Copyright & Fashion Design: Chuck Schumer’s Modest Proposal

On August 6th, Sen. Charles Schumer (D-NY), introduced the “Innovative Design Protection and Piracy Prevention Act (“the Innovative Design Act”) (S. 3728). If passed (and it has a long way to go before that happens), it will become the first U.S. law extending copyright protection to design elements of “men’s, women’s or children’s clothing, including undergarments, outerwear, gloves, footwear, and headgear; handbags, purses, wallets, duffel bags; suitcases, tote bags, belts and eyeglass frames” which are “unique, distinguishable, non-trivial and non-utilitarian variation[s] over prior designs.”

Under current copyright law, “useful articles” including clothing and accessories are not copyrightable. This is because they have “an intrinsic utilitarian function that is not merely to portray the appearance of the article or to convey information.” 17 U.S.C. § 101. (See Whimsicality, Inc. v. Rubie’s Costume Co., Inc., 891 F. 2d 452 (2d Cir., 1989), finding that children’s costumes were not copyrightable.) However, fabric design elements are copyrightable. (See Knitwaves, Inc. v. Lollytogs Ltd., 71 F. 3d 996 (2d Cir., 1995). In that case, the defendant was found guilty of copyright infringement for copying plaintiff’s stylized oak and maple leaf appliques on children’s sweaters.)

The Innovative Design Act, however, would not grant the same scope of protection to clothing designs that it does to fabric designs. Here the period of protection would be a mere three (3) years, but that is more than enough to eliminate the problem or benefit (depending on which side of the fence you sit) of knock-offs. To be sure, the Innovative Design Act would apply only to new designs, old ones being dedicated by law to the public domain. Moreover, in order to win an infringement suit, a designer will not only have to describe in detail exactly what s/he is laying claim to, but will have to prove in court that:

  • the copyrighted elements are wholly original and a “unique, distinguishable, non-trivial and non-utilitarian variation over prior designs;”
  • the accused design is “substantially identical,” i.e., so similar that it is likely to be mistaken for the original;
  • the allegedly infringing design “contains only those differences in construction or design which are merely trivial” — i.e., the design is truly “substantially identical” and not simply identical in certain features; and
  • the defendant had the opportunity to see the original design before creating the alleged infringement.

To uncomplicate the court’s job slightly, the law provides that a knock-off of a truly original work would be infringing regardless of its color or the design of the fabric with which it is made. Finally, the proposed law limits damages to a maximum penalty of $50,000 or $1.00 per copy, whichever is greater, although the law also makes clear that “the damages awarded shall constitute compensation and not a penalty.”

Whether the Innovative Design Act survives the legislative process is anyone’s guess, but it is worth observing here that it is not so much a law that protects the exclusive rights of the designer as one that mandates a compulsory fee for copying. In other words, the creation of knock-offs will continue to be economic decisions, but with the consideration that there might be an added cost should a designer decide to invest a substantial amount of money in lawyers’ fees to start a legal action. Thus one would presume that the law, if passed, will lead to knock-offs of only the most commercially successful products. $50,000 may be a worthwhile price to pay.

The LimeWire Decision & The End of Entrepreneurial P2P.

For a dozen years, Internet entrepreneurs have launched business after business attempting to capitalize on the concept of file-sharing.  Napster was sued in 1999, a preliminary injunction against it was granted in 2000 and it was found guilty of copyright infringement in 2001.

Grokster and Kazaa (both of which used the FastTrack protocol) and StreamCast Networks (creator of the P2P application, Morpheus) were next. Although the complaints against them were dismissed in 2003, and the dismissal upheld on appeal, in 2005 the Supreme Court found Grokster guilty. As Justice Souter wrote for the majority: “We hold that one who distributes a device with the object of promoting its use to infringe copyright, as shown by clear expression or other affirmative steps taken to foster infringement, is liable for the resulting acts of infringement by third parties.”

The Grokster decision was unanimous and the Supreme Court remanded the case to the District Court for further proceedings consistent with that decision. Seeing the writing on the wall, Grokster and Kazaa entered into settlement agreements with the plaintiffs, while Streamcast, which refused to give up, was summarily found guilty for copyright infringement. In the meantime, in December 2004, AIMster (subsequently renamed Madster) was shut down by preliminary injunction which eventually became permanent.

Throughout this period, LimeWire (which uses the Gnutella network) continued to distribute and sell its software, which became one of the most popular programs for P2P sharing. Some 58% of P2P music sharing is said to be done via LimeWire. In the wake of the Grokster decision, LimeWire maintained its innocence on the grounds that it merely provided software to be used for legitimate means. Accordingly, it amended its end-user agreement to require intended users of its software to warrant that they “will not use LimeWire for copyright infringement.”

The tactic provided LimeWire with no protection at all. LimeWire was sued in 2006. On Tuesday, May 11th, the United States District Court in Manhattan found LimeWire and its founder, Mark Gorton, guilty of copyright infringement and unfair competition. [1]

There is nothing ground-breaking about the District Court’s decision. LimeWire was damned by the facts. Among other things, the court found that:

  • 93% of the music files actually downloaded via LimeWire are under copyright;
  • LimeWire knew that the primary use of its software was to share copyrighted music;
  • LimeWire advertised itself as a replacement for Napster, Kazaa and Morpheus, thereby promoting LimeWire’s infringing capabilities;
  • LimeWire provided search functionality permitting users to search for categories such as “Top 40″ which, inevitably, are protected by copyright law;
  • LimeWire employees occasionally offered users technical information about obtaining music files which the employees knew were under copyright; and
  • LimeWire took no steps to mitigate users’ infringing activities.

And if that didn’t show guilty knowledge enough, LimeWire founder Gorton had taken steps to shield his assets should his company be adjudged guilty.

Although there are other P2P programs currently in use such as BitTorrent, eMule and BitComet, the decision is probably the death knell of entrepreneurial efforts to capitalize on P2P file sharing. This doesn’t mean that file sharing is dead. Far from it. Not only are P2P networks likely to continue to exist (albeit on a level not likely to attract big money investors), but there are also some 3,000,000 music blogs offering free downloads via external links to such file storage sites as Rapidshare, MegaUpload, Hotfile, FileServe, FileSonic, Zshare, narod.ru, Badongo, Mediafire and Deposit Files.  Nearly all of these sites respond to DMCA takedown notices (i.e., notices of removal pursuant to the U.S.’s Digital Millennium Copyright Act), but for days, weeks, months or years the music — virtually anything one might want to download — will be there. (If something isn’t there yet, it will be. Just wait.) And when something is taken down, it will eventually re-appear. It’s a game of whack-a-mole.

In fact, the  magnitude of infringement suggests that the music industry should explore different business models, ones that reconsider pricing and apply globally, not to mention satisfy consumer demand for better quality downloads than companies like iTunes or Amazon offer. P2P file sharing companies were easy enough targets because they were huge businesses. However, the P2P lawsuits simply made file sharing more efficient and more difficult to stop.

Footnote

[1] Because sound recordings made prior to 1972 are not protected under federal copyright law, claims of infringement on such recordings must be made under state anti-piracy and unfair competition laws, as well as federal unfair competition laws. Musical compositions contained on pre-1972 sound recording, however, are protected under federal copyright law.