Steve Madden Handbag Design Dispute Highlights Requirements and Limits of Different Forms of Intellectual Property

A recent lawsuit brought by Steve Madden against Cult Gaia concerning copying of a handbag design highlights the requirements and limits of different forms of intellectual property. 

While neither company is in the luxury goods space, the legal issues at the base of the suit are the same and important for luxury goods companies to consider.

The Dispute

Last summer, Cult Gaia introduced what became a hot item, a bamboo “Ark Bag,” which was heavily promoted on Instagram and other social media.  Shortly thereafter Steve Madden began marketing a very similar design bag.

Cult Gaia’s lawyers cried foul over the alleged copying, and threatened legal action.  Deciding to take matters in its own hands Steve Madden filed an action in federal court, seeking a declaration that Cult Gaia had no rights to infringe. 

Meanwhile, the United States Patent and Trademark Office denied Cult Gaia’s application to register the design as the company’s “trade dress.”  That rejection was in October; Cult Gaia has six months to respond.

A major argument raised by Steve Madden is that the Ark Bag itself closely resembles vintage Japanese bag designs that have been marketed for years. 

How then can Cult Gaia complain of copying when its own work is alleged to be a copy?  That seemingly simple moral argument, however, is not necessarily consistent with the law.

Trade Dress, Trade Mark Distinction Meaningful Again?

Trademark law recognizes that many things can function as a “symbol of source” and may be protected as a trademark: a word, a design, a package, a product feature.  

In recent years, Congress and the Supreme Court have made it more difficult to protect a subset of these symbols – called “trade dress” – by enacting additional legal hurdles that are not required for “trademarks” in general.  Trade dress for product designs requires a showing of “secondary meaning” -- that the design has achieved commercial recognition as associated with one source.  And, trade dress cannot be “functional” – meaning it gives an advantage in terms of use, cost or competition.

Not surprisingly, some litigants have tried to get around these new hurdles by claiming that what they are trying to protect is merely a “trademark” and not “trade dress.”  The line between the two then becomes important.

As we discuss here, the Patent and Trademark Office and the courts have taken divergent approaches to drawing this line.  The PTO takes a consumer-perception oriented approach, which considers whether consumers would be pre-disposed to viewing the design as a trademark.  Under this test, even portions of designs may be determined to be “trade dress” and face the legal hurdles discussed.

In contrast, the Second and Sixth Circuits have taken a more definitional approach – which limits trade dress to the “overall look” of the product.  Under this test, portions of a design are not treated as trade dress at all.  But as we also discuss, this approach does not appear consistent with Supreme Court treatment of trade dress.