ADR in Fashion Industry Part 2/2
By Veronika Válová
Previous blog post related to disputes within the world of fashion and design provided a short introduction to ADR mechanisms and touched upon initiatives to address those issues. Trends in the fashion industry are changing faster than before, however some iconic pieces are produced over and over again increasing their value as a part of luxury life. We can recall brands such as Chanel, Dior or Balenciaga where pieces of clothes and accessories hold on the top of the fashion industry. Imagine a suit from Chanel made of tweed, a perfectly designed bag from Hermes or an iconic trench coat from Burberry, these are all pieces designed in the last century and their value is just increasing. The high demand for luxury products and limited budget of people triggers initiatives to create similar products, which are affordable for normal people. Therefore, part of the job as a fashion designer is dealing with copies of good pieces, which is on one hand a sign of admiration and on the other side frustration over losing the profit. Let me introduce you to a few concrete disputes.
Christian Louboutin, S.A. v. Yves Saint Laurent America, Inc.
Fashion brand Louboutin is well known for shoes with its signature design – red outsoles. Application of red colour to the outsoles of high fashion womens shoes began in 1992. In 2008, the United States Patent and Trademark Office awarded Louboutin a trademark for lacquered red sole on footwear (Red Sole Mark). [1]However, in 2011 Christian Louboutin, S.A. filed a lawsuit against Yves Saint Laurent, who used similar design in his collection Cruise 2011 threatening the legality of the Trade mark. District Court rejected Louboutins motion due to impossibility to prove that its red outsole brand is entitled to trademark protection even if it has gained public recognition for it. Court at the end specified the conditions under which Louboutin red outsoles are protected.
[2]Tiffany & Co v. The Swatch Group
Famous jewellery stores and watchmaker brands joined in production of watches with diamond components in order to increase sales for both parties dividing profits between the two. However, a dispute arises when Tiffany is not happy with the design and production of watches in the style of their company. Based on this issue of taste Tiffany decides to promote new watches less and less, not supporting its business partner.[3] The Swatch commenced arbitral proceedings in the Netherlands to address this dispute, where Tiffany filed counterclaim immediately. Both parties agreed that the dispute would be brought before the Netherlands Arbitration Institute (NAI) and applicable law would be Dutch law. [4]The Arbitral Tribunal ruled in favour of the Swatch and issued Tiffany to pay 328 mil euro to Swatch for breach of the contract and damages. Tiffany tried to bring the claim before Dutch Court, Court of Appeal and even Supreme Court, however unsuccessfully at the end Tiffany & Co. Was forced to pay as decisions of Arbitrations are binding.[5]
In conclusion, it is very difficult to effectively solve disputes as both parties will claim their rights. Fashion industry changes very fast, both disputes presented took up time and money, appealing to different courts to challenge decisions, which affects not only the financial situation of the brand but also its reputation.
[1] Christian Louboutin S.A. v. Yves Saint Laurent Am. Holding, Inc., No. 11-3303 (2d Cir. 2013)
[2] ibid
[3] Conway, Advocaten and Attorneys at Law, website <https://www.conway-partners.com/media?id=2392c148bf32dd2> accessed 1 november 2021
[4] ibid
[5] ibid