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ADA Website Accessibility Litigation Presents High Risk to Retailers

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Adam Michaels | amichaels@hballp.com

Summary

The number of US lawsuits filed by visually impaired and other disabled people targeting business websites for violating the Americans with Disabilities Act (ADA) has reached fever pitch. Recent court rulings have emboldened plaintiffs’ attorneys and a significant uptick in litigation is expected in 2018. New York has proven particularly welcoming to these cases, with nearly 300 ADA website lawsuits targeting retail, fashion, and financial institutions filed in New York’s federal courts in the first quarter of 2018.

Despite this explosion of activity, many businesses are still unaware of the legal risk and continue to operate websites that fall short of accepted accessibility standards, courting ADA claims. Although monetary damages are unavailable under the ADA, these cases are not easily dismissed and the defense costs can be significant. To help minimize the lawsuit risk, businesses should consider proactive measures to ensure their websites meet the current accessibility standard.

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Important Trademark Litigation Victory For HBA Client Affirmed on Appeal

Essentially concluding over five years of litigation, the Second Circuit Court of Appeals on November 2, 2017 upheld the trial court’s determination that the sale of Clipps bag closures by Schutte Bagclosures Inc. (“Schutte”) did not infringe any trademark rights Kwik Lok Corporation (“Kwik Lok”). The court further upheld the lower court’s determination that Kwik Lok’s claimed trademark rights in the shape of bag closures were invalid because the shape was “functional” and that Kwik Lok’s trademark registration for that shape should be cancelled.
The same parties previously faced each other in court in the Netherlands, where the judge also ruled that Kwik Lok did not have valid trademark rights in their bag closures.

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NYU Stern and the CFDA

NYU’s Stern School of Business offers it’s MBA students the opportunity to work with emerging fashion companies through its’ CFDA Masters Workshop. Stern students are paired with designers to work on a variety of financial, marketing and other business-related projects.

Check out a short video on the program here featuring partner Douglas Hand, who is also the professor of the Fashion Law & Business course offered at both NYU School of Law & NYU Stern School of Business.

 

Lululemon Sues Under Armour For Design Patent Infringement Based on Sport Bra Strap Design

On July 7th, athletic apparel company Lululemon Athletica filed suit against competitor Under Armour, alleging that three models of Under Armour sport bras infringed on design patents held by Lululemon as well as Lululemon’s trade dress.  Specifically, Lululemon asserted that the interwoven strap design on Under Armour’s products closely resembled designs protected by patents Lululemon filed in 2014 and 2016, as well as a design first sold by Lululemon in 2011 as part of its Energy Bra model.

Design patents typically do not offer wide protection for fashion products. While relatively cheap to obtain compared to utility patents, design patents typically still cost several thousand dollars to register.  Furthermore, design patents can only be obtained if an item has been on sale for less than a year and fashion designers often do not want to commit to a registration until and unless a design demonstrates that it will be a core product line going forward.  Trade dress, on the other hand, does not require any formal filing with the United States Patent and Trademark Office (USPTO). However, those seeking trade dress protection must also prove that the design has no functional component, as well as prove that the item conveys a distinctive secondary meaning to consumers that would be jeopardized by the sale of imitations.

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Designers Are Using Social Media to Fight Knockoffs

The fashion industry is inundated with allegations of copyright violations and copied designs, often occurring when a small designer or brand claims that a large retailer or brand copies its designs. Traditionally, disputes over copied designs have been resolved through the legal system. Increasingly, however, social media and in particular Instagram has become a popular medium for small designers to fight back against larger companies that they believe copied their designs. With the support of passionate followers, these designers take to Instagram to spot and shame duplicates quickly, frequently resulting in the alleged offenders ceasing sales of the design in question.

Instagram has emerged as a channel to fight back against duplicate for several reasons. As HBA lawyer and NYU fashion law professor Douglas Hand stated in the recent article Designers Take Copyright Infringement Into Their Own Hands in the Business of Fashion, “copyright protection for designs, even post Star Athletica [v. Varsity Brands], is relatively thin when compared to Europe and other jurisdictions.” Therefore, the U.S. legal system may be an insufficient means for designers to successfully protect their designs. Additionally, smaller brands and up-and-coming designers often have neither the financial resources nor the time to litigate. Litigation is also undesirable because these small brands and designers frequently just want the offending designs removed from market and do not want a prolonged court battle.

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Supreme Court Strikes Down Prohibition on “Offensive” Trademark Registration

On June 19, the Supreme Court ruled in Matal v. Tam that the Patent and Trademark Office (PTO) could no longer deny trademark registrations for “marks that disparage the members of a racial or ethnic group.” Before this decision, the PTO used the Lanham Act’s Disparagement Clause as its legal basis for prohibiting protection for offensive names. The Court held, however, that the Disparagement Clause violated the First Amendment, reasoning that “Speech may not be banned on the ground that it expresses ideas that offend.”

The Court’s decision has important ramifications for the NFL’s Washington Redskins and other sports teams with names and mascots that many consider to be offensive. The “Redskins” was considered racially offensive on several occasions by the PTO and was held to be ineligible for federal trademark registration. The Supreme Court’s decision allows for the Redskins name to receive the benefits of federal registration.

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