British fashion-house Burberry is known for its $500 scarves, which are easily recognizable thanks to the brand’s iconic checked pattern. However, with the rise of high-quality imitation designer products, it has become incredibly difficult to tell whether a designer item is counterfeit or not. In particular, imitations of the famous Burberry scarf are rampant at both online and in-store retailers.
Burberry has been trying to take control of this issue. Earlier this year, Burberry Limited (US) and Burberry Limited (UK) filed a complaint against Target Brands Inc. for “offering for sale and selling various products featuring the BURBERRY CHECK Trademark or confusingly similar variants.” They claim these actions are “willful, intentional, and damaging to Burberry.” [1]
Burberry builds their image of luxury by pricing their items appropriately and ensuring that they are exclusive and coveted. Target’s designs included scarves of at least five different colour variations, eyewear, luggage, and bottles at much cheaper prices. In their original lawsuit, Burberry claimed Target had committed trademark counterfeiting as described in Sections 32 and 43(c)of the Lanham Act. Introduced in 1946, the Lanham Act protects owners of registered trademarks from the use of similar marks that result in “consumer confusion” or “dilution” of a mark. Additionally, Burberry referenced Section 349 of New York General Business Law, claiming that Target’s actions “affected the public interest of New York and have resulted in injury to consumers in New York” and damaged Burberry’s business reputation. Finally, Burberry claimed trademark infringement and unfair competition under the common law of the State of New York. Burberry sought $2 million dollars for each trademark violation and additional damages in an undetermined amount. The case was dismissed this past fall after the parties settled the trademark dispute. Although the specific terms of the settlement were not released publicly, it seems likely that Target agreed to cease production and sale of the specific items and paid Burberry for violating their trademark. Burberry had also filed suit against JC Penney for similar infringements but voluntarily dismissed the case.
In their 2017/18 Annual Report, Burberry’s independent auditors’ report stated the company’s need to assess the number of items that are “ultimately destroyed or sold below cost.” In 2018, a whopping 28.6 million pounds worth of merchandise and 10.4 million pounds worth of beauty inventory were destroyed. This was done to ensure that these products would not be sold significantly below retail price or sold off-market.
Historically, it has been extraordinarily difficult to trademark fashion items because often the items serve a functional purpose. To become recognizable and distinctive, brands must establish a reputation for producing a specific design over time exclusively. In Canada, trade dress can be protected under the Trademarks Act if the “distinguishing guise” is recognizable to the public and associated with a specific brand. However, a company can only register a distinguishable guise once it is recognizable by the public, and it is their responsibility to prove its distinctiveness. Similarly, in the United States, trade dress constitutes a “symbol” or “device” under the Trademark Act and has been expanded to cover not only the packaging of a product or good but also the overall design and product’s features. According to the Trademark Manual of Examining Procedure, the examining attorney must separately consider functionality and distinctiveness in determining whether a trade dress can be registered.
With some retailers, such as Forever 21 and Zara, selling numerous clothing pieces that are similar to designer items, it has become easy for consumers to purchase affordable versions of expensive designs. With Zara’s ability to produce an item from a runway show in less than two weeks, it has become the go-to place for consumers to find current fashion trends and goods disconcertingly similar to designer items. Although Zara has been sued numerous times by indie artists, small businesses, and well-known designers alike, the success of their claims has been varied due to differing levels of the distinctiveness of their designs. For this reason, large retailers have gotten away with producing items “inspired” by other brands on a regular basis.
Often, it can be difficult to determine the precise boundary between trade dress or trademark infringement and drawing inspiration from other designers. What is clear, however, is that brands such as Burberry will continue to fight to protect their designs and their brand. While these actions can only be taken retroactively, it is ultimately up to consumers to voice their opinions with their purchase decisions.
Written by Lauren Chan, IPilogue Editor and a JD Candidate at Osgoode Hall Law School.
[1] Burberry Limited (UK) et al v. Target Corporation et al, 1:2018-cv-03946 (SDNY)