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
Labor & Employment, International Corporate, Importation & Immigration
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New Revelations in the Leather Industry Put Western Footwear and Apparel Companies on their Back Feet

A watchdog organization known as Transparentem has uncovered dire working conditions in the heavily polluted tanneries located outside of Dhaka in Bangladesh. According to Transparentem, men, women, and children as young as fourteen have been working in a highly toxic environment under dangerous conditions with little or no protective gear. Further, Transparentem claims to have tracked the flow of leather from these tanneries to companies that produce shoes and handbags for several leading Western brands. Transparentem’s findings have been reported in a recent news story published by the Associated Press.
 

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Advertising, Data Collection & Privacy
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FTC Fires Warning Shot Over Misleading Instagram Posts

What’s New?

The Federal Trade Commission recently sent more than 90 letters to celebrities, athletes, and other influencers reminding them that brand endorsements made in social media posts must comply with the FTC’s Endorsement Guides. The letters reminded social media influencers – individuals or groups recruited to promote a brand’s products or services – that social media endorsements must clearly and conspicuously disclose “material connections” between the influencer and the brand, and focused on the need to disclose such connection in Instagram posts.

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Real Estate & Leasing, Fashion Law Videos
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Anthony Lupo and Mark Fawer Talk Fashion-Branded Hotels

Why limit yourself to simply traveling in style when you could also live it? Over the years, fashion designers have branded everything from furniture to luxury food products, yet the emerging trend of branching out into hotel design is becoming increasingly popular. While some have partnered with existing spaces to curate custom suites, others have gone a step further and have actually acquired high end premises to showcase their brands.  

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E-Commerce, Online Distribution & Fulfillment
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New Wave of Shipping Fee Class Actions: High Steaks

Omaha Steaks International Inc. recently became the target of a proposed class action lawsuit, in which the company is accused of charging unreasonable shipping fees that were excessive compared to the company’s actual costs.

The plaintiff, Neiman McCoy, alleges that he purchased a jar of Tangy Buffalo Rub from the Omaha Steaks website for $3.99, but then had to pay an additional $15.99 for shipping and handling, a flat rate charged by Omaha for orders under a certain total. McCoy alleges that the cost for shipping would have been less than half of that charge for his order through the United States Postal Service, and that the fee ultimately includes a profit for the company. He alleges that this is contrary to ethical guidelines provided by the Direct Marketing Association.

McCoy is seeking compensatory damages for the proposed class, including full refunds of shipping and delivery charges that were in excess of Omaha’s actual costs, as well as injunctive relief.

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Trademark
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In Benihana Case, Slicing and Dicing of Trademark Rights To Licensee Proves Problematic

A dispute that began with an unauthorized burger placed on a menu by a licensee recently culminated in the dismissal of the latest lawsuit between feuding factions of Benihana, the Japanese teppanyaki restaurant chain. In early March, the US District Court in the Southern District of New York dismissed a lawsuit brought by Benihana of Tokyo LLC (BOT) against its American counterpart, Benihana, Inc. (BI) that raised claims of breach of contract and breach of good faith, and highlighted the risks of splitting trademark rights between geographic territories.

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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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Intellectual Property, Copyright
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Supreme Court Clarifies Availability of Copyright for Applied Art on Apparel

On March 22, 2017, the Supreme Court issued a ruling in Star Athletica, L.L.C. v. Varsity Brands, Inc., et al, No 15-866, clarifying that the Copyright Act protects applied artistic elements appearing on utilitarian objects, including apparel. In a ruling authored by Justice Clarence Thomas, the Court held that: “[a] feature incorporated into the design of a useful article is eligible for copyright protection only if the feature (1) can be perceived as a two- or three- dimensional work of art separate from the useful article, and (2) would qualify as a protectable pictorial, graphic, or sculptural work – either on its own or fixed in some other tangible medium of expression – if it were imagined separately from the useful article into which it is incorporated.”

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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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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.