[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) 512ï¿½091800  
Fax: (202) 512ï¿½092250 Mail: Stop SSOP, Washington, DC 20402ï¿½090001

                       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

                              ----------                              

                             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

                              ----------                              


                        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.
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \4\ Thorstein Veblen, The Theory of the Leisure Class 132 (1899; 
Random House 2001 ed.)
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \5\ See Paul H. Nystrom, ECONOMIcs of Fashion 18-54 (1928).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \6\ Elizabeth Hawes, Fashion is Spinach (1938).
---------------------------------------------------------------------------
    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\
---------------------------------------------------------------------------
    \7\ James Thomson, quoted in J. Emerson Tennent, A Treatise on the 
Copyright of Designs for Printed Fabrics (1841).
---------------------------------------------------------------------------
    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.
---------------------------------------------------------------------------
    \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).
---------------------------------------------------------------------------
    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.

                                 
