the business and law of fashion and retail

26
The Business and Law of Fashion and Retail Kolsun Hand Business and Law of Fashion and Retail.indb 1 Kolsun Hand Business and Law of Fashion and Retail.indb 1 7/1/20 9:10 AM 7/1/20 9:10 AM

Upload: others

Post on 16-Oct-2021

15 views

Category:

Documents


0 download

TRANSCRIPT

Page 1: The Business and Law of Fashion and Retail

The Business and Law of Fashion and Retail

Kolsun Hand Business and Law of Fashion and Retail.indb 1 Kolsun Hand Business and Law of Fashion and Retail.indb 1 7/1/20 9:10 AM7/1/20 9:10 AM

Page 2: The Business and Law of Fashion and Retail

Kolsun Hand Business and Law of Fashion and Retail.indb 2 Kolsun Hand Business and Law of Fashion and Retail.indb 2 7/1/20 9:10 AM7/1/20 9:10 AM

Page 3: The Business and Law of Fashion and Retail

The Business and Law of Fashion and Retail

Barbara KolsunDirector, The FAME Center for Fashion, Arts, Media and Entertainment Law,

Cardozo School of Law, Yeshiva UniversityProfessor of Practice, Cardozo School of Law, Yeshiva University

Douglas HandPartner, Hand, Baldachin & Associates LLP

Adjunct Professor of Fashion Law, NYU School of Law,

Cardozo School of Law, Yeshiva University

Carolina Academic PressDurham, North Carolina

Kolsun Hand Business and Law of Fashion and Retail.indb 3 Kolsun Hand Business and Law of Fashion and Retail.indb 3 7/1/20 9:10 AM7/1/20 9:10 AM

Page 4: The Business and Law of Fashion and Retail

Copyright © 2020Carolina Academic Press, LLCAll Rights Reserved

LCCN: 2020939115ISBN: 978-1-5310-1619-7eISBN: 978-1-5310-1620-3

Carolina Academic Press700 Kent StreetDurham, North Carolina 27701Telephone (919) 489-7486Fax (919) 493-5668www . cap - press . com

Printed in the United States of Amer i ca

Kolsun Hand Business and Law of Fashion and Retail.indb 4 Kolsun Hand Business and Law of Fashion and Retail.indb 4 7/1/20 9:10 AM7/1/20 9:10 AM

Page 5: The Business and Law of Fashion and Retail

The co-editors would like to express special gratitude to

Simone A. Dvoskin and Nabeela M. Hanif

for their enormous contributions in making this casebook a success.

• • •

The co-editors would like to thank the following contributors for their work and research on the casebook:

Anna AntonovaJulianne Bagley

Lauren Bass Anabela Bello

Nikki Breeland Andrea W. Dorado

Emily Faro Katherine Joseph Rebecca Kravitz Daphne Lazar

Jessica Mauceri Maya Rand Katie Riley

Jolie SchenermanGeorge C. Sciarrino

Filippa Olsson SkalinKristina Stanković

Mona Zeitoun

Kolsun Hand Business and Law of Fashion and Retail.indb 5 Kolsun Hand Business and Law of Fashion and Retail.indb 5 7/1/20 9:10 AM7/1/20 9:10 AM

Page 6: The Business and Law of Fashion and Retail

Kolsun Hand Business and Law of Fashion and Retail.indb 6 Kolsun Hand Business and Law of Fashion and Retail.indb 6 7/1/20 9:10 AM7/1/20 9:10 AM

Page 7: The Business and Law of Fashion and Retail

vii

Contents

About the Editors xxi

About the Authors xxiii

Introduction to Fashion Law 3A. Defining the Scope of and Need for Fashion Law 3B. Fashion Lawyers Must Wear Many Hats 5C. Cases and Materials 8

1. The Fashion Industry and Legal Scholarship 8The Law, Culture, and Economics of Fashion 8Intellectual Property Law and the Sumptuary Code 16The Piracy Paradox Revisited 19

D. Conclusion 41

Chapter 1 · Formation, Fashion Finance, and Mergers and Acquisitions 43A. Forming the Com pany 43

1. Introduction 432. Sole Proprietorship 443. Partnership 444. Corporations 455. C- Corporations and S- Corporations — Tax Considerations 466. B- Corporations 467. LLCs 478. Conclusion 48

Notes 48B. Financing the Com pany 48

1. Introduction 482. Debt and Equity Financing 49

a. Debt Financing 49b. Equity Financing 51c. Initial Public Offering 53d. The Challenge for Eponymous Brands 55e. Factoring 57

Notes 58C. Mergers and Acquisitions 59

M&A and Fashion: If the Deal Fits — Buy It! 59

Kolsun Hand Business and Law of Fashion and Retail.indb 7 Kolsun Hand Business and Law of Fashion and Retail.indb 7 7/1/20 9:10 AM7/1/20 9:10 AM

Page 8: The Business and Law of Fashion and Retail

viii CONTENTS

1. Strategic Development — The Pro cess Before the Pro cess 61a. Synergies 61b. Cautionary Tales 64c. Growth Strategies 65d. Culture and Other Considerations 69

2. Valuing the Deal 70a. Overview of Valuation Methods 70b. Due Diligence Pro cess 72

i. IP Due Diligence 74ii. Designer Diligence 75

3. Structuring Considerations 77a. Overview of Traditional Structures 77

i. Asset Acquisition 77ii. Stock Acquisition 78iii. Mergers 79

b. Licensing and Joint Ventures as M&A 80i. Licensing 81ii. Joint Ventures 82

c. Some Tax Considerations 844. Negotiation, Documentation and Closing 85

a. Nondisclosure Agreement/Letter of Intent 85b. Negotiation Considerations 86c. Transaction Agreement 86

i. Risk Allocation — Representations and Warranties 87ii. Ongoing Covenants 88

d. Employment Agreements in M&A 88i. Eponymous or Lead Designer’s Employment Commitment 88ii. Creative Control 90iii. Noncompetes 91

e. The Closing 925. Post- Closing Integration 93

a. Ele ments of an Effective Integration Plan 94i. Assign a Dedicated Team, Backed by Executive Support, to

Manage the Integration Program 95ii. Plan for Workforce Integration and Create a Retention

Strategy for Key Personnel 96iii. Address Perceived Impact on Customer Base 97

b. Success or Failure? 97Notes 98

Chapter 2 · Sustainability and the Fashion Industry 99A. Sustainability Basics 100

1. Systems Thinking 1002. Com pany Valuation and the Six Capitals 100

Kolsun Hand Business and Law of Fashion and Retail.indb 8 Kolsun Hand Business and Law of Fashion and Retail.indb 8 7/1/20 9:10 AM7/1/20 9:10 AM

Page 9: The Business and Law of Fashion and Retail

CONTENTS ix

3. The Role of Legal Counsel 102B. Key Sustainability Issues for the Fashion Industry 103

1. Managing the Supply Chain 1032. Working Conditions and Human Rights 1053. Efficient Use of Energy, Water, and Chemicals 106

C. Growing Stakeholder Pressure 1091. Shifting Consumer Preferences 1102. Disruptive Innovators 1103. Investor Pressure and Access to Capital 1124. Putting Sustainability on the Corporate Agenda 114

D. Frameworks for Addressing Sustainability 1161. Three Stages of Corporate Sustainability 1162. Industry Leadership and Collaboration 120

E. Conclusion 122

Chapter 3 · International Trade 123A. History 123

1. U.S. Customs Service — History 1232. U.S. Customs and Border Protection — The Agency Today 1243. The Role of the Department of Commerce — International Trade

Administration 1254. The Role of U.S. International Trade Commission

in Trade and Fashion 1255. The Role of the U.S. Trade Representative in Trade and Fashion 126

a. Section 301 126b. How Section 301 Tariffs Can Affect Fashion — The United

States- China Trade War 127B. Importing Goods into the United States 127

1. Importer of Rec ord 1282. Reasonable Care 1283. Customs Brokers 1294. Classification of Imported Goods 1305. Valuation of Imported Goods 1336. Import Duties 1347. Valueless or Damaged Goods 1358. Country of Origin of Imported Merchandise 135

a. Import Declarations 135b. Preferential Treatment 137c. Marking and Labeling 138

9. Supply Chain Considerations and Forced Labor 138C. Other Government Agency Laws and Regulations 140D. Administrative Penalties 141E. Litigation 142F. Conclusion 143

Kolsun Hand Business and Law of Fashion and Retail.indb 9 Kolsun Hand Business and Law of Fashion and Retail.indb 9 7/1/20 9:10 AM7/1/20 9:10 AM

Page 10: The Business and Law of Fashion and Retail

x CONTENTS

Chapter 4 · Copyright Law 145A. A Bit of Copyright Theory 145B. What Copyright Law Protects 147

1. Criteria of Copyrightability: Fixation and Originality 1472. Limitations on Copyrightability: Idea/Expression and Useful Articles 150

a. Ideas versus Expressions 150b. The Useful Articles Doctrine 151

Star Athletica, LLC v. Varsity Brands, Inc. 155Notes 172

C. Congratulations! You’ve Cleared the Threshold. What’s Next? 1741. Copyright Owner ship and Duration 1742. Infringement 175

a. Copying- In- Fact 175Ty, Inc. v. GMA Accessories, Inc. 176Notes 179

b. Unlawful Appropriation 180Tufenkian Import/Export Ventures, Inc. v. Einstein

Moomjy, Inc. 180Nola Spice Designs, LLC v. Haydel Enterprises 185Bill Diodato Photography, LLC v. Kate Spade, LLC 189Notes 199

D. Limitations on Copyrights — The First Sale Doctrine and Fair Use 1991. The First Sale Doctrine 1992. Fair Use 200

Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC 201Notes 203

Chapter 5 · Trademark 205A. The Importance of Trademarks in Fashion 205B. Choosing and Registering a Trademark 206

20th Century Wear, Inc. v. Sanmark- Stardust Inc. 206Notes 213

1. Trademark Searches and Willful Infringement 213International Star Class Yacht Racing Ass’n v. Tommy

Hilfiger, U.S.A., Inc. 214Notes 219

2. Priority Disputes Between Commercial Use and Registration 220Zazú Designs v. L’Oréal, S.A. 220Notes 227

C. Eponymous Brands 2281. Registration Issues 2282. Use of a Name Similar to a Famous Trademark 229

Gucci v. Gucci Shops, Inc. 229Notes 238

Kolsun Hand Business and Law of Fashion and Retail.indb 10 Kolsun Hand Business and Law of Fashion and Retail.indb 10 7/1/20 9:10 AM7/1/20 9:10 AM

Page 11: The Business and Law of Fashion and Retail

CONTENTS xi

3. Losing the Right to Use One’s Name 239JA Apparel Corp. v. Abboud 239Notes 259The Designer Formerly Known As . . . : Intellectual Property

Issues Arising From Personal Names as Fashion Brands 259D. Product Design and Trade Dress Trademarks 277

1. Apparel Design as Trade Dress 277Wal- Mart Stores, Inc. v. Samara Bros., Inc. 277Notes 282

2. Functionality 282Adidas- Salomon AG v. Target Corp. 283Note 287

3. Color Trademarks and Aesthetic Functionality 287Christian Louboutin S.A. v. Yves Saint Laurent Amer i ca

Holding, Inc. 287Notes 297

E. Determining Trademark Infringement 2971. Multi- Factor Analy sis: The Polaroid Factors 298

Lois Sportswear, U.S.A., Inc. v. Levi Strauss & Co. 298Notes 309

2. Trade Dress Infringement 310Coach Leatherware Co. v. AnnTaylor, Inc. 310Notes 318Gucci Amer i ca, Inc. v. Guess?, Inc. 319Notes 337Louis Vuitton Malletier SA v. Haute Diggity Dog, LLC 337Notes 349Hard Candy, LLC v. Anastasia Beverly Hills, Inc. 350Notes 356Levi Strauss & Co. v. Abercrombie & Fitch Trading Co. 357Note 368

F. The Defense of Parody in Fashion Law Cases 368Coca- Cola Co. v. Gemini Rising, Inc. 369Note 376Gucci Shops, Inc. v. R. H. Macy & Co. 376Notes 378Jordache Enterprises, Inc. v. Hogg Wyld, Ltd. 379Note 389Tommy Hilfiger Licensing, Inc. v. Nature Labs, LLC 389Notes 402Louis Vuitton Malletier, S.A. v. My Other Bag, Inc. 402Notes 404MGA Entertainment, Inc. v. Louis Vuitton Malletier, S.A. 405Notes 410

Kolsun Hand Business and Law of Fashion and Retail.indb 11 Kolsun Hand Business and Law of Fashion and Retail.indb 11 7/1/20 9:10 AM7/1/20 9:10 AM

Page 12: The Business and Law of Fashion and Retail

xii CONTENTS

Chapter 6 · Design and Utility Patents 411A. Patents in General 411B. Design Patents 413

1. Design Patent Infringement 414High Point Design, LLC v. Buyer’s Direct, Inc. 414Notes 423

C. Utility Patents 4241. Utility Patent Infringement 425

QR Spex, Inc. v. Motorola Inc. 426Notes 436

2. Alternative Recourse: ITC 437Crocs, Inc. v. International Trade Commission 438Notes 445

Chapter 7 · Counterfeiting and Gray Market Goods 447A. Introduction 447B. Laws Governing Counterfeiting 448

1. Federal Laws Relating to Counterfeiting 4482. Civil Seizure 452

Cartier International B.V. v. Ben- Menachem 453Notes 462

3. Support of Government Agencies 463Gucci Amer i ca, Inc. v. Duty Free Apparel, Ltd. 464Fendi Adele, S.R.L. v. Ashley Reed Trading, Inc. 467Notes 470Coach, Inc. v. Fashion Paradise, LLC 471Notes 475

4. Importation, Smuggling, and Trafficking 475United States v. Chong Lam 477Notes 486

5. State Laws 4876. The Gray Market and the First Sale Doctrine 488

Zino Davidoff SA v. CVS Corp. 489Notes 496

7. The International Trade Commission as a Venue 497In re Certain Handbags, Luggage, Accessories

and Packaging Thereof 4978. Third- Party Liability: Indirect Infringement and Counterfeiting 503

a. Suits Against Landlords/Flea Market Owners 503Coach, Inc. v. Goodfellow 504Notes 509Gucci Amer i ca, Inc. v. Frontline Pro cessing Corp. 510Notes 520Tiffany (NJ) Inc. v. eBay Inc. 521

Kolsun Hand Business and Law of Fashion and Retail.indb 12 Kolsun Hand Business and Law of Fashion and Retail.indb 12 7/1/20 9:10 AM7/1/20 9:10 AM

Page 13: The Business and Law of Fashion and Retail

CONTENTS xiii

Notes 532C. Ethical Issues — Use of Private Investigators 533

Rolex Watch, U.S.A., Inc. v. Michel Co. 535Note 538

D. Suits against ISPs 538Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. 538

E. Real Property Law and Anticounterfeiting 543Omega SA v. 375 Canal LLC 5441165 Broadway Corp. v. Dayana of N.Y. Sportswear, Inc. 544Note 547

F. The Future of Anticounterfeiting and the Internet 548North Face Apparel Corp. v. Fujian Sharing Import &

Export Ltd. 548Gucci Amer i ca, Inc. v. Weixing Li 551Atmos Nation LLC v. Alibaba Group Holding Ltd. 567Cepia, L.L.C. v. Alibaba Group Holding Ltd. 575

G. Conclusion 584

Chapter 8 · Fashion Licensing and Collaborations 585A. Introduction 585

1. Valuable Brand — The Bedrock of Licensing and Collaborations in the Fashion Industry 586a. Design Ser vices Agreements 587b. License and Distribution Agreements 588c. Intercompany License Agreements 588d. Collaboration and Influencer Agreements 589

B. Why License? 590C. Peeling Back the Onion — A History: The Phenomenon of Licensing

in the Fashion Industry 592Wood v. Lucy, Lady Duff- Gordon 594Notes 595

D. Fashion Licensing and Brand Integrity: The Perils — From Class to Mass 596

E. Choosing a Licensing Partner — Wisely 599Calvin Klein Trademark Trust v. Wachner 600Notes 606

F. New Kids on the Block — Brand Management and Licensing Companies 607

G. The Art of Drafting a License Agreement 6101. License Grant and Rights Reserved by Licensor 6162. Term 6193. Design, Approval, Production Pro cess, and Quality Control of

Licensed Products 6194. Advertising, Marketing, and Promotion 621

Kolsun Hand Business and Law of Fashion and Retail.indb 13 Kolsun Hand Business and Law of Fashion and Retail.indb 13 7/1/20 9:10 AM7/1/20 9:10 AM

Page 14: The Business and Law of Fashion and Retail

xiv CONTENTS

5. Sales and Distribution of Licensed Products 6226. Compensation, Reporting, and Audit 6237. Termination — Cause and Effect 6258. Retail Store License Agreement 6289. Intellectual Property 63010. Repre sen ta tions and Warranties 63111. Indemnification/Insurance 63212. Other Provisions 632

H. The Paradigm of Naked Licensing 633Eva’s Bridal Ltd. v. Halanick Enterprises, Inc. 635Notes 637

I. Bankruptcy in the Fashion Industry: The Fate of a Licensing Arrangement 639

Mission Product Holdings, Inc. v. Tempnology, LLC 640Notes 651

J. Licensing Disputes: A Licensee’s Perspective 652Levy Group, Inc. v. L.C. Licensing, Inc. 652Notes 656Jones Apparel Group, Inc. v. Polo Ralph Lauren Corp. 657Notes 660Macy’s, Inc. v. J.C. Penney Corp. 661Notes 678

K. Collaborations in the Fashion Business 6791. The Quin tes sen tial Collaborator: Sarah Jessica Parker: From

Actor to Lifestyle Brand 6822. Influencers: The Next Frontier of Collaborations in the

Fashion Industry 6833. IP Rights in Collaboration Deals — How to Draft the Appropriate

Agreement 685Grande- Butera v. Forever 21, Inc. 686Notes 697

L. What Will the Future Bring? 698

Chapter 9 · Advertising 701A. Introduction 701B. What Constitutes Advertising? 701C. Regulatory Framework Governing Fashion Advertising 702

1. Claims 702a. Express Claims 703b. Implied Claims 703c. Puffery 704

Coty, Inc. (Sally Hansen Complete Manicure) 704Notes 716

Kolsun Hand 00 fmt.indd 14Kolsun Hand 00 fmt.indd 14 7/1/20 9:18 AM7/1/20 9:18 AM

Page 15: The Business and Law of Fashion and Retail

CONTENTS xv

2. Per for mance Demonstrations 716Ontel Products Corp. (Pink Armor Nail Gel) 717Notes 725

3. Other Advertising Claims 725a. Wool Products Labeling Act 725b. Labeling and Advertising Cotton Products 726c. Sustainability and Green Products 726

United States v. Nordstrom, Inc. 727Notes 734

d. CAN- SPAM 734e. Care Labeling 734

United States v. Tommy Hilfiger U.S.A., Inc. 735Consent Decree 737Notes 740

f. Made in the USA Standard 740Paz v. AG Adriano Goldschmied, Inc. 741Final Judgment and Injunction 750Notes 752

g. Feather or Down Products 753h. Fur Products Labeling Act (Fur Rules) 753

In re Neiman Marcus Group, Inc. 754Notes 761Humane Society of the United States v. Andrew & Suzanne Co. 762Notes 776

4. Native Advertising 776In re Lord & Taylor, LLC 777Notes 785American Media, Inc. (Shape Water Boosters) 785Notes 789

D. Creating and Clearing Content for Marketing Campaigns 7891. Copyright, Trademark, and Unfair Competition 790

Louis Vuitton Malletier, S.A. v. Hyundai Motor Amer i ca 790Notes 820

2. Right of Publicity 821Heigl v. Duane Reade, Inc. 821Notes 830Kim Kardashian West v. Missguided Ltd. 830Default Judgment 839Notes 839

3. Talent/Union Issues 839E. Influencer and Social Media Marketing 840

Letter from FTC to Cole Haan 841Notes 843

Kolsun Hand Business and Law of Fashion and Retail.indb 15 Kolsun Hand Business and Law of Fashion and Retail.indb 15 7/1/20 9:10 AM7/1/20 9:10 AM

Page 16: The Business and Law of Fashion and Retail

xvi CONTENTS

Letter from Public Citizen, Commercial Alert, Campaign for a Commercial- Free Childhood and Center for Digital Democracy to the Federal Trade Commission 843

Notes 846Gregory M. Messer, as Chapter 7 Trustee of the Estate of Fyre

Festival LLC v. Kendall Jenner Inc. 847Notes 860Disclosures 101 for Social Media Influencers 860

F. Collection of Information and Privacy Considerations 8621. COPPA and Marketing to Children 8622. Federal and State Regulatory Framework for Privacy 863

G. Conclusion 863

Chapter 10 · Employment Law Issues in Fashion 865A. Introduction 865B. Overview of Discrimination Laws 865

1. Title VII of the Civil Rights Act of 1964 8652. The Pregnancy Discrimination Act 8663. The Age Discrimination in Employment Act of 1967 8674. Americans with Disabilities Act 8675. Requirement to Exhaust Administrative Remedies 8686. The Equal Pay Act of 1963 8697. The Family and Medical Leave Act 869

C. Discrimination Case Studies 8701. Sexual Harassment Case Study 870

Mendez- Nouel v. Gucci Amer i ca, Inc. 870Notes 882

2. Employer Dress Code Policies Case Studies 883Equal Employment Opportunity Commission v.

Abercrombie & Fitch Stores, Inc. 883Note 886Schiavo v. Marina District Development Co. 887Notes 904

D. Noncompete Provisions in Employment Contracts 9051. Noncompete Case Study 905

Estee Lauder Cos. v. Batra 905Notes 925

E. Wage and Hour Compliance 9261. Wage and Hour Case Studies 926

Luna v. Chanel, Inc. 926Otsuka v. Polo Ralph Lauren Corp. 934Notes 943

Kolsun Hand 00 fmt.indd 16Kolsun Hand 00 fmt.indd 16 7/1/20 9:20 AM7/1/20 9:20 AM

Page 17: The Business and Law of Fashion and Retail

CONTENTS xvii

Chapter 11 · Privacy 945A. Introduction 945B. What Is Personal Information? 945C. What Are Fundamental Privacy Concepts? 946

Fashion Law in Practice: FIPPs 946D. U.S. Federal Privacy Laws 947

1. Section 5 of the FTC Act 947a. Misrepresenting or Insufficiently Disclosing How the

Com pany Collects, Uses, or Shares Personal Information 948In re Sears Holding Management Corp. 949Notes 953

b. Using or Sharing Personal Information for a New Purpose without Obtaining Consumer Consent 954

c. Circumventing Consumers’ Privacy Settings 954In re Nomi Technologies, Inc. 954Notes 957

d. Misrepresenting a Com pany’s Data Security Standards or Practices 957

2. Marketing 958Sample Notice and Consent for Sending Marketing

Text Messages 9603. The Children’s Online Privacy Protection Act 960

United States v. Iconix Brand Group 962Notes 966

4. The Health Insurance Portability Accountability Act 9675. The Fair Credit Reporting Act 967

E. U.S. State Privacy Laws 9681. Comprehensive Consumer Privacy Laws 9682. Breach Notification Laws 971

Fashion Law in Practice: Breach Readiness 9723. Data Security Requirements 973

California v. Target Corp. 974Notes 975

4. Privacy Notice Requirements 9755. Laws Regulating Information Collection at the Point of Sale 979

Harrold v. Levi Strauss & Co. 979Notes 985

6. Biometrics Laws 986F. General Data Protection Regulation (GDPR) 987

Fashion Law in Practice: GDPR Compliance 988G. Laws and Regulations Related to Targeted Advertising and Analytics 989

Kolsun Hand 00 fmt.indd 17Kolsun Hand 00 fmt.indd 17 7/1/20 9:20 AM7/1/20 9:20 AM

Page 18: The Business and Law of Fashion and Retail

xviii CONTENTS

1. Regulation of Display Advertising in the United States 990Fashion Law in Practice: FTC Enforcement Regarding

Online Tracking 9902. Regulation of Display Advertising in the E.U. 9923. Self- Regulatory Rules Governing Online Advertising and Tracking 993

Chapter 12 · International Issues 995A. Initial Steps Before Going Beyond the United States of Amer i ca 995

1. Trademarks — “First to File” 995Fashion Law in Practice: Case Study 996

2. Disclosure of Designs 996Fashion Law in Practice: Case Study 996

B. Protection of Intellectual Property Internationally 9971. Trademark Protection 997

a. Trademark Clearance Searches 997b. International Trademark Filings 997c. Nontraditional Trademarks 999

Fashion Law in Practice: Case Study 9992. Design Protection 999

a. Disclosure 999b. Unregistered Design Protection in the Eu ro pean Union/

United Kingdom 1000Fashion Law in Practice: Case Study 1000

c. International Variations 1001d. Hague Convention 1001

Fashion Law in Practice: International Design Strategy Checklist 1002

Fashion Law in Practice: Illustration 1002C. Owner ship of Employment- Generated Intellectual Property 1002

1. Not “At Will” Employment 10022. Employee- and Employer- Owned Intellectual Property 10023. In de pen dent Contractors and Agencies 10034. Importance of Written Assignments, Formalities 1003

D. Anticounterfeiting 10031. Customs Programs 10032. Legal Reforms 10043. E- Commerce Anticounterfeiting Programs 1004

E. Contracts 10051. Governing Law and Jurisdiction 10052. Choice of Court and Enforcement of Judgments 10063. Location of Counterparty 10064. Ser vice 10065. Enforcing Judgments in Other Jurisdictions 10076. Who Will Sue Whom? 1007

Kolsun Hand Business and Law of Fashion and Retail.indb 18 Kolsun Hand Business and Law of Fashion and Retail.indb 18 7/1/20 9:10 AM7/1/20 9:10 AM

Page 19: The Business and Law of Fashion and Retail

CONTENTS xix

7. Home Advantage 10078. Subject Matter of Dispute 10079. Remedies 100810. Costs 100811. Types of Jurisdiction Clause 100812. Terms 100813. Express and Implied Terms 100914. Contracting Out/Excluding Terms 1009

F. E- Commerce and Consumer Law 10101. Website Requirements (Non- Transactional) 10102. Distance Selling Requirements (Transactional Website) 10103. Canceling “Online” Orders 10114. Localization for Sales into Overseas Countries 10115. General Data Protection Regulation (GDPR) 1012

G. Promoting and Marketing Your Brand 10121. Regulation of Marketing 10122. Localized Accounts and Operation on Social Media 10133. Regulation of Influencers 1013

H. Corporate Citizenship 10141. Modern Slavery and Ethical Supply Chain Regulations 1014

Fashion Law in Practice: Case Study 10152. Anti- Bribery and Corruption Regulation 1016

I. Distribution and Licensing 10171. Introduction to Distribution in the Eu ro pean Economic Area 10172. Resale Price Maintenance 10183. Territorial Restrictions 10194. Online Sales Restrictions 10205. Customer Restrictions 10206. Selective Distribution Systems 10217. Franchises 10218. Agency 10219. Using a Combination of Distribution Models 1022

Table of Cases 1023

Index 1027

Kolsun Hand Business and Law of Fashion and Retail.indb 19 Kolsun Hand Business and Law of Fashion and Retail.indb 19 7/1/20 9:10 AM7/1/20 9:10 AM

Page 20: The Business and Law of Fashion and Retail

Kolsun Hand Business and Law of Fashion and Retail.indb 20 Kolsun Hand Business and Law of Fashion and Retail.indb 20 7/1/20 9:10 AM7/1/20 9:10 AM

Page 21: The Business and Law of Fashion and Retail

xxi

About the Editors

Barbara Kolsun is a Professor of Practice at Cardozo School of Law, Yeshiva University, and is also the Director of The FAME Center for Fashion, Arts, Media and Entertainment Law at Cardozo School of Law, the first law school program providing training and development opportunities relating to the representation of businesses driven by the creative process. She has been a leading fashion industry attorney for 35 years, and was also co-editor of the first handbook on Fashion Law, Fashion Law: A Guide for Designers, Fashion Executives and Attorneys (Bloomsbury, 2010, 2014), and the first casebook on Fashion Law, Fashion Law: Cases and Materials (Carolina Academic Press, 2016). She developed the first joint JD/MBA course in Fashion Law and Business at New York University and has also taught at Fordham Law School and guest lectured at dozens of law schools and fashion schools. She started the legal departments at three “startups”—Kate Spade, Seven for All Mankind and Stuart Weitzman and was the first General Counsel at all three companies. She was Assistant GC at Calvin Klein Jeans and Westpoint Stevens and has probably been through more mergers than most lawyers in the fashion business. While in private practice, her clients included Tommy Hilfiger and Ralph Lauren, and currently she continues to consult with fashion companies on various issues. She has chaired and been a regular speaker at the Luxury Law Summit in New York and London for several years. She has been honored with lifetime achievement awards in 2015 by the Luxury Summit and the World Trademark Forum, and another lifetime achievement award from the Women in Law Empowerment Forum. She has also served as Chairman of the Board of the International Anticounterfeiting Coalition and has spoken and published widely on fashion law around the world. Douglas Hand is a Partner at Hand, Baldachin & Associates, LLP in New York and an Adjunct Professor at NYU Law School (where he also sits on the Fashion & Luxury Council) and Cardozo School of Law, Yeshiva University (where he also sits on the Board of Advisors for The FAME Center for Fashion, Arts, Media and Entertainment Law). He is also the Secretary and Board Member of the Fashion Institute of Technol-ogy (FIT) Foundation and a member of the CFDA Fashion Awards Guild. Douglas’ experience in the fashion and retail world has led him to counsel global brands such as Everlane, Rag & Bone, Stella McCartney and Zadig & Voltaire. His book, The Laws of Style, was published by the American Bar Association in 2018 and he hosts a pod-cast of the same name.

Kolsun Hand Business and Law of Fashion and Retail.indb 21 Kolsun Hand Business and Law of Fashion and Retail.indb 21 7/1/20 9:10 AM7/1/20 9:10 AM

Page 22: The Business and Law of Fashion and Retail

Kolsun Hand Business and Law of Fashion and Retail.indb 22 Kolsun Hand Business and Law of Fashion and Retail.indb 22 7/1/20 9:10 AM7/1/20 9:10 AM

Page 23: The Business and Law of Fashion and Retail

xxiii

About the Authors

Catherine Adam is a Partner at K&L Gates in London where she specializes in commercial contracts, advising fashion clients from start-ups to global brands as well as having a particular specialism in logistics for e-commerce. She was recently named a “Next Generation Partner” for Commercial Contracts by the Legal 500. Catherine studied Law & Business Studies at the University of Edinburgh and has worked in London, Milan, New York and Luxembourg and brings this international outlook and experience to her clients for whom she provides complex yet user friendly commercially driven advice. Arthur Artinian is a Partner at K&L Gates in London and head of the IP and Technology Group. He is an internationally recognized intellectual property lawyer, representing numerous iconic brands, including leading fashion, luxury and retail brands, in complex cross-border IP counselling, litigation, enforcement and transactional matters. His work has been recognized in a number of publications including Chambers, Legal 500, World Trademark Review, World IP Review Leaders, Who’s Who, and Client Choice. He holds bar registrations in the UK, Ireland, Belgium, and Australia and has worked in London, New York, Tokyo, and Sydney.

Robertson D. Beckerlegge is a Partner in the New York office of Baker & Hostetler LLP focusing on litigation, brand protection, and anticounterfeiting. Whether online or brick and mortar, he works with numerous brands to help protect their invaluable IP. Christopher Buccafusco is Professor of Law and Director of the Intellectual Property and Information Law Program at Cardozo School of Law, Yeshiva University. Nancy S. Cleveland, now retired, was a private practice lawyer for many years before she co-founded Sustrana LLC, a sustainability management software and consulting company in 2009. Nancy became an accredited FSA II (SASB) and LEED® AP and was trained in GRI reporting and as a TSC Service Provider to better support her career in sustainability management. For several years, she co-chaired the Governance and Sustainability sub-committee of the American Bar Association’s Business Law Section. Barry Lewin is a Partner at Gottlieb, Rackman & Reisman, P.C., an Intellectual Property boutique in New York. He is a licensed patent attorney and has been practicing patent law and advising domestic and foreign fashion and technology clients for over a decade.

Kolsun Hand Business and Law of Fashion and Retail.indb 23 Kolsun Hand Business and Law of Fashion and Retail.indb 23 7/1/20 9:10 AM7/1/20 9:10 AM

Page 24: The Business and Law of Fashion and Retail

xxiv ABOUT THE AUTHORS

Miriam Farhi is a Partner in the Technology Transactions & Privacy practice at Perkins Coie LLP. She represents brands, retailers, and online marketplaces on issues relating to privacy, data security, ecommerce, social media, advertising, consumer protection, and the adoption of new technologies that transform the retail experience.

Frances P. Hadfield is a Counsel in Crowell & Moring’s International Trade Group in the firm’s New York office. Her practice focuses on customs litigation and regulatory compliance and she regularly advises corporations on matters involving customs compliance, audits, forced labor, customs enforcement, as well as import penalties. Meredith Halama is a Partner in Perkins Coie’s Privacy and Data Security group and co-chairs the firm’s Ad Tech and Data Management group. She counsels ad technology com-panies, publishers, and retailers on privacy matters, including self-regulatory obligations and compliance with federal and state laws governing the collection and use of data.

Sherry L. Jetter is considered to be a pioneer in the establishment of the field of fash-ion law. She has practiced law in the fashion and retail industries for over 30 years, founded and held leadership positions in legal departments of the foremost luxury brands, and is currently an Adjunct Professor at Cardozo School of Law, Yeshiva Uni-versity and in private practice specializing in intellectual property, global licensing and commercial transactions. Ted Max is a Partner at Sheppard Mullin Richter & Hampton in New York who leads its Fashion Apparel and Beauty Industry Group and has counseled clients in the fashion and retail industries and has written and lectured extensively. He combines his skill and experience as a trial attorney with his knowledge of intellectual property and commercial law in assisting emerging designers and leading fashion and retail companies. Tiffani McDonough Solomon is the Director, Senior Counsel, Employment & Litigation for Louis Vuitton with sole responsibility for managing labor and employment matters and litigation for all corporate offices, workshops and retail locations throughout the United States, Canada, Mexico, Central America, the Caribbean, and South America. In addition, she oversees the Louis Vuitton legal externship program and serves as the Senior Employment Counsel for Berluti LLC. Olivera Medenica is a Partner at Dunnington Bartholow & Miller LLP and chairs its Fashion and Trademark Law Practice Groups. She has almost two decades of experience advising domestic and foreign businesses in fashion, retail, media and entertainment on transactional, litigation and arbitration matters. Marc Reiner is the Head of the Intellectual Property Group at Hand Baldachin & Associates LLP where he represents a broad variety of fashion and retail clients. He has practiced trademark law for over two decades, including trademark prosecu-tion, licensing, litigation, anti-counterfeiting, and managing international trade-mark portfolios.

Kolsun Hand 00 fmt.indd 24Kolsun Hand 00 fmt.indd 24 7/1/20 9:25 AM7/1/20 9:25 AM

Page 25: The Business and Law of Fashion and Retail

ABOUT THE AUTHORS xxv

Amanda Simpson is an international trade attorney who predominantly focuses on matters relating to customs and import compliance. She is passionate about helping her clients find practical solutions to complex issues from an import perspective, as well as identifying and implementing duty savings strategies.

Lee S. Sporn is Of Counsel at Olshan, Frome & Wolosky, having served as SVP Business Affairs & General Counsel at Michael Kors for 13 years, and in various capacities at Ralph Lauren for 11 years, after his career in private practice at Proskauer. With co-editor Barbara Kolsun and Dean Melanie Leslie, he was instrumental in the creation of the The FAME Center for Fashion, Arts, Media and Entertainment Law at Cardozo School of Law, Yeshiva University and continues to serve on its advisory board, and currently teaches Fashion Law at Penn and Villanova law schools. Lee is a contributor to Fashion Law: A Guide for Designers, Fashion Executives & Attorneys (Fairchild Books, 2014), was the co-editor of the seminal treatise Trademark Counterfeiting (Aspen Law & Business, 1999) and in May of 2016 he received the Lifetime Achievement Award at the Luxury Law Awards in London. Julie Zerbo is the Founder and Editor-in-Chief of The Fashion Law (www.thefashionlaw.com), a modern media company that provides unique insight on and unparalleled access to the legal and business aspects of the rapidly evolving fashion and retail industries.

Kolsun Hand 00 fmt.indd 25Kolsun Hand 00 fmt.indd 25 7/1/20 9:25 AM7/1/20 9:25 AM

Page 26: The Business and Law of Fashion and Retail

Kolsun Hand Business and Law of Fashion and Retail.indb 26 Kolsun Hand Business and Law of Fashion and Retail.indb 26 7/1/20 9:10 AM7/1/20 9:10 AM