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

Shareholder lawsuits are practically inevitable in any going private transaction in today’s economic climate and under the current securities regulatory regime. Two major apparel companies, Gymboree and J. Crew, have recently gone private in very high profile transactions that have not unexpectedly spawned multiple shareholder lawsuits.  In connection with the proposed sale of J. Crew to Texas Pacific Group and Leonard Green & Partners, J. Crew shareholders have filed suits against the company’s management and directors alleging breaches of fiduciary duties. Shareholders similarly sued Gymboree after its sale to Bain Capital Partners, alleging breach of fiduciary duties. All companies attempting to go private can expect to be served with complaints challenging the process of negotiating an offer and the price of the offer itself within days of announcing a transaction.  However, there are several actions that companies can take when contemplating these types of transactions in order to limit exposure to this sort of costly litigation.
 

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Beginning December 1, 2010, foreign-invested enterprises, foreign enterprises, and foreign individuals are now required to pay the city maintenance and construction tax as well as the education surcharge, from which these entities and individuals were formerly exempt. Prior to this regulation, the PRC levied those taxes only on Chinese-owned and funded enterprises and Chinese citizens.
 

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On October 28, 2010, the Standing Committee of the National People’s Congress promulgated the “Law of the People’s Republic of China on the Application of Law for Foreign-related Civil Relationships” (the “Law”). It will become effective on April 1, 2011. Until now, China’s civil code had buried its choice-of-law provisions within the substantive laws, causing uncertainty and confusion. The Law established a clearer standard of what the applicable law is in foreign-related civil relationships. The most significant provisions of the Law are summarized below.

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On December 13, 2010, the Supreme Court affirmed Omega, S.A. v. Costco Wholesale Corp., 541 F.3d 982 (9^th Cir. 2008), aff'd per curiam, No. 08-1423 (U.S. Dec. 13, 2010). Justice Kagan did not partake in the consideration or decision in this case.  Costco Wholesale Corp. v. Omega, S.A., No. 08-1423 (U.S. Dec. 13, 2010) (per curiam) (available here).  As the Supreme Court issued an unsigned per curiam opinion, there remains no binding Supreme Court precedent to guide courts in consideration of this issue.
 

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Fordham Law School has founded the world's first Fashion Law Institute, marking a critical effort to advance the study and application of fashion law. The Institute, which officially launched September 8, 2010 during New York City's renowned Fashion Week, will be the "primary nerve center" for all things fashion, ranging from the academic study of fashion-related legal issues to offering pro-bono legal counseling for designers in need.
 

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As it becomes increasingly common to find "green" environmentally-friendly products on retailers' shelves, the Federal Trade Commission is taking active steps to guarantee the legitimacy of "green" labeling and ensure that such labels do in fact represent accurate descriptions of the products' environmental benefits. Consequently, the Federal Trade Commission (FTC) is about to release updated "Green Guides," which are expected to narrowly redefine and limit companies' and marketers' abilities to make environmental claims about their products. Once the updated guides are released, they will be the first environmental-marketing guidelines to be issued in the past twelve years. Currently, there are approximately 300 products and packages on the market stamped with environment seals of approval, such as "recyclable" or "chemical free." Experts are predicting that the new Guides could render many labels such as these useless, or even more drastically, in violation of the new Federal Trade Commission standards.

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Now more than ever workers are leading double lives, only not in the way that you might expect. The old distinctions of day job and night job, or office life and home life are fading to the background as we rapidly embrace a new double life: one actual and one virtual. It is almost cliché to cite statistics detailing the staggering growth of social media, but it is nevertheless instructive. Facebook, MySpace, Twitter and LinkedIn boast a combined 885 million worldwide users, with Facebook accounting for 56 percent of that figure despite first reaching 250 million users just last year.[1] Facebook is currently the second most visited Internet site in the United States behind Google, while MySpace, Twitter and LinkedIn each place in the top 20.[2] Combine all social media and blog sites, and suddenly 22 percent of all time spent on the Internet is accounted for.[3] If use of social media has not already permeated your workplace, perhaps the next IT roll out should focus on ditching the dial-up modems.

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Online piracy and internet counterfeiting are unfortunate realities in our Information Age. On the Internet, a counterfeiter can sell consumers a pair of counterfeit Louboutins or a fake Hermes Birkin bag purchased with the simple click of a mouse. Other online pirates can sell consumers unauthorized copies of their favorite television show, movie, or music with impunity. In response to the onslaught of online counterfeiters, Senate Judiciary Committee Chairman Patrick Leahy (D-Vt) and senior Republican member Orrin Hatch (R-Ore) have introduced the Combating Online Infringement and Counterfeits Act ("COICA")(S. 3804)[1], a bipartisan bill that would give the Justice Department an expedited means to track and shut down unlawful domains devoted to the unauthorized downloading, streaming, and sale of copyrighted content and counterfeit goods. On November 18, 2010, the Senate Judiciary Committee unanimously voted in favor of COICA and sent the bill to the full Senate for consideration.
 

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On November 30, 2010, the Judiciary Committee of the United States Senate unanimously passed the Innovative Design Protection and Piracy Act (“IDPPA”) (S. 3728), which was introduced by Senator Charles Schumer (NY) on August 6, 2010.
 

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