Fashion has always reveled in its knock-down, drag-out legal brawls.
Whether it’s a courtroom square off or a nasty back and forth in the press, the drama speaks to the competitive nature of the business, the branded turf companies are looking to protect and the big-time dollars and market share at stake.
Most fashion lawsuits today revolve around intellectual property rights — the intangible fuel that keeps fashion moving forward.
But that might be starting to change.
New types of law are being made in fashion.
The Federal Trade Commission, for instance, challenged Tapestry Inc.’s $8.5 billion deal to buy Capri Holdings with a suit that upset the status quo in dealmaking.
And there’s more to come.
“Fashion law is getting bigger,” said attorney attorney Douglas Hand of Hand Baldachin & Associates, who wrote a more than 1,000-page book on the topic entitled, “The Business and Law of Fashion and Retail.”
“The number of cases will now grow because there is actual black letter law, or there will be black letter law with respect to regulation of the fashion industry,” he said.
Sooner or later and in some form, Hand predicted the federal Fabric Act, California’s Responsible Textile Recovery Act and New York’s Fashion Act would become law.
And that signals a legal future with more cases that revolve around the environmental, social and governance practices of fashion companies — tackling topics from greenwashing to how closely brands are monitoring the factories making the looks they sell.
“For the first time, really in a long time, we’re going to have fashion law that is on the books — specific fashion law, not intellectual property laws that applies to fashion, not corporate laws,” Hand said.
And that will move the industry’s relation to the law into a new phase.
“The regulators write the law, but then the courts essentially interpret the law and the case law evolves from there,” he said. “And so the law evolves based on not just the regulations, but the case law, which interprets the regulation. We’re absolutely at the chrysalis stage of that.”
As fashion enters that new stage — and gets ready for a new round of legal fisticuffs — here’s a look back at some of the key fashion lawsuits in the U.S.
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Federal Trade Commission vs. Tapestry Inc. and Capri Holdings
Image Credit: WWD Accessible Luxury Goes on Trial — 2024
After giving fashion-specific deals a pass for a generation or more, the FTC sued to block Tapestry’s $8.5 billion buyout of Capri, a transaction that would bring Coach, Kate Spade and Michael Kors all under one roof. The government argued that the buyout would give Tapestry a 58 percent share of the accessible luxury handbag market and enough heft to raise prices on consumers $365 million annually. But that’s an unusually narrow market for the FTC to chase, making it an interesting test case that could shape future dealmaking. For their part, the companies argued there’s more than enough competition. “We’re getting squeezed from the top and from the bottom,” said Capri CEO John Idol. “Everybody wants a piece of the handbag market.”
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Federal Trade Commission vs. Amazon
Image Credit: Courtesy Accusations of Monopolistic Pressure Online — 2023
The FTC and the attorneys general from 17 states called foul on Amazon, arguing the online giant uses monopolistic practices to eliminate competition and raise prices. FTC chair Lina Khan said Amazon “is exploiting its monopolies in ways that leave shoppers and sellers paying more for worse service.” While the case has the potential to leave a big mark on e-commerce, it’s not scheduled for trial until October 2026.
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Hermès International vs. Mason Rothschild
Image Credit: MetaBirkins Courtesy of Mason Rothschild, artist The MetaBirkin Showdown — 2022
As technology has evolved at lightning speed, fashion has turned to the courts to protect its branded turf. In 2022, Hermès sued Mason Rothschild, claiming the artist’s “MetaBirkins” NFTs amounted to trademark infringement. Rothschild sold 100 faux-fur Birkin bag-inspired non-fungible tokens the year before and argued that the NFTs amounted to commentary on fashion’s fur-free initiatives and were protected by the First Amendment. A jury in Manhattan disagreed and awarded Hermès $110,000 for trademark infringement and brand dilution and $23,000 for cybersquatting.
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Adidas vs. Thom Browne
Image Credit: Courtesy Striped Suit — 2021
Designer Thom Browne likes his stripes, which he has said started off in his designs as a reference to collegiate varsity sweaters. Turns out, active giant Adidas likes them too, usually three stripes placed diagonally. While the two parties reached a kind of peace in 2007, when Adidas contacted the designer about some of his looks and Brown agreed to switch over to four parallel bars, that peace broke in 2021. Adidas sued, but a New York jury found the designer brand was not liable for damages or the profits it made selling four-stripe looks.
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Chanel vs. What Goes Around Comes Around
Image Credit: Courtesy A Designer Resale Rumble — 2018
Chanel is known for protecting its spot at the top of the fashion food chain in court. In 2018, the French fashion giant sued reseller What Goes Around Comes Around for trademark infringement, charging the company sold counterfeit products and insinuated a relationship that did not exist. It took six years, but the brand came away with a win when jurors in a New York federal court awarded Chanel $4 million for statutory damages.
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Olaplex Vs. L’Oréal
Image Credit: Courtesy Amazon Olaplex Claimed A L’Oréal Look-see — 2016
Big time dealmakers are always looking at the market, so it was no surprise that L’Oréal was considering an acquisition of professional hair care brand Olaplex. That deal never came about, but L’Oréal did get a look at its rival’s product formulations in the process and later launched products that Olaplex saw as patent infringing. Olaplex sued for trade secret misappropriation and won a $66 million judgment, but it didn’t stick as an appeals court later vacated the judgment.
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Christian Louboutin vs. Yves Saint Laurent
Image Credit: Timothy A. Clary/AFP/Getty Images
The Red-soled Suit — 2011
Louboutin sued YSL in New York federal court claiming that the brand’s all-red pumps stepped on its trademark for red-soled shoes. At first, the suit backfired with the judge not only ruling that YSL could sell its monochromic style, but also questioning the validity of Louboutin’s trademark. An appellate court later agreed that YSL could continue to sell all-red shoes, but did not cancel the Louboutin mark.
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Varsity Brands vs. Star Athletica
Image Credit: Getty Cheerleading’s Supreme Court Moment — 2010
Varsity sued Star in 2010 for copyright infringement, putting two manufacturers of cheerleading looks front and center in fashion. The case went all the way to the top when the Supreme Court agreed to weigh in on just how to determine whether graphic features, like zigzags and chevrons, could be identified separately from the overall look and therefore be eligible for copyright. The court said yes and ruled in favor of Varsity, confirming that apparel has at least limited access to copyright protections. After soaring to the top of the legal system, the case was settled out of court.
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Gucci vs. Guess Inc.
Image Credit: Gabriel Sacco Mass and Class Clash in Court — 2009
When Guess’ designs started to lean on the letter “G,” green and red stripes and diamond-logoed motifs, designer giant Gucci called out the brand and sought more than $221 million in damages in court. A federal judge eventually sided with Gucci, but granted the designer brand only $4.7 million in combined damages, from Guess and its footwear licensee Marc Fisher Footwear. The two sides continued to fight in courts around the world until reaching a settlement in 2018.
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Tiffany & Co. vs. EBay
Image Credit: Courtesy Photo Authenticity Online — 2004
Tiffany & Co. sued EBay for trademark infringement just as e-commerce was really ramping up, arguing that the marketplace “should bear responsibility for the sale of counterfeit merchandise on its site.” The case was a landmark in deciding just where the legal responsibility for authenticity lies. It took four years, but EBay prevailed with a Manhattan federal judge ruling that the company had taken enough precautions to block the sale of fakes.
