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High court fashion statement could lead to more lawsuits

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Last week’s ruling by the U.S. Supreme Court on copyrighting cheerleader uniforms could lead to increased litigation in the fashion industry, although it also provides needed guidance on the issue of copyright law, experts say.

The 6-2 ruling by the U.S. Supreme Court in Star Athletica L.L.C. v. Varsity Brands Inc. centers on the question of whether a useful article’s design is eligible for copyright protection.

Memphis, Tennessee-based Varsity Brands, which designs and sells cheerleader uniforms, had filed suit against Chesterfield, Missouri-based Star Athletica, charging it had violated its copyrights on certain of the designs that appeared on its uniforms and other garments.

The U.S. District Court in Memphis ruled against Varsity, holding the designs serve a utilitarian function and could not be separated from the uniforms’ utilitarian function.

But the 6th U.S. Circuit Court of Appeals in Cincinnati reversed the ruling and said in its 2015 decision that the graphic designs were “separately identifiable” and could exist independently, because they could be incorporated into the surface of different types of garment, hung on the wall and framed as art.

 Star Athletica appealed the ruling to the Supreme Court. 

To be eligible for copyright, a feature of a useful article “must be able to exist as its own pictorial, graphic, or sculptural work” once it is imagined apart from the useful article, said the majority opinion, which was delivered by Justice Clarence Thomas.

In his dissent, Justice Stephen Breyer said while he agrees with much of the majority’s opinion, the designs submitted by Varsity do not exist independently of the uniform’s utilitarian aspects. 

Donald M. Falk, a partner with Mayer Brown L.L.P. in Palo Alto, California, who is not involved the case, said: “Traditionally, there’s this division between functional devices,” which are protected under patent law, and copyright, “which is supposedly pure creativity, completely separated from function,” and this case presented an issue “where you had the characteristics of a work of art” that were also functional.

“Even the dissenters believe that copyrights could apply in cases like this,” he added. “They just didn’t believe the design at issue here was separable enough from functional elements of a cheerleader uniform to be separately copyrightable.”

“It’s a pretty significant ruling,” said Mr. Falk. “It has taken an area of intellectual property protection that was a gray area, and it’s provided some clarity, at least, in not excluding a substantial category of designs for protection just because they maybe were produced, and in some ways intertwined with, functional elements of goods.”

The ruling is “very significant for fashion houses, designers and other innovators,” said Michelle Mancino Marsh, a partner with Arent Fox L.L.P. in New York.

“It’s an additional protection” for them, she said, noting that the U.S. is unlike Europe, “where that area is very well-protected.” 

In the United States, in contrast, there is “kind of a patchwork quilt of protections for clothing designs,” said Ms. Marsh, who submitted a brief supporting Varsity on behalf of the Fashion Law Institute in New York.

Luke W. DeMarte, a partner with Michael Best & Friedrich L.L.P. in Chicago, who was not involved in the case, said: “The fashion industry in the U.S. has long complained about the lack of legal weapons to address knockoffs, and it particularly comes from high-end designers” who show designs on the runway on Saturday, and then see copies of their designs on the shelves of discount stores the following week.

This ruling “makes sure that one of the tools they have to fight knockoffs was not taken away,” he said.

It is also possible the ruling could apply beyond the fashion world in cases where machinery, for instance, has an aspect that is nonfunctional but attractive and copyrightable, said Mr. Falk.

Experts say the ruling could mean increased litigation against fashion house and designers.

“The practical takeaway of this from the insurance and business side of things is that it could increase intellectual property litigation and costs associated with products being put into the marketplace,” said Ms. Marsh. 

Litigation will not increase immediately, however, she said: “It might take a little time for this to be absorbed into companies.” 

“I don’t see an uptick in litigation until more copyright registration is obtained, she said.

The Supreme Court ruling left open the issue of “whether or not the design elements claimed here (by Varsity Bands) area actually subject to copyright protection,” said Mr. DeMarte.

“The cheerleader outfits at the center of the case claimed some pretty rudimentary designs — stripes, color blocking, chevrons — things that are pretty common,” he said.

“What this case did not resolve was whether the elements or the arrangement of those elements is sufficiently original to merit copyright protection. That’s the second part of this case,” as Star Athletica goes back to the lower court to litigate whether those elements were copyrightable “and sufficiently original to merit copyright.”