Knockoffs: To kill or Not to Kill, That is the Copyright Question Before the Supreme Court
BY: ELIZABETH KURPIS
On Oct. 31, the U.S. Supreme Court heard oral arguments in Star Athletica LLC v. Varsity Brands Inc., No. 15-866, a case in which Varsity Brands has alleged that competitor Star Athletica infringed Varsity’s copyrighted stripe, chevron, color block and zigzag designs by applying them to Star Athletica’s cheerleading uniforms.
The issue was not whether each company’s stripes and chevrons were substantially similar. Instead, the issue was whether Varsity’s designs were copyrightable at all — and this is where things get fuzzy.
The case was first heard by the U.S. District Court for the Western District of Tennessee, which held that Varsity’s designs are not separable from the utilitarian function of the cheerleading uniform and therefore are not copyrightable.
The 6th U.S. Circuit Court of Appeals reversed, concluding that the designs could be copyrighted because the combinations of stripes, chevrons, color blocks and zigzags allow the garment to be recognizable as a cheerleading uniform, which conceptually separates it from the basic function of the underlying article of clothing.
Star Athletica then petitioned the Supreme Court to review the case in hopes of getting some clarity.
Because a useful article itself cannot be copyrighted, copyright owners rely on the concept of "conceptual separability" to protect their designs. Conceptual separability essentially allows for a component of an article that is separate from its utility aspect to be copyrighted. Because there is no concise and uniform definition of “conceptual separability,” the meaning of this term has become an important unresolved question in U.S. copyright law.
Further compounding the issue, federal courts have applied a variety of tests to determine when, if ever, a design on clothes is conceptually separable. Unfortunately, no clear-cut rule has emerged to settle disputes like the one that exists in the Star Athletica case.
As a result, when Star Athletica’s petition for certiorari was granted, IP professionals and owners expected the Supreme Court to finally address the confusion that has mounted with regard to this concept.
Unfortunately, many were disappointed, as the justices seemingly failed to do so based on their line of questioning.
They neither brought up the issue directly nor showed interest in discussing under what circumstances a useful article can be protected.
Rather, the justices focused overwhelmingly on whether the specific designs in question were utilitarian or not, leading one to believe that we may end up with a far narrower ruling than most interested followers had hoped for.
POTENTIAL OUTCOMES AND THE FASHION INDUSTRY
A Supreme Court ruling in favor of Star Athletica could deal a significant blow to the fashion industry in terms of copyright protection.
Generally speaking, companies and designers have been able to rely on copyrights to protect things such as original fabric prints.
Here, Varsity is arguing that the chevron designs on their cheerleading uniforms fall more in line with a fabric “print” or “design,” rather than a utilitarian and non-copyrightable aspect of the uniform.
Stripping away legal protection would essentially be saying that stripes, chevrons, color blocks and zigzags as applied to a uniform would not be copyrightable, but would be if they were a printed design — a seemingly lopsided result.
And because these designs were actually copyrighted already, a ruling for Star Athletica would undermine the rights designers assumed they already had, a tough pill to swallow where often their work already straddles numerous IP protections — usually without neatly falling under any.
If the Supreme Court rules for Varsity and establishes a single test for determining whether a design is conceptually separable from its utilitarian function, it would likely provide the fashion industry with more confidence in the ability to protect through copyright certain design elements of apparel and accessories.
Designers will have clearer guidance on how best to protect portions of their work that may not have been deemed covered under U.S. copyright law because they were considered to be strictly “useful.”
At present, numerous tests exist for analyzing whether such elements are copyrightable. As a result, at present the outcome depends on the test used in the jurisdiction where the enforcement action is brought or maintained.
Of particular interest to the fashion industry is the effect that the high court’s ruling will have on powerhouse fast-fashion retailers and others currently relying on the lack of protections for designs in U.S. copyright law.
Because so few protections currently exist for such fashion designs, some powerhouse fast-fashion retailers have been able to generate substantial revenue producing near-copycat designs from the runways of luxury brands and selling them at a significantly lower price point.
They are able to do so much faster than the traditional model allows. As a result, such knockoff pieces can become available in stores even before the original designs are produced and delivered to retailers.
Under those circumstances, the merchandise from fast-fashion companies is often posted on a retailer’s website as soon as samples are available, which allows customers to order the pieces as production is being completed.
These fast-fashion companies understand that the protections afforded to ready-to-wear companies and their designs are extremely limited and difficult to enforce.
Because of these limitations, they have created successful business models that are based on exploiting the ambiguity in copyright protection by copying only the uncopyrightable elements of a fashion design, including shapes and visual elements of a garment, while taking care to avoid copying logos or specific custom prints.
If the Supreme Court rules in favor of Varsity, fast-fashion retailers will have to adjust their business models accordingly, as elements of the designs that may not have been deemed copyrightable may become so.
They will also have to carefully assess how any new judicial standard will affect each copy. They will further need to analyze whether elements that were traditionally considered “useful” may be copyrightable under the new standard.
This will be risky business until the new test is litigated and the fashion industry can see how the courts apply it in practical terms.
Although it is not known if this case will lead to a single test for determining conceptual separability, one thing that is clear from oral arguments is that the justices understand the implications of their decision.
Justice Sonia Sotomayor pointed out that depending on the end result, the knockoff might be eliminated altogether.
This could have a deep impact on fast-fashion retailers in particular because knockoffs are the foundation of their business model.
While the justices understand the broad financial and legal implications of their decision, there is a lot of basic information they need to digest. Justice John Roberts made that clear when he asked whether it would make a difference if the chevrons and stripes were stitched rather than applied.
Other justices struggled with the issue of whether camouflage should receive copyright protection, since it is a distinctive design that also serves a practical purpose.
Considering that the answers to these questions are still uncertain, one would think that a concise test would be the best way to resolve these ambiguities.
MORE THAN JUST FASHION
Although this case mainly focuses on the fashion industry, the Supreme Court’s ruling may also have ramifications for other industries such as that of 3-D printing.
As with any new copying technology — think CD burners and Napster for the music industry — the invention of 3-D printers creates a host of IP issues, some of which the Supreme Court may touch upon here.
At the most basic level, any objects printed that are strictly nonfunctional or ornamental, such as a unique jewelry design, would be protected by U.S. copyright law.
On the other hand, objects that are designed strictly as utilitarian and functional articles, such as a hanger, would not be.
The issues affecting the 3-D printing industry fall somewhere in between and also involve the doctrine of conceptual separability.
Should the Supreme Court rule in favor of Varsity, the law would allow the utilitarian core of an object to be separated from its creative parts and therefore be eligible for copyright protection.
Such a ruling would change the landscape of the law, as copyrights would then be allowed to apply to certain “useful articles,” protections for which were traditionally not available.
The potential consequences for the 3-D printing industry are enormous, as this expansion can hypothetically apply to any printed object so long as the owners can argue that there are elements that are not strictly utilitarian.
For instance, a 3-D printed pen cap that does anything other than strictly cover the top of a pen can be protected by U.S. copyright law.
With the Star Athletica case, the 3-D printing industry is hoping the Supreme Court will provide some guidance on how to separate creative, copyrightable designs from unprotected utilitarian objects because the survival of the industry may depend on it.
Star Athletica is a case that the copyright world generally, and the fashion world specifically, has anxiously been following in hopes of receiving some clarity in the murky body of copyright law that has developed over the years.
In addition to the fashion industry, the advancement of a test by the Supreme Court for determining when certain elements of a useful article are copyrightable may have significant implications for other industries that produce goods that combine artistic and utilitarian elements.
Depending upon which side the Supreme Court ruling falls, the parameters of copyright protection in the fashion industry may be clarified or even completely redefined. We wait with bated breath, Supreme Court.
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