Your Own Argument and Opinions

I agree with the ruling in Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc. In an increasingly global market it is important to establish responsibility in internet fraud and piracy cases. As shown in the Madrid Agreement, more and more countries are banning together to create an international standard in recognizing copyrights and trademarks. “Under the Madrid Agreement, any trademark registered with the international registry is valid in all signatory countries. (The United States is a signatory.) The Trademark Law Treaty simplifies and harmonizes the process of applying for trademarks around the world. Now, a U.S. firm seeking international trademark protection need file only one application, in English, with the PTO, which sends the application to the World Intellectual Property Organization (WIPO), which transmits it to each country in which the applicant would like trademark protection” (Page 512). It is important for the global community to uphold another countries established trademarks, copyrights, and patents. In order for a brand to become huge on a global scale, there has to be some level of assurance that another brand cannot easily come in and steal a design or logo because there was no protection in that country, especially when the company is a start-up looking to create a name for itself on a global market. “Transnational business is growing with breathtaking speed. The United States now exports more than $1 trillion worth of goods and services each year. Leading exports include industrial machinery, computers, aircraft, electronic equipment, and chemicals” (Page 126). The industry lines of trade are increasingly becoming more blurred as the consumer market moves online in order to reach a wider audience. There are treaties in place for trade and laws in place regarding trade taxes so why is the protection of intellectual property hard to enforce and why are laws slow to catch up to the technology in place for ecommerce?

Rule of law

There are several precedents set regarding one of the issues brought up in my questions- copyright and trademark infringement. It seems commonplace now especially in the fashion industry where there are thousands upon thousands of counterfeits on the black market. The factories making them seem hard to punish because when one shuts down, another one pops up somewhere else to take its place. “Although authors still routinely place the copyright symbol (©) on their works, such a precaution is not necessary in the United States. However, some lawyers still recommend using the copyright symbol because other countries recognize it. Also, the penalties for intentional copyright infringement are heavier than for unintentional violations, and the presence of a copyright notice is evidence that the infringer's actions were intentional” (Page 506).  It is vital for a large brand to protect itself internationally against design thieves especially since it is quite prevalent in large countries like China where intellectual property is not as upheld as it is in the European Union or United States.

It is interesting to note the affect that the internet is having in creating more opportunities for infringement and pirating to happen. “Once again, the Internet is challenging intellectual property laws that were not conceived with this technology in mind” (Page 511). There is a continuing grey line as to where the responsibility lies in the seeking of damages regarding copyright infringement. In 2011, a precedent was set regarding third party liability among internet piracy. The case, Louis Vuitton Malletier, S.A. v. Akanoc Solutions, Inc., 658 F.3d 936 (9th Cir. 2011), intended to prove that an internet server was liable for damages because they willfully allowed web domains from China sell counterfeit Louis Vuitton goods. Lawyers representing Louis Vuitton sent those owning the server eighteen notices regarding the infringement but they went unheeded. The courts eventually found in the luxury brands favor stating:

“First, with regard to the contributory trademark infringement claim, the Court noted that “websites are not ethereal; while they exist, virtually, in cyberspace, they would not exist at all without physical roots in servers and internet services. . . . Appellants had direct control over the ‘master switch’ that kept websites online and available.” Therefore, the servers themselves, as distinct from the infringing websites, were a “means of infringement” under federal trademark law. Second, with regard to both claims, the Court held that defendants' assertion, that "contribution to infringement must be intentional for liability to arise", was without merit. Rather, proof that defendants had actual or constructive knowledge that the users of their services were engaging in infringements or knowingly failed to prevent infringing actions is sufficient. Third, with regard to the contributory copyright infringement claim, the Court maintained that, as is the case with trademark law, "intent may be imputed" because of the knowing failure to prevent infringement and “there is no question that providing direct infringers with server space” constitutes a material contribution to direct infringement because this "substantially assists" direct infringement”               (http://www.fashionapparellawblog.com/2012/01/articles/fashion-cases/louis-vuitton-sets-a- new-standard-in-federal-trademark-and-copyright-law/).

This shows that the laws are catching up to the ever evolving technology making it easier for intellectual piracy. In the end, this may not stop all counterfeits hitting the black market, but it sends a clear message. Intellectual property is valuable and worth protecting. Big brands such as Louis Vuitton will go through extensive measures to attack any kind of infringement upon their designs and trademark.  

Reasoning of the Law

Interview with Brian Chau (Commentary in Italics)

1.  How important is it for a company to develop brand recognition through trademark?
Depends on the industry. Trademarks are important where there is little customer recognition of the merits of your product or where you have a large number of competitors. For example, Coca-cola's trademark is far more valuable than Apple's trademark because Apple's products can themselves, while Coca-cola's can't.

He explains the importance of trademarking especially when the market is saturated with similar products. I thought he gave a great example with Coca-Cola. There are plenty of other colas in the market and through a trademark, Coca Cola was able to create a lifestyle image around the product. As they became better known, it was that much more important to register their trademark to ensure other would not infringe upon what the company built. “A trademark is any combination of words and symbols that a business uses to identify its products or services and distinguish them from others” (Page 509). Even though there are plenty of fizzy drinks on the market, the brand logo distinguishes it from others similar products.

2.  Why is it necessary for companies in the fashion industry to protect their product through trademark registration?
You get trademark protection automatically, but trademark registration gives you benefits you would have on top of common-law trademark protection, such as presumed notice by infringers,
cross-jurisdictional enforcement, etc. Given the ease of copying in the fashion industry, it's important to have all means available to stop infringers.

Brian brings up an interesting point here. Under common law, the first person to use a mark in trade owns it. Registration under the federal Lanham Act is not necessary. However, registration has several advantages:

·         Even if a mark has been used in only one or two states, registration makes it valid nationally.

 

·         Registration notifies the public that a mark is in use, which is helpful because anyone who applies for registration first searches the Public Register to ensure that no one else has rights to the mark.

·         The holder of a registered trademark generally has the right to use it as an Internet domain name. (Page 509)

It is interesting to note that there is protection of a brand mark regardless of federally registering it or not. I agree that it is probably in the brands best interest to trademark the logo because it is very easy to steal and replicate designs. One can see this just by typing “fake Louis Vuitton” into a Google search.

3.   If I make a design that unbeknownst to me is a reasonable facsimile of someone else's design, what legal recourses will the offended party take against me?
This is both a copyright and trademark issue. Copyright may not apply if you can show that you independently designed it, without access or copying another's design. Trademarks on the other hand, they can demonstrate that if a potential customer would be confused by your design and think that the object came from the original designer, then they may be able to sue for passing off (unregistered) or trademark infringement (registered). They can either sue for an injunction (stop using it) or damages (payment).

Brian’s standpoint on copyrights are interesting. I think it would be difficult to prove you did NOT access another designer’s design for the sole issue that the designs looks similar enough to bring before a court. “The holder of a copyright owns the particular expression of an idea, but not the underlying idea or method of operation” (Page 506). It is very difficult for brands to go after copyright pirates and seek damages. We can see this by the amount of counterfeits there are out in the market now.

4.   In your opinion, can it be argued that the common practice of copying new fashion designs in affect forces designers to come up with fresh new ideas?
That's one side of the argument. The other side is that fashion designers invest significant resources in developing their ideas and no one would create if it would be immediately stolen by a third party.

I have to agree with both arguments. Yes, it does force designers to come up with the newest greatest ideas, but on the other hand, these designers are investing time, money, and effort into creating a tangible form of their artistic expression. This is why it is important to have copyright laws in effect to at the very least, dissuade others from stealing a designer’s work.

5.   When in the startup of a business is it advisable to trademark your brand?
You can either do it before you use it as a proposed use, or after you start using it. It depends on the type of business, how important the trademark is going to be, and the strength of the trademark. If it's
really distinctive, it's easier to apply for a trademark; if it's not, it's really hard to get one without showing that customers know your mark in the marketplace.

I believe it also depends on the strength of the brand. I don’t see a use in spending the money to trademark a logo if they are not even big enough for anyone to care about. Brian speaks about the strength of the trademark which might be hard to figure out. It really depends on the trajectory of the brand itself and whether the owners see it exploding into a well-known brand.

6.   How long does it take for an application for a fashion trademark to be approved?
Depends - if it doesn't get opposed by a third party, likely in 4-8 months (in Canada). If it becomes opposed or the examiner thinks it is unacceptable, it can be much longer.

7.   How long do fashion trademarks last?
Trademarks have no set expiry date; but if you don't use it, it is vulnerable to an expungement action from a third party to get rid of it.

Perhaps this is different in Canada, but according to the textbook, “Initially, the trademark is valid for 10 years, but the owner can renew it for an unlimited number of 10-year terms long as the mark is still in use” (Page 509). It really depends on the strength of the brand and whether it has become well-known in the 10 years it has been in use. If after 10 years, it is still obscure, then I agree someone else should be able to use the logo without fear of infringement.

8.   Are fashion trademark rights transferable?
In Canada, yes. I think there are some restrictions in the US, but I'm not sure what they are.

9.  When starting a business, should I license my company as LLC or INC?
This is not my area of expertise; I can't help since my work is primarily in the

10.  What are the legal advantages and disadvantages of a sole proprietorship?
This is something you can probably google, but off the top of my head, the advantages are simplicity and ease of creation, disadvantages are no liability protection, tax disadvantages and inability to persist after the death of the sole proprietor.

The Questions

1.       How important is it for a company to develop brand recognition through trademark?

2.       Why is it necessary for companies in the fashion industry to protect their product through trademark registration?

3.       If I make a design that unbeknownst to me is a reasonable facsimile of someone else's design, what legal recourses will the offended party take against me?

4.       In your opinion, can it be argued that the common practice of copying new fashion designs in affect forces designers to come up with fresh new ideas?

5.       When in the startup of a business is it advisable to trademark your brand?

6.       How long does it take for an application for a fashion trademark to be approved?

7.       How long do fashion trademarks last?

8.       Are fashion trademark rights transferable?

9.       When starting a business, should I license my company as LLC or INC?

10.   What are the legal advantages and disadvantages of a sole proprietorship?


These questions are of interest to me because these are pertinent issues we have to face once we decide to become small business owners. “For much of history, land was the most valuable form of property. It was the primary source of wealth and social status. Today, intellectual property is a major source of wealth. New ideas—for manufacturing processes, computer programs, medicines, books—bring both affluence and influence” (Pg. 502). The protection of our intellectual property is one we should look carefully on and research upon embarking on creating our own brand. “The high cost of developing intellectual property, combined with the low cost of reproducing it, makes it particularly vulnerable to theft” (Pg. 502). As designers and professionals in the fashion industry, I believe many of us feel we have ideas and designs that are unique and worthy of exploration by perhaps leveraging it to start our own business or land a lucrative position in a large company. But what if someone were to steal our designs or unique ideas? We must know the law to see where we can be protected. We are fortunate to live in the United States where there is a high value in intellectual property so there are laws to protect it. “Some commentators suggest that the United States has been a technological leader partly because its laws have always provided strong protection for intellectual property” (Pg.502). Brian is from Canada and expresses there are very similar laws governing intellectual property in his country as well. Because of the Madrid Agreement, there are some 92 countries that recognize another participating country’s trademarks. This international agreements make it easier for a company to protect its brand because there are less complicated steps to take. The internet also makes commerce a global stage and with many company doing e-commerce, it is incredibly important to protect your brand internationally.

 I also asked questions on the most advisable way to structure a business, as an LLC or S class. As I continued to read the chapter, I started to understand it is probably most advisable to obtain an LLC structure because of the easier tax filing and less financial risk in terms of bankruptcy. “Members are not personally liable for the debts of the company. They risk only their investment, as if they were shareholders of a corporation” (Pg 377). Capital and investment in building a business is enough to risk. I would rather not risk losing my personal assets as well if the business does not succeed and I need to file for bankruptcy.  

Legal Authority

"Law is powerful, essential, and fascinating" (Pg. 3). The lawyers who argue both sides of the law are equally as fascinating. Brian Chau is an attorney specializing in patents and trademarks. He attended the University of Toronto and obtained his law degree in the specialty. Winky Wu, the owner of the company I work for, mentioned she had spoken to him quite a bit about getting a trademark for her business name and he was of great help.

I am excited to speak to someone who could potentially help me in the future with my business issues pertaining to trademarks, business structure, and the dangers of copyright and trademark infringement. "We may not always like the way our legal system works, but we depend on it to keep our society functioning" (Pg. 4). There are so many avenues for people to steal intellectual property that is integral to understand the legal issues surrounding business law. I believe it is very important to know your rights and become informed. Once you establish your brand you must protect it. Brian is also very knowledgeable about intellectual property as well. I contacted him via email after I developed my questions and tried to get as much information as I can. I also conversed with Winky about the issues she faces in building her brand as she is in the process of trademarking Winky Designs. I find it fascinating to get two perspectives on the issues of trademarking. I think her opinion on the matter is incredibly interesting and it was not what I expected to her at all. She brings up issues regarding the actual need for trademarking in creating a start-up. "Intellectual property, however, has little economic value unless others use it" (Pg. 502). Will others even be interested enough to steal my intellectual property? These are issues we have to face in creating a business and I am excited to explore the issue further.

Week 7 EOC: The Lawyer

The lawyer I am contacting is a friend of my boss, Winky Wu. Brian Chau attended the University of Toronto with her and eventually went on to obtain a law degree specializing in patents and copyrights. Winky had mentioned she had spoken to him quite a bit about getting a trademark for her business name and he was of great help. When I told her about my class project, she said she would get me in contact with him and I can ask him questions pertaining to my project.

I believe he would be a great person to speak to because he deals with these issues every day and it would be a personal favor for his friend. I am excited to speak to someone who could potentially help me in the future with my business issues pertaining to trademarks. I believe it is very important to know your rights and become informed. Once you establish your brand you must protect. He is also very knowledgeable about intellectual property as well. I will call him once I develop my questions and try to get as much information as I can. Also conversing with Winky about the issues she faces as she is also building a brand would help me immensely as well.

Week 6 EOC: Illicit Trade

Illicit trade is an economic boost to any society and yet while some may see this as a “good thing”, it is nothing but destructive and harmful as the implications are far more reaching than the average person realizes. In the illegal trade business there are people devoid of moral integrity, ethical intent, and legal responsibilities, in order to gain millions and millions in financial gains. This money is untaxed therefore all money made from the illegal trade is pure profit.

It is far more prevalent than most suspect. There is illegal trade everything from people to prescription drugs. What most people don’t realize is this also is a major funding of deplorable international criminal acts like human trafficking, illegal weapons trade, and the drug trade. If criminals are willing to manufacture and move such “harmless” (to the everyday consumer) such as dvds or handbags then what else are they willing to produce and do that are far more sinister?

There needs to be much more education on what illegal trading is and what the implications are. Westerners go to China and, because of the thrill, buy counterfeit goods at a steep discount. It is likely that there is no education about what their money is actually going to support. Women, children, and men will be sold and illegally trafficked using the money from that sale. Drugs will be shipped to affluent countries and sold to young children using the money from that sale. Buying counterfeit goods is not a harmless crime. I remember seeing some advertisements warning against the purchase of counterfeit goods. It has all but disappeared now. Public awareness needs to be raised to educate the consumers of what the money from these illegal acts are really doing. Apathy against relatively low harm acts as purchasing a “knockoff” is what makes deplorable illegal trade possible. It is a chain of crime that is everywhere yet people turn a blind eye to or willingly participate in for their own selfish vanity.

Week 5 EOC: Apple-Samsung Patent Battle

The Apple-Samsung patent battle is one that seems like it has no end in sight. There are currently 4 complaints by either company against the other up for review in court in the US and dozens internationally (http://money.cnn.com/2013/08/09/technology/mobile/apple-samsung-itc/index.html). These are cases based on one company violated the technology patent of the other. It originated when Apple filed a suit against Samsung alleging that Samsung stole patented design software related to the iPhone and iPad. Samsung then counteracted with a lawsuit that alleges Apple was unfairly “hording” the patent when it is to be licensed to other manufactures because it will eventually become an industry standard (http://www.natlawreview.com/article/international-trade-commission-addresses-use-standard-essential-patents-section-337-). This allows for fair competition among the different manufacturers in the industry and discourages monopolistic business practices. Since then, Apple and Samsung has gone back and forth and have tried to get the other’s products banned from import into the US. The ITC has ruled in favor for both in different cases, but none have yet to see the full weight of the courts imposing punishment.

I think it is extremely disconcerting this is the way big business is conducting themselves from an ethical standpoint. Both companies have violated the other’s right to fair completion and patents. Apple should have allowed the license of their software knowing this was a “game changer” in the way phone technology would evolve. It’s like saying the first company to create cell phones all together would not allow any other manufacture and design company to make one either and a majority of us would still be tethered to the wall. On the other hand, I also don’t believe Samsung should steal another company’s design because of this. The talent at Apple is obviously high they should not be penalized for creating great software. It’s tough to side with one company or the other, but it’s easy to say there is not a clear right and wrong in this. This is obvious because of the different court rulings. This war will not be ending anytime soon even though each company might win a battle here and there. As CNN expressed in a recent article, “The good news for consumers is that the trial proceedings in such disputes typically take so long that the products in question are often long obsolete by the time a judge rules” (http://money.cnn.com/2013/08/09/technology/mobile/apple-samsung-itc/index.html). While the companies continue to take each other to court, it seems we the consumers will not have to suffer.

Week 4 EOC: Eric Snowden

The Edward Snowden controversy is on the tip of everyone’s tongue these days. Whether some hail him as a patriotic citizen who cares for the American people or whether he is a traitor to his country and should be hanged, someone has an opinion. I personally believe, and this is just MY HUMBLE OPINION, that Snowden did us (the American people) more of a disservice than helped us.

Yes, the government has unprecedented access to our personal lives. Everything that we do from the phone calls we make to the emails we right, they have access to. There are many many Americans who are outraged at the invasion of privacy they see as unconstitutional and are calling for reform in Washington. However popular this stance, I would like to take a different one. I want the government to keep track of what Americans say and do (of course, not in a 1984 “Big Brother oppression” kind of way). I fear as an American, what the consequences could be if the government does not keep track of what people are talking about. CNN recently wrote an article detailing the response of the NSA in defense of the program in question, XKeyscore: “The training materials claim XKeyscore assisted in capturing 300 terrorists by 2008.” (http://edition.cnn.com/2013/07/31/tech/web/snowden-leak-xkeyscore/). This might or might not be true. We may never know. However, the sheer thought of our own citizens conspiring to hurt us in another terrorist attack is enough for me to say ok, listen in on us. I would rather give up some of my personal privacy to ensure 9/11 does not happen again.

I believe we, as Americans who love and serve our country, need to take a step back and focus on national security instead of personal liberties. As the Examiner wrote, Americans are concerned about the issue of how secure this personal information is if people like Snowden has access to the information. “Tens of thousands of us have access to national secrets? How has something like this happened? Why is it necessary for so many individuals to have knowledge of our nation’s security secrets? One might go as far as to say that it’s shocking more information isn’t released more often when there are so many individuals who have access to information” (http://www.examiner.com/article/the-nsa-s-edward-snowden-controversy-where-the-nation-goes-from-here). This does address the issue of our information being put in the wrong hands. This could possibly give our nation’s enemies valuable information on what we do.

There are other countries that are tied in with the controversy as well. Recently, the Bolivian president was denied access to a flying zone because of suspicions Snowden might be on the flight and seeking asylum in Bolivia. The Huffington Post reports that, “Latin American leaders were outraged by the incident, calling it a violation of national sovereignty and a slap in the face for a region that has suffered through humiliations by Europe and several U.S.-backed military coups” (http://www.huffingtonpost.com/2013/07/05/spain-snowden-bolivia_n_3549346.html). The president’s staff assured the US Snowden was not on the plane, but expressed outrage over America’s allies restriction to airspace in their country to this flight. The implications are far outreaching just the American people’s rights to privacy. Diplomatic relationships hang in the balance because of this one man and the “Pandora’s box” he has opened.