Fashion Counsel with Anthony V. Lupo

Arent Fox's fashion law blog offers news, analysis, and insights for the industry from fashion attorney Anthony Lupo.

Fashion Counsel with Anthony V. Lupo
Advertising, Data Collection & Privacy
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California Governor Signs Bill Aimed at Aligning Nationwide “Made in USA” Labeling Requirements

On Tuesday September 1, 2015, California Governor Jerry Brown signed a bill that will enable products to be labeled and marketed with an unqualified “Made in USA” statement even if not entirely made in the United States – a major departure from California’s current more stringent standard. The bill, to be effective January 1, 2016, will permit unqualified Made in USA labeling of products with foreign content not exceeding 5% of the final wholesale value, or in cases where the manufacturer cannot domestically produce or source the needed parts or components obtained outside of the U.S., the foreign content cannot exceed 10% of the final wholesale value. Albeit closer to the Federal Trade Commission’s (FTC) “Made in USA” standard, the California bill does not directly align the standards.
 

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Intellectual Property
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Cheerleader Uniform Designs Eligible for Copyright Protection, Sixth Circuit Rules

In a closely-watched fashion design case, the Sixth Circuit ruled last week that decorative designs on cheerleading uniforms are eligible for copyright protection. The US Copyright Act does not provide protection for functional aspects of clothing. However, it is possible to obtain copyright protection for purely-decorative features of clothing that exist independently of an article’s utilitarian aspects, which is the heart of the issue the Sixth Circuit was grappling with. The 2-1 opinion in Varsity Brands et al. v. Star Athletica overturned a district court ruling which found that the decorative components of the uniforms were not “conceptually separable” from the utilitarian apparel such that copyright protection would apply.

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Intellectual Property, Patent
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The Start of a New Wearable Brand Battle

Jawbone and Fitbit, both billion-dollar leaders in the “wearable” technology category of fitness bands, are warming up for what may become a test of legal endurance. Jawbone recently filed three lawsuits in three different courts, accusing Fitbit of infringing patents, poaching employees, and stealing trade secrets. Although Fitbit has not yet hit back with its own suit, the two rivals seem poised to start a lengthy legal battle.
 
The first complaint, filed in California state court in May, accuses Fitbit of trying to “decimate” Jawbone by luring its employees and taking its trade secrets. The second complaint, filed in California federal court shortly before Fitbit’s initial public offering in June, accuses Fitbit of infringing three patents covering fitness software technologies.  And the third complaint, filed in the International Trade Commission in July, accuses Fitbit of infringing six patents covering fitness software and hardware technologies.

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Consumer Product Safety
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IKEA Repair Program Not Labeled “Recall” By CPSC

On July 22, 2015, the Consumer Product Safety Commission (CPSC) and the Swedish consumer products company, IKEA, issued a joint press release to announce a “repair program,” addressing a furniture tip-over safety hazard posed by 27 million chests and dressers sold by the company. IKEA’s repair program consists of providing consumers with free wall anchoring repair kits that can be used to fasten the chests and dressers to the wall to help prevent future tip-over incidents involving these products. However, an interesting aspect of the CPSC/IKEA announcement is that the initiative was not characterized as a “recall” as is CPSC’s common practice when product repairs are needed to address safety issues related to normal product use. The CPSC/IKEA press release can be found here.

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Advertising, Data Collection & Privacy
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FuelBand Advertising Claims Spark Settlement Agreement

Nike Inc. (Nike) recently agreed to pay more than $2.4 million to settle a class action lawsuit related to the Nike FuelBand activity tracker. The lawsuit, Levin v. Nike, was filed May 17, 2013, in California Superior Court in Los Angeles County. The Plaintiffs alleged violations of California unfair competition and false advertising laws, as well as breach of warranty.
 
The FuelBand Advertising Claims

The Plaintiffs’ allegations center around claims made in connection with the Nike FuelBand, which is a wristband activity tracker. Specifically, advertising for the FuelBand suggests that the product is capable of tracking every calorie burned and step taken by a FuelBand user. The complaint singles out the following claims:

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Fashion Law Videos
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Former H&M General Counsel and Anthony Lupo Discuss the Multinational Retailer's US Expansion in NYC
In this episode of Fashion Counsel, partner Anthony Lupo talks with Hank Rouda, Former General Counsel - North America at H&M, about the brand’s scalability, the importance of 5th Avenue, growth opportunities, legal challenges, and the company’s commitment to sustainability before a live audience at Bisnow’s 5th Annual NYC Retail Summit Event.
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Labor & Employment
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NYC Bans the Box and Becomes Latest Jurisdiction to Limit Criminal Background Checks

On June 29, 2015, New York City Mayor Bill DeBlasio (D) signed into law Bill 318-A, also known as the Fair Chance Act (the “Act”), which limits an employer’s ability to ask about an applicant’s criminal history until the applicant has been given a conditional offer of employment. The bill was passed by the City Council overwhelmingly on June 11, 2015 with 45 yeas and 5 nays. By passing the Act, New York City joins 17 states and over 100 cities that have enacted similar legislation. The law will take effect on October 27, 2015, 120 days after the Act was signed into law.
 

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Court Certifies Class Action Alleging Fictitious “Sale” Prices by J.C. Penney

What’s the News?
 
A California federal judge recently certified a class action lawsuit that alleges violations of California consumer protection laws by J.C. Penney Corporation, Inc. (J.C. Penney). Specifically, the class claims that J.C. Penney engaged in a misleading pricing scheme by promoting “sale” prices on items that may never have been offered for sale at the advertised “regular” price.  This case is a reminder to retailers to ensure their “sales” reflect legitimate discounts on regular priced items. 
 
Background on the Case
 

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Communications, Technology & Mobile
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PayPal Will Tweak User Agreement To Clarify Proposed Autodialing Provisions

On June 29, 2015, PayPal’s General Counsel released a blog post indicating that the company will be tweaking its proposed revisions to its User Agreement regarding PayPal’s ability to send its customers autodialed or prerecorded messages. The changes to PayPal’s terms as originally proposed drew the ire of government regulators, including the Federal Communications Commission and the New York Attorney General. These regulators, as well as numerous consumer groups, asserted that PayPal’s proposed changes would conflict with the Telephone Consumer Protection Act (TCPA) and its provisions prohibiting autodialed or prerecorded calls to consumers without obtaining consumers’ prior express consent. 
 

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Advertisers Beware: New FTC Guidance Signals Tough Stance on Endorsements

The Federal Trade Commission (FTC) recently released new guidance regarding the use of endorsements in advertising. The new guidance is a “must read” for marketers that feature endorsements from celebrities or consumers in their advertising, as well as for any companies that operate contests or sweepstakes on social media.

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Arent Fox LLP, founded in 1942, is internationally recognized in core practice areas where business and government intersect. With more than 350 lawyers, the firm provides strategic legal counsel and multidisciplinary solutions to clients that range from Fortune 500 corporations to trade associations. The firm has offices in Los Angeles, New York, San Francisco, and Washington, DC.