H&M sues Forever 21? Beach Please!

In an interesting twist, arguably the two most common fashion design piracy defendants are pitted against each other. H & M Hennes & Mauritz AB (“H&M”) has issued a complaint against Forever 21, Inc., in the US District Court Southern District of New York. Below is a comparative image of the tote bags at issue:

          (H & M Hennes & Mauritz AB)                                    (Forever 21, Inc.)

There is no doubt about it – there is a stark similarity between the designs.

H&M, which professes to be the second largest global clothing retailer, first sold its BEACH PLEASE tote bag in the US in April 2014. As of July 2015, it sold thousands of BEACH PLEASE tote bags globally. H&M formalized its copyright to the design by securing a copyright registration, which was granted on June 12, 2015. H&M alleges that Forever 21 subsequently commissioned a Chinese-based manufacturer to produce infringing designs, which were sold globally. H&M has reason to believe that Forever 21 has profited substantially from sales of the BEACH PLEASE tote bag.

H&M is seeking the following relief:

• Forever 21 be enjoined from:
  • creating, importing, purchasing, distributing, displaying, selling or offering to sell tote bags that infringe H&M’s BEACH PLEASE tote bag
  • using H&M’s intellectual property rights regarding the tote bags;
  • inducing others to commit infringing acts.
• An accounting of Forever 21’s profits derived from the advertising, promoting, marketing, purchasing, distributing, selling or offering of the infringing products
• Damages
• Costs of litigation

H&M bases its complaint on 5 grounds:

• H&M’s graphic is subject to copyright protection. Forever 21’s graphic is substantially similar, if not virtually identical, to that of H&M, thereby constituting copyright infringement.
• The graphic is non-functional, inherently distinctive and has acquired secondary meaning. As such H&M asserts that the BEACH PLEASE design functions as trade dress; Forever 21’s unauthorized use of the BEACH PLEASE logo constitutes trade dress infringement.
• Forever 21’s unauthorized use also constitutes a false designation of origin.
• Moreover, Forever 21’s unauthorized use constitutes an attempt to pass off its products, constituting statutory and common law unfair competition against H&M.

What is interesting to the fashion law community is that H&M and Forever 21 are notorious defendants in the fashion industry. In fact, H&M takes note of this trend with respect to Forever 21 stating in the Complaint: “[Forever 21] has also been accused of copyright violations in the past”. So to a large extent, we have the kettle calling the pot black. However, it is interesting that they are now warring amongst themselves. Perhaps it is karma; perhaps it is just business. Nonetheless, in this instance the magnifying glass is focused on Forever 21. In the fashion law community, Forever 21’s disregard for intellectual property rights and propensity to resolve matters outside of litigation has some wondering whether this is all a part of its business strategy. It may simply be cheaper to pay an undisclosed settlement sum to the designer rather than sourcing new designs or paying licensing royalties. It would not be shocking if this case settled, but it sure would be interesting if it did not!

Ashlee Froese is a partner at Fogler, Rubinoff LLP. She runs the website www.canadafashionlaw.com. Follow her at @brandfashionlaw.