Urban Outfitters lost its appeal of a district court jury decision that found the company guilty of willful infringement, and has been ordered to pay $530,000. A small Los Angeles fabric supplier to the apparel industry, Unicolors, successfully sued Urban Outfitters for copyright infringement in district court. Urban Outfitters appealed the decision, and on April 4, the Ninth Circuit Court upheld the district court’s ruling. The court ruled that Urban Outfitters had willfully infringed of one of Unicolors’ copyrighted fabric designs. The court published the ruling, a step the Kali Hays described in WWD as unusual and indicative of the court’s intention that lower courts look to the ruling for guidance in similar cases.

At issue is a palm frond design which was originally created by Milk Print, LLC. Unicolors bought the intellectual property rights to the pattern, which they then modified slightly for printing on bolts of cloth by changing the size and color palette. The final design was registered with the Copyright Office. (Unicolors is aggressive in protecting its copyrights, having registered thousands of patterns and designs.) In 2010, Urban Outfitters developed a dress which used a textile with a that textile design. Unicolors noticed, and sent the company a cease-and-desist letter, followed by the lawsuit.

During the original trial, Unicolors provided evidence showing that Urban Outfitters maintains a library of thousands of fabric swatches, collected from vintage goods and some purchased from design studios, including Milk Print. The samples are used by Urban’s designers for “inspiration” upon creating new fashions. Unicolors argued that Urban’s failure to check on the copyright status of the swatches used by its designers showed that the company acted with “with reckless disregard for the possibility that the fabric it sampled was protected by copyright, and such conduct is sufficient evidence of willful infringement…”.

For its part, Urban argued that they had no knowledge that they were infringing, and that it’s unreasonable to expect the company to “exhaustively investigate whether any particular fabric design is protected by a copyright registration.” The court dismissed this argument: “Regardless of how difficult it may be to determine whether particular designs have been registered with the Copyright Office, a party may act recklessly by refusing, as a matter of policy, to even investigate or attempt to determine whether particular designs are subject to copyright protections.”

Intellectual property law firm Knobbe Martens covered the case in an article on their legal blog. They caution companies using existing designs: “The best practice would be to use only those works where either the author is known and permission has been received or it is clear that the work is not protected by copyright.”

The court decision can be downloaded from the Fashion Law Institute website.

Photo: public domain.