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

On April 12, 2011, United States Senators John Kerry and John McCain formally proposed the Kerry-McCain Commercial Privacy Bill of Rights Act of 2011 ("CPBRA"). This proposed legislation would apply to all retailers, including those in the fashion, beauty, and apparel industries, that request and record their customers' personal information. If passed in its current form, the CPBRA would preempt similar state laws, would not provide a private right of action upon which an individual claim could be based, and would cap penalties at $3 million. While that is good news in light of the burgeoning class action privacy-related litigation filed against companies by private plaintiffs under state consumer protection laws, compliance with the CPBRA could potentially be onerous because the CPBRA replaces industry self-regulation with government regulation.
 

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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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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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Hardly a day passes without new revelations about global FCPA investigations. In just the past ten days, cases involving companies as diverse as Hewlett-Packard, BHP Billiton and Avon have been reported. Earlier this year 22 individuals were arrested simultaneously on two continents in a global FCPA sting operation, the first of its kind. The U.S. Department of Justice reportedly has 140 active FCPA investigations underway.
 

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On June 1^st, 2008, New York lawmakers put into effect a law that narrows the online tax exemption and sends a clear message to online retailers: You’re either in or you’re out.  New York wants retailers "in" so that they can collect NY sales tax.  Retailers want to remain "out" in order to keep the online tax exemption and avoid the costs associated with collecting sales taxes from customers.

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U.S. Customs and Border Protection ("Customs") is proposing a change to the First Sale Rule that, if made, will force U.S. companies to pay millions of dollars in additional duties on the products they manufacture in foreign countries and import to the U.S.

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In a recent decision, the U.S. Court of Appeals for the District of Columbia overturned the Federal Motor Carrier Safety Administration (FMCSA) truck diver Hours of Services ("HOS") rule that regulates the amount of time commercial truck drivers can operate their vehicles (Owner-Operator v. FMCSA, 494 F.3d 188 (D.C. Cir. 2007)).  The current HOS rules, which were adopted in October 2005, provide for a daily driving limit of eleven hours followed by a ten hour rest period.  Also, pursuant to the current rules, truck drivers may restart their weekly count of hours after they have taken a break of thirty-four hours.  In its decision, the court reduced the maximum driving time to ten hours a day followed by an eight hour rest period and vacated the thirty-four hour restart provision in order to ensure highway safety and protect driver health.

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Congress gave final approval to legislation that requires stricter screening of sea cargo containers bound for the U.S. at foreign ports.  The bill will implement many of the recommendations of the 9/11 Commission to strengthen national security and help to prevent terrorist attacks (click here for full text of this bill).  The bill has been opposed by large U.S. importers, the U.S. Chamber of Commerce and the American Apparel and Footwear Association, which pointed out that the cargo screening requirement will do little to increase security, is impractical and could have negative impacts on global trade and the U.S. economy.

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On June 1, 2007, the controversial new EU Regulation for the Registration, Evaluation and Restriction on Chemicals (“REACH”) came into force to regulate the use of chemicals in consumer products, including apparel, fragrances and cosmetics.  The regulation’s most important goals are to improve the protection of human health and the environment while enhancing the innovative capability of the EU chemicals industry.  Although European companies will be primarily hit by this regulation, US manufacturers exporting in the EU market must be in compliance as well.

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On August 2, 2007, Senator Orrin Hatch announced S. 1957, a bill intended to provide protection for fashion designs.  In his comments introducing the draft legislation, Senator Hatch noted that the goal of the legislation "is to ensure that those who spend their time and money developing new and innovative fashion designs are able to secure and enforce adequate copyright protections for their hard work."  Senator Hatch noted while introducing S. 1957 that the current bill is "not perfect" and that "some areas of the bill that need to be improved are: the standard for liability, the definition of designs in the public domain, and the secondary liability provisions."  Co-sponsored by Senators Clinton, Feinstein and Schumer, among others, the bill is the latest rendition of the proposed Design Piracy Prohibition Act which was twice previously introduced in the House by Representatives Goodlatte and Delahunt as H.R. 5055 (109th Congress, 2d Session) and H.R. 2033 (110th Congress, 1st Session).  Although not yet available, S. 1957 is reported to mirror the content of the prior bills which are available at: http://frwebgate.access.gpo.gov/cgiin/getdoc.cgi?dbname=109_cong_bills&docid=f:h5055ih.txt.pdf and http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=110_cong_bills&docid=f:h2033ih.txt.pdf

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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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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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