Fashion Apparel Law Lawyer & Attorney : Sheppard Mullin Law Firm : Fashion Legal Issues

Today, the California Supreme Court unanimously decided Murphy v. Kenneth Cole Productions, Inc. S140308, and held that the "one additional hour of pay" in Labor Code section 226.7 constitutes a wage and not a penalty. This decision is significant because a wage is subject to a three year statute of limitations (Code of Civ. Proc. Section 338), while a penalty is only subject to a one year statute of limitations (Code Civ Proc. Section 340). Moreover, the ramifications of this decision may have broader wage hour implications. Sheppard Mullin's Labor and Employment attorneys are evaluating the impact of this new decision on employers and will provide a more detailed analysis in the next issue of the California Labor and Employment ALERT.

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The fashion and apparel industry will confront many interesting and important issues in 2007. The following is a list and brief description of some of the most significant issues facing the industry this year:

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The textile and apparel industry is in transition, moving from a regulated quota regime to global free trade, allowing retailers to make sourcing decisions based on their business model and customer needs as opposed to managing quotas.

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The concern for anorexic models in the fashion industry gained renewed global prominence after the eating-disorder deaths of two young South American models last year. The controversy over these deaths led Madrid government officials in September to ban models below a certain body-mass index from working on city-sponsored fashion shows. Milan followed with a similar ordinance, and in a December deal with the Italian fashion industry, designers agreed not to hire models younger than 16, and to require all models to submit medical proof that they do not suffer from eating disorders as a condition to work.

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In a recent case, the Ninth Circuit rejected the aesthetic functionality defense to trademark infringement as applied to those who sell products with popular logos of other companies on them, like Volkswagen's and Audi's logos and other marks, the Nike Swoosh, the Playboy bunny ears, and the Mercedes tri-point star.  Au-Tomotive Gold, Inc. v. Volkswagen of America, Inc. et al., 457 F.3d 1062 (9th Cir. 2006). In that case, Au-Tomotive Gold sold key chains and license plate covers bearing Volkswagen's and Audi's logos and word marks. A trademark infringement lawsuit arose, and the district court concluded that Au-Tomotive Gold did not infringe Audi's and Volkswagen's trademarks because of aesthetic functionality.

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In a decision of great interest to California employers, the California Supreme Court yesterday agreed to settle the dispute among California's Courts of Appeal regarding whether the "payment" of one hour's pay at the employee's usual rate for a missed meal and/or break period mandated by California Labor Code §226.7 is a "wage" subject to a three- or four- year statute of limitations or a "penalty" subject to a shorter one-year statute of limitations.

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Under U.S. Copyright law, copyright protection generally does not extend to fashion designs, such as the dimensions, style, cut or shape of a fashion item like clothing.  However, original patterns or images that are imprinted or stitched on fabric are protected by copyright.  A recent bill has been introduced in the House of Representatives that would change this statutory framework. The bill, H.R. 5055, aims to modify the U.S. Copyright Act to cover fashion designs.  If implemented, H.R. 5055 would extend copyright protection to clothing (including undergarments, outerwear, gloves, footwear, and headgear); handbags, purses, and tote bags; belts; and eyeglass frames.  Protection would extend to the appearance of the article of apparel as a whole, including any ornamental elements of the article.

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