Articles / Designer Jewelry vs Inspired-by Jewelry By: Daliah Saper

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Source: http://saperlaw.com/blog/2008/09/18/%E2%80%9Cdesigner%E2%80%9D-jewelry-vs-%E2%80%9Cinspired-by%E2%80%9D-jewelry-intellectual-property-infringement-and-unfair-competition-considerations/
February 13, 2009 - Content has been reformatted but otherwise is unaltered.
Footnotes are indicated in the original but no footnotes were provided in the original.

“Designer” Jewelry vs. “Inspired-by” Jewelry:
Intellectual Property Infringement and
Unfair Competition Considerations
By Saper Law | September 18, 2008
By: Daliah Saper, Saper Law Offices, LLC with assistance from her law clerks: Nicolas Jaramillo, Northwestern ’10, and Adam Urbanczyk, John Marshall ‘09
Introduction
Are you dying to buy a new Rolex watch or maybe a Cartier ring but don’t have the budget for one of these pricey brand name items? You would never consider buying a “counterfeit” Rolex, but perhaps you’ve considered buying an “inspired by” piece instead: a watch that looks kind of like a Rolex, but is not branded with the famous mark. After all, vendors selling “inspired-by” jewelry and accessories aren’t infringing on any designer’s rights - right? Increasingly litigious jewelry designers say: wrong! Even inspired-by jewelry may also constitute infringement.
This article analyzes copyright, trademark, and unfair competition law as applied to “inspired-by” jewelry designs. The article explains the necessary elements for establishing a claim under each area of law and provides practical tips to avoid legal problems in these areas.
I. Copyright Interests
Copyright holders own a bundle of exclusive rights in their original works, including rights of reproduction, distribution, and the right to create additional works derived from their originals.1 Thus, someone other than the copyright owner who reproduces or distributes a copyrighted product without the owner’s authorization, and who can be shown to have had access to the infringed product either directly or circumstantially,2 would be in violation of those exclusive rights and subject to penalties for infringement. Since most jewelry items are comprised of non-original designs already in the public domain (circles, squares, loops, etc.), many copyright disputes involving jewelry focus on the factual determination of whether the combination of several common elements in a piece of jewelry is sufficiently original such that the piece deserves copyright protection.
a. Copyright Validity and Protectability
Though a work’s protectability under copyright law does not require federal registration, such registration is prima facie evidence of a design’s originality.5 The burden thus shifts to an alleged infringer to prove that despite the designer’s federal registration, the design in question is either insufficiently original or is simply not a copyright-protectable creation.6
In Van Cleef & Arpels Logistics, S.A. v. Jewelry, the court held that one of Van Cleef & Arpel’s designs, a military clover insignia, was copyrightable. The court came to this conclusion, despite the commonness of the quatrefoil shape and metal frame, because the arrangement of the elements was sufficiently original.7 Once a valid copyright in the military clover insignia was established, the Court determined that the Defendant’s jewelry was “substantially similar”8 to Van Cleef’s copyright protected design and was therefore infringing.9 The “substantially similar” determination was made under the following two-part test: (1) whether the Defendant’s product’s ideas, patterns, themes, organization, and other objective details were substantially similar to those of Van Cleef, the original designer, and (2) whether a lay observer would find the “concept and feel” of the Defendant’s product designs to be substantially similar to those of Van Cleef’s.
Alternatively, the court in Herbert Rosenthal Jewelry Corp. v. Honora Jewelry Co. held that while a determination of substantial similarity should be based on an average lay person’s observation, circumstances may require further examination.11 The artifact in that case was a turtle-themed pin. The inescapable characteristic of a turtle – its shell – limited the extent to which a designer could deviate from another’s design. This commonality rendered a mere side-by-side visual comparison sufficient.12 In its examination of the competing turtle pins, the court meticulously analyzed each of the pins shell markings, manufacturing methods, metal thickness, and even whether the turtle’s head had a mouth.13 Concurrent with its brief sojourn into the various characteristics of chelonia (turtle-like reptiles), the court noted the arguably inferior characteristics of the defendant’s example. The court emphasized the plaintiff’s misplaced reliance on the fact that his turtle had ten stones on its shell; coincidentally corresponding to the number of vertebrae a turtle has. Predictably, the court granted the defendant’s motion for summary judgment and, held “there is nothing anyone can design or manufacture which someone else cannot make worse and sell for less.”14
Nevertheless, these “substantial similarity” considerations warn “inspired by” jewelry designers that protectable “creations” require a minimum amount of originality. If a designer fails to meaningfully distinguish their “inspired by” design from an original work it will likely raise infringement concerns. Here, it is not enough to merely disassociate from a designer (see Part II, below). “Inspired by” designers must carefully take into account similarities between all elements of their designs. Aesthetically, it is the size, shape, proportion, and ornamentation of products that will be compared to the original producer’s design.15 Small differences in detail between a potential infringer’s products and the original artist’s design, however, would not preclude a finding of substantial similarity.16 Moreover, when an allegedly infringing jewelry design’s similarities to a copyrighted design are a result of the designers making the same artistic choices to achieve the same visual impact, a court will likely find that substantial similarity exists.17
b. Damages
The U.S. Copyright Act provides that a copyright owner, whose rights have been violated, may recover either actual damages it suffers - including the profits the infringer made as a result of the infringement - or statutory damages.18 Statutory damages stand at a minimum of $750 per violated work and can easily rise to a substantially higher sum.19 In calculating these statutory damages, the law allows the court to increase or decrease the total amount based on the nature of the infringement itself.20 If the court finds willful infringement of a copyrighted design, it has the legal authority to increase the statutory damage award, per infringed work, up to $150,000.21
The burden to prove willful infringement is on the entity that owns the copyrighted material. In such a case, the copyright owner would have to show either deliberate conduct or reckless disregard of the possibility that specific actions may result in infringement. In a case where the copyright owner sustains the burden of proving infringement—and the court finds that infringement was committed willfully—the court may use discretion in increasing the award of statutory damages to a sum of not more than $ 150,000.22
In a similar manner, should a potential infringer be found an “innocent infringer,” the court could, reduce the damage amount down to $200 per work.23 However, innocent infringement is quite difficult to prove. A few examples demonstrate the inherent ambiguities in a determination of an “innocent infringer” or a “willful infringer.”
In the case Warner Bros., Inc. v. Dae Rim Trading, Inc., infringing shopkeepers spoke little English, were unaware of the concept or existence of copyrighted property, committed a single infringing sale of dolls, and were told by an attorney that use of a copyrighted work did not qualify as infringement.24 Due to this complex chain of events the defendants qualified as innocent infringers.
Willfulness, on the other hand, may be identified through a broader range of circumstances. In a case against Prime Art & Jewel, Inc., the court affirmed a jury’s finding of willful infringement. There the defendant, after receiving copyright designs that it was supposed to manufacture, failed to investigate the possibility of any intellectual property violations. The defendant failed to investigate even after the vendor to whom the defendant was going to sell returned the items because they were “similar to” David Yurman’s cable-style jewelry.25 Consistently, the U.S. Appeals Court for the Second Circuit found the defendant in N.A.S. Import, Corp. v. Chenson Enterprises, Inc. willfully infringed a plaintiff’s handbag buckle design. There the infringing buckle was identical except for the embossed brand name, and, among other things, the defendant infringer sold handbags in a market “rife with knockoffs.26
Generally speaking, a search of federal case law reveals the extremely benign nature of the circumstances which support a finding of “innocent” infringement and the relative ease in which “willful” infringement may be proven. As the above case law indicates, a determination of unintentional infringement demands a substantially greater burden than does one of intentional infringement.
II. Trademark Interests
Trademark protection reflects similar considerations to copyright law. In the case of “inspired by” jewelry designs, trademark concerns deal largely with the products particular “trade dress.” Originally, the definition of trade dress was confined to the overall appearance of a products packaging or “dressing.”27 Gradually, this definition has expanded to include the design of the product itself.28 Trade dress today encompasses the total impression of a product including its package, size, configuration, color, design, and trademark, all of which may serve as a source identifier.29 A trade dress artifact serves as a source identifier when consumers recognize a product’s trade dress and immediately associate the product with a particular business or manufacturer.30
A jewelry design’s trade dress consistently includes the combination of general elements that, when taken as a whole, combine to create a unique and distinct source identifier. Just as under copyright law, each individual aesthetic feature may not be protectable, however, the overall impression created through their combination may be.31 For example, a standard circle with a gold chain will most likely not be protectable for trade dress. However, an otherwise simple design could be protectable under trade dress law if it had a few additional specific elements such as three strategically placed diamonds or special engravings.
In order to succeed on claims for trade dress infringement, a plaintiff must prove two factors: (1) that their design is non-functional;32 and (2) their design is distinctive or has acquired a secondary meaning prior to the alleged infringer’s entry into the market.33
a. Functionality
“Functionality” is the quality of serving some useful purpose.34 For example, a chair manufacturer cannot claim the four legs of its chair as a trade dress. Those four legs are a useful and functional aspect of that chair. Should a competitor come along and make another chair that has four legs, the competitor has not infringed on the manufacturer’s trade dress because those legs serve a purely functional purpose.
Whether jewelry design is functional will depend on the effect that protecting a specific design may have on marketplace competition.35 If the exclusive use of a particular trade dress “would put competitors at a significant…disadvantage,”36 the design behind that trade dress is considered functional. For example, the hands or numbers on a watch face would probably be considered functional since exclusive use of these aspects would severely hamper competition in the watch industry. On the other hand, a very intricate jewelry design may not be considered functional since exclusive use of its particular combination of elements still allows for other competitive pieces of jewelry.
b. Distinctiveness
Once a plaintiff establishes the non-functionality of its design, it next must prove that its design has acquired distinctiveness through secondary meaning. This requires establishing that (1) the combination of elements in the design identifies the plaintiff’s brand as the responsible brand, and (2) that the general public actually identifies the design with the brand.37 Several factors are considered, including: (1) consumer surveys; (2) evidence of intentional copying by the defendant; (3) advertisement expenditures; (4) sales success; (5) length and exclusivity of use; and (6) unsolicited media coverage.38 Due to the factual intensity involved, judicial determinations of secondary meaning are unpredictable. Jewelers with particularly famous designs, however, can take advantage of this fact-specific determination by conducting surveys, producing their advertising budget, and producing sales receipts to support their argument in favor of a finding of distinctiveness. Taking advantage of their financial strength, these famous jewelry designers may often tip the scales of justice in their favor.
c. Damages
Artists who successfully sue for trade dress infringement are entitled to recover (1) the defendant’s profits resulting from sale of the infringing goods, (2) any damages the artist suffers as a result of the infringement, and (3) the costs of the action.39 Just as with copyright infringement, whether the trade dress infringement is found to be “willful” provides the court some discretion in adjusting the damage award. Willful trade dress infringement can result in a damage award being increased threefold.40
III. Common Law Unfair Competition
Common law unfair competition, by nature, is a much broader claim than trademark or trade dress infringement.41 A claim of common law unfair competition simply consists of an allegation that a competitor’s product will mislead the public into believing that the competitor’s product was actually designed by the original producer.42 In creating confusion, the competitor is reaping the benefits of the original producer’s hard work through misappropriation of its good name and established reputation. Determinations of unfair competition are made similar to that of trade dress infringement. Here, a court will not focus on one particular feature of a product’s trade dress, but will instead consider the product’s overall impression from the standpoint of a member of the general public.43
While the general public’s confusion between products is necessary to establish unfair competition, the claim also rests on the intent of the accused to deceptively pass off an infringing product.44 For example, a jewelry company that sells products with a notification that they are “Inspired by Van Cleef and Arpels, Tiffany, Cartier” would provide strong support against claims of unfair competition. In the absence of any explicit claims of sponsorship, affiliation, or endorsement from another jewelry designer, the original designer would likely not succeed on a claim of common law unfair competition.
Despite the difficulty in proving claims of unfair competition, a successful claimant may obtain: (1) an injunction of further use of the offending product, (2) an award of actual damages including special damages and loss of profits, (3) punitive damages, (4) an accounting to the injured party by the offending party for all profits arising out of the offending product’s sale, and (5) the destruction of any offending objects still in the offending party’s possession or control.45
IV. Conclusion
The relationship between high end jewelry designers and their copy-cats present unique issues for adjudication in copyright infringement, trademark infringement, and unfair competition cases due to the fact that many high end jewelry designs consist of a combination of elements which exist in the public domain. Alone, these elements would not qualify for protection under either copyright or trade dress law, but when combined they may qualify for both. Such determinations are highly fact specific, and may present interesting quandaries for students, legal professionals, judges, and the increasingly prominent field of intellectual property. To avoid legal problems, jewelry designers should: (1) err on the side of caution when attempting to mimic any preexisting design; (2) refrain for associating the piece with the brand responsible for any preexisting sources of “inspiration;” and (3) emphasize the piece’s origin with the jewelry designer’s enterprise.
© 2007 Saper Law. All rights reserved.

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