Knockoffs: Flattery or Theft? 7.26.11

Knockoffs: Flattery or Theft? 7.26.11

Maxwell Ryan
Aug 17, 2011

What: Design Evenings: Knockoffs Panel Discussion
July Guests:
  John Edelman, CEO of Design Within Reach
  Kate Hable, co-founder of Hable Construction
  Alan Heller, founder of Heller Inc
  Marc P. Misthal, attorney at Gottlieb, Rackman & Reisman
Attendance: 269

This was our biggest panel discussion yet, and it was thrilling to have four such distinguished guests. Knockoffs as a subject is so complicated and controversial that it made for a lively discussion among our guests. Read all about our evening below, and please join us in September for our next New York Design Evening at ABC Carpet & Home!

l to r: John Edelman, Kate Hable, Marc Misthal, Maxwell Gillingham-Ryan (missing: Alan Heller)

This month's meetup was kicked off again by Ken Pilot, Executive at ABC Carpet & Home. In a fitting introduction to our panel, he talked about real vs. fakes when it comes to what ABC Carpet carries in its store, and that they deal with this dilemma often. It's pervasive throughout the design world yet hasn't been talked about much in realms outside of fashion, so it's of great importance that we're talking about it this evening.

Maxwell Gillingham-Ryan:
Thank you everyone for being here. So a quick back story to my own personal experience with knockoffs - when I first started as a designer and was working with clients, I was always happy when I could find them "affordable" pieces. The whole idea of whether or not it was a knockoff piece wasn't as top-of-mind, but fast forward to today and I'm a lot more aware of it, including affordable alternatives that are not knockoffs, which is important and something we'll most likely touch on this evening.

So, let me introduce our panel, from left to right:

Marc P. Misthal is a patent and trademark specialist at Gottlieb, Rackman & Reisman. He specializes in all areas of trademark and copyright litigation and prosecution, and has extensive familiarity with domain name and Internet issues. Mr. Misthal has contributed to the Aspen Law & Business treatise, Trademark Counterfeiting, (George W. Abbott, Jr. and Lee S. Sporn, eds. 1999); and he is the author of Reigning in the Paparazzi (10 International Legal Perspectives 287, Northwestern School of Law [2000]).

More recently Marc, along with George Gottlieb, contributed an extensive chapter on intellectual property to the newly released book Fashion Law: A Guide for Designers, Fashion Executives and Attorneys. The book takes a practical approach to addressing legal issues. It is the first book to comprehensively examine, in one volume, those areas of the law implicated in the fashion business (including, in addition to intellectual property issues, franchising, distribution, rentals, leasing and import/export). Fashion Law, published by Fairchild Books, is available from, Barnes and Noble and other booksellers.

John Edelman joined Design Within Reach in January 2010 as President and Chief Executive Officer. He has more than 20 years' experience with consumer-focused lifestyle brands, most recently at Edelman Leather. During his 14-year tenure at Edelman, six years as President and CEO, he exponentially increased its brand awareness, sales and profits as the leading national provider of premium leather to the home furnishings industry. He was instrumental in leading the sale of his namesake company to Knoll, Inc. in October 2007. Prior to joining Edelman Leather in 1995, Mr. Edelman spent seven years at Sam & Libby, Inc., where he was responsible for its U.S. business.

Kate Hable is co-owner of Hable Construction with her sister, Susan. Her academic background in journalism, marketing, and sales management at Polo Ralph Lauren and Kate Spade refined her skills in co-owning the company with her sister, Susan. She was born and raised in Corsicana, TX, and currently resides in Brooklyn, NY.
As the entrepreneurial force of the company, Kate is influenced by the independent and hardworking women around her, and inspired by her sister's artistry. Kate also realized the benefits of starting her own company which afforded her the freedom to be a mom, wife, and her own boss.

Alan Heller founded Heller Inc. in 1971. The company's philosophy is good design, industrial production, and reasonable prices. For over forty years, Alan has collaborated with some of the world's leading designers and architects, including Massimo Vignelli, Philippe Starck, Vico Magistretti, Mario Bellini, and Frank Gehry. Heller products have received numerous prestigious design awards, including two Compasso d'Oro's, Italy's highest design award, and Germany's Red Dot and IF Design awards for technology. Heller products have been exhibited and included in the permanent design collections of museums such as the Louvre, MoMA, the Metropolitan Museum of Art, the Cooper-Hewitt National Design Museum, the Smithsonian Institution in Washington, the Victoria and Albert in London, and the Pinakothek in Munich, among many others.

Throughout his career, Alan Heller has worked closely with manufacturers of innovative technologies both in Europe and the U.S. Alan Heller holds a number of patents, including one for his new invention ErgoErgo, a revolutionary chair based on plastics technology which won the Good Design award even before being launched in the market. He has consulted on technology for various companies.
Alan graduated from The New School, N.Y., with a BA in economics and lives in New York City with his wife, Barbara Bluestone.

Just so everyone knows, I tried to get a fifth panelist, someone who actually makes knockoffs - I tried three different people and they all backed out.

So, let me start by asking you all how this issue has affected your own lives?

I've always worked with major designers, with a focus on industrial production. We look at price as it compares to the production cycle and try to find how we can make the absolute best product within the required price point.
There will always be copies, they're just out there. But you don't have to buy a copy to get a "designed" product. Many of our least expensive products are actually carried at Design Within Reach. Their wholesale prices would make Wal-Mart laugh, but the key here is that we want to create good product and won't sacrifice that.
The first product I produced was a dinnerware line in 1971, which is still in production. At one point I think there were 34 copies of it out there. This particular line is in MoMA.

For me, as a textile designer, we're in a bit of a different realm, as people can easily copy 2D work. We produce our goods domestically, so our prices will always be hire - but we've made the choice to produce in the U.S. and use U.S. workers and we're proud of that. Along with that comes the higher price.
We've sued and won two major lawsuits with department stores. They came about because designers knocked off our textile designs. People just Xerox our fabrics and then manufacture them in China, but luckily, we have great customers who have actually seen this and brought it to our attention. In fact, a friend of my sisters from Parsons called us a while back - she almost lost her job because she told us that her company was Xeroxing their designs.

This issue affects us on a daily basis. Our main goal is to make sure our clients aren't confused - therefore, we want people to know that we carry zero knockoffs. There are other companies which have lines that are similar to ours that are knockoffs - it's unfair competition and it's confusing for the client. We can't blame people for being confused, it's too easy to use these similar names to find a market at a lower price point, and much lower quality.

Now, DWR used to have a mix of product, correct?

Correct. At the beginning, Knoll wouldn't sell to us - they are very, very strict with who they license to, as they should be, and when DWR started they didn't know how legitimate we were as a new player in the space. So we started offering knockoffs. And as we grew and they realized we were a legitimate company, they gave us the license arrangements and we stopped carrying knockoffs. Originally the company really wanted to have "modern within reach", so they did what they had to in order to reach that company goal.
You know, in general, creative people have demands. It's our job to find a way to work with them.

So Marc, you're on the other end of this - you're the one who's called when a designer finds a knockoff of their work. Tell us how a knockoff is defined in legal terms?

There are a few factors we take into account, but mostly it comes down to what a piece looks like. Is it a "good" knockoff, meaning that it looks exactly like, or as good as, the original? Or is it "influenced" by a famous piece yet has its own distinct look?
To be honest, there isn't a really good legal definition. The big question here comes down to rights - that is, if you have rights to something, what are they? Our best legal test is the visual test - if you put two pieces side-by-side, do they look similar? Is it hard to tell them apart? Is one a "good" knockoff of the other, or is it "influenced" by the original? It's subjective, but this is mainly what we use when looking at knockoff cases.

And what about if a bag has a Hable Construction logo?

That's considered trademark infringement, which is something a bit different. That's more to protect the consumer than the designer.

What about the shape of a chair or table?

The first question is how is it protected? Patent or trademark? The question with Trademark is, Is the consumer going to be confused? With a design patent, that is more to protect the designer and his/her design.

So you're a small company knocked-off by a big one. Is it expensive to sue?

The main way Katherine won her lawsuit is because she had a Copyright, and Copywrights are cheap. She spent $35 and was covered, end of story. They're easy to get online, and any work you create can be covered.

One of the lawsuits involved a print we call the "Poppy". We had pictures of it in the press three years prior to the creation of the knockoff, so that helped. Also, we had