opportunity here. Although I think
it was yourself or Mr. Banks that said that the lack of
litigation in the E.U. underscored the fact that the E.U. rule
served as a deterrence. Can you describe for us the regimen in
the E.U. and its application?
Ms. Scafidi. Absolutely. Mr. Sprigman has said that
designers in the E.U. don't take advantage of the protections
available to them. That is actually inaccurate. First of all,
designers in the E.U. automatically have 3 years of
unregistered design protection. Moreover, a large number of
them continue to register to get longer terms of protection
anyway, terms of up to 25 years under the E.U. registered
design right.
In fact, 4,013 designs for clothing were registered in
2004; 5,426 in 2005, numbers substantially larger than those
suggested by Mr. Sprigman, and about half that much again for
fashion accessories. So we do have a large number of
registrations taking place.
Concurrently, we have a very small amount of litigation.
Why is that? I think it is because these registrations and the
unregistered design protection, together serve as a deterrent
to would-be copyists. In fact, it forces those copyists to
innovate so that we actually get more innovation in the fashion
industry as a whole. So I think those two elements work
together very nicely.
Mr. Delahunt. Thank you, Professor.
Let me direct this question to Mr. Banks. I notice that
although the Copyright Office said that the bill before us
provides a sound basis for legislation to protect fashion
designs, and that while there may be merit, the fashion design
should be given protection. The office has, at least at this
stage, not been provided with sufficient information to come to
a conclusion on the need.
I am aware of the fact that you and your colleagues have
had a series of discussions with the Copyright Office. Was the
case presented there for protection?
Mr. Banks. The reason that we wrote to the Copyright Office
was to find out if it would be feasible to, and a sort of ready
way to make copyrights, or rather registration of designs
through that office. Following the European system, which is to
take a digital picture of the design, front and back; have that
digital picture e-mailed to the Copyright Office; and then it
would be registered. It is just that simple. A fee would be
paid. It is not obstreperous. It is not a difficult thing to
do. It is not particularly time consuming. That was what we
approached the Copyright Office about.
Mr. Delahunt. Let me just ask one final question here. Do
you have a concern, and I think the catalyst of the concern is
the reality of electronic commerce, the advent of the Internet
has changed, if you will, the need for design protection. I
think as Mr. Sprigman talked about 217 years of a tradition,
well obviously the Internet is a rather recent innovation.
I have a concern, and tell me if it is a legitimate
concern, that since the E.U. has this regimen, this regime of
protection, I don't want you running over to Europe and
incorporating over there and further exacerbating our trade
balance.
Has anyone in the industry, you know, what is the buzz in
the industry in terms of if we see an enhancement of, we see an
increase in terms of the billions of dollars of piracy, is
there a potential for an exodus of American fashion designers
to go to Europe and receive the protection under the E.U.?
Mr. Banks. Well, I would say a perfect example of an
American designer flourishing in Europe is Marc Jacobs, who
designs for Louis Vuitton, which has a multimillion-dollar
business.
Louis Vuitton registers up to 80 designs per season of just
accessories alone designed by Marc Jacobs for Louis Vuitton.
That is just bags, shoes and other accessories. That doesn't
even include the ready-to-wear.
They do a registration of 80 styles per season, and he is a
designer who, with the backing of Louis Vuitton, helps pay for
his business here in America, his Marc Jacobs business located
here in America.
Mr. Delahunt. Thank you, Mr. Banks.
Mr. Sprigman. Mr. Delahunt, I would like to be given a
chance to respond.
Mr. Delahunt. We don't--the rules here are that we ask the
questions.
Mr. Sprigman. Mr. Chairman, I would like to respond.
Mr. Smith. The gentleman is recognized for an additional
minute so that Mr. Sprigman can respond.
Mr. Sprigman. Well, I have done some research on the rate
of registration in Europe. I have actually looked at the
databases. Between January 1, 2004 and November 1, 2005, we
have 1,631 registrations. Of those, many, the majority are
nothing more than plain T-shirts, jerseys, sweatshirts with
either fixed trademarks or pictorial works. These are
registrations that are made to protect a trademark, which is
already protected. These are not major registrations for the
most part made to protect designs.
We see no evidence of any substantial number of
registrations by any major design firms. Most of the
registrations that we see are from fast-fashion firms like
StreetOne, which has about one-third of all the existing
registrations during this period. So we don't see this database
being used, and reality backs us up.
We don't see the lawsuits. And the copyists in Europe
thrive just as well as they do here. Topshop, Zara, H&M, these
are fast-fashion firms that are often said to take inspiration,
and designers do the same thing, so no working difference in
the way the industry operates.
Mr. Smith. The gentleman's time has expired.
We will go to the gentleman from California, Ms. Issa, for
his questions.
Mr. Issa. Thank you, Mr. Chairman.
Ms. Scafidi, who made your outfit you are wearing today?
Ms. Scafidi. Narciso Rodriguez, an American designer who
has in fact been copied and has suffered losses from that
copying, probably not of this suit, but of a much more unique
gown and several other of his items.
Mr. Issa. And, you know, always on these Committees, at a
hearing you kind of look at who is for and against the bill and
so on, but in this case, I am sort of looking at academia and
the legal profession versus the folks that have to try to make
this thing work for designers, but I am concentrating on you
first.
From a constitutional law standpoint, and I keep it as
simple as can be and so did the founding fathers, it said to
promote the progress of science, well, scratch that out, and
useful arts, we will assume that applies, by securing for
limited times to, and we will scratch out ``authors,'' and say
``inventors.''
Now, a dress designer is an inventor by anyone's standard,
and I think dresses are clearly, let's be honest, it's art.
Otherwise, we would all be wearing something that looks like
the Russians wore during the Soviet period or worse. Clearly,
there is a constitutional obligation for us to secure for a
limited period of time for these creations. I guess the
question is, how are we meeting that standard if not for this
type of legislation?
This legislation does not, although, you know, we are
certainly talking about promoting commerce, this is not
promoting commerce in the statute. This is a protection that
promotes people inventing. It has nothing to do with whether or
not we are promoting their financial well being. We are simply
incentivizing them to have the pride of inventorship for a
limited period of time, which sometimes people miss, and they
assume they have to be commercially make it viable.
Well, in patents you don't have to be able to market the
product and make a bloody penny. You have a right for 20 years
from invention to keep it to yourself. Would you agree with
that?
Ms. Scafidi. I would agree that there is a constitutional
obligation, and moreover that it is to the benefit of the
American economy to incentivize and to protect these young
designers. Mr. Sprigman has said that there is no harm to the
industry even if there is harm to individuals. Individuals are
the industry and it is a loss of human capital and a personal
tragedy when designers are driven out of business because they
are copied.
Mr. Issa. Now, with all due respect to the laymen here,
your outfit looks very classic to me.
Ms. Scafidi. Thank you. [Laughter.]
Mr. Issa. It looks less classic. However, it certainly
seems to have inspiration that dates back well to black and
white movies and to early color. Would you agree?
Ms. Scafidi. I would agree that particularly in the area of
more formal wear, men's and women's, you have a greater degree
of standardization than you do in the more fanciful clothing
that a woman might wear in the evening, for example.
Mr. Issa. So men are at a considerable disadvantage,
unfortunately, on the whole of really appreciating this. I
dress to be proven no exception. But if I understand basically
the bill, not the nuances we may change in a markup, but
basically the bill, we want to give 3 years of broad protection
to those who create, while leaving 100 years or more of fashion
to inspire the copycats.
Anyone on this panel want to disagree with the basic intent
of the bill?
Mr. Sprigman. Oh, yes.
Mr. Issa. Well, we will let you wait for a second. Anyone
else want to disagree with that?
Mr. Wolfe. I have such a problem with the bill because----
Mr. Issa. No, no, no. The intent--I am thrilled to death to
talk about modifications, but then is there anything wrong with
in fact a very limited period of time, much more limited than
other pieces of art. Let's be honest, Mickey Mouse and Donald
Duck get 100 years more or less of protection for a drawing.
Right?
Mr. Wolfe. Right.
Mr. Issa. Okay. And I am an inventor with 37 or so patents
that are still worth something, and I get either 17 years from
granting or 20 years from application, depending upon when I
did them. We are talking a fraction of that.
Is there anyone that says that the basic intent of this
bill is inappropriate? I think you don't like the bill, but you
don't say the intent is inappropriate. You have said sort that
it is already being met, right?
Mr. Wolfe. I think it is impossible because the bill is
predicated on the fact that fashion design is original and it
is not. So that is where it is stuck. It is not an invention.
Mr. Issa. We will take it as, you know, the Mona Lisa is
already settled. The question of women's smiles, and that
everything else is not original for a moment, and we will
accept that that is your position.
My time is expiring, but you were so animated, Mr.
Sprigman. In short, because it is limited, what is it that is
inherently wrong, not unachievable in your and Mr. Wolfe's
opinion, but what is inherently wrong with this fraction of the
time that we give to pieces of electronics like mine or works
of art like a drawing of Mickey Mouse or Donald Duck?
Mr. Sprigman. Because fashion is not music and it is not
film. It has its own particular innovation dynamic which should
be respected because it works. And this bill takes that
innovation dynamic and applies rules to it which aren't going
to do any good and may do it some harm. So if your intent is to
help, leave it alone.
Mr. Issa. So you, just to summarize, you are saying that
protection is fine, but the rules are wrong in this bill.
Mr. Sprigman. No. I am saying that you protect the industry
by letting it alone. If you want to regulate it, you are likely
to do it harm. This is not film. This is not books. This is not
music.
Mr. Issa. Mr. Chairman, I would just close by saying that
in fact we protect individuals, not some industry and we are
here today to talk about individuals protected under the
Constitution.
Thank you, Mr. Chairman.
Mr. Smith. Thank you, Mr. Issa.
I am going to recognize additional Members who are here for
their questions, but I also want to remind the other Members
who are present that we had intended to mark up a bill at
10:30, and I would like to conclude our hearing as quickly as
we possibly can.
The gentlewoman from California, Ms. Waters, does she wish
to be recognized for questions? She is.
Ms. Waters. Thank you very much, Mr. Chairman and Members.
I would like to thank our panelists for being here today.
The first question that I have is I want to know from Mr.
Jeffrey Banks whether or not there is a consensus in the
industry wanting protection and basically in support of this
legislation?
Mr. Banks. I would say yes, there is, certainly among
designers I am associated with and designers that I have spoken
with. I am on the board of the Council of Fashion Designers of
America which represents almost 300 designers, men's wear,
women's wear, accessory designers, fabric designers, not only
in New York, but across the country.
And when we told them that we were going to be working on
this bill, I got a plethora of e-mails supporting not only the
idea of the bill, but also supporting, and telling me that they
have in fact been copied on many occasions. I would say from my
point of view and from the point of view of my colleagues that
I have spoken to, there is a groundswell of support for this
bill.
Ms. Waters. Thank you.
Mr. Sprigman, you are an associate professor at the
University of Virginia?
Mr. Sprigman. Correct.
Ms. Waters. Why do you believe that your knowledge and
background should supersede the wishes of the industry? Why do
you think you know more than they do? And what is unique about
you and your knowledge that could convince us that someone who
is not in the creative industry understands it better than the
designers?
Mr. Sprigman. Sure. The designers design clothes. I study
innovation. So I don't claim to be a better designer or
clothes. I also don't claim to be a fashion design expert in
the sense that I am not here to tell you, you know, what
designs are inspired by others in particular ways.
But what I do know, and what I have researched for a long
time, and my training gives me expertise in, is how firms
innovate. If you look at the way firms innovate, if you go
shopping, which everybody does, you will see lots and lots of
clothes that are working this season and every season off the
same design themes, powerfully common-sensical.
Why are these clothes working off the same design themes?
Because in the last few months, as runway shows have happened
and as the fashion press has talked, designers and the industry
have identified some themes that they think are going to be
this year's trends and they copy them.
Ms. Waters. If I may interrupt you for a moment, I am
trying to follow your argument, but let's take a look at Diane
von Furstenberg's dresses.
Mr. Sprigman. Sure.
Ms. Waters. Of course, that design has been around for
many, many years, and a lot of people have copied the design.
Many of those who copied the design do it badly. They do it
poorly. The dresses don't fit. As a matter of fact, they use
very cheap material in some of the dresses; the patterns that
they choose are an insult to the work that she has done. And
people think they are getting the same thing, and then they get
disgusted when they take this product home.
I think there is probably something called pride in your
work, and you don't want it to be undermined by those who would
do it poorly, do it badly and have people think it is all one
and the same. What do you know about that?
Mr. Sprigman. I would ask what Congress knows about that.
My suggestion would be that that argument for putting Congress
in charge of quality control in the fashion industry is not
particularly one I am attracted to.
Copyright law in the United States is there to incent
individuals to engage in innovation. In the fashion industry,
we have high levels of innovation because we have the ability
to take inspiration, designers have the ability to feed from
one another's work. That is the source of inspiration. If you
want to dam up that source, go ahead.
Ms. Waters. Well, you asked what does Congress know about
that. Well, when we talk about women's fashion and design,
fortunately there are a lot of women in Congress now. We know a
lot about it. We shop. We buy these labels. We understand I
think more than a professor from the University of Virginia who
comes and gives us an intellectual argument about creative
product.
And so I don't think designers in this industry are trying
to legislate in the field of law. None of them would try and
determine a lot about your business. And while I have great
respect for the fact that you have worked here in Government,
to be so adamantly opposed to what the designers want, while
there is a consensus, and then to make the case that your
profession will exploit it by bringing in too much litigation
is just not something that I can, you know, receive here very
lightly.
And let me just say, this is just for 3 years. The
protection is just for 3 years, not 10 years, not 25 years, not
50 years. I don't think the argument that you make about
litigation and how it is going to explode and your profession
is to exploit this opportunity really holds water here.
I yield back the balance of my time.
Mr. Smith. The gentlewoman yields back the balance of her
time. Thank you, Ms. Waters.
The gentleman from Florida, Mr. Keller, is recognized for
his questions.
Mr. Keller. Thank you, Mr. Chairman.
My wife just made me go see ``The Devil Wears Prada.''
[Laughter.]
I observed that Meryl Streep was even meaner and tougher
than Sensenbrenner. [Laughter.]
That fully exhausts my knowledge of the fashion industry,
and I will yield back the balance of my time.
Mr. Smith. Thank you. [Laughter.]
Thank you, Mr. Keller. Your incisive and brief comments are
appreciated.
The gentleman from California, Mr. Schiff, do you have
questions? If so, the gentleman is recognized.
Mr. Schiff. I do, Mr. Chairman, although I have to confess
I don't know much more about fashion than Mr. Keller. I wore a
seersucker suit for the first time yesterday, and people asked
me for a scoop of ice cream. [Laughter.]
I wanted to ask whether there are any unique challenges
posed by intellectual property protection for fashion in the
sense that will it present questions of first impression for
the examiners in this area or the potential litigants in this
area about whether design is sufficiently unique and innovative
to qualify for protection, or to have been copied?
I assume if a designer comes out with bell-bottoms, that is
not intellectual property protected, but at what point do those
bell-bottoms become stylistically individualistically distinct
enough to warrant protection? Is this different in-kind than
other issues that we have wrestled with in this area? Or is it
something we have a lot of experience in by analogy?
And the second question I had is, if you could comment a
little bit, I know there is a difference of opinion on how
successful protection has been in Europe, and I would be
interested to hear more of your thoughts on that subject.
Whoever would care to comment.
Ms. Scafidi. Yes, I think that there is very little
difference in the way that a court or any other trier of fact
would approach the question of whether two fashions are
different, or whether something is part of a trend. There is a
huge public domain of fashion. Everything that has ever been
made is currently now in the public domain.
And if we make the analogy to an area like novels and
publishing, when you have a John Grisham come along and write a
legal thriller and it becomes a bestseller, all of a sudden the
publishing industry is very excited about legal thrillers and
we get a spate of legal thrillers published. None of those
authors can plagiarize John Grisham and any court that had to
compare an alleged plagiarism would be able to compare the two
the way they would compare two paintings or anything else.
So it is not that difficult or that different an approach
in this area. And so I don't think it would raise those kinds
of issues in a difficult way.
Mr. Schiff. With a novel, you can compare how many
characters are the same, how many passages are word for word.
With a design, are the facets of that design so unique that
they can be identified that way? I suppose if you have a yellow
lapel and you have another yellow lapel, is that equivalent to
having a sub-plot that is the same?
Ms. Scafidi. Fashion is a visual medium like sculpture or
painting. And it has its own system of recordation of elements.
We have words to describe lapels. We have a color system to
describe shades of colors. An expert in the field would have no
difficulty making those very specific comparisons using the
notion of the industry in which we are not all literate, but we
all have a sense of how it works.
When a fashion magazine like Marie Claire publishes an
original and a knockoff next to one another, the public
recognizes that that is a knockoff, whether or not it is a
literal line-for-line copy or whether it is something that is
substantially similar.
Mr. Schiff. Would anyone else like to express a
contribution?
Mr. Banks. I would also like to say, designers don't create
trends. Trends are remarked on by people such as my colleague
next to me. That is what he does. He goes out. He looks at the
market. He looks at what designers have done, what
manufacturers have done.
If he sees that there is a recurring theme such as the
color black or short lengths, he makes the decision that that
is a trend. He along with his other colleagues like fashion
editors and buyers for stores, they see the prevalence of short
lengths or of the color black or of sequins and they say that
the trend for this fall is black sequined short dresses.
Designers do their own thing creatively and sometimes there
is a similarity because we all go to the same fabric resources
or we all are inspired by the same films, or we all travel to
the same art exhibitions.
Mr. Schiff. Which way does that cut, though? I mean, that
seems to say there is going to be a merger of fashion in a
certain direction which would make it more difficult,
potentially, to distinguish one from another.
Mr. Wolfe. I think it makes it impossible. I think that is
the problem. I think the major problem is that there is nothing
new about black, there is nothing new about sequins, there is
nothing new about short. So how can the first designer of the
season who makes the black short sequined dress, is that the
one that gets protected and no one else can make another?
Everything is in public domain in fashion. Everything.
Mr. Sprigman. There is an example in our paper.
Mr. Smith. The gentleman's time has expired. You will,
without objection, be recognized for an additional minute.
Mr. Sprigman. There is an example in our paper in spring
2005 of something called the ``driving shoe,'' which is a shoe
that has--it is like a moccasin, and it has a sole that runs up
the back. So it is a rubber sole that runs up the back.
And suddenly in spring 2005, if you walked into Nordstrom,
you saw a table in the Nordstrom that I walked into right here
in D.C., you saw a table, and around the table were about 40-
some-odd versions of this driving shoe. And they are all
different, right?
Mr. Schiff. If I could ask Ms. Scafidi, would that driving
shoe be copyright-protected, that little run of strip up the
back?
Ms. Scafidi. I think what we have here is a clear example
of the idea-expression dichotomy, which all of copyright has to
deal with. Ideas are never protected; very specific expressions
are. I am not an expert in driving shoes, but I think that
would be the nature of the inquiry.
Mr. Sprigman. I think it is clearly protectable subject
matter under this bill. It is a design. A design is for the
sole. And if you get all these driving shoes that are
different, but they are using that design and adding new
creativity to it, the point of that is the industry is
establishing a trend in driving shoes.
It is driving the consumption by men of footwear. Now, many
are generally insensitive to footwear and this is how the
industry gets them to pay attention, by innovating something.
That process is going to be interfered with under the
substantial similarity standard in this bill. That is what I
worry about.
Mr. Schiff. Okay. Thank you, Mr. Chairman.
Mr. Smith. The gentleman's time has expired. Thank you for
yielding back.
That concludes our hearing. I want to thank our witnesses
for a very, very interesting hearing and for lots of good
information for us to consider.
We stand adjourned on the hearing, and I would ask Members
to stay right where they are, if they would. We are going to
stand adjourned for about 3 minutes, and then reconvene in
order to mark up a piece of legislation.
Thank you all again.
[Whereupon, at 10:45 a.m., the Subcommittee was adjourned.]
A P P E N D I X
----------
Material Submitted for the Hearing Record
Prepared Statement of the Honorable Howard L. Berman, a Representative
in Congress from the State of California, and Ranking Member,
Subcommittee on Courts, the Internet, and Intellectual Property
Mr. Chairman,
Thank you for scheduling this hearing on H.R. 5055 which would
extend copyright protection to fashion designs. I am open minded about
this issue and see the Copyright Office, in their written testimony,
has raised the core question for discussion today: is there a need for
this legislation and what evidence is available for quantifying the
nature and extent of the harm suffered by fashion designers due to the
lack of legal protection for their designs.
The global fashion industry is said to have revenues of $784
Billion. According to the NPD Group, total U.S. apparel sales reached
$181 Billion in 2005. California alone produces over $13 billion in
apparel products and employs 204,000 direct employees and 59,000
indirect workers. Reportedly, apparel and footwear losses due to
counterfeiting have been estimated to be $12 Billion annually.
The fashion designers are seeking this protection in order to
prevent the rampant piracy of their fashion designs, as well as to
maintain the incentive for designers to continue to develop new
original fashion designs. This protection would last only three years
allowing original designers sufficient time to recoup the expenses
incurred in designing and developing their fashion works.
Current copyright law only provides protection to those design
elements of a useful article that are separable and independent of the
utilitarian function of the article. Therefore, fashion works have
traditionally been denied copyright protection on the ground that they
are considered to be ``useful articles.''
Fashion designers do have access to some other Intellectual
Property rights both in trademark and patent law. However, trademark
law protects the elements of a design that indicate the source of the
product but does not provide general protection for designs. In patent
law, there is the potential for design patents, but this route of
protection often is not practical for designers because of the length
of time it takes before the patent issues combined with the typical
life span of a fashion design which is only a single season, maybe 3 to
6 months. Further, design patents require a level of novelty and
originality that has generally been held to be higher that which is
achieved by fashion works.
The fashion industry is unique, in that it epitomizes the ultimate
paradox of Intellectual Property protection. The arguments I have heard
illustrate both sides of the debate. Is a high level of protection
necessary to promote innovation, or does the lack of a high level of
protection for fashion designs actually spur increased creativity in
the fashion industry? Furthermore, in part as a result of the great
speed with which fashion trends come and go, new fashions are available
in the high end designer stores and in the low end retail outlets,
making these fashions available to virtually all individuals regardless
of their income level. Will an increased level of protection for
designers, be at the detriment of the retailers and the public?
In the past, Congress has demonstrated flexibility in expanding the
Copyright laws, for example providing design protection for buildings
(through the Architectural Works Copyright Protection Act (AWCPA)), and
providing protection specifically for semiconductor ``mask works'' and
boat hulls.
Should we be extending copyright protection to fashion designs and
are there other areas which we should also consider extending
protection to such as, for example, the furniture and auto part
industries.
I look forward to understanding the extent of the problem of
fashion design knock-offs, and what the impact is on the high end
market, for example is there fear of lost sales in the couture market
as a result of production in retail stores? In addition I would like
for the witnesses to describe what constitutes a design that is
``substantially similar.'' Is it an exact copy? Is it a mere
inspiration of a current trend? And how does one determine if it is
something in between?
I yield back the balance of my time.
__________
Prepared Statement of the Honorable Maxine Waters, a Representative in
Congress from the State of California
Chairman Smith, Ranking Member Berman, thank you for holding this
legislative hearing, and I appreciate the time and testimony of our
witnesses. I commend the gentlemen from Virginia [Mr. Goodlatte] and
from Massachusetts [Mr. Delahunt] for their leadership in introducting
the legislation before this Subcommittee, H.R. 5055, which would amend
Title 17 of the United States Code to provide protection for fashion
design.
The Ranking Member would undoubtedly attest that our respective
shares of Los Angeles, California are home to numerous stakeholders in
the fashion design industry. As such, it is important that this
Subcommittee consider legislation to address the issue of piracy as it
relates to their primary means of income and thus, their livelihood.
My Congressional District is contiguous with the LA Fashion
District--a 90-block section of downtown Los Angeles where the apparel
industry comprises 80% of the Fashion District, and is responsible for
over $7 billion in annual wholesale revenues that support the City
treasury. Over 1.5 million people travel to Los Angeles from around the
world to patronize the fashion apparel portion of the Fashion District.
The LA Fashion District is truly a part of the new global economy.
Legislation that would reduce design piracy is of extreme importance to
the primary, secondary, and tertiary beneficiaries of the revenues
generated from this industry. Allowing piracy to persist will cause
this industry to diminish at a quick pace--given the ease with which
designs can be copied, reproduced, and implemented using the internet
and other digital communications technology. The LA Fashion District
must be rewarded for the ingenuity of its designers, rather than made
obsolete by the mercenary tactics of those who violate law designed to
protect creativity and intellectual property.
From a legislative perspective, extending Title 17 protection to
fashion designs marks a modernization of the United States Code. As the
testimony presented by the United States Copyright Office states,
design protection legislation for industrial products has passed the
House since the 71st Congress--back in 1930. A student of history knows
that fashion design has undergone breakthrough changes over the past
seven decades and continues to develop. If we want innovation to
continue at its current pace, we must allow designers to protect their
work. The three-year registration term for fashion designs--as compared
to the ten-year period established for vessel hulls, is small and
represents a reasonable concession.
I support the legislation that we now consider and urge my
Colleagues to support H.R. 5055, lest we lose another industry to
global competitors. I yield back the balance of my time.
Prepared Statement of the United States Copyright Office, Washington,
DC
Prepared Statement of the American Free Trade Association, Miami, FL
BACKGROUND
This statement is offered on behalf of the American Free Trade
Association (AFTA). AFTA is a not-for-profit trade association of
independent American importers, distributors, retailers and
wholesalers, dedicated to preservation of the wholesale and discount
marketplace to assure competitive pricing and distribution of genuine
and legitimate products for the benefit of all American consumers.
AFTA has been an active advocate of consumer interests for nearly
twenty years. It has appeared as amicus curiae in the two leading
Supreme court cases affirming the legality of parallel market trade
under the federal trademark, customs and copyright acts (the 1985 Kmart
case and the 1998 Quality King case) and in numerous lower court
decisions.
SUMMARY POSITION
AFTA strongly opposes HR 5055. H.R. 5055 is not legislation
intended to rightfully prosecute pirates stealing logos and trademarks,
which activities this Committee is already aware AFTA aggressively
combats and rejects. On the contrary, H.R. 5055 is about expanding our
U.S. Copyright laws to federally protect what our laws have insisted
for 40 years should not be protected at all. H.R. 5055 intends to
protect vague concepts of the ``overall appearance'' of a product,
without requisite proof of distinctiveness, uniqueness or its impact on
the American marketplace.
AFTA has consistently, for more than 20 years, advocated on behalf
of American businesses and American consumers to ensure that
protectionist intellectual property laws are not used to deprive
consumers and the American marketplace of legitimate products.
Manufacturers and intellectual property rights owners must not be
empowered--by this Congress or otherwise--to dictate what is sold
beyond the rational limits of intellectual property rights and
protections.
GENERAL DISCUSSION
Section 102(b) of the Copyright Act states ``in no case does
copyright protection for an original work of authorship extend to any
idea, procedure, process, system, method of operation, concept,
principle or discovery, regardless of the form in which it is
described, explained, illustrated or embodied in such work.'' Relying
upon this standard, garment designs have sometimes been deprived
copyright protection because they have been said to be ``useful
articles,\1\'' impossible to separate the utilitarian aspects from
aesthetic parts. In Jane Galiano and Gianna Inc., v. Harrah's Operating
Company, Inc.; Harrah's Entertainment, Inc (5th Cir 2005), the Court
explained the standard as follows: ``There is little doubt that
clothing possesses utilitarian and aesthetic value. It is common ground
. . . among the courts that have examined this issue [that the 1976
Copyright Act's provisions were] intended to distinguish creative works
that enjoy protection from the elements of industrial design that do
not.'' See Pivot Point Int'l, Inc. v. Charlene Prods., Inc., 372 F.3d
913, 920-21 (7th Cir. 2004) (en banc). ``The hard questions involve the
methodology for severing creative elements from industrial design
features.''
---------------------------------------------------------------------------
\1\ ``A ``useful article'' is defined in 17 U.S.C. Section 101 as
``an article having an intrinsic utilitarian function that is not
merely to portray the appearance of the article or to convey
information.''
---------------------------------------------------------------------------
Recognizing, then, that the Copyright Act offers no federal
protection for garments not employing some degree of aesthetic value,
separable from other utilitarian aspects of the design, designers have
lobbied Congress to draft H.R. 5055 to, instead, provide federal
protection simply for the ``overall appearance'' of each and every
design, without definition, limitation for ordinary features or even
examination for prior art. This is the exact broadening of existing
intellectual property laws in the same type of blatant, undisguised
claim of entitlement against which AFTA has advocated time and again.
If H.R. 5055 protects fashion designs why would any other
industry's designs still be considered useful embodiments of ideas or
discoveries which the Copyright Act is not intended to protect? Why
would designers of food packages not believe that the overall
appearance of their cartons deserve federal protection? Or designers of
shampoo bottles or hair spray cans? What is the difference between the
overall appearance of articles of fashion and the overall appearance of
lipstick cases or soft drink bottles?
In 2001, the Supreme Court clearly stated that the danger of
anticompetitive overprotection is especially high in the case of
product design. The Court in Wal-Mart v. Samara Bros., said ``It seems
to us that design, like color, is not inherently distinctive . . .
Consumers should not be deprived of the benefits of competition with
regard to utilitarian and aesthetic purposes that product design
ordinarily serves by a rule of law that facilitates plausible threats
of suit against new entrants.'' Although that case involved a
determination of protectibility under the Trademark Act, the Court's
opinion about the role of federal law in protecting product designs is
clear and indisputable. This Congress, via H.R. 5055, seeks to
contradict that opinion--with the bill's sponsors insisting only that
protection of clothing designs is long overdue. This is insufficient
evidence to support passage of a law that impacts many product designs
and the ability of American consumers to obtain economical alternatives
of products inspired by designers' creations otherwise out of their
economic reach and otherwise not available to them.
Thus, the problem with H.R. 5055 is that it tips the balance of
intellectual property protection overwhelmingly in favor of fashion and
other product designers. A fashion design copyright will be relatively
easy to obtain because no official with the Copyright Office conducts
an examination of prior art to ensure the application's originality. In
addition, the copyright would be relatively easy to prosecute. The
designer would merely need to show that the copyrighted design is
``substantially similar'' to the allegedly infringing design. And,
because there is no criteria of what constitutes either protectable
``appearance'' or what will be considered ``substantially similar'' to
that appearance, the one promise that will be realized is the promise
of protracted and expensive litigation. Very little in the world of
fashion design is truly original. Fashion designers frequently draw
inspiration from one another and inspired designs often bear a
similarity to the so-called ``original.'' For this reason, cases
brought pursuant to a fashion design copyright would be very difficult
to defend and mass marketers would very likely be discouraged from
taking the legal risk of offering inspired fashions. Thus, the real
losers will be the American consumers, who will be cheated out of
access to the latest fashions at prices they can afford.
Consumers care about the impact of HR 5055. The Internet is
swarming with people--your constituents--critical of the efforts of
this Congress to act as ``fashion police.'' Two examples should suffice
to show the sentiments being expressed in this wide-spread electronic
forum. ``Capital Eye'' distributed by FYI News Service at www.fyi-net
includes an article ``Copyrighting Fashion Not Only Impossible, But
Silly'' written by Randi Bjornstad and posted the week of April 9,
2006. ``Now, let's be serious,'' she says, ``when was the last time
someone designed a dress--or coat, or shoe, or a pair of boxer shorts,
for heaven's sake--that was so unusual that anyone would say, ``Wow,
I've never seen anything like that before. . . . The fact is, in the
world of art, everything's derived from everything else, recycled,
given a new name and embraced as something new and different and really
out there.'' At www.reason..com.hitandrun/2006/03/be--serious--
dahl.shtml, Julian Sanchez writes: ``Is this necessary? The idea behind
intellectual property is supposed to be to provide creators with an
incentive to innovate. Are we supposed to believe that Sears is digging
into Armani's profits to the point where they're putting out fewer
items each year? Are we supposed to believe that this effect is so
pronounced that the loss in novelty outweighs the benefit to consumers
of inexpensive, attractive clothing?''
AFTA, whose members include major distributors to retailers, are
forthright in their analysis and objections to this or any other bill
which would eliminate the creation, distribution and sale of
competitively priced genuine goods in the US marketplace. The obvious
result of H.R. 5055 would be to diminish the right of American
consumers to a freely competitive marketplace while providing
heretofore unprecedented and uncontrollable dominance of distribution
and pricing to a small cadre of designers. There is no method to defend
against a claim that one has copied the ``overall appearance'' of any
product design--because there are no standards or criteria in the bill
that distinguish distinctive design elements from those that are merely
common place or ordinary. And while originally consumers were promised
that Section 13 of the Copyright Act was passed only to protect boat
hull designs--about which, frankly, not many people could even feign
much interest. Now this Congress wants the Copyright Act to also
protect the overall appearance of articles of fashion. Tomorrow, then,
it could be argued that Congress will have little reason not to permit
copyrighting of the ``overall appearance'' of cosmetic bottles, earring
holders or cereal boxes.
AFTA understands that the American fashion industry may feel
slighted because protection of fashion design in Europe is greater than
currently offered under American intellectual property laws. AFTA knows
that the European Union offers a type of community design protection
which would certainly cause the envy of our domestic designers looking
to protect ordinary features of their products.\2\ But, our Congress
should never merely mimic the laws of Europe. Our Congress should
strike a balance between rights of the American consumer, American
industry and American ingenuity, and if it does so, we believe it will
reject the EU model and reaffirm our existing law which provides the
needed incentives for original design based upon fair use of past
creativity.
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\2\ A registered Community design right may provide protection for
the appearance of a product or part of a product. The appearance can
result from the shape, lines, contours, ornamentation, colours, texture
or materials of the product. In this context, a product means any
industrial or handicraft item except a computer program, and includes
parts intended to be assembled into a complex product, packaging,
``get-up'', graphic symbols or typefaces (see http://
www.hindlelowther.com/design2.htm).
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There is no reason to believe that our countries' top fashion
designers are suffering economically because others draw inspiration
from their designs. Nevertheless, H.R. 5055 seeks not only to ensure
continued and increased prosperity for such designers, but also, to
deprive American consumers of the less-expensive, alternative fashions
inspired by it.
H.R. 5055 damages rather than protects the American consumer; it
does not provide protection for creativity, but stifles future
creativity by extending the control of a few designers. AFTA urges this
respected Committee not to cede to the interests of the fashion
designers to the detriment of all that was intended to be protected by
strong intellectual property protection in this country. Do not deviate
from the need to protect our country against counterfeiters and
thieves. Do not distort the importance of your mission to protect
against misappropriation of distinctive creations and original works of
art. H.R. 5055 is legislation guaranteed to generate out of control
litigation and a bill that would impede our society's ability to rely
upon prior art to create new and better inventions.
There is a necessary balance between inventions that need to be
rewarded in order to generate greater inspiration and mere product
designs deserving no such protection against future amendment or
reproduction. The Copyright Act already recognizes such a distinction
by refusing protection for useful designs--even those qualifying as
articles of fashion under H.R. 5055. AFTA, its members and its
supporters sincerely hope that the respected members of this Committee
carefully consider the needs of the American consumer against the needs
of fashion and other product designers.
Subcommittee members are invited to contact AFTA's General Counsel,
Gilbert Lee Sandler, Esq., should they wish to discuss any matter
raised in this statement in more detail or in the event there are any
remaining questions or doubts regarding the intent or detrimental
impact of H.R. 5055 on the American consumer or the competitive,
domestic marketplace.
We thank you for providing us with this opportunity to have our
testimony made a part of the record of today's hearing.