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Designer Jewelry vs. Inspired-by Jewelry: Intellectual Property Infringement and Unfair Competition Considerations Chicago Bar Association: Young Lawyers.

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Presentation on theme: "Designer Jewelry vs. Inspired-by Jewelry: Intellectual Property Infringement and Unfair Competition Considerations Chicago Bar Association: Young Lawyers."— Presentation transcript:

1 Designer Jewelry vs. Inspired-by Jewelry: Intellectual Property Infringement and Unfair Competition Considerations Chicago Bar Association: Young Lawyers Section, IP Committee Presented by: Daliah Saper

2 Introduction When you think about jewelry litigation, you usually assume the dispute is regarding trademarks or counterfeit goods. Did you know however, that designers may sue competitors for copyright infringement if a competitors piece simply looks and feels the same as their designs? For example, do you think this clover leaf design should be afforded protection?

3 Copyright Law as it applies to Inspired- by Jewelry Analysis of inspired-by jewelry infringement primarily involves an the application of copyright law. Trademark or Unfair Competition Law are ancillary claims and may be more more difficult to prove.

4 Elements Of Copyright In Jewelry Copyright holders own a bundle of exclusive rights including: Reproduction, Distribution, and Creation of additional works derived from their originals.

5 To Establish Infringement The copyright owner (P) must demonstrate: It has a valid copyright The D has actually copied the Ps work The copying is illegal because a substantial similarity exists between the Ds work and the protectible elements of Ps work. Ds work was not an independent creation, i.e. D had access to Ps designs.

6 Copyright Interests Most jewelry items are comprised of non- original designs already in the public domain: Circles, squares, loops, etc. Many copyright disputes focus on the factual determination of whether the combination of several common elements in a piece of jewelry is sufficiently original such that the piece deserves copyright protection.

7 Substantial Similarity The test for substantial similarity: Whether an ordinary observer could recognize the alleged copy as having been appropriated from the copyrighted work. Often very fact based

8 Copyright Validity and Protectability Van Cleef & Arpels Logistics, S.A. v. Jewelry (2008): Ps Claim: Ds infringed copyright and trade dress rights to jewelry design - A quatrefoil/clover shaped charm or pendant. Ds Claim: This jewelry design is in the public domain (and only a trivial variant of the insignia used since 1917 by the 88th Infantry Division of the US Army) Holding: Van Cleef & Arpels military clover insignia is copyrightable. Rationale: Despite the commonness of the quatrefoil shape and metal frame, the arrangement of the elements was sufficiently original.

9 Copyright Validity and Protectability Van Cleef & Arpels Logistics, S.A. v. Jewelry continued: Once a valid copyright in the military clover insignia was established, the Court determined that the Defendants jewelry was substantially similar to Van Cleefs copyright protected design and was therefore infringing.

10 Copyright Validity and Protectability The substantially similar determination was made under the following two-part test: (1) whether the Defendants products ideas, patterns, themes, organization, and other objective details were substantially similar to those of Van Cleef, the original designer, and (2) whether a lay observer would find the concept and feel of the Defendants product designs to be substantially similar to those of Van Cleefs.

11 Copyright Validity and Protectability Alternatively: Herbert Rosenthal Jewelry Corp. v. Honora Jewelry Co.: Ps Claim: Manufacturer of jeweled turtle pin which was made of nugget gold and which contained ten gems on the turtle's back brought action against D for copyright infringement. Ds Claim: In nature, a turtle has at least ten vertebrae segments on its shell, so this was not evidence of copying. Outcome: Ps pin was not infringed by Ds jeweled pin which was made of similar material and which also contained ten gems on the turtle's back, but which had slightly different design with respect to turtle's head, feet, and tail.

12 Copyright Validity and Protectability Herbert Rosenthal Jewelry Corp. v. Honora Jewelry Co. continued: Rationale: The court analyzed each of the pins shell markings, manufacturing methods, metal thickness, and even whether the turtles head had a mouth. The inescapable characteristic of a turtle – its shell - limited the extent to which a designer could deviate from anothers design. Purpose of the copyright laws is to protect original designs from being copied, not to convey to the proprietor any right to exclude others from the market place for similar items.

13 Take Aways Protectable creations require a minimum amount of originality. If you are the Plaintiff, be prepared to demonstrate why your combination of items constitute a protectable work. A copyright registration afford the plaintiff a statutory presumption that copyrights are valid.

14 Take Aways The size, shape, proportion, and ornamentation of products will be compared to the original producers design. Small differences in detail between a potential infringers products and the original artists design are not enough. If a defendant designer fails to distinguish their inspired by design from an original work it will likely raise infringement concerns.

15 Damages Actual damages - including the profits the infringer made as a result of the infringement Statutory damages stand at a minimum of $750 per violated work and can easily rise to a substantially higher sum. Court can increase or decrease the total amount based on the nature of the infringement itself. If willful infringement court can increase the statutory damage award up to $150,000 per infringed work.

16 Burden of Proof Should a potential infringer be found an innocent infringer, the court could reduce the damage amount down to $200 per work. However, innocent infringement is quite difficult to prove. A few examples demonstrate the inherent ambiguities in a determination of an innocent infringer or a willful infringer.

17 Innocent Infringement In the case Warner Bros., Inc. v. Dae Rim Trading, Inc., infringing shopkeepers spoke little English, were unaware of the concept or existence of copyrighted property, committed a single infringing sale of dolls, and were told by an attorney that use of a copyrighted work did not qualify as infringement. Due to this complex chain of events the defendants qualified as innocent infringers.

18 Willfulness In a case against Prime Art & Jewel, Inc. by Yurman, Inc., the court affirmed a jurys finding of willful infringement. PAJ received cable designs that it was supposed to manufacture for Zales, another jeweler, but failed to investigate the possibility of any intellectual property violations. When Zales later decided to buy from David Yurman directly and told PAJ that the designs could be infringing, PAJ disregarded the warning and proceeded to label the jewelry under its own name.

19 Willfulness Consistently, the U.S. Appeals Court for the Second Circuit found the defendant in N.A.S. Import, Corp. v. Chenson Enterprises, Inc. willfully infringed a plaintiffs handbag buckle design. Here, the infringing buckle was identical except for the embossed brand name, and, among other things, the defendant infringer sold handbags in a market rife with knockoffs.

20 Trademark Interests Trademark protection reflects similar considerations to copyright law. In the case of inspired by jewelry designs, trademark concerns deal largely with the products particular trade dress. Originally, the definition of trade dress was confined to the overall appearance of a products packaging or dressing. Gradually, this definition has expanded to include the design of the product itself.

21 Trade Dress Trade dress today encompasses the total impression of a product including its: package, size, configuration, color, design, and trademark All of which may serve as a source identifier. A trade dress artifact serves as a source identifier when consumers recognize a products trade dress and immediately associate the product with a particular business or manufacturer.

22 A jewelry designs trade dress includes the combination of general elements that, when taken as a whole, combine to create a unique and distinct source identifier. Just as under copyright law, each individual aesthetic feature may not be protectable. For example, a standard circle with a gold chain will most likely not be protectable for trade dress. However, an otherwise simple design could be protectable under trade dress law if it had a few additional specific elements such as three strategically placed diamonds or special engravings. Trademark Interests

23 Infringement Claim In order to succeed on claims for trade dress infringement, a plaintiff must prove two factors: (1) that their design is non-functional, (not merely ornamental or intended to increase sales of the product as opposed to serve as a source identifier); and (2) their design is distinctive or has acquired a secondary meaning prior to the alleged infringers entry into the market.

24 An additional note on functionality Whether jewelry design is functional will depend on the effect that protecting a specific design may have on marketplace competition. If the exclusive use of a particular trade dress would put competitors at a significant disadvantage, the design behind that trade dress is considered functional. For example, the hands or numbers on a watch face would probably be considered functional since exclusive use of these aspects would severely hamper competition in the watch industry. On the other hand, a very intricate jewelry design may not be considered functional since exclusive use of its particular combination of elements still allows for other competitive pieces of jewelry.

25 Case example Cosmos Jewelry, Ltd. v. Po Sun Hon Co. (July 2008): Facts: Makers of the federally registered Tropical Memories Plumeria flower jewelry, inspired by Hawaii's plumeria flower blossoms sued D for trade dress infringement for selling similar jewelry designs Outcome: P was awarded $2.3 million in damages, attorney's fees and a permanent injunction. Rationale: The D was aware of the strength of P's trade dress and designed and marketed his plumeria jewelry to capitalize on this strength in a high-demand market. However, P could not be afforded copyright protection for its representation of the plumeria flowers because all of the features of the flowers such as their five slightly overlapping petals occur frequently in natural plumeria flowers. [Kind of like the turtle pin we discussed earlier]

26 Case Example 2 Yurman Design, Inc. v PAJ Inc. 262 F.3d 101 (2 nd Cir. 2001) Although Yurman was successful on its copyright claims against PAJ, it failed to articulate what specifically constituted its trade dress. It also failed to register its trade dress with the USPTO. Court reasoned that trade dress protection in these cases should be afforded sparingly: While most trademarks only create a monopoly in a word, phrase, or symbol, granting trade dress protection to an ordinary product design would create a monopoly in the goods themselves.

27 Take Away Need to be very specific as to what elements of your design constitute trade dress, why these elements are non-functional, and why they serve as source identifiers---ie have acquired distinctiveness.

28 Damages Designers who successfully sue for trade dress infringement are entitled to recover: (1) the defendants profits resulting from sale of the infringing goods, (2) any damages the artist suffers as a result of the infringement, and (3) the costs of the action. Just as with copyright infringement, whether the trade dress infringement is found to be willful provides the court some discretion in adjusting the damage award. Willful trade dress infringement can result in a damage award being increased threefold.

29 Common Law Unfair Competition Much broader claim than trademark or trade dress infringement. A claim of common law unfair competition simply consists of an allegation that a competitors product will mislead the public into believing that the competitors product was actually designed by the original producer.

30 Common Law Unfair Competition In creating confusion, the competitor is reaping the benefits of the original producers hard work through misappropriation of its good name and established reputation. Determinations of unfair competition are made similar to that of trade dress infringement: Here, a court will not focus on one particular feature of a products trade dress, but will instead consider the products overall impression from the standpoint of a member of the general public.

31 Common Law Unfair Competition To establish unfair competition, there must be: Confusion by the general public between products, and Intent of the accused to deceptively pass off an infringing product. For example, a jewelry company that sells products with a notification that they are Inspired by Van Cleef and Arpels, Tiffany, Cartier would provide strong support against claims of unfair competition. In the absence of any explicit claims of sponsorship, affiliation, or endorsement from another jewelry designer, the original designer would likely not succeed on a claim of common law unfair competition.

32 Common Law Unfair Competition Claim Despite the difficulty in proving claims of unfair competition, a successful claimant may obtain: (1) an injunction of further use of the offending product, (2) an award of actual damages including special damages and loss of profits, (3) punitive damages, (4) an accounting to the injured party by the offending party for all profits arising out of the offending products sale, and (5) the destruction of any offending objects still in the offending partys possession or control.

33 Conclusion Due to the fact that many high end jewelry designs consist of a combination of elements which exist in the public domain, there are unique issues for adjudication in copyright infringement, trademark infringement, and unfair competition cases. Alone, these elements would not qualify for protection under either copyright or trade dress law, but when combined they may qualify for both.

34 Conclusion To avoid legal problems, jewelry designers should: (1) err on the side of caution when attempting to mimic any preexisting design; (2) refrain from associating the piece with the brand responsible for any preexisting sources of inspiration; and (3) emphasize the pieces origin with the jewelry designers enterprise.

35 Any Questions? Go to Call Daliah at:

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