In a 2014 article, this author provided an overview of business and legal issues created by the fashions worn by celebrities during entertainment award ceremonies like this Sunday’s Grammy Awards and the Oscar ceremony, which will be held on Sunday, February 22nd. One year later, award season continues to be as important for the fashion industry as it is for the industries that are the subject of these award ceremonies. As award-show watchers wait to see whose designs their favorite stars are wearing, they are probably unaware of the legal challenges designers face in trying to protect the investments—both of time and money—they have made in helping stars prepare to walk the red carpet.
First, designers often spend weeks or even months preparing the perfect gown for a celebrity to wear on the red carpet of events like the Grammys or the Oscars, but often have little assurance that the star will follow through on their promise to actually wear the designer’s creation. Indeed, this issue has come to light numerous times in recent years, as stars have reneged on promises to wear certain gowns. In 2013, Anne Hathaway famously apologized for her last-minute decision to wear a Prada gown rather than the one that had been designed for her by Valentino. One way fashion houses have moved to prevent this problem, and reduce the uncertainty they face, is by tying red carpet appearances to endorsement deals, as demonstrated by Jennifer Lawrence and Marion Cotillard’s numerous red carpet appearances in Dior, a brand they both represent. With the rise of the “360 deal” in the music industry, under which the record companies share not only in the artist’s record sales, but also other sources of income, such as endorsements, artists attending the Grammy’s may increasingly be bound to wear specific designers in order to maximize the value of their endorsements for themselves and their record companies.
Fashion houses and retailers have also become more likely to pursue legal action to protect their investments in celebrity endorsements. For instance, Charlize Theron was famously sued by Raymond Weil’s after she was photographed wearing a Christian Dior watch at a film festival in violation of her endorsement agreement with Weil. Similarly, Jessica Simpson was sued by Tarrant Apparel Group, who manufactures Simpson’s eponymous denim line, after she told an interviewer that “True Religion” was her favorite brand of jeans. While the adoption of contractual protections will certainly help the fashion industry, it may reduce the overall excitement of red carpet watching when there is no question of “who” certain stars will be wearing.
Second, high-end designers preparing designs for the red carpet continually face the challenge of being undercut by fast-fashion retailers copying their designs given the gaps in the current intellectual property regime with respect to fashion design. Designers for fast-fashion retailers will often stay up all night after watching the red carpet arrivals for events such as the Grammys or the Oscar so they can reproduce red carpets looks as quickly as possible. Indeed, companies like Faviana and ABS by Allen Schwartz pride themselves on how quickly they can get versions of popular red carpet looks to market. Because U.S. law does not provide a specific category of legal protection to fashion designs comparable to most other industrialized nations, and efforts to get such protections passed by Congress have stalled, designers need to rely on a patchwork of other intellectual property protections—such as trademark, copyright, design patent, and trade secret law—to protect their designs. For instance, some designers are focusing on developing unique fabrics, which may be protected by copyright law, as means of making it more difficult for others to “knock off” their designs. Companies also fiercely defend their intellectual property rights in “nonfunctional” elements of their designs, such as Louis Vuitton’s trademarked “Toile Monogram.”
Last, all designers continue to be threatened by widespread counterfeiting of their goods. With the rise of the internet, counterfeit goods are widely available beyond the infamous Canal Street markets in New York, so fashion designers and retailers are continually working to shut down operations hawking faux versions of their designs. For instance, Hermes has worked closely with French police to prevent counterfeiting operations from selling faux version of their famous Berkin bags, and Coach dedicates a portion of its website to educating consumers about counterfeiting. Gucci and others have similarly pursued actions that have expanded the tools available in the fight against counterfeiting and clarified the potential liability of companies that knowingly assist counterfeiters in their operations. United States Senator Bob Menendez has even taken an interest in the issue and has been pressuring the President to take legal action against particularly Chinese websites selling counterfeit versions of prom dresses and bridal gowns produced by American companies, including companies which themselves produce knock-off versions of famous red carpet dresses.
This post was prepared by Howard Hogan and Laura Mumm of Gibson Dunn.