Target to Pay $389,000 in EKB Textiles Copyright Case Target Corp. has been ordered to pay more than $389,000 and attorney’s fees to Los Angeles–based EKB Textiles Inc. following a recent copyright-infringement trial in U.S. District Court in Los Angeles. A jury handed down its verdict on July 27, said Stephen M. Doniger, who represented EKB Textiles, also known as Caribbean Blues Inc. Doniger claims the verdict was one of the top four largest copyright verdicts issued by the federal Central District of <strong>California</strong> in the past two years. His Culver City, Calif.–based firm, Doniger/Burroughs APC, also won a judgment of more than $500,000 for United Fabrics International against retailer Lane Bryant last year. “When you realize that it will go to a jury, you need to respect copyright—or it will cost you,” Doniger said. Target’s co-defendants were Kandy Kiss of <strong>California</strong>, NC <strong>Apparel</strong> Inc., LF USA Inc. and Samsung C&T America Inc. A LF USA representative said the company has no comment on the case. Rollin A. Ransom of the Los Angeles office of Sidley Austin LLP represented Target in the early part of the case, which was filed last year. In court documents, Ransom argued that Target had not infringed on the rights of EKB and t<strong>here</strong> was no substantial similarity between the fabric represented by EKB and the print that was sold at Target. The trial focused on EKB print #4644, a floral/paisley print with a geometric border pattern. EKB had sold the design to various manufacturers, who then used the print to make various womenswear styles. In 2010, an EKB employee found the print being sold at a Southern <strong>California</strong> Target store for a beach � � � No Two Businesses are alike. � � 2 CALIFORNIA APPAREL NEWS August 5–11, 2011 NEWS Side by Side: EKB’s fabric is pictured on left, and Target’s “Beachy Keen” dress is pictured on right. coverup dress, called the “Beachy Keen,” which was sold under Target’s private-label brand Xhilartion. The colors, layout and the composition of the design remained the same, but a few details were changed. Specifically, some of the flowers in the EKB design were changed to diamond shapes, according to Doniger. EKB’s suit was filed last year, and a ceaseand-desist letter was sent to Target in March 2010. The retailer replied, saying it would look into the matter, according to Doniger, who said Target sold out of items using the EKB print by July. The number of copyright-infringement ‘A Different Level of Client Service’ �������� � ����������� �����������A 888 S. Figueroa St., Suite 1100, Los Angeles, CA 90017 T 213-430-4888 F 213-430-4877 �� 450 7 th Ave., Suite 1006, New York, NY 10123 T 212-629-8688 F 212-629-8638 Tae Chung (213) 534-2908 New business development Austin Sohn (212) 629-8688 New business development ������������������������� ��� � � ��FACTORING�������� ���TRADE FINANCING ���P/O FINANCING � cases has been increasing for the past decade, according to Crystal A. Zarpas of law firm Mann & Zarpas LLP. In such cases, juries and judges must determine if defendants have access to the original work and whether the original work and the alleged copy are substantially similar. Changing a few details of the original design is not a guarantee against a copyrightinfringement claim. “T<strong>here</strong> is no 30 percent rule, as many in the industry falsely believe,” Zarpas said. Copyright-infringement cases have increased because of the ease of registering a copyright, said Frank J. Colucci of New York–based intellectual-property-rights firm Colucci & Umans. “We do not believe that t<strong>here</strong> is any discernible pattern in jury verdicts,” Colucci said. However, big retailers can find themselves at a disadvantage because of their large volume of vendors. “Target sells numerous products that they obtain from vendors and other parties whose policies with respect to copyrighted works may not be as stringent as theirs,” Colucci said.—Andrew Asch China/Costa Rica Free-Trade Agreement Begins China has free-trade agreements with Peru and Chile in South America, but on Aug. 1, the international trade giant kicked off its first free-trade pact with a Central American country. The new free-trade agreement between China and Costa Rica, countries that signed an accord more than a year ago, has gone into effect. China’s major exports to Costa Rica include textiles, machines, electric appliances, vegetables, fruits, cars, chemical products, raw fur and leather. Costa Rica’s chief exports to China are coffee, beef, pork, fruit juices and jam. Last year, Costa Rica imported $25.5 million in textiles from China, according to the Costa Rica Department of Commerce. Chinese fabrics are not allowed to be used for duty-free goods coming in from Costa Rica to the United States. The only exception is if they are under the short-supply list approved by the member countries of the freetrade agreement. The China/Costa Rica freetrade agreement could make short-supply textiles cheaper in Costa Rica because they wouldn’t be subject to tariffs. But Nicaragua already has trade-preference levels, allowing them a certain amount of outside fabric to be used in garments sent to the United States. The new agreement means about 60 percent of the two countries’ products immediately will be duty-free. Tariffs on another 30 percent of goods will gradually expire after five to 15 years. In addition to tariff-free entries for products, the two countries have agreed to open their service sectors. Costa Rica will allow free service trades in 45 sectors, including telecommunications, business services, construction, real estate, distribution, education, environment services, information-technology services and tourism, while China will open seven sectors in return, including IT services, real estate, market research, translation and interpretation, and sports. In 2010, the value of bilateral trade between the two countries was $3.8 billion, a 19 percent jump over 2009. China, which received $3.1 billion in goods from Costa Rica in 2010, has become the Central American country’s second-largest export market, after the United States.—Deborah Belgum WEEK In RevIew <strong>California</strong> Levi’s gets strategic. San Francisco– based Levi Strauss & Co. named Beto Guajardo global vice president of strategy. Guajardo was most recently vice president of North America strategy for Avon. He also served as vice president of global sales strategy and vice president of Asia Pacific strategy and new business development for the direct-toconsumer beauty brand. R&R auction a hit. The asset auction of luxury cars, jeans and sewing equipment once owned by Los Angeles– based denim brand Rock & Republic was a hit, according to Great American Group LLC, the Woodland Hills– based asset-disposition and appraisal company that conducted the auction. The sale drew more than 500 registered buyers and a standing-room-only crowd for the July 26 auction, according to Great American Group, which described it as one of its most popular auctions held. Among the auction highlights was a 1965 Shelby Mustang GT 350 SR, which sold for $141,250. Rock & Republic filed for bankruptcy protection last year. Earlier this year, the brand was acquired for $57 million by Greensboro, N.C.–based VF Corp., which inked an exclusive licensing deal for the Rock & Republic label with Kohl’s Corp. SMP turns 1. Upscale lifestyle mall Santa Monica Place is celebrating the one-year anniversary of its renovation with three days of shopping promotions and restaurant deals beginning Aug. 5. Nearly two years of construction and a $265 million budget transformed the 1980s-era enclosed shopping mall, designed by Frank Gehry, into a threelevel luxury open-air retail and dining district with sweeping views of the beach and the Pacific Ocean. Owned by Macerich Co., the retail center features a mix of upscale chain and independent retail, including Bloomingdale’s, Nordstrom, CB2, Nike, Louis Vuitton, Tiffany & Co, Burberry Brit, Tory Burch, Barneys Co-Op, Michael Kors and Kitson, among other retail attractions. International Gap opens in Rome. San Francisco– based Gap Inc. opened its first Gap flagship store in Rome on Via del Corso. Last year, the company opened its first Gap and Banana Republic stores in Milan and launched an e-commerce website tailored to the European market. Quote of the Week Narco-beauty: That’s what the fake boobs and bums are about. Drug traffickers want this kind of femininity—and very young women go along with it because they think it is a passport to a better life. … But today, we are pushing women to be financially independent and opt for a different kind of elegance. —Lila Ochoa, editor in chief of Colombian women’s magazine Fucsia, talking to Vogue at Colombiamoda in Medellin
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