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Nasir and Matt talk about the accusations surroundingfashion giant Zararipping off the designs of independent artists like Tuesday Bassen and howsmaller companies can battle the industry giants.

Full Podcast Transcript

NASIR: Welcome to our podcast.
My name is Nasir Pasha.

MATT: And I’m Matt Staub.
We’re two attorneys here with Pasha Law, a firm practicing in California, Illinois, New York, and Texas.
Welcome to the podcast. I don’t get the opportunity to do the bulk of the intros.

NASIR: We’re splitting it up a little bit this time but welcome, everybody! This is where we take business in the news and add our legal twist to it. I think today we have a nice topic. What do we have?

MATT: We have an interesting topic today. We’re going to be discussing what’s come together as a group of independent artists and designers who have all alleged that their works, intellectual property have been stolen by this huge fashion icon, Zara, which is believe is a Spanish-based company.
One artist in particular – which kind of started this whole dispute that’s been going on – is Tuesday Bassen who first started off by taking action that sent a cease and desist letter to Zara and basically asked them for compensation because she was under the impression that some of her pins and patches… It’s going to be easier for us to kind of show this. We’ll put a link in the notes. People have to see for themselves but basically saying that some of her work had been essentially ripped off by this huge company and, as a result, she lost money.
We know this is something a lot of business owners care about, particularly ones that we work with, I mean, being the smaller companies here. Sometimes, they have to fight these battles against the bigger ones. This is something that comes up all the time with clients or other individuals that we talk to. I think it’s going to be pretty good. We’re going to run through kind of the background here but I think it’s going to be a pretty good takeaway for these smaller companies because those are going to be the ones in this position here.

NASIR: Yeah, absolutely. Thankfully, I am a fashion guru, as you said. I’ve actually shopped at Zara, I think, at least once. I assume you have not?

MATT: No, I didn’t even know they sold men’s clothes until I looked them up.

NASIR: Oh, I didn’t buy men’s clothes there.

MATT: Okay.

NASIR: But, apparently, Zara has a little bit of a reputation apparently of allegedly stealing some of these designs. Tuesday Bassen is not the first person to go after Zara for the same thing but I think her case is a little bit different and she seems to have a social media presence that is behind and I think that’s what really galvanized a response from Zara that has gone public now.

MATT: Exactly. She’s really the one that has kind of kicked things off – or at least the one that gained the PR in order for other people to step up. I know there’s another one, for example, this guy named Adam Kurtz who was verified when I looked him up on Twitter so he must be a pretty big deal in the industry as well. But, yes, Tuesday, she started things off by sending this cease and desist letter to Zara. As far as we know, we don’t know the exact.

NASIR: Yeah, we couldn’t find the exact letter but I think we know how much she paid for it. She paid $2,000 but we don’t know what exactly it said.

MATT: Yeah, the pertinent information is just how much she paid an attorney to write it and not what was actually in there.

NASIR: Not a bad price, by the way.

MATT: I mean, we have a good idea what was in there. Basically, I’m assuming she kind of asserted that she owns these works and Zara is infringing upon them by straight up ripping them off. I assume maybe she had asked for some sort of compensation for them to stop doing it – something to that effect is my guess. She can send me that bill for $2,000 now as well since I just…

NASIR: Anyone could have wrote—no, that’s true.
No, absolutely, it was probably a typical cease and desist letter that outlines the reasons why Zara should take down what they’re selling and I believe they did do that.

MATT: Yeah, eventually.

NASIR: That’s correct. But here’s the thing with that, you kind of have to know the background of Zara to understand why that may not be the biggest deal in the world for them because Zara is actually known for – it may not be widely known but, since I’m a fashion guru, I know this, with the help of our research, of course, Logan – Zara is actually known for being able to produce a new design and put it to market really quickly in as little to a week and they’re able to do about 12,000 new designs each year. Because of that agility, they go through new designs very quickly. If it’s not going off the shelf, they get rid of it and go onto the next one. And so, getting rid of the design is not that big of a deal. if it’s true that this is part of a common practice – I don’t know if that’s the case or not but definitely there’s other people that have made similar allegations – if that’s the case, then they may just play that role. “Let’s just get the good designs out and then, by the time anyone complains, we’re no longer selling the designs.”

MATT: Yeah, it could be that. I think there’s a good chance that could be the case but in this case well, like you said, eventually, they stopped selling these items but that seems to be exactly in line with what their model is typically. At any time, since they pump out so much volume, at any time, they can just stop selling something and stop making it and that’s it. Move onto the next thing. It’s not like a typical – I don’t know the exact numbers of other big fashion companies but I’m sure it doesn’t approach the number of designs that Zara pumps out every year.

NASIR: In fact, it takes six months for most retailers to actually go from design to production to put it in stores. A week is pretty phenomenal.

MATT: Yeah, that’s the kind of insight was looking for from my fashion expert.

NASIR: That’s right.

MATT: I think the most interesting part of this is Zara’s response. I’m just going to touch on a couple of things here. To sum it up, this is their defense, the pins, patches, whatever you want to call them, “there was a lack of distinctiveness between the designs of Tuesday and the infringing designs of Zara. It makes it very hard to see how a significant part of the population anywhere in the world would associate the designs with Tuesday’s,” which that argument just doesn’t even make sense to me. We just don’t even see how anyone can confuse these. I mean, I get that aspect of it but it’s a weird thing that they had put in there.

NASIR: That makes me believe that the cease and desist letter probably alleged – in part at least – trademark infringement. Of course, one of the elements of being able to prove trademark infringement is that there’s a likelihood of confusion. Of course, Zara is saying there’s no way anyone could confuse these. This is literally a slap in the face. They talk about Zara has 98 million average monthly visits per year.

MATT: That’s their main site, yeah.

NASIR: Yeah, their main site and something else called Bershka. I don’t know what that is – 15 million average monthly visits last year. As if, “Okay, Tuesday, you are way too small. No one’s going to confuse your designs with ours and so forth.” But there’s trademark infringement and that’s one area of the law that a lot of designers can use to protect their designs. But keep in mind that establishing a trademark, think of that more as like Louis Vuitton having that kind of design is associated with Louis Vuitton and so therefore anyone else that tries to do that, if they’ve established that kind of presence or they’ve been able to trademark it legally, then they may be able to prove that anyone else that tries to emulate them, there’s a likelihood of confusion whereas a copyright think of it as the actual pattern of Louis Vuitton – the pattern that they’ve designed that’s iconic to them which I’m trying to picture in my mind right now, I can’t seem to do that. I know it does have an iconic design but that particular pattern can be copyrighted and, if you copy that pattern, then it’s copyright infringement.
And so, it’s kind of an interesting response but, Matt, you’ve seen these patches compared basically side by side between Tuesday’s design and Zara’s.

MATT: Right. Like I said, we’re going to put a link to this because, I mean, I’m looking at the four that were initially alleged right now. The way I’d describe it – and I wouldn’t want to say kids’ drawings but – younger drawings of certain shapes like a heart and an eraser and a book. I say younger drawings because the lines aren’t straight. Obviously, a book’s not a trapezoid.

NASIR: It’s cartoonish, right?

MATT: Yeah, cartoonish is a good way to put it.

NASIR: But, you’re right, if you’re listening, it’s hard to kind of imagine. You’ll have to go to the website. But the best I can describe it if I can attempt it is it’s just kind of a cartoonish patch that is on clothing. There’s one picture of a heart lollipop and another one that says it’s basically – what are those triangle banners called?

MATT: Pennant?

NASIR: Yeah, a pennant that just says “GIRLS” on it. That’s my attempt.

MATT: Yeah. Well, they have a book that says “KEEP OUT” – same color, same kind of latch. There’s a heart instead of an eyeball. But you look at these things and some of them, like, the heart lollipop looks exactly the same, basically.

NASIR: I think they all look exactly the same. They didn’t use a copy machine but, if someone was emulating it by hand, it looks exactly the same.

MATT: Right. Going back to what you said, we went on a little bit but I think you’re right about the trademark infringement because, for copyrights, like you were mentioning, these would be ownership and then original artwork and someone copied it and that’d be copyright. But, yeah, trademark is going to be the likelihood of confusion so I guess it makes a little more sense when you look at it but it’s still a weird way.
Let me get into the last point here in the Zara response because I thought his was even more crazy. In the last part, “Please note that such notifications amount to a handful of complaints only.” Basically, they’re saying this is only a little bit of complaints. We have, like you mentioned, 98 million average monthly visits.

NASIR: 98 million average monthly visits last year.

MATT: Yeah.

NASIR: Still quite a bit. As if it’s only a small portion of their users that are complaining, as if they’re supposed to know that this may be copyright infringement.
By the way, probably the only reason people were complaining was because of Tuesday’s social media response. But, really, the measure – when it comes to copyright at least – copying those designs verbatim, it’s pretty egregious in my mind and, if they have a history of that, it also shows intent. The thing with fashion, actually, copyrights traditionally don’t protect fashion designs. It’s very difficult to prove that distinctiveness that comes with fashion and certain cuts because there’s some utility to it. For example, there’s only so many ways you can do a belt. It has to have something that goes around the waist and a buckle and there’s only so many ways to design a buckle that still maintains its function.
Generally, the courts have not permitted any kind of copyright protection for just general designs. But what they have allowed protection are patterns, certain images or pictures. In this case, that’s exactly what it is. You have a certain fashion but you have a picture of a patch or a pin that is actually on the particular clothing. A little bit different here.

MATT: Yeah, you’re exactly right. That is the case here. It says here Tuesday is in the process of trademarking and copyrighting or submitting these.
I did a quick search for the trademark and I only found one under her name which had nothing to do. It was just a phrase. I had nothing to do with any of these.

NASIR: Which is not uncommon. As everyone knows, a fashion designer isn’t going to trademark every single design nor is it possibly trademarkable even but, in theory, if it is, that would be overly cumbersome and expensive because you don’t know which trademark fashion designs would work. That’s always been a problem in the fashion industry for some designers and, every once in a while, you’ll hear some movement to try to get some more protections for designers. I mentioned Louis Vuitton and their purses and these other designer purses are a classic example of industry leaders that are trying to make copyright infringement much easier and that’s why patterns are much easier to protect and those knockoffs have had a history of being able to litigate against.

MATT: Yeah. That’s something I’ve always wondered about – well, particularly I guess in other countries it might be different but you see it there. You can go to New York City, for example, and go down and buy knockoff whatever. A good example, I’m wearing a Lacoste polo and I know people…

NASIR: The alligator one, right?

MATT: I know you can go and buy knockoff Lacoste polos for $25.00 – I don’t know what the numbers are.

NASIR: Wow. $25.00.

MATT: I’m just making this up. I don’t know. Maybe it’s $25.00 a piece. I have no idea. You can go and do that.

NASIR: Wow. $25.00 a piece.

MATT: You can go and do that. I’ve just always wondered about how they skirt the law. I just kind of assumed that they were doing it illegally.

NASIR: Oh, they are. They crack down on it, too.

MATT: That’s why I looked into it a little bit more for these purposes and there was a case with Alexander Wang. He won an insane amount – $90 million dollars in damages – against 45 different…

NASIR: 45 different other defendants that were knocking off his product websites.

MATT: Yeah, 45 individuals with nearly 500 websites and other issues with that with trademark. I don’t think he’s going to see any of that money.

NASIR: What’s interesting though there is it was a trademark infringement case and also cybersquatting. It was probably easier for him. When you’re doing an online and you’re using the same brand name for example, just for the sake of discussion, it was Alexander Wang, let’s say his brand name is Alexander and then you have all the other sites that are saying Alexander Purses, Alexander Watches, it’s a lot easier to sue because you can establish a trademark associated with your brand. But, if someone that is totally unrelated to Alexander copies the design, then the enforcement becomes a little bit more difficult. Actually, Louis Vuitton which I mentioned earlier, they got into a shakeup with Zara, too. They had designed some open-toed, red-soled shoe. It was selling and apparently they have a claim that an open-toed, red-soled shoe was selling for £40.00 in Europe. It was similar to its yoyo-style shoe that the designer had made famous much time before. This is a French case. European law is actually a little bit more strict in some ways when it comes to copyright protection. But, actually, in that case, the French court ruled that Zara’s cut price shoe could not be confused with that made by the high-end designer.

MATT: I agree with that too if you look at the photos. I mean, it was much different than this Tuesday Bassen case.

NASIR: Absolutely. A lot of times, you just have to make a small change in order for there to be a big enough difference but, yeah, compared to Tuesday.

MATT: Not to embarrass the fashion guru here, your example previously was Louis Vuitton.

NASIR: Oh, I honestly thought it was… What is it?

MATT: I think it’s Louboutin. It’s Christian Louboutin. I could be mispronouncing that.

NASIR: I thought it was written down so that I can pronounce it.

MATT: See, I knew you were doing that but that’s fine. We’ve exposed you. Just like Zara was exposed with their rip-offs.
Actually, one more thing before we get into legal takeaways here, I actually stumbled across a site that basically was trying to – because you had mentioned before, it’s not just Tuesday this happened to, it was a bunch of different independent artists and designers. There’s a site that’s essentially Stop Zara’s Theft and it just shows all these images, just like the ones that you and I were looking at a bit ago with the razor and the heart. Some of them are, you know, kind of close but some of them are almost dead-on – like these ones with Tuesday.
So, I’m still going to side with these independent artists because, at the end of the day, their stuff is getting ripped off. I know they’re pumping out a lot of different things and I don’t know if it’s intentional but it could be a case where, when you produce 12,000 different designs a year, let’s say you go and see something, you walk around and you see some design online or at a store or whatever, subconsciously, it’s in your head and maybe you were one of the designers and you go and draw that out and that’s what it ends up being. Some of them are too close for that to be the case but I can definitely see that happening.
The reason I bring this up, I was listening to a podcast with Seth Rogan this past week and he didn’t want to watch this movie he really wanted to watch because he was in the middle of writing a movie and he thought subconsciously he was going to pull something from that movie he really wanted to see and somehow write it into his script which I thought was interesting and I can definitely see it happening if you’re really pushed on trying to get something out and this happened on Seinfeld too. Remember with the Ziggy cartoon with Elaine?

NASIR: Yeah, absolutely.

MATT: I don’t know what’s the case here.

NASIR: No, I think you’re right. I think it’s a common thing to happen but, as you said, when you have four images – by the way, I’m looking at now and it has much more than four images. It has about twenty or so that look exactly the same. It becomes probably more than subconscious. Most likely, Zara has a bunch of designers doing a bunch of things and it may just be one bad actor that, in order to save his or her job, has to come up with cool designs and just wants to surf the internet for that.

MATT: Yeah, that’s what I was saying. It’s way too close for it to be a subconscious thing – too much detail in some of these for it to be different than an eraser that says the same word, for example. We’ll let people decide for themselves but I think they’re going to come down on our side on this one – the artists.

NASIR: Tuesday’s side.

MATT: Independent artist side. You know, we mentioned at the top of the show or the top of the episode, this is something that obviously a lot of small, very small – sometimes one person – or small and medium-sized businesses experience or can experience if they’re designing something or doing something artistic.
When this happens, I guess, one, they have to find out. But, two, what’s the response going to be? What’s the best course of action? How does a small business who obviously can’t do any sort of legal battle financially for most of them, how do they respond or how do they adequately protect the things they’ve created. I mean, it’s a big issue for these small companies that are creating something artistic.

NASIR: Absolutely, and the reality is that your intellectual property rights – and I’ll repeat this – your intellectual property rights are useless and worthless unless you have the money or means to enforce it. That is a big kind of limitation to smaller microbusinesses that want to enforce their intellectual property rights. However, there are ways to do so short of litigation that can be more effective than others and I think, primarily, this person – Tuesday – using an attorney to send a strong, fast, and immediate cease and desist letter as soon as you find out becomes very important. Even if you don’t have the funds to further litigate, it is probably the most cost-effective way to possibly stop the continued infringement
Now, there’s always a chance that they may not listen and you have to consider what your next step is in order to enforce such an infringement but, at the least, that’s your first step.

MATT: Yeah. I mean, like you say, you put them on notice at a minimum.

NASIR: That’s right – at minimum.

MATT: For a lot of these, I would have to think, for a lot of these smaller companies, they didn’t want to pursue a lawsuit at that point, you know, I just can’t imagine the damages they would have would be worth it just based on – I’m just thinking – you know, sales, what they would lose – those kinds of numbers. We won’t get into the specifics.

NASIR: Well, what is developing here and I’m sure the current law firm that’s been hired is some kind of entertainment media law firm has now been taking up the case that they say that, if they don’t get some kind of reasonable action from Zara, that they’re ready to file suit. I’m sure they’re thinking the same things we are – that, if there are other people that are in similarly situated situations with Zara, that it’s going to be much more effective to pool those into a plaintiff’s group to file a lawsuit. They actually may make a substantial impact all of a sudden to Zara and there also may be an easier way to actually litigate that because now you’re splitting costs with other plaintiffs on the attorneys or maybe the attorney now is willing to take it on a contingency. I wouldn’t be surprised if that is on the horizon for Zara.

MATT: Yeah, especially when we mentioned that that site – Stop Zara Theft – it’s not only Tuesday that’s had this happen to her. It’s a bunch of different artists, a bunch of different designers. Yeah, I mean, you’re exactly right. If they can kind of pool all that together, it might be a different story. It can’t always be necessarily the case with every case of infringement but, if someone’s going to rip someone off, it’s probably not going to happen just once but who knows?

NASIR: Keep in mind that, if they’re able to prove copyright infringement in the court of law, there are statutory damages. There’s a range that is statutorily provided. It goes from 750 to I think somewhere around 30,000-plus. The point being is that on each incident. And so, that range depends on what the court considers just. If the plaintiffs can show that only did they do this once but multiple times and they did it intentionally even after being forewarned in the past, that’s plenty of evidence to show to a judge that, “Hey, I’m going to institute the maximum or a large amount in statutory damages.” That’s in addition to profits and actual damages of profits and losses.

MATT: That’s one point of that cease and desist. They abide by it but, yeah, like we said, you put them on notice and at least start things from there. Yeah, it happens and the infringer continues to do it, then it’s going to be even more argument to what you just said.

NASIR: I think that was a successful review between Zara and Tuesday, the designer.

MATT: Yeah. Well, it’s kind of a wait-and-see. We don’t know if she’s actually going to file a suit or not. She claims she’s going to but she might get talked out of it or financially she might realize, obviously, she lost in the case that her stuff got ripped off but I think this was a net win for her with the exposure.

NASIR: Yeah, the exposure alone. Even from Zara’s perspective, I know people that may be listening to this podcast now, people that are followers of Tuesday, people that are familiar with the case are going to question the next time they think about shopping at Zara. That alone, from Zara’s perspective, they should probably consider doing a balancing test whether they want to actually settle this pretty quickly, make it go away, make her satisfied, and stop making any kind of even the appearance that they’re stealing other designs. Even if somehow they’re able to argue that this is not copyright infringement, at the least, they should probably stop doing designs that look exactly like everybody else’s.

MATT: Yeah. We will have to provide a link to that because, the more I look at it, the more it just seems like it’s pretty obvious but it’s alleged, still.

NASIR: Agreed.
All right. Well, thank you for joining us.

MATT: Yeah, keep it sound and keep it smart.

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Legally Sound | Smart Business covers the top business stories with a legal twist. Hosted by attorneys Nasir N. Pasha and Matt Staub of Pasha Law, Legally Sound | Smart Business is a podcast geared towards small business owners.

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