Summer Fun 2018 at the Conkle Firm

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Sure, we’re serious lawyers but we like to have a little fun too, especially during the summer with our law clerks.  This summer, our law student clerks joined us for a lot of hands-on, real world experience in commercial litigation, intellectual property and transactional practice.  And they still had time for some fun, including an outing to a Dodgers vs. Angels game in the Freeway Series.  We started with a limo stop for dinner at Wurstkuche in DTLA, and ended the evening with fireworks after the game.

Conkle Kremer and Engel at Dodgers vs. Angels 2018

We also attended a special evening at the Hollywood Bowl – Star Wars Episode IV: A New Hope, with a live orchestra and even more lively lightsabers.  The evening began with a special private dinner served at the Hollywood Bowl Volunteers Cottage, and ended with a limo ride home for our stormtroopers.

Star Wars at Hollywood Bowl 2018Star Wars at Hollywood Bowl 2018Conkle Firm Light Saber Battle at Star Wars at Hollywood Bowl 2018

Back in the office, our lawyers and summer law clerks joined in a lark of a project that one of our attorneys, Evan Pitchford, dreamed up as an homage to the movie “Inception”.  Rather than dreams within dreams, Evan decided he wanted to create “Shirtception” – T-shirts within T-shirts.  Evan photographed himself wearing successive generations of T-shirts to organically create an infinite mirror effect of image within image of himself in his T-shirt.  When Evan was done, attorneys and our summer law clerks wanted to join in.  This photo of our attorneys and summer law clerks wearing successive generations of the T-shirts followed:

Evan's T-Shirts Within A T-Shirt

One of our clients imports kites and other toys and games, and gave our attorney Desiree Ho a couple of kites as a gift of appreciation.  As summer wound down and fall breezes picked up, a few of our attorneys decided to hold a kite-flying contest – from the roof of our building.

We can’t say exactly what next summer will bring, but we can say that we expect to have more fun.

 

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Conkle Firm Attorneys at Craft Beer Summit

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Conkle, Kremer & Engel attorneys Evan Pitchford and Zachary Page will attend the California Craft Beer Summit September 6-8, 2018 in Sacramento, California.  The Summit is presented by the California Craft Brewers Association, the preeminent craft beer trade group and legislative advocate in California, which is in turn one of the most progressive states in terms of its policies towards the craft beer industry.  The Summit is one of the largest West Coast craft beer-oriented industry events, with thousands of industry professionals and exhibitors in attendance each year.

Mr. Pitchford and Mr. Page will attend to meet with industry professionals and keep current on the latest industry trends, including legal developments, craft brewing distribution and business issues, and evolving beer styles.  For example, this year’s Summit seminars include the cutting-edge topic of brewing, selling, and advertising products with cannabis-derived ingredients such as hemp and cannabidiol (CBD) oil, creative uses of ABC licenses, updates on the Tax and Trade Bureau’s guidelines and requirements, and discussions on the changing and more competitive retail environment in California.

Conkle, Kremer & Engel brings its decades of experience to bear on a number of beer industry-specific issues, such as brand protection and intellectual property, distribution and vendor relations, state and federal regulatory issues, advertising and labeling, employment law, and litigation and alternative dispute resolution in state and federal courts.  If you’re an industry professional or craft beer-related business who will be at the California Craft Beer Summit and would like to connect with Mr. Pitchford and Mr. Page before, during or after the event, please contact them at e.pitchford@conklelaw.com and z.page@conklelaw.com.  They would be happy to arrange free initial discussions about particular issues you may be facing.

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California Consumer Privacy Act of 2018 – A U.S. Version of EU’s GDPR

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The California Consumer Privacy Act of 2018, regarded as the most comprehensive privacy law in the United States, was unanimously passed by the California legislature and signed into law by governor Jerry Brown on June 29, 2018. The bill (AB 375) was fast-tracked through the State Senate and Assembly in a rush to defeat an even stricter privacy ballot initiative, which was introduced by Californians for Consumer Privacy. After weeks of intense negotiations with technology companies, Californians for Consumer Privacy agreed to withdraw the initiative if AB 375 was signed into law.

The  new law, which takes effect January 1, 2020, is a reactive measure to recent privacy and data breaches, including the Cambridge Analytica scandal, and governs the use of California consumers’ data by larger companies. Businesses are required to disclose the categories of information to be collected prior to collection, as well as the identity of third-parties that are allow to access that information. Consumers also have the right to request the data that has been collected on them and may also request that the data be deleted. While consumers over 16 years old may opt out of having their data sold to third-parties without being penalized, businesses are prohibited from selling data collected from consumers under 16 years old unless these underage consumers affirmatively opt-in. The bill also gives California consumers the right to sue for up to $750 in the event of a data breach involving non-encrypted personal information due to the failure to implement and maintain reasonable security procedures and practices.

While this California law is the strictest in the nation, it is less restrictive than the EU GDPR.  For example, the GDPR requires consumers opt into, or give consent, by “clear affirmative action,” prior to the collection of personal data, whereas the California law only requires disclosure prior to the collection of personal data and allows them to opt-out of the sale of personal data. Most importantly, the GDPR requires any business that offers goods or services to consumers in the EU and collects any personal data from those EU residents to comply with the GDPR, while the California law only applies to companies that do business in California and satisfy one of the following criteria: (1) have an annual gross revenue exceeding $25 million; (2) in connection with a commercial purpose, annually buy, receive, sell, or share the personal information of 50,000 or more consumers; or (3) derive 50% or more of its annual revenues from selling consumers’ personal information.

The California Consumer Privacy Act may not remain in final form as passed. Tech companies have already expressed their desire to lobby legislators to change certain provisions of the law which they believe will result in unintended consequences. Lawmakers are expected to make amendments to the bill over the course of the next 18 months.

Conkle Kremer & Engel will continue to monitor the status of the California Consumer Privacy Act and will report on changes to the final version of this law, if any. CK&E has many years of experience advising clients about regulatory compliance issues they face, and helping them prepare for foreseeable changes in the law.

 

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The Conkle Firm Presentation at 2018 PCPC Legal & Regulatory Conference

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On May 9, 2018 Conkle, Kremer & Engel attorney John A. Conkle presented on “The State of the States” panel at the 2018 Personal Care Products Council’s Legal & Regulatory Conference.  The panel focused on the increasingly strong role of state legislatures and state regulatory bodies in addressing issues of importance to the personal care products and cosmetics industries.  The panel featured lively discussion of issues arising from the evolving patchwork of laws and regulations among numerous states, including California’s infamous Proposition 65, slack fill laws, and labeling and ingredient disclosure regulations, ingredient phase-out requirements and outright bans, volatile organic compound limitations to protect air quality, and animal testing regulations.  The discussion included the importance of preservation and presentation of evidence to support manufacturers’ positions, including testimony in depositions and at trial.

The panel’s presentation is available here for review.  Contact John Conkle to discuss the latest issues affecting the state of the personal care products and cosmetics industries.

 

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CKE Attorneys Attend Craft Brewers Conference in Nashville

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From April 30 to May 3, 2018, attorneys Evan Pitchford and Zach Page of Conkle, Kremer & Engel attended the Brewers Association’s Craft Brewers Conference in Nashville, Tennessee.  The Conference, with nearly 15,000 attendees, is the premier trade show, educational, and networking event for the craft brewing industry.  At the Conference, Mr. Pitchford and Mr. Page participated in numerous business and legal affairs seminars and conferred with brewery operators and executives, suppliers, attorneys, accountants, and consultants from California and across the country.

While the main theme of the Conference was solidarity and cooperation between independent craft brewers and their networks, prominent legal and business issues discussed among attendees often focused on the increasingly crowded space of the craft beer market.  This increasing competition has resulted in intellectual property conflicts and disputes (for example, regarding trademarks for brewery names or branding for particular beers) that craft brewers need to plan around when starting their business and expanding their portfolios.  CK&E has attorneys like Mr. Page and Mr. Pitchford who are experienced in assisting clients in selecting, registering, and enforcing trademarks and trade dress in many consumer product industries.

Another hot business topic concerned distribution models for small breweries.  In several states (including California), self-distribution is available for small breweries (California allows for self-distribution regardless of volume), but as our previous blog noted, oftentimes a small brewery reaches a point where it cannot handle its own distribution and must seek out a distributor.  And, of course, in many other states, self-distribution is not permitted at all, necessitating the involvement of a distributor when a brewery wishes to sell draught beer or package their products.  Many small breweries are concerned not only with the myriad choices of distributors, but also with finding a distributor that is the right fit and will actively promote their portfolio, and with the often restrictive laws that are involved in manufacturer-distribution relationships.  Breweries should certainly be choosy about their distributors when possible, and in many jurisdictions there are an array of potential contractual provisions (for example, regarding sales goals, chain vs. independent accounts or other account stratification, marketing, plans for brand growth, audits, etc.) that can help shape a distributor relationship before it starts.  It pays to consider and discuss as many contractual parameters as possible before signing a distribution agreement.

Additional hot topics at the Craft Brewers Conference included new Tax and Trade Bureau funding for enforcement, government regulations of taprooms and brewpubs, off-premise sales, and licenses for short-term out-of-state sales (e.g. for festivals or competitions).  As the craft brewing industry continues to grow in footprint and sophistication, look for business and legal issues to be pushed even further to the forefront of the discussion.

Contact Conkle, Kremer & Engel for assistance with your brewery business or distribution needs.

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The Conkle Firm to Present at 2018 PCPC Legal & Regulatory Conference

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Conkle, Kremer & Engel attorney John A. Conkle will be on the panel opening the 2018 Personal Care Products Council’s Legal & Regulatory Conference.  The panel will present “The State of the States,” which will focus on the increasingly strong interest of state legislatures and state regulatory bodies in addressing issues of importance to the personal care products and cosmetics industries.

States have come to recognize that, with the U.S. Congress largely gridlocked and federal regulatory agencies in a deregulation mood, the path is open for the states to regulate consumer industries in manners that they deem fit.  The result is a continuously evolving patchwork of laws and regulations that can be difficult for industry participants to navigate.

Issues to be discussed at the May 9, 2018 panel presentation include California’s infamous Proposition 65, slack fill laws, and labeling and ingredient disclosure regulations that include even public databases disclosing products’ ingredients found by state governments to be detrimental.  Further, state regulations can include ingredient phase-out requirements and outright bans, volatile organic compound limitations to protect air quality, and even animal testing regulations that can affect industry participants’ ability to compete in international trade.

A lively discussion is inevitable given the rich and topical subject matter and the vital industry interests affected.  The rest of the Legal and Regulatory Conference program should be just as engaging, covering topics such as employment law, cannabis (THC, CBD, marijuana extracts and hemp) in cosmetics and personal care products.  The many other topics to be covered in the three-day conference in Savannah, Georgia can be found in the conference program.

 

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The Conkle Firm to Attend Craft Brewers Conference and BrewExpo America

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Attorneys Evan Pitchford and Zachary Page of Conkle, Kremer & Engel will be attending the 2018 Craft Brewers Conference and BrewExpo America in Nashville, Tennessee from April 30 to May 3.  The Conference, presented by the Brewers Association trade group, is one of the largest craft brewing-centric trade shows in the world, with thousands of industry professionals and exhibitors in attendance annually.

Mr. Pitchford and Mr. Page will attend to take meetings and keep abreast of the latest industry trends, including legal developments, craft brewing distribution and business issues, and evolving beer styles.  Conkle, Kremer & Engel brings its expertise to bear on a number of beer industry-specific issues, such as brand protection and intellectual property, distribution and vendor relations, regulatory issues, advertising and labeling, employment law, and litigation and alternative dispute resolution in state and federal courts.

If you’re an industry professional or craft beer-related business who will be at the Craft Brewers Conference and would like to connect with Mr. Pitchford and Mr. Page before, during, or after the event, please contact them at e.pitchford@conklelaw.com and z.page@conklelaw.com.  They would be happy to arrange initial discussions about particular issues you may be facing.

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CK&E Attorneys Lobby California Legislature with PCPC

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On March 20, 2018 Conkle, Kremer & Engel attorneys Eric S. Engel and Aleen Tomassian helped the Personal Care Products Council fulfill part of its mission by organizing and executing an effective lobbying day to advance the legislative interests of the industry.  Led by PCPC Senior Vice President Government Affairs Mike Thompson and PCPC Director of Government Affairs Karin Ross, a group of personal care product industry members, lobbyists and advisors heard presentations by pivotal regulatory agencies and then met with key legislators and their staffs to address issues of importance to the industry.

PCPC Chief Scientist Alex Kowcz seminar to Calif Legislative Staff

The PCPC held a luncheon at which it presented its first Legislator of the Year Awards to congresspersons who have been the most effective in advancing the important interests of both business and consumers in relation to personal care products.  Legislative staff also received an educational presentation from PCPC’s new Chief Scientist, Alex Kowcz, to help bring to Legislators the most current scientific information about issues affecting personal care products.  After a long day of meetings, participants unwound and connected at an informal reception for legislators, the governor’s office and administration officials at Ella, a popular restaurant near the State Capitol.

 

Eric S. Engel and Aleen Tomassian at PCPC Calif Lobby Day Reception

Some of the highlights of the 2018 PCPC California Lobby Day included a presentation by Meredith Williams, Deputy Director of Department of Toxic Substances Control (DTSC), and Rick Brausch, Chief of DTSC’s Policy and Program Support Division, Hazardous Waste Management.  The mission of the DTSC is the Safer Consumer Products (SCP) program, directed toward advancing the design, development and use of products that are chemically safer for people and the environment.  The aim is to reduce toxic chemicals in consumer products and create new business opportunities in green chemistry.

Dr. Williams advised the PCPC group that DTSC’s SCP program intends to focus over the next three years on nail salon products, particularly to assure a safe working environment for salon employees as well as customers, such as by assuring adequate ventilation and safety equipment.  Dr. Williams also noted that Volatile Organic Compounds (VOCs) are not only within the ambit of California’s Air Resources Board (ARB) as to their effect on the environment, but they are also within the scope of DTSC’s authority when regulation of VOCs can meaningfully enhance protection of human health.

On February 8, 2018, DTSC released a draft 2018-2020 Priority Product Work Plan for public review, in which “Beauty, Personal Care and Hygiene Products” are identified as targets for possible regulation.  Of some concern to PCPC, the Priority Product Work Plan includes DTSC’s interest in broad classifications of chemicals without defining exactly which chemicals in what formulations are of concern.  For example, DTSC’s Priority Product Work Plan identifies oxybenzone, BPA, DEA, formaldehyde, phthalates, parabens, triclosan, titanium dioxide, tolulene and VOCs as classes chemicals being considered for possible regulation, but there are a great many specific chemicals, formulations and uses within such classes, and not all of them are likely to be of concern to DTSC.  PCPC expressed its concern that broad classifications can cause confusion among manufacturers and consumers, and unnecessarily inhibit product development and sales.  For example, oxybenzone (aka Benophenone-3) is one of just 16 chemicals approved by the US Food and Drug Administration (FDA) as safe and effective for use as an ultraviolet (UV) filter to achieve broad-spectrum sun protection.  The health benefits of effective UV sunscreens are well documented, but the broad suggestion of “endocrine toxicity” or “dermatoxicity” in DTSC’s identification of oxybenzone is on shaky scientific footing.  Dr. Williams noted that the 2018-2020 Priority Product Work Plan is only in draft form, and that DTSC recognizes the broad nature of the chemical groups identified and is working on identifying specific chemicals of concern rather than entire classes of chemicals.

DTSC’s Richard Brausch spoke of the hazardous waste logistics issues facing the personal care product industry, affecting the entire supply chain from manufacturers to retailers.  The issue often occurs when products are returned from retailers, and questions arise as to whether they may be regarded as hazardous waste if they are no longer considered fit for regular sale, such as when new product labeling is introduced.  Issues can arise as to who has responsibility for proper transportation and disposal of the products, whether by sale in secondary markets, repair or refurbishment, donation to charities or recycling.  It is notable here that improper transportation and disposal has led some local authorities to sue retailers and wholesalers for failing to use hazardous waste transporters.  That in turn has caused retailers to impose anticipatory disposal charges on manufacturers and wholesalers for a wide range of products.  PCPC therefore supports Assembly Member Bill Quirk’s introduction of new legislation, AB 2660, which places the onus on the disposal company to determine the correct method of transportation, as that is not within the expertise expected of retailers.

The overriding hazardous waste concern is that California uses an “aquatic toxicity” (aka “fish kill”) test that is grossly out of alignment with federal law, and which results in most cosmetic products being characterized as hazardous under California law.  The “fish kill” test is exactly like it sounds – it tests only whether quantities of the subject product added to a water tank will kill fathead minnows.  The test is not regarded as especially accurate, notably because high viscosity products that are otherwise harmless can kill the fish by clogging their gills.  Further, the test presents a significant problem for the personal care products industry, which has taken a strong stand against animal testing, so manufacturers generally do not conduct this “fish kill” test on finished products.  PCPC therefore advocates a more modern approach to accomplish the same goal, by use of a more recently developed fish embryo test (FET), in which live fish are not killed.

An interesting side note is that SB 1249 was introduced by Senator Cathleen Galgiani to prohibit importation or retail sale of any cosmetic that was developed or manufactured using animal testing after January 1, 2020.  While PCPC takes a strong stand against animal testing, it could not support the bill as written because it included no exception for products marketed in countries (notably China) which require that products be subject to animal testing.  Rather, the PCPC has been working to obtain an amendment of the proposed legislation to make it conform to that of the European Union, which has strong anti-animal testing regulations but allows for accommodations to make products acceptable for sale in China.

Dr. Michael Benjamin, Air Resources Board Chief of Air Quality Planning and Science spoke about the substantial product data that ARB had collected from product manufacturers selling in California, through extensive annual surveys conducted over the past three years.  From that data, ARB is working to identify trends in emissions of VOCs.  Of particular interest is a February 15, 2018 publication in the academic journal Science of a study of VOC emissions from consumer products.  The Science publication (Volatile Chemical Products Emerging as Largest Petrochemical Source of Urban Organic Emissions, by Brian C. McDonald, Joost A. de Gouw, Jessica B. Gilman and others), Science Vol. 35, Issue 6377, pp. 760-764 (Feb. 16, 2018)) caught popular attention and some popular press because it found that vehicle emissions had become so much cleaner over the past decades that they were now responsible for less than half of VOC emissions.  Overall, the total volume of VOCs had diminished greatly.  Further, while the Science article authors made many assumptions on which they based their assessment of VOC contributions of consumer products, Mr. Benjamin pointed out that ARB has the actual data from its industry surveys to determine whether the author’s assumptions and conclusions are well founded.  ARB therefore intends to do its own assessment of the points made in the Science article to determine what further action is appropriate.

PCPC’s first Legislator of the Year Awards were presented to Senator Ed Hernandez, Assembly Member Bill Quirk and Senator Galgiani.  In his comments to PCPC members, Senator Hernandez emphasized, “We want business to stay here in California, we want businesses to be successful.  There’s a lot of people here that purchase your products.”   Assemblyman Quirk addressed the need for common sense limitations on legislation such as Proposition 65, remarking that “[Someone] sent me a package of Coors beer with a Prop 65 warning on it.  We now have cases in court where people want Prop 65 warnings on coffee. * * * One study after another shows it’s not a health risk. * * * We’ve got to do something about this.  I’m definitely going to be working as time goes on in the legislature so that we don’t end up with things that are harmless being labeled.”  Finally, Senator Galgiani observed that good legislative policy is not a zero sum game:  “It’s not about having a proposal that’s just good for the environment or just good for business but we can meet in the middle and have regulations and policies that work for both sides and help everybody involved.  It’s just harder to get there – it takes more work, it takes more time and it takes patience, and all of you [at PCPC] have done a great job.”

 

 

 

 

 

 

 

 

 

 

See the Beauty Industry Report article on the PCPC California Lobby Day here.

 

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Women Make Their Presence Known at Natural Products Expo West

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Conkle, Kremer & Engel attorneys Heather Laird and Desiree Ho attended the Natural Products Expo West in March 2018, where they encountered product trends emphasizing simple recognizable ingredient formulations, and business trends emphasizing strong women’s influences in ownership and management.  Demonstrating the growing consumer interest in natural and organic products, attendance at this year’s Expo was reported to be the largest ever, exceeding 85,000 visitors to more than 3,500 exhibitors.  CK&E attorneys visited clients’ exhibit booths and met with entrepreneurs in the beauty, food, and beverage industries to help them strengthen their brands, navigate regulatory and labeling issues, and grow their business.

Exhibitors showed strong cross-cultural influences, with many products and flavors from around the world, all emphasizing the trend toward fewer and more recognizable ingredients in simple formulations.  Businesses clearly demonstrated they are responding and catering to the adventurous interests and palates of health-conscious, worldly, and informed consumers.  Countless product lines were customized for consumers committed to paleo, vegan, and gluten-free diets.  Another popular trend is toward products and businesses that are dedicated to championing charitable causes, so consumers can use their purchases to support causes they are passionate about and can feel loyal to brands that are as committed as they are.

Mirroring recent cultural trends, women-owned and managed businesses were very notable throughout the Expo.  Many entrepreneurs proudly advertised their Women’s Business Enterprise National Council (WBENC) certifications.  The WBENC certification “validates that the business is 51 percent owned, controlled, operated, and managed by a woman or women.”

In the beauty arena, there were a refreshing number of brands actively encouraging women to maintain an open dialogue with the product manufacturer to address issues they regularly face.  The trend of businesses expending great effort to establish dialogue and long-term relationships with their consumers through social media and direct contacts has become clear.  These overlapping trends resulted in prominent presentation of many products “made for women, by women,” ranging from beautifully packaged feminine hygiene products to natural pre-natal and post-natal products promoted as safe for use by pregnant women and around infants.

CK&E attorneys provide full service to businesses in the beauty, food, and beverage industries.  They regularly attend important trade shows to help their clients stay abreast of trends, new regulations, and developments in the law and the marketplace affecting these industries.

 

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The Conkle Firm Addresses The Future of Fashion

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On January 30, 2018, the USC Gould Law School presented “The Future of Fashion,” a panel discussion co-hosted by the IP & Technology Law and Art Law Societies at USC.  Conkle, Kremer & Engel attorney Aleen Tomassian was one of the expert panelists invited to discuss the current state of intellectual property law as it affects the fashion industry, and to discuss how recent court decisions affect the future of the industry.

USC Panel – Aleen Tomassian (Center)

A major point of discussion involved the impact of the Supreme Court’s recent Varsity Brands v. Star Athletica decision, a copyright case that concerned design features on cheerleading uniforms.  Historically, articles of clothing have not generally afforded copyright protection because they are considered “useful articles.”  But the Supreme Court held that the design features of the uniforms in issue were protectable because they were works of art which could be imagined separately from the useful article into which they were incorporated.    Many have suggested that the holding in Star Athletica signals that broad copyright protection would be available for articles of clothing.  But the USC panel discussion made  clear that Star Athletica affirmed that copyright protection is available for design elements as distinct from “useful articles,” and the recognized protection is not available to clothing in general.

The panel addressed the unique intellectual property issues that the fashion industry faces.  There was a broad discussion about the economic and moral impact of “copycat” designs on society and the effects of “knockoffs” on innovation.  Since fashion designs are not specifically protected under U.S. law, the conversation highlighted how attorneys skilled in fashion law use a combination of available forms of protection, including copyright, trademark, trade dress and design and utility patents.  A recent example is the pending case of Puma SE v. Forever 21, Inc., USDC Central District of California Case No. 2:17-cv-02523, in which Puma asserts that it has distinctive shoe designs in a line called Fenty Shoes that is promoted by singer Rhianna.  Puma contends that Forever 21 engaged in deliberate copying of some of its Fenty Shoes designs, notably the popular “Creeper”, “Fur Slide” and “Bow Slide” models.  To protect its designs, Puma alleged infringement of design patents, trade dress and false designation of origin under the Lanham Act, and copyright.  Puma’s copyright claims attempt to leverage the Star Athletica decision by contending that certain elements of the Fenty Shoes “can be perceived as a two- or three-dimensional works of art separate from the Fenty Shoes” and “would qualify as protectable pictorial, graphic, or sculptural works – either on their own or fixed in some other tangible medium of expression.”   Under the Star Athletica standard, to allow this type of copyright infringement claim, the court will have to determine that “the separately identified feature has the capacity to exist apart from the utilitarian aspects” of the shoe.  “If the feature is not capable of existing as a pictorial, graphic, or sculptural work once separated from the useful article” – the shoe – then it is a utilitarian feature and not subject to copyright protection.

The attorneys at Conkle, Kremer & Engel have years of experience navigating the complex legal and intellectual property issues faced by clients in the fashion industry.  Our attorneys help clients protect their brands to ensure their continued success in this demanding and fast-paced industry.

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