In August 2015, the United States Sixth Circuit Court of Appeals held in Varsity Brands, Inc.. v. Star Athletica, LLC, 799 F.3d 468 (6th Cir. 2015), that the stripes, chevrons and other visual elements that appear on a cheerleading uniform could be protectable under United States copyright law. While clothing is generally considered to be the kind of “useful item” that cannot be protected by copyright law, the Sixth Circuit held that the cheerleader outfit design is conceptually separable from the utilitarian aspects of the uniform. “Because we conclude that the graphic features of Varsity’s designs can be identified separately from, and are capable of existing independently of, the utilitarian aspects of cheerleading uniforms, we hold that Varsity’s graphic designs are copyrightable subject matter,” Circuit Judge Karen Nelson Moore wrote for the majority. A copy of the Sixth Circuit decision can be found here.
An appeal court in Frankfurt has asked the European Court of Justice to clarify the application of the competition rules to online sales. The Frankfurt court made its request in the context of a dispute between a leader in beauty products with an extensive portfolio of beauty brands and its German distributor. The supplier of beauty products operates a selective distribution system in Germany to manage how its products are sold and has taken its distributor to court for selling products over online platforms, such as Amazon.com and eBay. The Frankfurt court is seeking guidance from the European Court of Justice on whether a supplier can prohibit its distributor from selling its goods on online marketplaces, regardless of whether the distributor has met the criteria of the selective distribution system. This question is highly topical in the EU and particularly in Germany, where the German competition authority and the courts have recently taken divergent positions. The German competition authority has issued rulings prohibiting suppliers of branded goods from restricting internet sales by retailers and, in particular, over third party platforms such as eBay and Amazon.com. These rulings have been in contradiction with the stance taken by the German courts, such as the Higher Regional Court of Frankfurt, which recently decided that a branded manufacturer acted lawfully when banning its authorized retailers within its selective distribution system from selling its products on online marketplaces. According to the Higher Regional Court, a manufacturer has a legitimate interest in ensuring that its branded products are perceived as high-quality products sold with the requisite level of sales advice and a manufacturer is, therefore, free in principle to decide under which conditions its products are sold, provided that these conditions are necessary to meet its quality standards. It is expected that the European Court of Justice will issue its ruling on this issue within the next 15 months or so.
Many consumer-facing businesses have learned to identify high-risk Prop 65 targets: soft, flexible plastics; faux and colored leathers; and any kind of brass or metal that may contain lead or other heavy metals. But businesses need to take action to avoid Prop 65 liability based on a new culprit: bisphenol-A (BPA) that may be lurking in your cash register receipts and other thermal papers. Continue Reading
Recent efforts by the Federal Trade Commission (“FTC”) to regulate the use of native advertisements — a popular and growing advertising tool– have resulted in the first enforcement action. On March 15, 2016, the FTC settled charges brought against New York retailer Lord & Taylor, LLC (“Lord & Taylor”), arising from Lord & Taylor’s March 2015 social media campaign targeted at 18 to 35-year old women its launch of its new Design Lab Collection, signaling the FTC’s intention to more heavily regulate the use of social media influencers to advertise fashion apparel. The FTC complaint alleged that Lord & Taylor promoted the launch of the Design Lab Collection and a featured Design Lab paisley dress design through native advertising, including a Lord & Taylor-sponsored article in the online publication Nylon, and a Nylon Instagram post that was approved by Lord & Taylor. The FTC complaint alleged that Lord & Taylor paid fifty online fashion “influencers” to post Instagram pictures of themselves wearing the same Design Lab paisley dress. A copy of the consent order and complaint are attached. The exhibits to the complaint can be found here. Continue Reading
In the wake of 2016, Jay-Z faces an $18 million lawsuit for his failure to publicly appear and promote his signature fragrance line, as he was contractually obligated. 2009 marked the start of a budding licensing relationship between Parlux Fragrances and Hova, wherein Parlux courted the rapper with common stock offers and warrant transfers to win his affections for a fragrance deal. Finally in 2012, Mr. Carter agreed to an exclusive license to his name and likeness for Parlux’s use in fragrances and other beauty products. The successful 2013 launch of the GOLD Jay-Z fragrance promised growth for the future relationship. However, things began to smell sour once Jay declined to meet his contractually obligated minimum number of public appearances in support of the fragrance and Parlux sought Jay-Z’s assistance in developing flanker fragrances to no avail. Parlux cites a number of declined appearances and attempts to communicate with Jay-Z and his representatives, which they claim are the basis for three separate counts of breach of contract and one count of breach of implied duty of good faith and fair dealing. Parlux seeks rescission, which entails the return of 300,000 shares of Perfumania common stock, 800,000 Perfumania warrants, and $2 million in guaranteed royalties, along with a declaratory judgment, and $18 million in damages. The New York Supreme Court is left to decide whether or not these communication breakdowns amount to one of Jay-Z’s 99 problems, this one with an $18 million price tag. Continue Reading
The fashion industry has recently been using its clout and cachet to combat climate change. Who else has a heavy hand in the fight against climate change? The answer, while a bit less surprising, is the White House. With a common goal, it has been an inspiring journey for these two unlikely allies. Continue Reading
The European Court of Justice (ECJ) has struck down the 15-year-old “Safe Harbor” agreement that permitted companies operating in Europe to transmit personal user data to the United States, as long as the U.S. ensures an adequate level of data protection at the company and certifies that it will abide by seven EU data privacy principles regarding notice, choice, onward transfer, security, data integrity, access, and enforcement. The case, entitled Maximillian Schrems v. Data Protection Commissioner, was decided on October 6, 2015 and has an immediate effect on European courts. See here. Continue Reading
In 2014, the United States Court of Appeals for the Third Circuit ruling in FTC v. Wyndham Worldwide Corporation agreed to hear an immediate appeal on two issues: “whether the FTC has authority to regulate cybersecurity under the unfairness prong of § 45(a); and, if so, whether Wyndham had fair notice its specific cybersecurity practices could fall short of that provision.” On August 24, 2015 the Third Circuit affirmed the decision of the District Court and denied Wyndham’s motion to dismiss the complaint. Continue Reading
On July 2, 2015, the Second Circuit Court of Appeals issued significant pro-employer decisions in Glatt v. Fox Searchlight Pictures (Nos. 13-4478-cv, 13-4481-cv) (“Fox”) and Wang v. Hearst Corp. (No. 13-4480-cv) (“Hearst”) that served as a setback for the plaintiffs in both cases. In both cases, the plaintiffs – unpaid interns who had spent time at Fox Searchlight and Hearst magazines, respectively – alleged that they should have been classified as employees and paid for their time. As a result, they brought claims for, among other things, unpaid wages on a class-wide basis. The district court decisions were split. In Fox, the judge granted summary judgment on the issue that interns were employees and permitted the plaintiffs to proceed on a class and collective basis. To the contrary, in Hearst, the judge denied summary judgment on the same issue and denied the plaintiffs’ motion to proceed as a class. On appeal in both cases, the Second Circuit adopted a balancing standard called the “primary beneficiary test” and held that district courts should use this test when analyzing whether an individual should have been classified as an intern or an employee. The Second Circuit also held that the proposed classes of interns in both cases failed to satisfy the requisite standards in order to proceed on a class-wide basis. Continue Reading