Over the last ten years the world marketplace has expanded exponentially to meet the ever increasing demands of consumers worldwide. With more efficient communications, better software and technology, sophisticated equipment and greater investment in the manufacturing sector, global trade has exploded. Did you know that the Department of Homeland Security revealed that 81 percent of all counterfeits in the U.S. come from mainland China?

Most people think that the increase in availability of various goods is – well, a good thing – totally ignoring the reality that some of those goods may be counterfeit knockoffs. While the knockoffs may very well be less expensive than the originals, they are not as well made as the originals (that’s why people pay big bucks for the original in the first place.) Not worried about that? You should be, because making counterfeit items is not only illegal, it is an incredibly dangerous risk for people who buy those products later. This relates to defective products.

Generally speaking, most manufacturers do a good job of quality control for their goods. If something does get messed up, a recall will totally tank that company’s reputation and affect their sales. One only had to look at recent baby accessory recalls to know that is true. That aside, one thing is brutally clear when it comes to bootleggers or counterfeiters, most of them have no clue (nor care) what the technical niceties are when it comes to making various goods.

They don’t know how to make sure seams don’t rip, that zippers work, that baby toys won’t choke a baby or how to keep the dyes from leaching out of fake leather goods. In short, their only concern is getting something out on the market as fast as possible that looks OK and is cheap. Looking OK and cheap is one thing; whether or not that product works, will last or won’t harm someone is another can of worms entirely.

Knockoffs are not just clothing, shoes, handbags and jewelry. They can and do include things like exploding fake Zippo lighters, fake diabetic strips that may not give accurate readings and fake power cords, power strips and night-lights that may fail. While those may be the smaller things in life, there is more bad news. The latest media reports include stories about how fake/counterfeit computer components from China are winding up in US ships and warplanes. Gives one pause for thought, doesn’t it?

To learn more about David Alden Erikson, Attorney at Law, visit Daviderikson.com. Mr. Erikson specializes in Los Angeles fashion law, internet law, business litigation, trademark and copyright law.

You may have noticed that sculpture downtown in the middle of the rotunda at your local city hall. At least you “think” it’s a sculpture, but then again, it might also be a bike rack. That’s the prevailing problem with art – what is it? This is actually a question that has been argued in many courts across the nation, and frankly, no one is even close to being able to define what art really is and they may never be.

The reason for that? It changes all the time. One year the “in” thing may be pictures of soda cans in a back alley depicting the angst of modern society and their throwaway habits – and this will be considered to be art. The next year, and honestly sometimes even the next month, those same soda cans become passé and the newest hot item is something that passes for finger painting done on steel panels. Go figure. Nonetheless, someone somewhere may find their “art” being knocked off and the battle may be on in the form of a lawsuit.

When defending the rights of the creator of the “art,” the main issue is what belongs to whom, and let’s also not forget who actually owns the “art.” While most would say the creator of the art is the owner, are they really? They don’t have anything appropriated to their work once it’s not in the studio.

Then, there is the often contentious issue of the relationship the artist has with the gallery. The artist is the worker who produces the work, but the gallery also has ownership rights to the work because they represent the artist. Often they get a whopping 50% cut of the final sale price for the work because they promoted it, showed it and raved about it and that got the artist and the work noticed.

Ownership changes hands through sale of the work, or does it? That’s the multi-million dollar question and one that poses an endless conundrum for those with a philosophical bent. It also poses some interesting questions in legal cases as well.

Here is an example of the problem of legality and ownership issues. Have you heard about Associated Press (AP) suing Shephard Fairey? They sued him over the Obama Hope posters that he artistically interpreted. Problem is that AP says his posters amount to copyright infringement because he mass produced a photo originally owned by AP without their permission. Fairey didn’t use the exact photo, he artistically interpreted it.

Fairey’s portrait version of the original image was based on a photo taken in April 2006 by AP photographer Mannie Garcia. AP kicked up a stink and in reply Fairey sued for a declaratory judgment that his poster, despite its origin, was “fair use” of the original photo. This is just one example of the kinds of issues that are floating around in the world of art law with the underlying confusion threaded into the mixture of what happens when you give art a primary holder. Is its meaning, which only the artist seems to know and understand, affected by giving it an owner?

To learn more about David Alden Erikson, Attorney at Law, visit Daviderikson.com. Mr. Erikson specializes in Los Angeles fashion law, internet law, business litigation, trademark and copyright law.

The online world is indeed getting more and more sophisticated, particularly when it comes to using open-source collaborative efforts to develop programs. The most well-known example of that would be Open Office, much the same as MS Word, but users seem to feel it’s easier to use. In addition to that observation, it is also constantly updated, because it’s open source, and it’s free. You can’t beat that as a major motivator to use it.

Over ten years ago, Linux was the first company to drive the revolution to open source technology and now, a drug company is dipping its toes into the open source waters for developing a new drug. GlaxoSmithKline PLC (GSK) is on the cutting edge of what may be the latest in creating new drugs quickly in response to perceived threats to humanity.

Just recently, GSK allowed the public to access the designs for about 13,500 chemical compounds that it feels may inhibit the parasite that causes malaria. The idea here is that by sharing information and partnering with others, scientists may find the right combination faster than if they were trying to do it by themselves.

It’s certainly not too far-fetched to think that everyone who sees the chemical compounds are going to see them they same way GSK scientists do. Often innovation and success comes from pooling the ideas and expertise from others with different approaches. At the moment, two government websites and one private one will act as hosts for the data.

This step forward into sharing what has previously been a deep, dark company secret may open the doors to the creation of drugs that are not owned by a single company. That in itself would be a giant step forward for the global community. Would it mean they would lose money or are we seeing the greening of a global sense of community responsibility for everyone affected by disease?

Interestingly, drug formulas are typically tightly guarded trade secrets and often end up being blockbuster sellouts with billions being made for the drug company. Is GSK about to give that potential up in this experiment? Chances are the answer is no, largely because malaria usually plagues poor countries and drugs for those countries aren’t famous for providing a large payback, thus reducing the drug company’s risk.

Just when you’d think Microsoft would have nothing to do with a venture of this type, up pops the information that one of the three websites hosting this open source effort is called Collaborative Drug Discovery, an Eli Lilly & Co spin off with funding from the Bill and Melinda Gates Foundation and Flounders Fund.

While the current drug information sharing is being done to experiment with “neglected” diseases, there is some speculation this process may be viable for developing commercial drugs. That might be a bit of a stretch for the simple reason that intellectual property issues would need to be dealt with before anyone could proceed. No matter what the outcome of “this” experiment in camaraderie, it may turn out to be “the” way of doing business in the future.

To learn more about David Alden Erikson, Attorney at Law, visit Daviderikson.com. Mr. Erikson specializes in Los Angeles fashion law, internet law, business litigation, trademark and copyright law.

There is one exception to the general rule of copyright vesting in an author’s work. It’s called “work for hire.”

In a nutshell the concept of work for hire is meant to let a company train, share ideas and educate the people they employ without the underlying fear that they are creating their own future competition. Generally speaking, this is an exception to the general rule of copyright where it vests in the author of a work.

Let’s take a closer look at this doctrine. A company employer is assumed to own copyright on any work created by their workers during the scope of their job. Along with this assumption is the fact that businesses will usually also lay claim to ownership of work produced by independent contractors (if they commissioned the work); if both parties agree in writing the work was work for hire, and that the work itself fits in one of nine categories enumerated in federal law.

As you may expect, the language in the statute leaves the door fairly wide open for vigorous arguments. Let’s look at an example. What if you had a tech support person working for you during the day that went home at night and created software applications? Is that person now working outside the scope of their job at your company? What if the person used skills or ideas learned at your workplace? While you might have thought to put scenarios like this in a work for hire document, the vital question is whether or not “you” will own the work.

There is no right or wrong answer to those questions because an answer is dependent on the facts of each case individually. This is why it is critically important to speak to a Los Angeles business litigation attorney with expertise in this area to outline what you would need to protect your company.

Now, here comes the fly in the ointment – startup tech companies who need their software developed for them and they hire out work as they need it done and when they can afford it. The fly in the ointment is that computer code isn’t really in any one of the nine federal work for hire categories, which puts a crimp in what the company is supposed to do. Put another way, this means the company almost has to hope the programmer’s ethics are superior, and that they won’t use what they’re working on to start their own firm.

The good news is that a recent court decision, JustMed, Inc. v. Byce offered this area of the business world a bit of elasticity when dealing with work for hire issues. The court held that a software developer was an employee and that meant any code developed belonged to the company that hired the developer.

This is an interesting case for another reason as well. The court came to this verdict by almost flying in the face of considerations that would usually lead courts to classify a relationship as being that of an independent contractor. Those factors included: the parties never having a written employment agreement; the business didn’t withhold taxes, provide benefits or a W-2; the company didn’t offer much in the way of direction for the job; the contractor used their own equipment and worked remotely.

The bottom line here is that this area may yet be open to further interpretations as new cases develop for consideration. In the meantime, each case is based on and dealt with on its own merits virtually guaranteeing different results every time. When in doubt about the work for hire doctrine, talk to a Los Angeles business litigation attorney. It could save you some grief later.

To learn more about David Alden Erikson, Attorney at Law, visit Daviderikson.com. Mr. Erikson specializes in Los Angeles fashion law, internet law, business litigation, trademark and copyright law.

The Genetic Information Nondiscrimination Act (GINA) gives the nod to the fact that advances in genetics is crucial, indeed critical, to medical progress. Unfortunately, these advances held the potential to have the information misused against employees. In order to avoid this possibility, Congress passed GINA to ostensibly protect genetic information of workers and ban employment discrimination that may be based on genetic information.

What does genetic information include? Typically, it is a sign of the possible manifestation of a disease or disorder that may run in an employee’s family. Genetic testing usually takes place in clinical research or other areas that examine human RNA, DNA, proteins, chromosomes and/or metabolites which detect chromosomal changes, mutations or genotypes.

Just to avoid some confusion here, according to the Act, it is against the law for employers to fire, not hire or discriminate in other ways against a worker. This would apply to circumstances dealing with pay and the conditions and terms or privileges of their employment based on genetic information. It is also against the law for employers to refuse workers opportunities or use genetic information against them to affect their employment status.

It would seem logical that GINA would also make it illegal for an employer to ask or demand genetic information from an employee or their families. There are, however, some exceptions to the rules, and this is certainly an area you will want to speak to an experienced attorney about if you find yourself in the position of having been requested to provide genetic information.

The exception to the rules come into play when an employer – by accident – asks or requires a family medical history; when a company offers health or genetic services as a component of a wellness program and worker’s provide their written consent; when an employer asks for or requires a family medical history from workers under the FMLA; where the company buys material publically available that includes a worker’s family medical records; and where the genetic information is used for monitoring biological effects of toxic substances in the workplace.

It may seem like there are just too many exceptions that an employer could use to get the prohibited information and if that is the case, then what was the point of the Act in the first place? Fair question and a valid one too. This Act does address this by saying that even if the employer gets genetic information under an exception, they are still prohibited from using it against a worker for any reason.

While there are other safeguards built into this Act that are intended to protect workers whose employers to happen to get their genetic information, it still raises questions about violation of secrecy and privacy. If the employee happens to be dead set against that kind of information being at the hands of their employer and they say so, the company may not retaliate against them.

As you can see, this is a new area and largely untried and untested in the legal arena. It will be interesting to see how the rules are interpreted, if a case that’s filed under a breach of the provisions of this Act makes it to court.

To learn more about David Alden Erikson, Attorney at Law, visit Daviderikson.com. Mr. Erikson specializes in Los Angeles fashion law, internet law, business litigation, trademark and copyright law.

Unfortunately, they can’t.

Copyrighting a fashion design is not possible because it does not provide the creator of that design with the kind of protection they really want – protection from knockoffs. In fact, the converse is true when a fashion designer gets ready to launch a new design; they expect they will be copied. Often, they get knocked off before their product even hits the market; such is the cutthroat competition within the industry.

Until recently, this dire state of affairs has caused a great deal of angst among designers who want to go places but want their creations to remain their own and not show up under someone else’s label as a “less than perfect copy” of the original. There may be good news on the horizon in the form of the Design Piracy Prohibition Act – if it actually passes into law. This bill would offer copyright protection for fashion designs widely defined as eyeglass frames, duffel and tote bags, handbags, purses and clothing. Admittedly, clothing is a tad vague, but chances are that would be sorted out in the courts when push came to shove and a lawsuit was filed.

This Act actually amends Chapter 13 of the Copyright Act, which you may find rather interesting since that chapter provides protection to one category of useful articles, boat hull designs. Wondering what boat hull designs have to do with clothing, et cetera? The key here is the term “useful article.” Currently, fashion designs are classified as “useful articles” and have what is referred to as an intrinsic utilitarian function. There is more to that definition, but you have the key element.

Right now, designs of useful articles may be protected under copyright law “only if such design incorporates pictorial, graphic, or sculptural features that can be identified separately from, and are capable of existing independently of, the utilitarian aspects of the article.” In addition, there is very limited protection to be had under trade dress (trademark) and design patents (patent) law. The problem with those two “protections” is that they’re not practical for the fashion industry.

The proposed Act suggests a three year protection for fashion designs. Why? It’s limited because typically fashion trends are rather short-lived at the best of times. You’ll also find out that applications for protection may be filed at the U.S. Copyright Office, where it would be put on a database of protected designs and images of that design.

The Act also aims to narrow the definition of innocent infringement so that the courts are able to impose liability on those who had reasonable grounds to believe a design was protected. It would also boost damages for infringement, something the fashion industry would be enormously happy to see.

To learn more about David Alden Erikson, Attorney at Law, visit Daviderikson.com. Mr. Erikson specializes in Los Angeles fashion law, internet law, business litigation, trademark and copyright law.

So, you just finished reading a great blog on trade dress law and you want to quote it. Is that OK to do? Well, the short answer to that question is yes, short quotes are not usually thought to be copyright infringement because they are considered to be fair use. That basically means if you are criticizing or offering a comment about what someone else has slapped up on their blog, you’ve got what is referred to as fair use right to quote.

It’s even better if you take the time to use the material you want to use in a transformative manner – a lovely legal word that means the courts like it when you transform the original comment/post into something else such as praise, commentary or criticism. If you are commenting on a passage, you can generally copy and paste.

So the whole deal boils down to what fair use is in the long run. If you hunt that down and read it in the Copyright Act, it states that fair use “for purposes of criticism, comment, news reporting, teaching, scholarship, or research is not an infringement of copyright.” That’s about as clear as mud and really, if you get right down to brass tacks, there is no one definitive rule that applies for fair use. Even the courts have a time of it, but do tend to follow four factors when considering cases like this.

Those four factors have to do with the character/purpose of the use, the nature of the work, the amount of the portion used, and the affect on the market/potential market. These factors tend to vary from case to case, and trying to second guess just what is acceptable to copy is guaranteed to give you a massive headache.

On the other hand, you may freely copy federal government documents. Although we’re not quite sure why anyone would want to, since reading them is usually an exercise in confusion. Nonetheless, any materials produced by the US government are in the public domain. You may also report facts and ideas in someone else’s website or article, but “not” the expression. The expression is copyrighted and encompasses the particular combination of words and structure that make the material what it is.

To learn more about David Alden Erikson, Attorney at Law, visit Daviderikson.com. Mr. Erikson specializes in Los Angeles fashion law, internet law, business litigation, trademark and copyright law.

Not many people really understand just what the term trade dress law actually means, which is a bit unusual, since the term has been around for at least a hundred years, give or take. In fact, it was the courts of days gone by that set the principle of trade dress law in stone by stating the maker of a product intended to be consumed by the public or used by them “must see to it that the product is not dressed in the clothes of another.”

Put another way, this simply means that the idea here was to stop commercial piracy where manufacturers/retailers would fob off their products as being someone else’s. Confused yet? In even simpler terms this just means that the courts, even a hundred years ago, wanted to stop people from ripping off others by offering goods that looked like something they were not. Today that would be called infringement.

So by now you’re wondering what the heck trade dress really means, since no one seems to have a good grasp of the concept. History says that at one time, trade dress meant the manner in which a product was “dressed up” for marketing. It means far more than that now.

Sometimes the more things change, the more they remain the same. This concept is no different. Even way back when, commercial piracy involved things like mimicking brand names or labels to fool consumers.  There were even instances of manufacturers imitating another’s packaging so closely, it was hard to tell which product was the genuine original. In response to that sneaky backdoor practice, the courts widened the definition of trade dress law to include product packaging – in particular, specific shapes.

Over time, the laws dealing with trade dress issues were rewritten, added to, expanded and changed. Interestingly enough, the specific term trade dress itself doesn’t actually appear in the Trademark Law revision of 1988. Instead, protection is offered for any word, term, name, symbol or device, or any combination.

Time passed once again and as the world turns, trade dress decisions handed down in the courts in the 1990s started to show a more aggressive stance by plaintiffs who wanted the expanded trade dress protection applied to them. Since the law is rarely static, this began to change as other courts started to restrict protection for trade dress – specifically product configuration. Consider this whole area to be a moving target, subject to change depending on the nature of the case at hand.

What makes trade dress protectable and how does a plaintiff prove they have been infringed upon? In a nutshell, the plaintiff has to show their trade dress is unique (distinctive), inherently or through the acquisition of secondary meaning, not functional. They also need to show that the defendant’s rip-off or knock-off is bound to cause confusion to the public because they won’t know the original source.

As you can tell, this is a fairly complex area of the law, and proving a trade dress case can be touch and go. However, having said that, it can certainly be done, and done with success.

To learn more about David Alden Erikson, Attorney at Law, visit Daviderikson.com. Mr. Erikson specializes in Los Angeles fashion law, internet law, business litigation, trademark and copyright law.

What if some large corporation did something really bad, even evil toward you; something that would seem to be ripe to justify punitive damages? While that might be something we’d all love to see happen, call it the desire for vengeance, this doesn’t always happen.

Yes, unfortunately, there are instances when corporations may sometimes escape punitive damages when the wrongful act they have been charged with and sued over, was committed by an employee. This raises an interesting question: to wit who else would perpetrate a bad act if not an employee; after all, companies are only able to act via the human beings that work for them.

How could something like that be? A company not being assessed punitive damages for an outrageous act? The bottom line is that judges don’t particularly like punitive damages claims. Thus, one of the ways they weed them out of lawsuits against big companies/corporations is to misread the California Civil Code section 3294.

Section 3294 provides that corporations aren’t liable for the bad acts of their employees, unless either the corporation should have known they were employing some crazy rogue nut bar who might be capable of misconduct, or if someone very high up in the corporation directed or ratified the conduct. To put that in simpler terms, that means that the corporation isn’t liable for punitive damages unless it can be traced to “an officer, director or managing agent.”

The obvious intention of the legislature in enacting that statute was to avoid corporate liability for the intentional torts of low-level employees, like when a security guard beats up a visitor for no good reason. The idea is that “No purpose would be served by punishing the employer for an employee’s conduct that is wholly unrelated to its business or to the employee’s duties therein.” Fine, we get that.

However, judges too often use the law to allow companies to avoid punitive damages and use a low level employee as a scapegoat for the company’s misconduct, or where it’s truly hard to figure out who made the ultimate decision. Judges may even weed out punitive damage claims at the pleading stage, simply because a plaintiff doesn’t know who made the decision.

The lesson for plaintiffs here is to allege as much as they can in the Complaint, which might be only that the conduct in question was made by an officer or managing agent acting in their corporate capacity. That done, then quickly propound discovery aimed at identifying the real decision maker in order to fend off an early motion to strike. The dance of law can be such fun at times.

To learn more about David Alden Erikson, Attorney at Law, visit Daviderikson.com. Mr. Erikson specializes in Los Angeles fashion law, internet law, business litigation, trademark and copyright law.

Here’s the scoop on this latest fashion knockoff lawsuit. North Face, who is well known for selling a particular kind of hiking apparel is more than slightly peeved with South Butt who is also offering very similar clothing, which isn’t so bad if that was all they were doing. However, South Butt is blatantly using North Face’s logo and typeface. This is decidedly tacky to say the least, not to mention it crosses some fine lines in the world of trademark infringement.

One of the defense’s used in this case invokes something not a lot of people, even lawyers, have heard about; the free speech/parody defense. It’s quite clear that South Butt (who do you suppose chose that name anyhow?) is just having a blast with this lawsuit. And why not, the publicity is potentially worth millions for them in sales. What’s so hilarious is the fact that their official court documents claim the public is well aware “of the difference between a face and a butt.” Well, obviously the Butt’s lawyer happens to have a sense of humor.

While it might be funny, knowing the difference between a face and a butt really is precisely the question that needs to be asked – would the public be confused by the difference in clothing lines and names? Hard not to laugh about this, isn’t it? Take a look at this from the viewpoint of the right to free speech is inherent in our nation and add the vital importance of parody in the marketplace and, well to be honest, it appears South Butt has a good point. It begins to appear that perhaps North Face may be holding some sour grapes.

What’s even more interesting about this case is that the creator of South Butt is 19 years old and set up this line of clothing for the very purpose of commenting on consumerist culture by doing a parody on the prominence of the North Face logo. Enter the freedom of speech defense. North Face is none too impressed, but the general public is rather amused.

Here is a really good question to ponder. When does the right to free speech and parody trump a trademark? Case law indicates that “it appears that resolution may turn on no more than how clever and humorous the court thinks the defendant’s usage is. If it is relatively innocent and clever, it will be allowed.”  For example the federal court in Ohio held that the slogan “This bud’s for you” as part of a florist’s ad campaign was not an infringement of the Budweiser beer slogan.

And, let’s not forget the stuffed dog chew toys dubbed Chewy Vuiton, Chewnel #5, Dog Perignon and Sniffany & Co.  The court allowed these names, reasoning that the  “Chewy Vuiton” dog toy deliberately conjures up the famous [plaintiff's] marks and trade dress, but also communicates that it is not the [plaintiff's] product …  The juxtaposition of the similar and dissimilar-the irreverent representation and the idealized image of [plaintiff's] handbag-immediately conveys a joking and amusing parody. The furry little “Chewy Vuiton” imitation, as something to be chewed by a dog, pokes fun at the elegance and expensiveness of a Louis Vuitton handbag, which must not be chewed by a dog.

So, in the case of North Face versus South Butt – it looks like the winner may be South Butt, provided they really are making a social comment.

To learn more about David Alden Erikson, Attorney at Law, visit Daviderikson.com. Mr. Erikson specializes in Los Angeles fashion law, internet law, business litigation, trademark and copyright law.