By Lígia Carvalho Abreu (2015)

Homage to Louis Vuitton I. Illustration made by Catarina Pinto and Lígia Carvalho Abreu Source of Inspiration: Look 45 of the 2014/2015 Fall RTW Collection, including the Petite Malle Red Epi, all designed by Nicolas Ghesquière for Louis Vuitton.

 

As an exclusive right, intellectual property (IP) is a limitation to the freedom of competition and free initiative of those who do not have any intellectual property rights (IPR) over immaterial goods. The recognition of this exclusive right to the author (copyright), a first trademark user, the inventor (patent) or the designer of an industrial design, is a matter of justice and equity.

IP protection must reflect this theory in order to be a stimulus for creative expressions[i], which are the fundamental elements of a democratic civil society[ii]

Applying the aforementioned theory to Louis Vuitton, I think that the craftsmen work and expertise transmitted onto the hand-made products or the amount of hours employed in the elaboration of each piece are some of the indicating efforts and merit this company has in creating a worldwide recognised brand. Louis Vuitton must not be alienated from the original and distinctive work that it produces with its own efforts and merit.

Constitutionally, rewarding efforts and merit through IP protection is associated with the social function of these rights. By protecting IP we reward the efforts and merit to the extent that this protection promotes innovation and economic, cultural development.  For instance, according to the United States Constitution, as shown in article 1 of the Section 8, the Congress has the power:

 To promote the progress of science and useful arts, by securing for limited times to authors and inventors the exclusive right to their respective writings and discoveries.[iii]

 

IPR are not granted to protect closed monopolies that restrain the freedom of creation or of private initiative of third parties and, therefore, dissuade original, novel and distinctive goods from appearing in the marketplace.

However, we cannot apply this social function limitation of the IPR to counterfeiting and design piracy. Those activities do not produce original, novel or distinctive goods.

Counterfeiting is an illegal and unregulated process of making products with a brand name and logo that are identical to those of a registered trademark, normally a prestigious and high valuable brand. The counterfeit product may display not only a fake brand name and logo, but also copyright work without the authorisation from its owners of this IPR. As a consequence and in spite of its inferior quality, the counterfeit product is made, sold and posed as the original product, creating confusion in consumers. In addition, the producers of counterfeits take illegal advantage of the economic and creative efforts of a widely recognised brand, affecting its reputation and goodwill.

I agree with Louis Vuitton when it states that counterfeiting:

Is the violation of the talent, the skills of the craftsmen and the creativity of the artists to whom Louis Vuitton owes its success. The robbery of intellectual property rights undermines the investment and knowledge made to develop the company.[iv]

 

The thousands of raids, anti-counterfeiting procedures and the consequent break-up of criminal networks and shutdown of litigious websites, show how Louis Vuitton is annually faced with this huge problem. For instance, in the case Louis Vuitton Malletier S.A. v. Singga Enterprises (Canada) Inc., 2011 FC 776, [2013] 1 F.C.R. 413[v], it was proven that the companies Singga Entreprises (Canada) Inc. and Carnation Fashion Co., both based in Burnaby British Columbia and Altec Productions, based in Markham, Ontario, imported, advertised, offered for sale and/or sold counterfeit Louis Vuitton fashion accessories, in particular, handbags. Those products were made in China and were imported into Canada. As a consequence they have infringed the trademark and copyright rights of Louis Vuitton.

According to the Federal Court, the recognition of a trademark depends on its valid registration. Louis Vuitton has registered the following trademarks in Canada: LV dessin, Louis Vuitton, Toile Damier Dessin, Toile Damier & Dessin, Toile Monogram Dessin, LV & Dessin, Fleur (dessin), Fleur (Dessin), Fleur dans un losange dessin, Serrure dessin, Decor Floral Dessin, Flowers Dessin, galliera and Neverfull. According to the Court, those trademarks have been used to identify Louis Vuitton products. Thus, they are valid[vi]. By virtue of being the owner of those trademarks, the company has:

The exclusive right to advertise, distribute, offer for sale and sell fashion accessories and other merchandise in association with Louis Vuitton trade-marks in Canada, to preclude others from using the Louis Vuitton trademark or trade-name, words or designs likely to be confusing therewith and to prevent others from depreciating the value of the goodwill attaching to the Louis Vuitton.[vii]

 

Those counterfeit products were sold as if they were the original products produced by the original brand. They had an inferior quality than those of the authentic products made by Louis Vuitton. Thus, they created confusion in consumers with regards to their origin, character, quality and composition, hence affecting the reputation and goodwill of the registered trademark Louis Vuitton[viii].

Thus, the activities of the defendants were found contrary to the Canadian Trademark Act, notably on paragraphs 7(a), (b) and (c), and in sections 19, 20 and 22. 

The Federal Court also recognised Louis Vuitton’s exclusive ownership of its copyright work. Louis Vuitton is the author of the black multicoloured monogram and the white multicoloured monogram, with its flowers and quatrefoils. Those details represent the originality of Louis Vuitton. They are not merely mechanical reproductions of previous work created by other authors. They are not copies, but rather a representation of the labour, skills and creativity of the artists who work for Louis Vuitton. This originality in the expression of thought is protected by copyright law. It is a prerequisite for copyright protection. As judge Peterson J. rightly stated:

Copyright Acts are not concerned with the original of ideas, but with the expression of thought in print or writing. The originality which is required relates to the expression of thought. But the Act does not require that the expression must be in an original or novel form, but that the work must not be copied from another work – that it should originate from the author[ix].

 

Copyright work may be used by third parties with the consent of the author or if it is justified by copyright law exceptions such as fair use or fair dealing for the purposes of criticism, review or reporting news.

None of these situations apply to the case that was decided by the Canadian Federal Court. It was proven that the defendants:

Have never been authorized by the Louis Vuitton plaintiffs to manufacture, import, distribute, offer for sale, sell or otherwise deal in any product bearing Louis Vuitton copyright work.[x]

Therefore:

It is an infringement for anyone other than Louis Vuitton to sell, possess for the purposes of selling and importing into Canada for the purpose of selling a copy of the Louis Vuitton copyrighted works, that such person knew or should have known the infringed copyright or would infringe copyright if it had been made in Canada.[xi]

Thus, the defendants disrespected sections 3 and 27 of the Canadian Copyright Act.   

Homage to Louis Vuitton II. Illustration made by Catarina Pinto and Lígia Carvalho Abreu Source of Inspiration: Look 2 of the 2014/2015 Fall RTW Collection, including the Petit Malle Noir, all designed by Nicolas Ghesquière for Louis Vuitton.

 

In addition, counterfeiting is not only a threat to the creativity and the rights of designers, artisans and brands; it is also a threat to the rule of law. Counterfeiting is often associated with criminal organisations and networks. The production and selling of counterfeited products hides situations of labour exploitation, such as the forced labour of children and of illegal immigrants, workers exposed to hazardous substances and other unhealthy working conditions, environmental negative impacts as well as tax and customs evasion[xii].

In turn, design piracy is related to the production and commercialisation of a knockoff. A knockoff is a product made and commercialised by a registered trademark. It is a less quality imitation of another product created and commercialised by another registered trademark. A knockoff does not contain counterfeit logos or brand names. The knockoff displays the brand name and the logo of the brand which has produced it. The original product is produced according to high quality standards, often hand-made and, as a consequence, it is more expensive than the knockoff. Consumers may know that they are buying a product from the brand that produces the knockoff. However, they can think that this cheaper version is an original product of this brand. Thus, a knockoff spreads consumer’s confusion and infringes the intellectual property rights of the creator of the original product. 

Louis Vuitton believes in the application of the contributory liability principle:

In both the online and off-line world opportunities and responsibilities should be shared, based on the principle that each actor should be under a duty of care to take all reasonable steps to protect consumers from misleading practices[xiii].

 

However, sometimes it is not easy to stop actions which promote misleading practices.

For instance, the Warner Brothers Entertainment Inc. movie Hangover II shows in the airport scene, knockoffs of Louis Vuitton trunks and Keepal travel bags which were produced by the Chinese-American company Diophy. Besides the appearance of the knockoffs, one of the main characters exclaims “careful that is a Lewis Vuitton”.

Louis Vuitton, on the subject of Louis Vuitton Mallatier S.A against Warner Brothers Entertainment Inc[xiv], claimed that by seeing the movie many consumers do not have the perception that the Diophy bags are not genuine Louis Vuitton bags or they can think that the company has given consent to Warner Brothers to use the knockoffs.

According to Louis Vuitton:

The use and misrepresentation of the Diophy bag bearing the Knock-Off Monogram Design as an authentic Louis Vuitton bag is likely to blur the distinctiveness of the LVM Marks (…) Tarnish the LVM Marks by associating Louis Vuitton with the poor quality and shoddy reputation of the cheap products bearing the Knock-Off Monogram Design.[xv]

 

Consequently, Louis Vuitton invoked false designation of origin and unfair competition in violation of article 15 of the United States Code § 1125 (a) civil action [xvi]:

(1) Any person who, on or in connection with any goods or services, or any container for goods, uses in commerce any word, term, name, symbol, or device, or any combination thereof, or any false designation of origin, false or misleading description of fact, or false or misleading representation of fact, which: (A) is likely to cause confusion, or to cause mistake, or to deceive as to the affiliation, connection, or association of such person with another person, or as to the origin, sponsorship, or approval of his or her goods, services, or commercial activities by another person, or (B) in commercial advertising or promotion, misrepresents the nature, characteristics, qualities, or geographic origin of his or her or another person’s goods, services, or commercial activities, shall be liable in a civil action by any person who believes that he or she is or is likely to be damaged by such act.[xvii]

 

Louis Vuitton also invoked trademark dilution under the New York General Business Law § 360-l (Injury to Business Reputation and dilution)[xviii]:

Likelihood of injury to business reputation or of dilution of the distinctive quality of a mark or trade name shall be a ground for injunctive relief in cases of infringement of a mark registered or not registered or in cases of unfair competition, notwithstanding the absence of competition between the parties or the absence of confusion as to the source of goods or services. [xix]     

 

Using as an example the Rogers v. Grimaldi, 875 F.2d 884, 10 USPQ2d 1825 (2d Cir. 1989) case, the Court noticed that the first amendment to the Lanham Act protects the use of a trademark in an artistic work if it is artistically relevant and not explicitly misleading[xx].

The artistic relevance of the non-misleading use of the Diophy bags to the plot of the film was justified by the judge as follows:

There is no likelihood of confusion that viewers would believe that the Diophy bag is a real Louis Vuitton bag just because a fictional character made this claim in the context of a fictional movie. Neither is there a likelihood of confusion that this statement would cause viewers to believe that Louis Vuitton approved of Warner Bros' use of the Diophy bag.[xxi]

Furthermore, it stated that the use of the knockoffs in the film:

Was intended to create an artistic association with Louis Vuitton, and there is no indication that its use was commercially motivated[xxii].

Homage to Louis Vuitton III. Illustration made by Catarina Pinto and Lígia Carvalho Abreu. Source of Inspiration: Look 12 of the 2014/2015 Fall RTW Collection designed by Nicolas Ghesquière for Louis Vuitton.

Although Louis Vuitton lost the case, it is a fact that the movie uses infringing products, the knockoffs.

I agree that the freedom of artistic expression presented in a movie, painting, illustration or in other manifestations of art, should be preserved and prevail even when they may conflict with other rights such as intellectual property rights. In this sense, the use of the expression “careful that is a Lewis Vuitton” in the movie Hangover II is part of the construction of a fictional character, according to the freedom of artistic expression of the screenwriter. However, the use of knockoffs is not necessary to the construction of the fictional character or to any other relevant artistically manifestation of the film. The purpose of the construction of the fictional character could be achieved by using the original Louis Vuitton fashion accessories and not by using the knockoffs.

Even if there is a growing perception that luxury is less based on logos than on quality and artistic aspects of a product, it is a fact that some consumers may be tempted to buy counterfeiting and knockoffs of luxury brands for several reasons: economic reasons, imitation of a social status, among others. However, the richness of Louis Vuitton is not its logo but the high quality of materials, the savoir-faire, the artistic aspect and the concept behind each piece, elements which a knockoff and a counterfeiting product are not able to reproduce.   

 

[i] Peter Drahos. A Philosophy of Intellectual Property. Aldershot. Ashgate: 1996, 199-228.    

[ii] Neil Weinstock Netanel. Copyright and a Democratic Civil Society. In: Yale Law Journal. 106: 2.1996, 283-388.

[iii] United States Constitution available at http://www.law.cornell.edu/constitution/overview

[iv]Louis Vuitton, Respecting Heritage, http://us.louisvuitton.com/eng-us/la-maison/brand-protection#/respecting-heritage

[v] Louis Vuitton Malletier S.A. v. Singga Enterprises (Canada) Inc., 2011 FC 776, [2013] 1 F.C.R. 413 available at : http://recueil.cmf.gc.ca/eng/2013/2011fc776.html

[vi] Ibid., § 8.

[vii] Ibid., § 100.

[viii] Ibid., §§ 100 and 107.

[ix] Peterson J.. University of London Press Ltd v. University Tutorial Press Ltd.. 1916 2 Ch at 608-609. Oxford, University Press University http://oxcheps.new.ox.ac.uk/oxcheps/

[x] Louis Vuitton Malletier S.A. v. Singga Enterprises (Canada) Inc., 2011 FC 776, [2013] 1 F.C.R. 413, §111.

[xi] Ibid., § 109.

[xii] United Nations Office on Drugs and Crime (UNODC). The illicit trafficking of counterfeit goods and transnational organized crime.     

http://www.unodc.org/documents/counterfeit/FocusSheet/Counterfeit_focussheet_EN_HIRES.pdf.  United Nations Office on Drugs and Crime (UNODC). Labour exploitation, harmful and potentially dangerous products, and a $250 billion a year funding source for organized crime: Find out about the true costs of counterfeit goods. http://www.unodc.org/documents/counterfeit/Leaflet/Counterfeit_Brochure_2014_-_EN_-_WEB.pdf

[xiii]Louis Vuitton, Fighting Illegality, http://us.louisvuitton.com/eng-us/la-maison/brand-protection#/fighting-illegality

[xiv] Louis Vuitton Mallatier S.A against Warner Brothers Entertainment Inc. United States District Court Southern District of New York. Case 1: 11-cv-09436-ALC-HBP,  http://www.hollywoodreporter.com/sites/default/files/custom/Documents/Hangover.pdf

[xv] Ibid., 4-5.

[xvi] Ibid., 5.

[xvii] United States Code available at http://www.law.cornell.edu/uscode/text/15/1125

[xviii] Louis Vuitton Mallatier S.A against Warner Brothers Entertainment Inc., 5.

[xix]New York General Business Law available at http://law.onecle.com/new-york/general-business/article24.html

[xx] Anandashankar Mazumdar. “Appearance of Knockoff Louis Vuitton Bag in Hangover Part II Not Subject to Claims.” In: Patent, Trademark and Copyright Law Daily. Blomberg, BNA. http://www.bna.com/appearance-knockoff-louis-n12884910142/    

[xxi] Louis Vuitton Mallatier S.A against Warner Brothers Entertainment Inc., 18.

[xxii] Ibid, 9.