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
Intellectual Property
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WWD Names Arent Fox a Top Retail Practice

Arent Fox’s Fashion Law group was recommended as one of the best retail practices in the country by WWD, which encouraged retailers to call on the firm’s attorneys when faced with issues that threaten their bottom line.
 
The article focused on the rise of knockoff and infringing fashion products, as issue that is occurring at an alarming rate in 2017. “Every month, shoppers spend billions (yes, billions) of dollars on counterfeit versions of designer goods and with social media’s ability to create a fervor over so many things, fashion chief among them, the knockoff industry is set to keep growing,” reported WWD.
 

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Regulatory, Recall & Prop 65, Consumer Product Safety, Fashion Law Videos
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Anthony Lupo and James Ravitz on Perfumes and Cosmetics in the Retail Sector

Gone are the days where a brand's DNA is defined solely by clothing and accessories. With the luxury goods sector experiencing a recent downturn, more and more companies are breaking into the perfume and cosmetic spheres. The movement may be attributed, in part, to the "lipstick index," a phrase coined in 2001 by Leonard Lauder, then-chairman of Estee Lauder, to describe how beauty products may act as affordable indulgences during times of economic recession.

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Class Action Defense
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The Next Wave of Class Action Lawsuits Against Fashion Retailers: Excess Shipping and Handling Fees

Based on recent federal court filings in the Central District of California, it appears that plaintiff lawyers have found a new way to threaten retailers with class action litigation. In January of this year, two class action complaints were filed on behalf of consumers who allegedly were charged shipping and handling fees “not reasonably related to Defendant’s actual costs of shipping or delivering the items to consumers but instead greatly exceeded those costs.” The complaints assert that the shipping and handling fees violate “established ethical principles” and California law.

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Consumer Product Safety
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FTC Continues Close Scrutiny of "Made in USA" Claims

The Federal Trade Commission (FTC) has just announced that it will be closing its "Made in USA" investigation of certain Target pillow products. According to the FTC, the outer packaging of the pillow products bore an unqualified "Made in USA" claim while the packages' contents – the pillows themselves  bore a "Made in China" label claim. FTC's investigation began in response to numerous consumer complaints regarding this conflicting origin labeling. In response to the FTC’s investigation, Target agreed to remedy the problem, including removing all affected items from sale, introducing remedial packaging, and, most significantly, agreeing to undertake several longer term "process enhancements" designed to prevent future deceptive "Made in USA" claims.

These longer term enhancements include:

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E-Commerce, Online Distribution & Fulfillment, Advertising, Data Collection & Privacy
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Consumer Review Fairness Act of 2016: What Brands Need to Know About This New Consumer Review Law

What’s the News?

Before leaving office, President Obama signed into law the Consumer Review Fairness Act of 2016 (CRFA), which protects consumers engaging in consumer reviews. The CRFA voids a contract if it prohibits or restricts an individual from reviewing a seller's goods, services, or conduct.

Who is Affected?

All companies that have the prohibited clauses (see below) in their consumer contracts will have to review and update these contracts for compliance with the CRFA.

What Do You Need to Know?

We’ve compiled some of the things that you ought to know about the CRFA:

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Consumer Product Safety
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FTC Settlement Shows Agency Remains Focused on “Made in USA” Claims

The Federal Trade Commission has announced a proposed settlement and consent order in its investigation of a US-based water filtration company, iSpring Water Systems, concerning that company’s representations that its products are "Proudly Built in the USA," which is considered an unqualified "Made in USA" claim that the products were all or virtually all USA-made. These representations appeared on the company’s own websites, as well as those of other online retailers who sold the products. The FTC alleges that many of the company’s products were wholly imported and/or produced with significant foreign inputs, and therefore, the unqualified US-origin claims are false and misleading. While iSpring has neither admitted, nor denied, the allegations, it has agreed to drop the "Made in USA" references, and to make only qualified "Made in USA" claims which clearly and conspicuously identify the extent to which foreign parts, ingredients or processing are utilized.

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Consumer Product Safety
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FDA Issues Draft Guidance on Lead Levels in Cosmetics
The US Food and Drug Administration recently issued draft guidance establishing an upper limit for lead levels in externally applied cosmetics of 10 parts per million (ppm) of lead. FDA’s upper limit lead restriction applies to lip products, such as lipsticks, lip glosses, and lip liners, and to other externally applied cosmetics, such as eye shadows, blushes, compact powders, shampoos, and body lotions. FDA intends the draft guidance to educate new manufacturers entering the marketplace, as well as encourage existing manufacturers to continue to follow or improve on voluntary good manufacturing practices that limit trace amounts of lead as an impurity.

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Advertising, Data Collection & Privacy
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New Version of Payment Card Information Standards Targets Recent Breach Issues

What’s the News?

Following recent updates, merchants and retailers will soon become subject to the updated Payment Card Information Data Security Standard (PCI DSS), the security standard that organizations need to follow if they handle credit and debit cards from major card companies, such as Visa, MasterCard and American Express. This round of changes will be known as version 3.2 of PCI DSS, and include significant guidance and updates on hot topics such as encryption and strong credentials. Compliance with the changes is important because companies that are subject to PCI DSS but fail to comply face exclusion from processing credit card payments and/or hefty fines. Sometimes, noncompliance could mean leaving open the doors to your cardholder data environment, thereby allowing hackers and malicious entities to enter.
 

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Fashion Law Videos, Intellectual Property, Copyright
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The Real Deal: Anthony Lupo and Michelle Marsh Discuss Clothing and Copyright
In this episode of Fashion Counsel, partners Anthony Lupo and Michelle Marsh discuss copyright laws and their applications (and road blocks) to the retail sector. Stay tuned, as the Supreme Court is expected to render a decision regarding the copyright case discussed above in the spring of 2017.
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International Corporate, Importation & Immigration
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What Trump Means for the Fashion Industry

As the inauguration of President-elect Donald Trump nears, retailers should be paying close attention to expected seismic changes in domestic trade policy that will have an important impact on the fashion industry.
 
Mr. Trump recently announced the nomination of Robert Lighthizer to serve as US trade representative, another indication that the new Administration intends to make good on campaign promises to curb imports that are seen as hurting US businesses. A longtime adviser to US steel industry companies, Mr. Lighthizer served from 1983 to 1985 as deputy US trade representative during the Ronald Reagan. Mr. Lighthizer is known as a master strategist for trade sensitive domestic manufacturers, and he joins Commerce Secretary-Designate Wilbur Ross, a longtime steel industry investor, and economist Peter Navarro, a leading China trade critic, to constitute a trade policy team decidedly skeptical of past free trade conventions.
 

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ABOUT ARENT FOX LLP

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.