“Designer” vs. “Inspired-by”: Jewelry, IP Infringement, and Unfair Competition

This article analyzes copyright, trademark, and unfair competition law as applied to “inspired-by” jewelry designs, explaining the necessary elements for establishing a claim under each area of law and providing practical tips to avoid legal problems.

Copyright Interests

Copyright holders own a bundle of exclusive rights in their original works, including rights of reproduction and 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.³ 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.⁴

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 and is required in order to commence a lawsuit in federal court.⁵ The burden then shifts to the alleged infringer to prove that, despite the designer’s federal registration, the design is either unoriginal or not copyrightable.⁶

In Van Cleef & Arpels Logistics, S.A. v. Landau Jewelry, the court held that one of Van Cleef’s designs, a military clover insignia, was copyrightable.⁷ 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. 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 Van Cleef’s.¹⁰

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 layperson’s observation, the factual 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. Ultimately, the court granted the defendant’s motion for summary judgment and held that “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. It is not enough to merely disassociate from a designer (see below). “Inspired-by” designers must carefully take into account similarities between all elements of their designs. Aesthetically, the size, shape, proportion, and ornamentation of products will be compared to the original producer’s design.¹⁵ That said, small differences in detail between a potential infringer’s products and the original artist’s design 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

Copyright 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 On the other hand, should a potential infringer be found an “innocent infringer,” the court could reduce the damage amount down to $200 per work.²³ A few examples demonstrate the reasoning behind finding infringers to be either “innocent” or “willful.”

In the case of Warner Bros. v. Dae Rim Trading, Inc., foreign shopkeepers sold infringing doll figurines.²⁴ They spoke little English, were unaware of the concept or existence of copyrighted property, committed only a single infringing sale, and were told by an attorney that their use of a copyrighted work did not qualify as infringement. Due to these circumstances, the court concluded that the defendants qualified as innocent infringers. On the other hand, the Second Circuit affirmed a jury’s finding of willful infringement in the case of Yurman Design, Inc. v. PAJ, Inc.²⁵ In that case, the defendant failed to investigate the possibility of any IP violations after receiving copyright designs that it was supposed to manufacture. Even after the defendant’s vendor returned the items because they were “similar to” David Yurman’s cable-style jewelry, the defendant failed to further investigate so as to constitute willful infringement. Consistently, the Second Circuit found that the defendant in N.A.S. Import, Corp. v. Chenson Enterprises, Inc. willfully infringed a plaintiff’s handbag buckle design.²⁶ The court reasoned that the infringing buckle was identical except for the embossed brand name and that the defendant knowingly sold these handbags in a market “rife with knock-offs.”²⁷

A final example considers Pamela Love, a well-known jewelry designer whose products are sold in major high-end retailers and have been featured in numerous fashion publications. In July 2016, Love filed suit against fashion brand Nasty Gal for copyright infringement of three of Love’s designs: the “Five Spike earring,” “Dagger Rosary,” and “Talon Cuff.”²⁸ According to the suit, Love’s counsel reached out to Nasty Gal in 2014 in regard to the infringing designs. Nasty Gal’s counsel responded that it would remove the designs from the online store. However, it continued to sell the jewelry until February 2016 and did not remove the online listings until the suit was filed. The suit alleged that a Nasty Gal employee “purposefully sought out” and purchased the original designs and that Nasty Gal was aware of the alleged infringement prior to Love’s counsel informing Nasty Gal.²⁹ In sum, Pamela Love asserted that Nasty Gal’s deliberate, blatant, and repeated conduct constituted willful infringement.

As these cases show, the innocent or willful nature of copyright infringement is based on the infringer’s knowledge and course of conduct. Therefore, “inspired-by” jewelry vendors should be wary of selling such products, especially if they have reason to know their actions may infringe a brand name designer’s IP rights.

Trademark Interests

Trademark protection reflects similar considerations to copyright law. A trademark acts as a source identifier and helps the consumer immediately associate the jewelry with the designer.³⁰ When using a trademark, the sale of counterfeit jewelry may also implicate trademark infringement, as the following case illustrations demonstrate.

In 2003, Tiffany & Co. sent several complaints to eBay regarding the sale of counterfeit Tiffany products. In 2004 and 2005, Tiffany conducted a survey to determine what percentage of Tiffany products sold on eBay were counterfeit. Tiffany purchased a random sample of “Tiffany sterling” products and then inspected the items to determine authenticity. Of the 136 pieces purchased in 2004, 73.1% were counterfeit. Of the 139 pieces purchased in 2005, 75.5% were counterfeit, though the trial court later found this survey to be “methodologically flawed and of questionable value.”³¹

Tiffany made five demands to eBay in June 2004:

“(i) ban any eBay seller from listing five (5) or more ‘Tiffany’ jewelry items at any given time; (ii) ban the sale of silver ‘Tiffany’ jewelry, the vast majority of which our analysis has shown to be counterfeit; (iii) ban the sale of any ‘Tiffany’ item that is advertised as being counterfeit (as some currently are) or as being ‘inspired by Tiffany’” (as is often the case now); (iv) not advertise the sale of “‘Tiffany’ merchandise and (v) remove sponsored links to ‘Tiffany’ on any search engine.”³²

eBay refused to comply with the demands, and its refusal led Tiffany to file suit in 2004. In 2008, the trial court ruled against Tiffany and Tiffany appealed. In 2010, the appeals court agreed with the lower court, ruling that eBay was not liable for either direct or contributory trademark infringement.³³ This effectively places the burden on trademark owners, rather than online retailers, to police for counterfeit items on third-party websites.

Everyone recognizes the iconic CC monogram trademark of Chanel. Therefore, when a jewelry company, Shiver + Duke, refashioned authentic Chanel buttons bearing the CC monogram and put them on chains, earrings, and bracelets, Chanel filed a complaint on February 12, 2021, for trademark infringement, unfair competition, and trademark dilution.³⁴ The refashioning of Chanel buttons conflicts with trademark law, and the “use of the CC Monogram is intended to trade on the goodwill that Chanel has created in its mark through decades of use and millions of dollars in investments.”³⁵ The complaint alleges that “[t]he prominent mark and feature of the costume jewelry is Chanel’s CC Monogram. The commercial interest in the Defendants’ jewelry is based on the use of Chanel’s iconic trademark on the jewelry and the use of the CHANEL name to promote and market the jewelry.”³⁶

Before filing the lawsuit, Chanel sent a cease and desist letter. Rather than cease the use of the CC monogram, the defendants made minor changes to their products and packaging by adding the words “reimagined” and “reworked.” However, the packaging still did not state that the jewelry was not authorized or associated with Chanel. Shiver + Duke also added its “SD” markings on the backs of the Chanel-inspired jewelry and on their tags. These changes do not change the fact that the jewelry bears the immediately recognizable CC monogram. Chanel argues, “in the post-sale context, the mark most prominently displayed on Defendants’ jewelry belongs to and identifies Chanel as the source of Defendants’ products.”³⁷ Chanel is seeking monetary damages and injunctive relief to immediately and permanently bar Shiver + Duke from using the Chanel trademark. The case is currently pending in the U.S. District Court for the Southern District of New York.

Trade Dress Protection for Jewelry Designs

In the case of “inspired-by” jewelry designs, trademark concerns deal largely with the product’s particular “trade dress.” Originally, the definition of trade dress was confined to the overall appearance of a product’s packaging or “dressing.”³⁸ Gradually, this definition has expanded to include the design of the product itself.³⁹ 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.⁴⁰ 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.⁴¹

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. While each individual aesthetic feature may not be protectable, the overall impression created through their combination may be.⁴² 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 has 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) their design is nonfunctional,⁴³ and (2) their design is distinctive or has acquired a secondary meaning prior to the alleged infringer’s entry into the market.⁴⁴

Trade Dress Functionality

“Functionality” is the quality of serving some useful purpose.⁴⁵ For example, a chair manufacturer cannot claim the four legs of its chair as a trade dress because those four legs are a useful and functional aspect of chairs generally. Should a competitor make another chair that has four legs, the competitor is not infringing 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 protection of a specific design may have on marketplace competition.⁴⁶ If the exclusive use of a particular trade dress “would put competitors at a significant . . . disadvantage,”⁴⁷ the design behind that trade dress is considered functional. For example, luminous numbers on a watch make it easier to tell time in the dark. Since exclusive use of this feature would severely hamper competition in the watch industry by disallowing competitors to use luminous numbers, trade dress protection likely cannot be obtained due to the feature’s utilitarian functionality.

Trade Dress Distinctiveness

Once a plaintiff establishes the nonfunctionality of its design, it then 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 its source, and (2) the general public actually identifies the design with the brand.⁴⁸ Several factors used to determine secondary meaning include consumer surveys, evidence of intentional copying by the defendant, advertisement expenditures, sales success, length and exclusivity of use, and unsolicited media coverage.⁴⁹ Due to the factual intensity involved, judicial determinations of secondary meaning are often unpredictable. However, jewelers with particularly famous designs are often able to conduct surveys, produce substantial advertising budgets, and show significant sales receipts supporting their argument in favor of distinctiveness.

Damages for Trademark Infringement

Designers who successfully sue for trademark and trade dress infringement are entitled to recover (1) the defendant’s profits resulting from sale of the infringing goods, (2) any damages the designer suffers as a result of the infringement, and (3) the costs of the action.⁵⁰ Just as with copyright infringement, whether the trademark infringement is found to be “willful” provides the court some discretion in adjusting the damage award. Willful infringement can result in a damage award being increased threefold.⁵¹ The case below serves as an illustration.

In February 2013, Tiffany & Co. filed suit against Costco for trademark infringement after Costco sold diamond rings advertised with display case signage that bore the “Tiffany” name. Tiffany alleged that “[t]here are now hundreds if not thousands of people who mistakenly believe they purchased and own a Tiffany engagement ring from Costco.”⁵² Costco argued that it was not selling counterfeit Tiffany rings as it used “Tiffany” generically to describe the diamond’s setting. It further argued that the rings were not branded with the Tiffany name nor were they sold in Tiffany blue boxes. Costco claimed that Tiffany was attempting to prevent others from using “Tiffany” to generically describe a ring’s setting.⁵³

In 2015, the court ruled against Costco and granted summary judgment in favor of Tiffany, finding Costco liable for trademark infringement and counterfeiting.⁵⁴ On August 14, 2017, a federal judge awarded $19.4 million in damages to Tiffany: $11.1 million, plus interest, for Costco’s trademark infringement, plus $8.25 million in punitive damages awarded by a jury in October 2016.⁵⁵ Costco was also barred from selling anything that was not made by Tiffany as “Tiffany” products. Most recently, in August 2020, a U.S. federal appeals court vacated and remanded the almost $20 million judgment against Costco for further proceedings to clarify fact issues.⁵⁶ This case demonstrates the significant temporal, legal, and financial consequences that come with trademark infringement and enforcing trademark rights.

Common Law Unfair Competition

Common law unfair competition is a much broader claim than trademark or trade dress infringement. 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.⁵⁷ 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. 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 when addressing unfair competition.⁵⁸

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.⁵⁹ For example, a jewelry company that sells products with a notification that they are “Inspired by Van Cleef and Arpels, Tiffany, and 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 against 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.⁶⁰

Conclusion

The relationship between high-end jewelry designers and their copycats presents unique issues for adjudication in copyright infringement, trademark infringement, and unfair competition cases. This is due to the fact that many high-end jewelry designs consist of a combination of elements that exist in the public domain. Alone, these elements would not qualify for protection under either copyright or trade dress law. However, when combined, they may qualify for both. Such determinations are highly fact specific and may present interesting quandaries for students, legal professionals, and judges in the increasingly prominent field of intellectual property. To avoid legal problems, jewelry designers should: (1) err on the side of caution when finding inspiration in any preexisting design, (2) refrain from 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.

Endnotes

1. 17 U.S.C. § 106.

2. Ty, Inc. v. GMA Accessories, Inc., 132 F.3d 1167, 1171 (7th Cir. 1997).

3. 17 U.S.C. § 501(a).

4. 37 C.F.R. § 202.1.

5. 17 U.S.C. §§ 410(c), 411.

6. See Feist Publ’ns, Inc. v. Rural Tel. Serv. Co., 499 U.S. 340, 346 (1991) (rejecting compiler’s “sweat of the brow” theory on the ground that a compilation of facts in a telephone directory did not show sufficient originality to benefit from copyright protection).

7. 547 F. Supp. 2d 356 (S.D.N.Y. 2008).

8. Knitwaves, Inc. v. Lollytogs Ltd., 71 F.3d 996, 1002 (2d Cir. 1995).

9. Van Cleef, 547 F. Supp. 2d at 359–60.

10. See Folio Impressions, Inc. v. Byer Cal., 937 F.2d 759, 766 (2d Cir. 1991).

11. 378 F. Supp. 485 (S.D.N.Y.), aff’d, 509 F.2d 64 (2d Cir. 1974).

12. Id. at 487.

13. Id. at 488.

14. Id. at 490; see also Herbert Rosenthal Jewelry Corp. v. Kalpakian, 446 F.2d 738 (9th Cir. 1971) (affirming summary judgment grant to the defendant as the plaintiff could not copyright both the expression and idea of a jeweled bee pin design).

15. See Aaron Basha Corp. v. Felix B. Vollman, Inc., 88 F. Supp. 2d 226, 230 (S.D.N.Y. 2000).

16. See Crown Awards, Inc. v. Discount Trophy & Co., 564 F. Supp. 2d 290 (S.D.N.Y. 2008).

17. Severin Montres, Ltd. v. Yidah Watch Co., 997 F. Supp. 1262, 1265 (C.D. Cal. 1997).

18. 17 U.S.C. § 504(a).

19. Id. § 504(c)(1).

20. Id. § 504(c)(2).

21. Id.

22. Id.

23. Id.

24. 677 F. Supp. 740 (S.D.N.Y. 1988).

25. 262 F.3d 101 (2d Cir. 2001).

26. 968 F.2d 250 (2d Cir. 1992).

27. Id. at 253.

28. See Love v. Nasty Gal Inc., No. 1:16-cv-06063 (S.D.N.Y. Sept. 16, 2019).

29. See id. (Love voluntarily dismissed the suit against Nasty Gal without prejudice in February 2017).

30. Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 215 (2000).

31. See Tiffany (NJ) Inc. v. eBay, Inc., 576 F. Supp. 2d 463, 512 (S.D.N.Y. 2008).

32. Id. at 482.

33. See Tiffany (NJ) Inc. v. eBay, Inc., No. 04 Civ. 4607, 2010 WL 3733894 (S.D.N.Y. Sept. 10, 2010); see also Tiffany (NJ) Inc. v. eBay, Inc., 600 F.3d 93 (2d Cir. 2010).

34. Chanel, Inc. v. Shiver & Duke, LLC, No. 1:21-cv-01277 (S.D.N.Y. Feb. 12, 2021).

35. See id. at 8.

36. Id. at 1–2.

37. Id. at 14.

38. Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 209 (2000).

39. Id.

40. Walt Disney Co. v. GoodTimes Home Video Corp., 830 F. Supp. 762, 766 (S.D.N.Y. 1993).

41. Wal-Mart, 529 U.S. at 210–11.

42. LeSportsac, Inc. v. K Mart Corp., 754 F.2d 71, 78 (2d Cir. 1985).

43. 15 U.S.C. § 1125(a)(3).

44. Id. § 1125(a).

45. Qualitex Co. v. Jacobson Prods. Co., 514 U.S. 159, 165 (1995).

46. Id.

47. Id.

48. Wal-Mart Stores, Inc. v. Samara Bros., 529 U.S. 205, 210 (2000).

49. Willajeanne F. McLean, The Birth, Death, and Renaissance of the Doctrine of Secondary Meaning in the Making, 42 Am. U. L. Rev. 737, 749–50 (1993).

50. 15 U.S.C. § 1117(a).

51. Id. § 1117(b).

52. Tiffany & Co. v. Costco Wholesale Corp., No. 13-1041 (S.D.N.Y. Feb. 14, 2013).

53. Tiffany & Co. v. Costco Wholesale Corp., No. 13-1041 (S.D.N.Y. Oct. 18, 2013).

54. See Tiffany & Co. v. Costco Wholesale Corp., No. 17-2798 (2d Cir. Aug. 17, 2020).

55. See id.

56. See id.

57. See Bos. Pro. Hockey Ass’n v. Dall. Cap & Emblem Mfg., Inc., 510 F.2d 1004 (5th Cir. 1975).

58. Chesebrough Mfg. Co. v. Old Gold Chem. Co., 70 F.2d 383, 384–85 (6th Cir. 1934).

59. Am. Washboard Co. v. Saginaw Mfg., Co., 103 F. 281, 285 (6th Cir. 1900).

60. Gai Audio of N.Y., Inc. v. Columbia Broad. Sys., Inc., 340 A.2d 736, 750 (Md. Ct. Spec. App. 1975) (citing 74 Am. Jur. 2d Trademarks and Tradenames § 145 (1974)).