This article is written by Rounak Biswas. Here he discuss the important developments in IPR laws applicable to fashion industry in India.

Introduction

Have you ever come across a woman who does not like a GUCCI bag or a lehenga designed by Sabyasachi Mukherjee or Manish Malhotra? Have you seen any man not getting amazed by an uber cool Rolex wrist-watch or a chic loafer? The answer is a big yes. People in today’s world have a general affinity toward fashion and they tend to showcase their fashion sense by buying the products belonging to different brand names. But money becomes a constraint to such an effort and that is where contrabands and copies of the original creations come to the rescue.

As and when a design becomes famous, others start copying it shamelessly resulting in a huge loss for the makers of the original products. Even though copying is generally being done by shady companies, sometimes branded ones take refuge of the fault in the laws to copy and create products belonging to some other brand. One may find counterfeit products of famous brands plaguing the fashion industry, and quite frequently we come across newspaper reports of complaints dealing with and selling counterfeit products through various trade channels including the online portals.

Counterfeit products pose a huge threat to the economy too (due to government’s loss of revenue), apart from posing huge challenges to the profits and brand values of the popular brands.  In the fashion industry, counterfeiting is known as wilful counterfeiting as the buyers while being aware of the counterfeit products buy the same, which can be attributed largely to the huge gap in the price between the original and counterfeit product.

Unlike countries like France, where the buyers are criminally liable for buying a counterfeit product, India, currently does not have any law for the same. In India, the owners of the original products have the right of moving to a court of law of appropriate jurisdiction seeking permanent injunctions and thereby preventing the counterfeiters from selling counterfeit products. The owners of the original product(s) may also move to the court seeking compensation for their losses.

How is IPR relevant to the fashion industry?

One may be curious to know how are all these relevant to the overall concept of intellectual property rights. The truth is that IPR and fashion are wedded to each other. The creations of the designs which are being accepted as fashions are the intellectual creations of an individual and the law of our land seeks to protect those creations by giving a right to those creators an exclusive right to use such creations and exploiting them to reap monetary benefits.

By following the same principle, the legal system seeks to promote creativity by encouraging more people to come up with innovations that may ultimately fuel the growth of an economy. If the said laws fail to protect creativity effectively, the same will result in profound loss to the nation, since no one will come forward to innovate, and no new creations will be created. Thus one may notice the huge correlation between the fashion on one hand and IPR on the other. The plethora of laws namely the Trademark Act, Copyright Act, Designs Act and Geographical Indication of Goods Act seeks to protect the intellectual property rights related to creations of the fashion industry.

Recent Trends in the fashion industry – Contentious Issues

Creativity comprises a very important component of the fashion industry. While abundance of creativity, help brands reach places, on the other hand, counterfeit fashion products pose threat to the fashion industry. Fashion industry, in particular, is plagued with such controversies of counterfeiting, or lifting of designs from popular works and putting them in some other product and thereby causing violation of the rights of the original rightful owners.

If one follows the news regularly, one may notice at least two important development of intellectual property rights infringement in India. The first one is the case of Christian Louboutin, whereby the ones selling counterfeit products were held accountable and were made to pay exorbitant penalties so as to compensate Christian Louboutin’s loss due to selling of counterfeit shoes resembling his original creations. One may have also come across the People Tree – Dior Controversy whereby Dior, the famous French fashion house was accused of lifting and reproducing the exact block prints of People Tree. The same act by Dior created huge furore due to blatant copying, without giving credit and the same would have gone undetected if the same dress was not chosen by actress Sonam Kapoor whose photo on the same dress was featured in the cover page of January edition of Elle India magazine.

The case of Ritika Apparels v BIBA is another case of significance, whereby one fashion brand lifted designs belonging to another fashion house and reproduced the same design in their product thereby causing loss to the original owner of the said design, Ms Ritu Kumar. However in this case, the defendants, BIBA went scot-free using a lacunae of the copyright law (Section 15(2) of the Copyright Act which says if a creation which is eligible to be protected under the design law has not been registered with the design authorities and has been reproduced more than fifty number of times by industrial process, it will be considered that the copyright in the same product has been lost forever).

Ritika Apparels v BIBA

The case of Ritika Apparels as already discussed has been a unique one. One party copied, rather lifted design from other party’s creation, reproduced and sold it in their own name. The party from whom the design was lifted moved to the court alleging copyright infringement. However the defendants, who lifted the same design took defence of Section 15(2) of the Copyright Act, 1957 and submitted that the act does not amount to infringement as the original right owners, Ritika Apparels has lost the copyright owing to the production of more than fifty numbers of products by industrial production.

Since the same design was not registered under Designs Act, Ritika Apparels did not have any means of protecting the said design other than producing products having the same design less than fifty numbers of times. Thus using the loophole existing in the IPR laws, BIBA escaped from any liability. The same case can be said to be a landmark one due to designer’s lack of knowledge of the IPR laws of India. Had the said design be registered under the Designs Act, 2000 the same design would have been protected for a total period of 10 + 5 years. But perhaps the designer wanted to keep a monopoly on the same design for a longer period of time and thus used the copyright law which later on was turned against her thus leading to the BIBA becoming free of any liabilities.

Christian Louboutin v Mr Pawan Kumar & Ors

The case of Christian Louboutin is a very important one, whereby a big brand famous for its highly stylized designer shoes dealt with the selling of counterfeited products at a lesser price causing loss both to the brand name and to the financial coffers of the company. Christian Louboutin’s Red Sole shoes are quite popular among the celebrities and the red coloured high heeled shoes are quite a rage among the customers who intend to copy their favourite celebrity’s fashion sense and style.

However as mentioned before too, the original products are quite highly priced, thereby keeping the products out of the reach of most of the customers. Louboutin’s brand has established itself as a famous brand and a world leader by means of usage of media and television. Louboutin’s shoes are known by their distinctive and characteristic red coloured soles which are common in all his creations and are marketed through specific channels and stores (Louboutin has 120 such stores all across the world and two such stores are there in India, one in Mumbai and other being in Delhi).

Louboutin’s products are protected under the trademark laws and the goodwill and reputation of the brand existed even before the brand’s formal entry into the Indian market. The defendants started marketing counterfeits of the much celebrated red sole shoe, however, with different colour schemes where the soles were red but the other parts came in different colour schemes.

The plaintiff, Christian Louboutin moved to the court seeking a permanent injunction and compensation claims from the two stores (Kamal Footwear and Adara Steps) selling counterfeit products of Red Sole Shoes. The court in its judgment held the defendants liable to pay a total sum of Rs. 10.72 Lakhs, while they were injuncted permanently from selling the counterfeits again. The Judge in its judgment declared Christian Louboutin as a well-known mark, a much sought after tag for any brand owner. The infringement of Louboutin’s mark and successful prosecution of the defendant shoe store owners are the best examples of how a designer or a brand owner needs to protect his or her trademark.

People Tree

The case of People Tree brewed a lot of controversies quite recently. Dior, a famous French fashion brand lifted certain designs from the People Tree’s collection which certainly violated the exclusive ownership rights of IP of the People Tree’s. In this paragraph I will dissect the issue and will try to bring out the contentious issues and what all IP rights can be said to have been violated by Dior or what all IP rights could have protected the said creation.

People Tree was started as a platform for expressing creative minds, which ultimately snowballed into a socio-economic organization which for the purpose of doing business, engaged with the Self Help Groups of different places and a certain amount from the sale proceeds goes to the people working with them. The issue at hand revolves around certain block prints which were developed by People Tree in collaboration with artisans from a specific area in Rajasthan (the artists at People Tree made the design, who were helped by those artisans who are highly specialized in making such blocks which ultimately were used in the clothes manufactured under the brand of People Tree).

The question which deserves a discussion is that how to protect the IP rights related to such work? The same creations cannot be protected under the Trademark law since the very requirement of the trademark is not satisfied. Section 2(zb) of the Trademark Act 1999 defines trademark as ‘a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include shape of goods, their packaging and combination of colours; and—

(i) in relation to Chapter XII (other than section 107), a registered trade mark or a mark used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right as proprietor to use the mark; and

(ii) in relation to other provisions of this Act, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so to indicate a connection in the course of trade between the goods or services, as the case may be, and some person having the right, either as proprietor or by way of permitted user, to use the mark whether with or without any indication of the identity of that person, and includes a certification trade mark or collective mark’

The Copyright Act vests exclusive rights on the owner of the creation of a particular author. Here in this case, since the block has been developed by a group of people, it is difficult to ascertain authorship of the said block prints. Although the period of protection can be determined using the same work as an Anonymous work, the ownership cannot be determined. However, if the block prints (blocks used for printing) are made by a group of people or people contracted by People Tree to develop such blocks, the People Tree will be considered as a rightful owner of such copyright originating from such creation. A contractual agreement between the two parties can help in proving the ownership and protection under Copyright Act can be granted based on the same, subject to the exception carved out in Section 15 of the Copyright Act.

Geographical Indication of Goods Act is perhaps one such legislation that may be able to protect such creation. The block prints which were developed by the artisans of different villages of Rajasthan have been granted GI tags by the Government of India. A GI tag means goods originating from a specific geographical area has the right to protect such IP originating from such region. Other companies like Fab India, have used different other techniques (which are protected by the GI Act) from artisans of different areas of Rajasthan have successfully commercialized such creations. However the ‘dabu’ technique used by the People Tree does not have any GI protection, a flaw perhaps utilized successfully by Dior in lifting the same block prints from People Tree’s creations.

The Designs Act, 2000, in my opinion, is a very potent weapon that could have been used for protecting People Tree’s work, has the same design been protected under the Designs Act with the Authority. But if the designs are not being registered with the design authority, and the design is applied on a product reproduced for more than 50 number of times, another situation like that of Ritika Apparels v Biba will be repeated, and such a situation will definitely not be useful for People Tree.

Thus one may easily understand that for protecting the IP in the fashion world, the designers need to be conscious of their rights and should form an IP protection strategy before commercializing their creation so as to get the cover of the IPR protection of their creations in India.

Ways of combating the problem

Taking into consideration the issues involved, one may be able to understand that even though there are legal protections available, most of the time it’s the designers who are at fault. It is no doubt true that the legal protection with respect to the fashion industry is little feeble, nevertheless, the designers also need to be cautious about their creations and they need to strategize accordingly. Following are the few ways of combating the problem, which are as follows –

1. Increasing the threshold limit of the commodities produced by industrial application from 50 to more number under the Copyright Act – a number commensurate with the consideration of the rising population and the fact that the machine production is in vogue nowadays.
2. Amending the laws to make the purchaser liable too, apart from the seller of the counterfeits. The laws must be made in consonance with the international standards like that of France.
3. Making a fixed percentage of profit of the infringer company to be paid as compensation or penalty, much like the EU GDPR penalty provisions.
4. Enforcing IPR laws in a more stringent way perhaps by imposing criminal charges too on the counterfeiters apart from the compensation which is already in vogue today, so that lifting of designs are controlled largely if not totally prevented.
5. Sensitizing the Designers about the need of protecting their IP in a correct way so that future troubles can be averted.
6. Sensitizing and making the public aware of the counterfeit goods prevalent in the market and the bad sides of using them.

Conclusion

The fashion industry has significantly evolved in the recent years, powered by the liberalisation further bolstered by effective implementation and application of laws. However, it has been noticed that the designers most of the time fail to protect their IP using the legal route. We have noticed such trend in Ritika Apparels case and also the People Tree case where due to the lack of the proper protection the defendants went scot-free.

At the same time, Christian Louboutin won permanent injunction against the counterfeiters and got compensated for the loss. The difference is because of the proper IP strategies and prior registration of the mark which gave the brand an added advantage in the legal proceedings. While it is true that it is almost impossible to totally eradicate counterfeiting and preventing others from copying, if the creation is protected in a right way it reduces the chances of the loss by reducing the damage. Thus it is of high importance that the creators of IP should always remain alert and should try to get the right protection for their creation. Also, the government needs to take into consideration the recent trend of the counterfeiting and pass a sui generis law specifically applicable to the fashion industry, in order to protect the IP of the country and overall to strengthen the country’s economy.