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DESIGN LAW—ARE SPECIAL PROVISIONS NEEDED 

TO PROTECT UNIQUE INDUSTRIES? 

HEARING 

BEFORE THE

SUBCOMMITTEE ON COURTS, THE INTERNET, 

AND INTELLECTUAL PROPERTY 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED TENTH CONGRESS 

SECOND SESSION 

FEBRUARY 14, 2008 

Serial No. 110–107 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 

(II) 

COMMITTEE ON THE JUDICIARY 

JOHN CONYERS, JR., Michigan, Chairman 

HOWARD L. BERMAN, California 

RICK BOUCHER, Virginia 

JERROLD NADLER, New York 

ROBERT C. ‘‘BOBBY’’ SCOTT, Virginia 

MELVIN L. WATT, North Carolina 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

MAXINE WATERS, California 

WILLIAM D. DELAHUNT, Massachusetts 

ROBERT WEXLER, Florida 

LINDA T. SA ́ NCHEZ, California 

STEVE COHEN, Tennessee 

HANK JOHNSON, Georgia 

BETTY SUTTON, Ohio 

LUIS V. GUTIERREZ, Illinois 

BRAD SHERMAN, California 

TAMMY BALDWIN, Wisconsin 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

ARTUR DAVIS, Alabama 

DEBBIE WASSERMAN SCHULTZ, Florida 

KEITH ELLISON, Minnesota 

LAMAR SMITH, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

HOWARD COBLE, North Carolina 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

STEVE CHABOT, Ohio 

DANIEL E. LUNGREN, California 

CHRIS CANNON, Utah 

RIC KELLER, Florida 

DARRELL ISSA, California 

MIKE PENCE, Indiana 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TOM FEENEY, Florida 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

PERRY APELBAUM, Staff Director and Chief Counsel 

SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

HOWARD L. BERMAN, California, Chairman 

JOHN CONYERS, JR., Michigan 

RICK BOUCHER, Virginia 

ROBERT WEXLER, Florida 

MELVIN L. WATT, North Carolina 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HANK JOHNSON, Georgia 

BRAD SHERMAN, California 

ANTHONY D. WEINER, New York 

ADAM B. SCHIFF, California 

ZOE LOFGREN, California 

BETTY SUTTON, Ohio 

HOWARD COBLE, North Carolina 

TOM FEENEY, Florida 

LAMAR SMITH, Texas 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

ELTON GALLEGLY, California 

BOB GOODLATTE, Virginia 

STEVE CHABOT, Ohio 

CHRIS CANNON, Utah 

RIC KELLER, Florida 

DARRELL ISSA, California 

MIKE PENCE, Indiana 

SHANNA WINTERS, Chief Counsel 

BLAINE MERRITT, Minority Counsel 

(III) 

C O N T E N T S 

FEBRUARY 14, 2008 

Page 

OPENING REMARKS 

The Honorable Howard L. Berman, a Representative in Congress from the 

State of California, and Chairman, Subcommittee on Courts, the Internet, 

and Intellectual Property .................................................................................... 1 

The Honorable Howard Coble, a Representative in Congress from the State 

of North Carolina, and Ranking Member, Subcommittee on Courts, the 

Internet, and Intellectual Property .................................................................... 3 

WITNESSES 

Mr. William T. Fryer, III, Professor of Law, University of Baltimore School 

of Law, Baltimore, MD 

Oral Testimony ..................................................................................................... 6 

Prepared Statement ............................................................................................. 9 

The Honorable William D. Delahunt, a Representative in Congress from 

the State of Massachusetts 

Oral Statement ..................................................................................................... 19 

Prepared Statement ............................................................................................. 19 

Mr. Narcisco Rodriguez, Designer, on behalf of the Council of Fashion Designers of America, New York, NY 

Oral Testimony ..................................................................................................... 21 

Prepared Statement ............................................................................................. 24 

Mr. Steve Maiman, Proprietor, Stony Apparel, Los Angeles, CA 

Oral Testimony ..................................................................................................... 30 

Prepared Statement ............................................................................................. 31 

Mr. Carl L. Olsen, President, Ark Design, on behalf of the Alliance of Automobile Manufacturers, Washington, DC 

Oral Testimony ..................................................................................................... 33 

Prepared Statement ............................................................................................. 35 

Mr. Jack Gillis, Director of Public Affairs, Consumer Federation of America, 

Washington, DC 

Oral Testimony ..................................................................................................... 36 

Prepared Statement ............................................................................................. 38 

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Prepared Statement of the Honorable Howard L. Berman, a Representative 

in Congress from the State of California, and Chairman, Subcommittee 

on Courts, the Internet, and Intellectual Property ........................................... 1 

Prepared Statement of the Honorable Howard Coble, a Representative in 

Congress from the State of North Carolina, and Ranking Member, Subcommittee on Courts, the Internet, and Intellectual Property ......................... 3 

Prepared Statement of the Honorable Bob Goodlatte, a Representative in 

Congress from the State of Virginia, and Member, Subcommittee on Courts, 

the Internet, and Intellectual Property .............................................................. 51 

APPENDIX 

Material Submitted for the Hearing Record .......................................................... 63 

(1) 

DESIGN LAW—ARE SPECIAL PROVISIONS 

NEEDED TO PROTECT UNIQUE INDUSTRIES? 

THURSDAY, FEBRUARY 14, 2008 

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY, COMMITTEE ON THE JUDICIARY, Washington, DC. 

The Subcommittee met, pursuant to notice, at 2:14 p.m., in Room 

2237, Rayburn House Office Building, the Honorable Howard Berman (Chairman of the Subcommittee) presiding. 

Present: Representatives Conyers, Berman, Delahunt, Sherman, 

Schiff, Coble, Smith, Goodlatte, and Issa. 

Staff present: Christal Sheppard, Majority Counsel; Eric 

Garduno, Majority Counsel, Rosalind Jackson, Professional Staff 

Member. 

Mr. BERMAN. The hearing of the Subcommittee on Courts, the 

Internet, and Intellectual Property will come to order, if Congressman Russo is okay with that? 

I would like to begin by welcoming everyone to this hearing, entitled, ‘‘Design Law—Are Special Provisions Needed to Protect 

Unique Industries?’’ We are not sure what the schedule is like, but 

the situation is this. One party in this place did something. The 

other party is mad about it. We are not clear whether the strategy 

coming up is lots of motions on the House floor or passive resistance, so we are not quite clear about how much uninterrupted time 

we will have before we have to go for votes. 

So what we decided to do, the Ranking Member and I, is to dispense with our opening statements, to include them in the record. 

Is everybody else on the Subcommittee okay with that? Then that 

is what we will do. But first, just for a few comments, I will turn 

it over to the Ranking Member, Mr. Coble. 

[The prepared statement of Mr. Berman follows:] 

PREPARED STATEMENT OF THE HONORABLE HOWARD L. BERMAN, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF CALIFORNIA, AND CHAIRMAN, SUBCOMMITTEE ON

COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

Our hearing today is about design rights. I must profess I am no expert in the 

art of design—however, design rights are a longstanding and fundamental area of 

intellectual property law. Like patents and copyrights, design protection fosters the 

creation of original designs by providing exclusive rights in a design to its creator. 

In the United States, while trade dress and copyright can in some cases provide 

protection for unique designs, the chief means of protecting designs is through patents. Design patents, like other patents, must pass a substantive examination by 

the United States Patent and Trademark Office before being granted. The subject 

2 

matter of a design patent must be novel, non-obvious, original, ornamental, and applied to an article of manufacture for it to qualify for protection. Design patents 

have existed since 1842 and have a well developed jurisprudence, though there may 

be changes in the near future. The Federal Circuit has agreed to review en banc 

the Egyptian Goddess case, which could lead to some significant changes in how design patent infringement will be analyzed. Nevertheless, design patents are widely 

used by various industries. According to the latest statistics, almost 21,000 design 

patents were granted in 2006 and companies like Sony, Nike, and Black & Decker 

were among the top recipients. 

However, some argue that design patents are ineffective, either because the hurdles to securing design patents are too onerous, or because it takes too long to get 

a design patent. Since at least the 1970’s there has been a policy debate in Congress 

as to whether to expand design protection beyond design patents. The record leading 

up to the 1976 Copyright Act shows that Congress seriously considered establishing 

a broad, sui generis design right. After multiple attempts, a limited design right in 

the form of the Vessel Hull Design Protection Act was passed in 1998. 

The Vessel Hull Design Protection Act protects only original vessel hull designs. 

Unlike design patents, the Copyright Office administers registrations and there is 

no substantive examination to ensure applications meet the originality requirement. 

Instead, originality is left to be determined at trial by a court. Additionally, vessel 

hull design protection lasts 10 years while design patents may last up to 14 years. 

So today, we have a number of mechanisms which provide design protection—design patents, vessel hull design protection, trade dress and copyright. Each sets out 

different standards in order to qualify for protection, a different scope of protection, 

and a different term of protection. Given this backdrop, there are a number of questions I’d like to cover today. 

The language of the Vessel Hull Design Protection Act was ‘‘designed’’ to accommodate additional subject matter should Congress decide it was necessary. Therefore, if we are to consider the Act as the starting point for a broad design right, 

we must ask whether it has been effective for vessel hulls. Are vessel hull makers 

using the protection? Is the protection adequate? Are the amendments made by S. 

1640 necessary? How have courts dealt with determining originality and infringement? And, are there other ways to improve the Act? 

Depending on the answer to these questions, we may consider if and how to expand design rights under the Vessel Hull Design Protection Act to fashion designs. 

Coming from the Los Angeles area, I am particularly interested in what impact it 

may have on the local fashion industry. According to the California Fashion Association, in Los Angeles County alone, there are over 68,000 jobs in apparel manufacturing and it constitutes the largest manufacturing sector in the county. There are 

also over a 1000 independent fashion designers in the region. 

Therefore we need to ask some general questions: Do fashion designers need design protection to be motivated to produce new designs? What impact would extending protection to fashion designs have on the apparel companies, designers and retailers of the Los Angeles area and throughout the country? And then some specific 

questions which can also be asked about H.R. 2033: How similar must a design be 

before you can enforce the design right? How does a court determine whether placement of the zipper on the left vs. the right is an original idea? 

Finally, other industries may want to consider making use of the Vessel Hull Design Protection Act. At one time car makers were interested in including exterior 

car parts within the scope of the Act because they feared that their design patents 

would not stand up to the scrutiny of a trial. However, it seems that a recent decision by the International Trade Commission has increased their confidence in design patents as a means to protect car parts. This decision has led to a backlash 

by generic part manufacturers, insurance companies and consumer advocacy groups. 

They recommend instituting a repair clause exception that would prevent a design 

patent holder from enforcing the patent against generic replacement auto parts. 

However, what is the cost of such an exception to the intellectual property system? 

Is there a solution which allows for robust patent protection while maintaining an 

adequate secondary market? And, more fundamentally, are design patents the right 

mechanism for protecting auto parts? Should auto parts be protected under the Vessel Hull Design Protection Act? 

There must be careful consideration given to the balance inherent in intellectual 

property rights. On one hand, we want to encourage innovation and creativity. On 

the other, we do not want to stifle the free flow of ideas nor place burdens so great 

that the public does not benefit from the innovation and creativity we hope to inspire. Finding the right balance is never easy. But, I believe that the testimony of 

our witnesses today will aid us in crafting that balance for design rights in vessel 

hulls, fashion and auto parts. 

3 

Mr. COBLE. I think you pretty well said it, Mr. Chairman. The 

future is nervously uncertain right now procedurally. I am pleased 

that you and I will waive our opening statements. I have no problem with that at all. Thank you, Mr. Chairman. 

[The prepared statement of Mr. Coble follows:] 

PREPARED STATEMENT OF THE HONORABLE HOWARD COBLE, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF NORTH CAROLINA, AND RANKING MEMBER, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY


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Mr. BERMAN. All right. Five of the six witnesses are here. The 

other one I think is voting on the House floor, and that is Congressman Delahunt. So when he gets in, we will introduce him. But 

let me start in terms of the order of testimony. 

William Fryer is a professor of law at the University of Baltimore, where he teaches several courses on intellectual property 

law. He has been a patent examiner, a patent attorney, and a Professor of Law at three other institutions. Professor Fryer has 

chaired the Industrial Design Committee of the ABA’s Intellectual 

Property Law Section, and he played an important advisory role in 

the crafting of the Vessel Hull Design Protection Act. 

Narcisco Rodriguez is an acclaimed fashion designer and a Member of the Board of Directors of the Council of Fashion Designers 

of America. After graduating from the Parsons School of Design, in 

my area, he worked for several of the biggest names in the fashion 

industry before launching his own label in 1998. He was the first 

designer ever to win back-to-back CFDA awards for outstanding 

achievement in fashion, and he also holds a Vogue VH1 Fashion 

Rocks award for best designer. 

Steve Maiman is a co-owner of Stony Apparel, an apparel design 

and manufacturing firm based in Los Angeles, California. Stony 

Apparel employs about 140 people and designs, manufactures and 

distributes women’s and children’s apparel to Sears, J.C. Penney, 

Dillard’s and others. Mr. Maiman has worked in the fashion business for more than 30 years. 

Carl Olsen is Director of Ark Design, an industrial design firm 

based in Detroit, Michigan. Mr. Olsen’s work for the last 13 years 

has been exclusively in vehicle design, though throughout his career he has worked on designing a variety of capital and consumer 

goods. Mr. Olsen has won several international awards for his auto 

designs. For 14 years, Mr. Olsen also served as chair of Transportation Design at the College for Creative Studies. 

Jack Gillis is director of public affairs for the Consumer Federation of America, the Nation’s largest consumer advocacy organization. He is the author, coauthor or editor of over 60 books, including ‘‘The Car Book,’’ ‘‘The Car Repair Book,’’ and ‘‘The Armchair 

Mechanic.’’ Mr. Gillis has served as a contributing consumer correspondent for the Today Show. He also serves as the executive director of the Certified Automotive Parts Association, a nonprofit organization that sets standards and certifies the quality of automobile body parts. 

I think we will start with the panel. All of your entire statements 

will be included in the record in their entirety. We would ask you 

to try to limit your comments to about 5 minutes, and then after 

all of you have finished, the Committee will bring questions to you. 

Mr. Fryer? 

TESTIMONY OF WILLIAM T. FRYER, III, PROFESSOR OF LAW, 

UNIVERSITY OF BALTIMORE SCHOOL OF LAW, BALTIMORE, 

MD 

Mr. FRYER. Thank you, Mr. Chairman. I will try to be efficient. 

I know you have time constraints. 

My job is to bring you up to date on the basic laws related to 

designs. That is the first part. The second part is to discuss briefly 

7 

the Vessel Hull Design Protection Act in general, and specifically 

as to its amendment. Then I will discuss the fashion design bill 

that is pending. Finally, I will look ahead to see what is going on 

around the world in related events. 

My introduction to design law in the United States is fairly simple. We have design patents which take time to obtain. They don’t 

protect things right away, and they are expensive usually. We have 

trademarks that do not usually protect designs, and certainly they 

take time to get the protection. We have copyright, which actually 

has some significant specific areas of design protection that are 

useful, but it has built into it separability that you can not have 

protection for designs that are associated with the functional parts 

of products. This requirement pretty much eliminates copyright 

protection. 

Congress in its wisdom decided to set up two separate sui generis, or independent laws. They are not copyright. They are not 

trademark. They are not patent. The first one was the Semiconductor Chip Act. I do not know whether you remember that law. 

The industry came to Congress and said, ‘‘We really have a tremendous economic value here in this country for our chip design.’’ Basically these chips were images. They were images of the chip layers. 

They used the design concept to protect them. 

As far as I know, it has been very successful. The basic idea was 

that once you make it, you put it on the market and it was protected. Then after it was in the market within 2 years you had to 

file an application for registration, which just basically showed the 

design and then the Copyright Office, which is a very efficient administrative agency, would just look to see that it was within the 

statute and then register it in a few months. 

They had a very efficient law that was working. Then when the 

next industry came to them, the boating industry—and I have to 

confess I have a boat, and I am Coast Guard crew-trained, auxiliary member, so I have knowledge in that area. The boat industry 

has the problem of the molding processes that made it so easy to 

copy the design of the boat. 

Congressman Coble was the leading person on this legislation, 

and he and others were able to put together a bill. Actually, they 

just took the same bill that the chip bill used and added the specifics for the boat hull. The word ‘‘hull’’ is a little confusing. We 

think of deck and hull. The statute had it written out, but the traditional uses of these words were a little bit confusing, and that is 

one of the problems. 

But the statute worked. A boat design owner would go and file 

within 2 years, and register, and get the protection for up to 10 

years. So it was essentially like the chip law. And that chip law 

actually went back to legislation that had not passed, but had been 

considered and that was basically what was the structure of the 

vessel hull law. 

So now we are here today. Why are we here? We are basically 

looking at a very small amendment to clarify what is a hull, what 

is a deck, and basically provide clarity that boat manufacturers can 

get protection for the hull separately. They can get protection for 

the upper part of the boat, the super-structure included. It is almost a procedural point that we have to kind of clarify. So that is 

8 

where we are today. Believe it or not, I have finished with the vessel hull part. 

The next part to address is the design for fashion that came 

along recently. All these industries have their unique concerns. 

Some people ask, well, why do we do it industry-by-industry? Well, 

they have significant concerns and they come to Congress with 

these concerns. The fashion design people have been inundated 

with copying, piracy and so forth. So they said, well, what could we 

do? 

What they did was to take the same legal structure more or less 

that the Chip Act had and the Vessel Hull Act had, but they set 

up a structure which was flexible or limited—not as much protection. They have 3 months to file their application, but while the design is in the market, at the beginning, it is protected. This point 

is the important thing. The pirates cannot come in and basically 

rip them off, so the fashion design legislation uses the same concepts of the other two laws: chip and boat. 

Basically that is the picture we are looking at now. They have 

up to 2 years protection. I know that I probably should finish at 

this point, but I just want to say that I have written an article and 

other things about the fact that this design protection—protection 

when you go into the market, the entry-level protection, is really 

a trend across the world that countries are using. The European 

Union has put it in its community design. 

For that reason, I will not go through my conclusions. I will just 

end at that point. 

Thank you. 

[The prepared statement of Mr. Fryer follows:] 

9 

PREPARED STATEMENT OF WILLIAM T. FRYER, III 


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Mr. BERMAN. Thank you. 

We have a quorum call up. My guess is we will be around here 

during that time. 

Mr. ISSA. I suggest we pair and stay here, Mr. Chairman. 

[Laughter.] 

Mr. BERMAN. This is one case where the pairing concept doesn’t 

quite work. [Laughter.] 

Okay. So we are going to have to recess. Maybe we can hear Congressman Delahunt. I am going to skip the introduction of Congressman Delahunt. I am just going to say it is probably better 

than the introduction I would give if I were giving one. [Laughter.] 

Mr. DELAHUNT. I am sure it is. I will achieve brevity here. I have 

a rather lengthy statement—— 

Mr. BERMAN. It will be entered in the record. 

STATEMENT OF THE HONORABLE WILLIAM D. DELAHUNT, A 

REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS 

Mr. DELAHUNT [continuing]. That I will submit for the record. I 

will waive my oral testimony. It is self-explanatory. Let me just say 

that the issue facing the fashion design industry now is critical. We 

hear much about the economy. The debate as to whether we are 

in recession or on the cusp of recession is ongoing. Whatever it is, 

if we don’t take steps now to protect intellectual property and deal 

with the issue of piracy, we are putting our entire national economy at risk. 

Clearly, in the area of intellectual property concerns, it is that 

segment of our national economy that produces a surplus in terms 

of trade balance. The estimate of piracy in terms of the issue that 

is the subject of one of the bills before us today amounts to $12 billion. For us to have passed a stimulus package and not recognize 

that we need to further protect those sectors that are producing a 

surplus for us is absurd and doesn’t make sense. 

With that, I will yield back. 

[The prepared statement of Mr. Delahunt follows:] 

PREPARED STATEMENT OF THE HONORABLE WILLIAM D. DELAHUNT, A

REPRESENTATIVE IN CONGRESS FROM THE STATE OF MASSACHUSETTS

Chairman Berman, Ranking Member Coble, Members of the Subcommittee— 

thank you for holding this hearing today and for inviting me to testify in support 

of H.R. 2033, the Design Piracy Prohibition Act, introduced by Congressman Goodlatte and myself. 

Yesterday, Congress and the President enacted into law a significant piece of legislation—the economic stimulus package. Notwithstanding some disagreement over 

what constitutes an effective stimulus, this legislation represents a consensus—a 

consensus that our nation’s economy is in trouble and that Congress has a vital role 

in stemming the tide. In this effort, we must take seriously the protection and promotion of America’s competitiveness, both in its traditional and emerging industries. 

To this end, it is critical that we lend our attention, and promptly, I would argue, 

to strengthening our nation’s intellectual property laws to protect some of the most 

important emerging innovators in America today—fashion designers. 

The Chamber of Commerce, in its recent report, ‘‘Economic Analysis of the Proposed CACP Anti-Counterfeiting and Piracy Initiative’’, reminds us that ‘‘the health 

of the US economy depends on a wide range of industries that rely on intellectual 

property to create and produce state-of-the-art products, and how . . . counterfeiting 

and piracy, therefore, serve to undermine the long-run competitiveness of the US 

economy.’’ According to the Chamber, counterfeiting and piracy cost U.S. businesses 

20 

$225 billion in revenue each year; of that, fashion and apparel piracy and counterfeiting account for a minimum of $12 billion. 

We have laws against counterfeiting apparel and footwear brands and pirating 

fabric designs; however, within these laws, a glaring hole exists which is putting 

at risk the very innovation we seek to encourage: we must enact laws against 

pirating fashion designs, which after all, is counterfeiting without the label. 

America has become the world leader in fashion design. This is not just an LA 

/ NY phenomena, it’s happening across America. 

Fashion design businesses are proliferating and growing. As they grow, so do the 

manufacturing, transportation, marketing, and publishing industries that support 

fashion design. This is not even including the television shows, cable networks, and 

internet sites devoted entirely to fashion, and most importantly, the innovations and 

creative works of American designers. I have even read that it’s even reviving real 

estate values in areas where garment manufacturing businesses lost their jobs to 

Asian competitors. 

In my home state of Massachusetts, the Massachusetts College of Art and Design 

(MassArt) is now offering a bachelor’s degree in Fashion Design to 4-year students. 

Some of these students have even gone on to win scholarships and recognition from 

the Council of Fashion Designers of America’s merit-based Scholarship Program. 

Massachusetts’ schools are not alone in recognizing the countless numbers of American students who strive to pursue fashion design as an academic and professional 

career. But of course—as we know from experience in other important areas of American 

intellectual property—when we lead the world in a creative industry, it soon will 

become the world’s leading counterfeit and piracy victim. 

FBI, Justice and Commerce Departments report that China is growing an industry based on copying and exporting American fashion designs. This job drain is fostered by the speed with which a 3D picture can be sent across the globe to machines 

that can take a picture and perfectly copy the pattern, the DNA of the design. 

Sadly, the growth of the Chinese fashion piracy industry is also spurred by our 

lack of laws against it. It’s legal! 

I read in the Wall Street Journal that in China, one city is devoted to making 

socks, another—kids’ clothes, etc. We need to make sure we don’t wake-up to find 

a Garment Knock-off City! They can create infrastructure in minutes. 

We are in tough economic times, as we were reminded during the holidays. Retail 

is a closely-watched barometer of the country’s economic health. This January was 

the worst January for retail sales since 1969 (the year the International Council of 

Shopping Centers started keeping track of such). Though, as Women’s Wear Daily 

reports, retailers are looking to designers to create unique and exciting designs to 

bring them out of the slump or otherwise improve their numbers, as they have in 

the past. 

So we really must ask ourselves: here we are with a real and proven growth opportunity for new jobs in America, new exports—ll based on the kind of intellectual 

property that has always advantaged our balance of trade. Why aren’t we protecting 

it in the same way we protect and promote our other creative industries that are 

so important to our economy? 

Europe, Japan and India have protection for 15–25 years for registered designs 

and we have nothing. Clearly, it has fueled their success; one doesn’t have to be a 

fashion expert to know that the European fashion industries are robust industries 

that play important roles in their economies. 

And in Europe (where in some countries they’ve had protection for over 100 

years), their 15–25 year copyright protection for registered designs has spurred negligible litigation. According to the EU, out of some 308 appeal cases concerning infringements of protected Designs in 2005, only 10 out of 308 related to registered 

designs in the fashion category. 

The U.S. fashion industry is vibrant, but it is young. We cannot just stand by and 

watch yet another industry migrate out of the U.S. We need to pass H.R. 2033 to 

prevent others from growing an industry that Americans create. 

As this committee proceeds to beef up the enforcement of our counterfeiting regimes, we should take the time to plug this loophole in our anti-counterfeiting regime. 

As reported in the media, law enforcement is being thwarted in its apparel anticounterfeiting efforts because the pirates are taking clever advantage of the fact 

that we don’t have laws against design piracy. To circumvent crackdowns on smuggling by customs, counterfeiters have taken to openly and legally importing goods 

with pirated designs—‘‘blanks’’—only to put on the label that makes a blank an official counterfeit either at the point of sale or in clandestine operations here in the 

U.S. 

21 

Last April, a storage unit raid in Massachusetts netted nearly 20,000 counterfeit 

handbags and wallets, plus more than 17,000 generic handbags and wallets, and 

enough counterfeit labels and medallions to convert more than 50,000 generic handbags and wallets into counterfeits. Clearly, storage units are not easy to find. Harder yet (or impossible) would be having an FBI agent at each sale. This bill proposes 

an easier way to prohibit design piracy and thwart counterfeiting. 

I’d like to quickly highlight another aspect of counterfeiting that is less discussed 

but deserves serious attention, and that is its link to organized crime and terrorism. 

Newsweek contributor Dana Thomas succinctly summed up the issue in an August, 

2007 New York Times Op-Ed; ‘‘Most people think that buying an imitation handbag 

or wallet is harmless, a victimless crime. But the counterfeiting rackets are run by 

crime syndicates that also deal in narcotics, weapons, child prostitution, human 

trafficking and terrorism. Ronald K. Noble, the secretary general of Interpol, told 

the House of Representatives Committee on International Relations that profits 

from the sale of counterfeit goods have gone to groups associated with Hezbollah, 

the Shiite terrorist group, paramilitary organizations in Northern Ireland and 

FARC, the Revolutionary Armed Forces of Colombia.’’ 

This bill introduced by myself and Congressman Goodlatte and several colleagues 

on the Committee, provides a framework for more comprehensive and seamless intellectual property enforcement. It would provide three years of copyright protection 

for fashion designs—not those that staple, standard or prevalent, but rather only 

those designs that truly unique. The protective time period is a fraction of that provided by other nations, but would serve as an important first step toward putting 

our young designers on equal footing with those abroad. 

I am aware that there have been fruitful negotiations with those who want to improve the bill, and I would hope, Mr. Chairman, that we can soon sit down to connect the ideas that have been proffered. However, I also believe that we must move 

expeditiously toward providing America’s artists and entrepreneurs with the tools 

they need to build their future and, in turn, America. 

Mr. BERMAN. Thank you. 

I think we still have time here for at least one of the witnesses 

before the two of us have to leave for a while. We will be back. 

Mr. Rodriguez? 

TESTIMONY OF NARCISO ROGRIGUEZ, DESIGNER, ON BEHALF 

OF THE COUNCIL OF FASHION DESIGNERS OF AMERICA, 

NEW YORK, NY 

Mr. RODRIGUEZ. Good afternoon, Chairman Berman, Ranking 

Member Coble, and other Members of the Subcommittee. I am 

pleased to be here today on behalf of the Council of Fashion Designers of America. I am currently serving on the board. 

First, I would like to thank—— 

Mr. BERMAN. Let me interrupt you here. 

Mr. RODRIGUEZ. Yes? 

Mr. BERMAN. Only because I was given some wrong information. 

This isn’t a quorum call. It is a motion to suspend the rules. There 

are eight of those. My guess is the ones that follow will be 5 minutes each. So this is going to mean about close to an hour that we 

are going to have to go. It looks to me like everyone is participating 

in this vote. 

So I hate to do it, but talk among yourselves. [Laughter.] 

I am going to recess. We will be back. Thank you. 

[Recess.] 

Mr. BERMAN. The Committee will come to order. 

We have only finished four of those eight votes I told you about, 

but there was a privileged motion for which there can be an hour 

of debate. We don’t know if there will be, so we decided let us move 

ahead in the meantime. But at any moment, those bells could go 

off and we will have to recess again. 

22 

Well, we can do one or two. We can certainly do one witness now. 

So, Mr. Rodriguez? 

Mr. RODRIGUEZ. Okay, I will continue. I am going to cut out the 

first part where I thanked you for having us here. I feel very welcomed here by everyone, and again thank you. 

I have a few things to say. The more acclaimed America’s fashion 

designs become, the more they are copied. The Chamber of Commerce estimates the lost revenues due to the counterfeiting and piracy in the fashion and apparel industry to be $12 billion annually. 

They also indicate that they believe it may be higher due to the 

fact that design piracy is not outlawed. Every counterfeit garment 

starts as a pirated design. It is a big problem and it is growing. 

I am an American designer with a unique story. I am the son of 

Cuban immigrants. I grew up in north New Jersey. From the time 

I was a teen, I dreamed of being a great American designer. It took 

a lot for me to become a designer. To train me, it took a lot of hard 

work. I borrowed a lot of money to go to school, and I worked very 

hard to get my business open, which was opened in 1998. 

I also want to add that when I work, I not only design garments, 

I design fabrics. I design materials. I get very into the design process—new construction, inspiration from architecture, photographs, 

daily life—the way a city breathes, moves, lives. All that is filtered 

into my work. 

Often my work is compared to architects, to painters, to sculptures. I am always very flattered by that comparison because it 

makes my work all the more unique. It makes it separate from everything else that is out there. It takes a great deal of capital to 

finance a collection and fabricate 125 pieces that I would show 

twice a year. That is 250 pieces a year, not inclusive of $800,000 

to stage a fashion show, $800,000 in fabric, pattern-makers, sewers, manufacturers here in the United States that we work with. 

It is our way of creating each collection. 

Back in 1996, I designed a dress for a very good friend who I 

loved very much. Her name was Carolyn Bissette Kennedy. She 

had asked me to design her wedding dress for John F. Kennedy, 

Jr. I designed something with great love for the most important 

person in my life. That dress spawned somewhere in the 7 million 

to 8 million copies. I got to sell 40 of those dresses. 

You know, it was a very personal thing for me, that dress, so I 

never looked at it like something was stolen from me because I 

would have made that dress anyway. But all that publicity and the 

knockoffs didn’t pay my bills or get me to where I am today. 

Unfortunately, the piracy story is not unique. There is no way 

under the current legal system in the U.S. for designers to beat the 

pirates to market. Other developed countries such as Europe, 

Japan and India all provide 15 to 20 years of protection for fashion 

designs. Since there is no protection in the U.S., companies have 

emerged with piracy as their business model. It is like the guy who 

takes a shortcut at the race. We all start at the beginning, but he 

cheats and is the first to walk across the finish line. 

With no human or capital investments to make when pirates 

copy, they spend nothing. They can afford to make the copy in such 

quantities and low price levels that just one of my 125 styles, they 

could recoup what I make on my entire collection. Some designers 

23 

have created diffusion lines—a mass market line using their own 

designs with machine-sewing and less expensive fabrics. Isaac 

Mizrahi has licensed a line at Target. Nicole Miller has one at J.C. 

Penney. I have been pirated so much that my brand is already diffused. 

Mr. BERMAN. Mr. Rodriguez, the 5 minutes has expired, but if 

you would just wrap it up because we are going to have to go vote. 

Mr. RODRIGUEZ. Sure. 

Really, we need your help to pass this bill because there are a 

lot of young, emerging talents here in the United States that need 

to be protected. I was lucky enough to survive and have a partner 

now that will protect me, but there are a lot of young people, truly 

talented, gifted designers that will not have that opportunity if this 

bill does not pass. 

Thank you. 

[The prepared statement of Mr. Rodriguez follows:] 

24 


NR-1.eps
25 


NR-2.eps
26 


NR-3.eps
27 


NR-4.eps
28 


NR-5.eps
29 


NR-6.eps
30 

Mr. BERMAN. Thank you very much. 

Mr. Maiman, we are going to have to vote and come back. We 

have four more 5-minute votes, I think. If we insult more of our 

colleagues, we will have a few more questions of privilege. 

[Recess.] 

Mr. BERMAN. The hearing will come back to order. I think we are 

to be uninterrupted now. 

Mr. Maiman? 

TESTIMONY OF STEVE MAIMAN, PROPRIETOR, 

STONY APPAREL, LOS ANGELES, CA 

Mr. MAIMAN. Our company designs, manufacturers and distributes women’s and children’s apparel to department stores and 

major specialty chain stores nationwide. Extending the copyright 

laws to the fashion industry is thoroughly a bad idea. This bill is 

misguided and unnecessary for several reasons. 

Over many years, the fashion industry has done very well. It has 

grown into a huge, competitive, innovative and vibrant industry, 

all without the help or interference from this particular type of 

copyright law. From my perspective, nothing new has occurred in 

the recent past to cause there to suddenly be a need for copyright 

protection of the design of a garment. 

Designer clothes are still selling for hundreds and even thousands of dollars. The big-name designers are not cutting their 

prices to respond to the so-called copyists. If anything, prices people are willing to pay for the top designers are going up. There 

really is no problem here to fix. 

This proposal will harm the fashion industry, reduce designers’ 

creativity, hurt consumers and the economy as well. This bill also 

threatens our firm and the rest of the industry because the bill will 

stifle creativity and innovation in fashion design, which I believe 

is the opposite of its intent. 

The law already protects against the copying of print and artwork, but it is impossible to determine the originality of a design 

because all designs are inspired by existing designs and trends. 

Under this bill, every time a designer wants to work with a current 

trend, they will be afraid that such a new look is somehow owned 

or monopolized by another designer. What is clear to me is that if 

this bill passes, we have an upcoming nightmare of litigation, including bogus claims that would have to be defended and most likely settled out of court in order to avoid massive legal bills. 

It will become very difficult for a manufacturer to obtain financing. When the manufacturer sells merchandise that is alleged to be 

infringing, the retailer will be forced to return it no matter what 

the truth. Retailers will refuse to do business unless a manufacturer will be able to provide effective indemnification against potential infringement, which many firms—especially new ones—are 

unable to do. 

This bill will create uncertainty and raise costs across the garment industry. Every designer, manufacturer and retailer will be 

worried about liability. This proposal will benefit a handful of rich, 

well-established designers at the expense of others. The rich, bigname designers have the money to pay for the legal support to create a copyrighted line of products. Most other designers won’t be 

31 

able to afford to do that, or more importantly, to defend themselves 

against claims of infringement. If this bill passes, the fashion industry could lose a generation of young designers with fresh ideas. 

Retailers just had the worst January in 40 years, and given the 

state of the economy right now, this is no time to be passing laws 

that will raise the price of clothing and layer on legal expenses. 

The fashion industry is very competitive and competition encourages lower prices, better looks, which of course benefits the American consumer. If this bill passes, we could see a future where only 

the wealthy will look up-to-date in the very latest fashions. 

The legislation threatens to split Americans into two classes of 

people: those with the money who can buy copyrighted designs, and 

those who can’t quite afford them. If we turn the fashion industry 

over to the lawyers and the courts, as this bill will do, firms like 

ours are going to slowly, but surely, disappear. The average manufacturers are the backbone of this industry. 

We are in this business to make cute garments at a fair price for 

the average American, not to sit in depositions and copyright lawsuits arguing with lawyers over who invented an original particular style of a kid’s top for $14.99 retail, and that is before it 

even goes on sale. If that is the way the business is going to be, 

we and many others like us are going to be forced out and thousands of jobs will be lost in the process. 

I personally can’t think of any reason why Congress or the American people would want that to occur. 

Thank you. 

[The prepared statement of Mr. Maiman follows:] 

PREPARED STATEMENT OF STEVE MAIMAN

1. My name is Steve Maiman. I am the co-owner of Stony Apparel, an apparel 

design and manufacturing firm based in Los Angeles, California. I have worked in 

the fashion business for more than 30 years. We employ 140 people designing, manufacturing, and distributing womens and children’s apparel to many of the stores 

in which Americans shop—Sears, J.C. Penney, Dillard’s, Belk, and many other retailers. I know this business—it is my life. And I am here today to tell you that 

extending the copyright laws to the fashion industry is a thoroughly bad idea. I oppose H.R. 2033, which proposes to do just that. This bill is misguided, for several 

reasons. 

2. First, the proposed legislation is unnecessary. Over many years, the fashion industry has done very well—it has grown into a huge industry, a competitive industry, an innovative and vibrant industry—all without any help—or interference— 

from copyright law. The clothing business is currently thriving in the United States, 

and from my perspective, nothing new has occurred in the recent past to cause there 

to suddenly be a need for copyright protection of the design of apparel. Unlike the 

music industry or the movie business, digital improvements in communications have 

not contributed to any revolutionary changes in the way apparel is designed, distributed or marketed. The internet is not destroying my business, or anyone else’s in 

this industry. You can see this for yourself. Come visit my business. You will see 

people working hard to put affordable apparel in the department stores. And then 

go take a look at a fancy boutique—there you will see designer clothes selling for 

hundreds and even thousands of dollars. I don’t see them cutting their prices to respond to the so-called ‘‘copyists’’—if anything, the prices people are willing to pay 

for the top designers is going up. There is no problem to fix. 

3. Second, and very importantly, I know—based on my experience—that the proposal will harm the fashion industry, reduce designers’ creativity, and hurt consumers and the economy. This bill threatens my firm and the entire fashion industry in several ways: 

a. First, this bill will make it very difficult for firms like mine to obtain financing. 

When a manufacturer sells merchandise that later is alleged to be infringing, retailers will return it, no matter what the truth. Manufacturers’ invoices for that merVerDate Aug 31 2005 11:21 Sep 04, 2008 Jkt 000000 PO 00000 Frm 00035 Fmt 6633 Sfmt 6621 H:\WORK\COURTS\021408\40745.000 HJUD1 PsN: 40745
32 

chandise, which serve as collateral for loans most fashion firms rely on (factoring), 

will be rendered valueless. This will undermine the value of invoices as collateral 

and make financing of apparel companies much more difficult. Additionally, if this 

bill should pass, when a designer or manufacturer sells apparel through to a retailer, that retailer is going to demand indemnification—because the bill, as I understand it, also says that retailers can be liable. Given the millions of dollars in damages that are possible in cases of copyright infringement—damages which, as I understand it, this bill seeks to raise further for fashion designs—retailers will refuse 

to do business unless a firm like mine can provide effective indemnification. This 

demand for indemnification will create a large and difficult-to-finance risk for designers and manufacturers. It will impose an additional layer of risk on the industry 

as a whole and make it even more difficult and costly for fashion firms to obtain 

financing—because my financial backers and everyone else’s in this industry will 

have to reckon with the possibility of frivolous lawsuits, injunctions, and ruinous 

damages. 

b. Second, this bill will raise uncertainty and costs across the fashion industry. 

Every designer, every manufacturer, every distributor, every retailer, will be worried that he or she is going to get sued because there is no way of knowing reliably 

what design has and hasn’t been copyrighted. The technology for computer searches 

for visual objects like fashion designs is not at a point where the industry can rely 

on the copyright registry that is supposed to be established under this bill. And even 

if the technology were to improve in the future, everyone in the industry will be 

forced, before approving any design, to hire lawyers to interpret whether the proposed design is likely to violate any one of potentially millions of new designs 

claimed to be copyrighted. If a designer wanted to avoid copyright infringement, 

how would he/she do it? Will the Copyright Office create a system that enables a 

person to look up ‘‘sheath dresses’’ or ‘‘wrap dresses’’? A firm like mine may consider 

hundreds of designs a year. Any registry, to be practical, would have to allow a designer—or, more likely, the designer’s lawyer—to find the relevant needle in a potentially gigantic haystack, and to do so quickly and cheaply. Just exactly how is 

that going to work? What will it cost to create this system, if it can even be created? 

Who will pay for it? How long will it take to implement? How will that designer 

access the system and at what cost? If Congress wants to load search and legal costs 

onto the fashion industry, if Congress wants to raise the costs of apparel for consumers, if Congress wants to put the brakes on growth and innovation in the fashion industry, and cost the taxpayers more money, it should pass this bill. Otherwise, 

it should leave well enough alone. 

c. Third, this bill will interfere with one of the most important sources of innovation in the fashion industry—the practice of designers interpreting a trend. Every 

time a designer wants to work with a current trend, she will be afraid that such 

a new look is somehow ‘‘owned’’ by another designer. (Would every fraction of an 

inch of a lower hemline belong to a different designer?) And as I understand the 

law, even designs that were created before the new law aren’t entirely safe. My understanding is that someone could claim a copyright even in a design that’s been 

around a while—they’ll just claim that they didn’t copy it from the pre-existing design but re-invented it themselves! What’s clear to me is that if this bill passes 

we’ve got a looming litigation nightmare in the fashion industry. And—very importantly—if designers are prohibited from interpreting trends—or are too afraid to do 

so—we cut off one of the most important ways in which the fashion industry appeals 

to customers and gets them to buy clothes. 

d. Fourth, this proposal will benefit rich, well-established designers at the expense 

of new designers. The rich designers have the money to pay for the legal support 

to create a copyrighted line of products. The young and poor designers won’t be able 

to afford to do that, or, more importantly, to defend themselves against claims of 

infringement. Additionally, the rich designers and large design firms will be better 

able to deal with retailers’ demands for indemnity. The young and poor designers 

won’t. I have heard some people who support this bill claim that it will help young, 

new, and small designers. Exactly the opposite is true—this bill will hurt young and 

small designers and manufacturers the most. If this bill passes, the fashion industry 

could lose a generation of young designers with fresh ideas. And the fashion manufacturing business that’s left in this country could move out to China and elsewhere. 

e. Fifth, but no less importantly, this bill will hit consumers right in the pocket— 

and given the state of the economy right now, in my opinion this is no time to be 

passing laws that will raise the price of clothing. New fashions have been interpreted by companies such as Stony Apparel to enable ordinary middle-class and 

working-class Americans to dress in up-to-date styles. The fashion industry is competitive, and competition encourages lower prices and better quality. The big point 

here is that competition in the fashion industry benefits consumers. We can measVerDate Aug 31 2005 11:21 Sep 04, 2008 Jkt 000000 PO 00000 Frm 00036 Fmt 6633 Sfmt 6621 H:\WORK\COURTS\021408\40745.000 HJUD1 PsN: 40745
33 

ure those benefits in dollars saved by shoppers, but there’s more to it than that. 

The availability of inexpensive but fashionable clothing allows every American to 

feel worthy, hip, and stylish. It’s a matter of pride and the clothes produced by firms 

like mine give people with a limited budget a sense of self-worth. But if this bill 

passes, we could see a future where only the wealthy will look up to date. This legislation threatens to split America into two classes of people: those with money who 

can buy copyrighted designs, and those who can’t afford them. 

At this point the problems with this bill should be clear. Extending the copyright 

laws to the fashion industry is unnecessary. It also threatens real harm. Fashion 

copyright will hurt designers. It will hurt manufacturers. It will hurt distributors, 

retailers, and consumers. There’s only one group I can think of that’s going to win 

out of this—and that’s the lawyers. If we turn the fashion industry over to the lawyers—and that’s what this bill will do—firms like mine are going to slowly but surely disappear. Firms like mine are the backbone of this industry. We are in this business to make good clothes, and sell those clothes for a fair price that people can 

afford to pay, and hopefully make some money in the process. If this bill passes, 

that hope will also dwindle. I’m not in this business to sit in depositions in copyright 

lawsuits arguing with lawyers over who invented a particular design of a kids shirt 

for $14.99 retail before it goes on sale. If that’s the way the business is going to 

be, I and many others like me are going to be forced out. And thousands and thousands of jobs will be lost in the process. Many designers will lose their jobs, not because they are bad designers, but because they are good designers, knowing what 

the American consumer wants next. 

I can’t think of any reason why Congress and the American people would want 

that to occur. 

Thank you. 

Mr. BERMAN. Thank you very much. 

Mr. Olsen? 

TESTIMONY OF CARL L. OLSEN, PRESIDENT, ARK DESIGN, ON 

BEHALF OF THE ALLIANCE OF AUTOMOBILE MANUFACTURERS, WASHINGTON, DC 

Mr. OLSEN. Good afternoon. My name is Carl Olsen. I am testifying on behalf of the Alliance of Automobile Manufacturers. The 

Alliance is the auto industry’s leading trade association, representing 10 auto manufacturers. 

When a product becomes easier to make than it is to sell, design 

or style, if you like, assumes paramount importance. Bang and 

Olufsen, the trendsetting Danish audiovisual product manufacturer, could not exist if it were not for their innovative refined design. Apple’s success grows not only because of their technical innovation, but also their design policy, which is the coolest in the industry, covering products, advertising, retail outlets and packaging. 

The second-generation Prius is sleek and aerodynamic, with a 

strong identity. In 2007, it had impressive U.S. sales of 181,221 vehicles. Other hybrid-powered vehicles—those based on existing sedans and SUVs—had only modest sales. The reason? Their designs 

did not express their technical innovation, thus the price premium 

necessary on these hybrid vehicles was not apparent to the customer. 

The 2004 Chrysler 300, with its radical exterior appearance, has 

been a runaway success. About 6 percent of the 300 sales were captured from prestigious brands like Mercedes Benz, BMW, and 

Lexus. Strong innovative design with details that express high 

quality spearheaded this unparalleled success story. 

Designing a new vehicle is not cheap. It requires a team of welltrained designers working in competition with each other, proposing a large number of creative solutions. Each part—from 

headlamps to door handles—receives tender-loving care. This methVerDate Aug 31 2005 11:21 Sep 04, 2008 Jkt 000000 PO 00000 Frm 00037 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\021408\40745.000 HJUD1 PsN: 40745
34 

odology assists management to make rational decisions on the final 

appearance of a new vehicle. It costs hundreds of millions of dollars 

to create unique, distinctive exterior designs for vehicles. 

Ford Motor Company estimates the overall cost of a typical new 

vehicle program to be between $500 million to $1 billion. These investments translate into desirable jobs. Based on recent studies in 

Europe, it has been reported that the loss of exterior automotive 

design protection alone would cost upwards of 50,000 jobs. Ford recently obtained an exclusion order from the International Trade 

Commission protecting seven exterior parts of the F-150 pickup 

truck, the largest-selling vehicle in America. 

This shows that a recognized right to protect the intellectual 

property embodied in exterior vehicle components exists. The ITC 

ruled that seven of the ten Ford patents were valid and infringed, 

thus allowing Ford to block the importation of copycat parts from 

overseas manufacturers. This victory for Ford further demonstrates 

the focused nature of this problem and the limitations of the patent 

design solution. 

Industrial design protection for the auto industry protects numerous high-paying design and manufacturing jobs, and also the 

automobile industry’s huge investment in the United States. It is 

consistent with the underlying policy goals of the U.S. intellectual 

property law and it mirrors the intellectual property rights protection provided to auto manufacturers in Brazil, France, Germany, 

Japan and other countries. 

Respecting intellectual property rights does not limit consumer 

choice. Consumers are encouraged to use re-manufactured parts, 

salvage parts and even new parts having their own unique designs. 

Protecting the exterior appearance of a vehicle does not affect 

customizers or after-market companies offering products of their 

own design as substitutes for OEM parts. In fact, OEMs encourage 

such customizing because it increases consumer loyalty to the 

brand itself. 

Those seeking to weaken American IP protection do not create 

their own designs. They exist only to make exact copies of parts of 

designs they did not create. 

In conclusion, there is a confluence of developments that makes 

it imperative to have more effective protection for exterior automobile designs. Technology has made it easy and inexpensive for 

counterfeiters to make knockoff products. A migration of the copycat industry almost entirely overseas, where cheap labor prevails, 

has further reduced the cost of intellectual piracy. Without protection, we are likelyo see rapid growth in this immoral activity. 

There is a demand that we enforce our property rights abroad, 

and this argues for us to strengthen and enforce them here at 

home in the U.S. America’s manufacturing sector is under serious 

threat. Without IPR protection, American manufacturers are 

caught in a race to the bottom with copycat producers from lowcost countries. 

Can the U.S. manufacturing sector continue to survive such an 

exodus? Is it something we want to encourage, or do we want to 

take steps to discourage the blatant copying of American design 

and American-made products? Congress must not waiver in its reVerDate Aug 31 2005 11:21 Sep 04, 2008 Jkt 000000 PO 00000 Frm 00038 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\021408\40745.000 HJUD1 PsN: 40745
35 

solve and obligation to protect the intellectual property rights that 

exist in exterior automotive design. 

Thank you. 

[The prepared statement of Mr. Olsen follows:] 

PREPARED STATEMENT OF CARL L. OLSEN

Good afternoon. My name is Carl Olsen and I am testifying on behalf of the Alliance of Automobile Manufacturers. The Alliance is the auto industry’s leading trade 

association representing ten manufacturers including BMW, Chrysler, Ford Motor 

Company, General Motors, Mazda, Mercedes Benz USA, Mitsubishi, Porsche, Toyota 

and Volkswagen. 

When a product becomes easier to make than it is to sell, design (or style if you 

like) assumes paramount importance. 

Bang and Olufsen, the trend-setting Danish audio/visual product manufacturers 

could not exist if it were not for their innovative, refined designs. Apple’s success 

grows not only because of their technical innovations but also their design policy, 

which is the ‘coolest’ in the industry covering products, advertising, retail outlets 

and packaging. 

The second generation Prius is sleek and aerodynamic with a strong identity. In 

2007 it had impressive U.S. sales of 181,221 vehicles. Other hybrid-powered vehicles, those based on existing sedans & SUVs, had only modest sales. The reason? 

Their designs did not express their technical innovation—thus the price premium 

necessary on these hybrid vehicles was not apparent to the customer. 

The 2004 Chrysler 300 with its radical exterior appearance has been a run-away 

sales success. About 6% of the 300’s sales were captured from prestigious brands 

like Mercedes Benz, BMW and Lexus. Strong innovative design with details that expressed high quality spearheaded this unparalleled success story. 

Designing a new vehicle is not cheap! It requires a team of well-trained talented 

designers working in competition, proposing a large number of creative solutions. 

Each part, from headlamps to door handles, receives tender-loving-care. This 

methodology assists management to make rational decisions on the final appearance 

of a new vehicle. It costs hundreds of millions of dollars to create unique distinctive 

exterior designs for vehicles. 

Ford Motor Company estimates the overall cost of a typical new vehicle program 

to be between $500 million to $1 billion. These investments translate into desirable 

jobs. Based on recent studies in Europe, it has been reported that the loss of exterior automotive design protection alone would cost upwards of 50,000 jobs. 

Ford recently obtained an exclusion order from the International Trade Commission protecting seven exterior parts of the F150 pickup truck, the largest selling vehicle in America, from copy-cat foreign imports. This shows that a recognized right 

to protect the intellectual property embodied in exterior vehicle components exists! 

The ITC ruled that 7 of the 10 Ford patents were valid and infringed, thus allowing 

Ford to block the importation of ‘copy-cat’ parts from overseas manufacturers. This 

victory for Ford further demonstrates the focused nature of this problem and the 

limitations of the patent design solution. 

Industrial design protection for the auto industry protects numerous high-paying 

design and manufacturing jobs and also the automobile industry’s huge investment 

in the United States; is consistent with the underlying policy goals of U.S. intellectual property law; and mirrors the intellectual property rights protection provided 

to auto manufacturers in Brazil, France, Germany, Japan and other countries. 

Respecting intellectual property rights does not limit consumer choice. Consumers 

are encouraged to use re-manufactured parts, salvaged parts and even new parts 

having their own unique designs. Protecting the exterior appearance of a vehicle 

does not affect ‘customizers’ or after market companies offering products of their 

own designs as substitutes for OEM parts—for the simple reason that these are not 

exact copies of the original parts. In fact OEMs encourage such customizing because 

it increases consumer loyalty to the brand itself. Those seeking to weaken American 

IP protection do not create their own designs. They exist only to make exact copies 

parts of designs they did not create. 

IN CONCLUSION

There is a confluence of developments that makes it imperative to have more effective protection for exterior automotive designs. Technology has made it easy and 

inexpensive for counterfeiters to make ‘knock-off’ products. The migration of the 

copy-cat industry almost entirely overseas, where cheap labor prevails, has further 

36 

reduced the cost of intellectual piracy. Without protection, we are likely to see rapid 

growth in this immoral activity. 

There is a demand that we enforce our property rights abroad; this argues for us 

to strengthen and enforce them here at home in the U.S. America’s manufacturing 

sector is under serious threat. Without IPR protection, American manufacturers are 

caught in a race to the bottom against with copycat producers from low cost markets. 

Can the U.S. manufacturing sector continue to survive such an exodus? Is it 

something that we want to encourage or do we want to take steps to discourage the 

blatant copying of America-designed and American-made products? Congress must 

not waiver in its resolve/obligation to protect the Intellectual Property Rights that 

exist in exterior automotive design. 

I would like to close with a simple example of the double standard that some are 

seeking to force onto the U.S. auto industry. Let us assume a vehicle collision has 

occurred. Its front fenders must be replaced, its CD player and its CDs are destroyed, and a book inside the car is also lost. 

Which of these items does a consumer have a right to a copy for a replacement? 

The answer should be none. We must be careful to ensure that IP continues to mean 

intellectual property—not intellectual piracy—for the American auto industry. 

Mr. BERMAN. Thank you very much, Mr. Olsen. 

Mr. Gillis? 

TESTIMONY OF JACK GILLIS, DIRECTOR OF PUBLIC AFFAIRS, 

CONSUMER FEDERATION OF AMERICA, WASHINGTON, DC 

Mr. GILLIS. Mr. Chairman, Mr. Coble, Members of the Committee, I am Jack Gillis, director of public affairs for the Consumer 

Federation of America. I am also here representing the Advocates 

for Highway and Auto Safety, Public Citizen, Consumers Union, 

and the Center for Auto Safety. We all are grateful for this invitation to appear before this Committee on a subject of incredible importance to the American consumer, and that is the repair and 

maintenance of our automobiles. 

Consider the following experiences, which many of you have had. 

You back into a pole at a shopping mall or someone stops short in 

front of you and your bumpers collide. Fortunately, few of those 

fender-benders result in serious injuries, but they often result in 

totally shocking effects on our pocketbooks. 

Why are these repair bills for these minor accidents so high? One 

reason is the cost of the parts that we need to get these repairs 

done. For example, Ford charges the same price for a simple sheetmetal fender as Dell charges for a computer with a flat screen monitor. An unpainted door from Chrysler costs the same as a Sears 

refrigerator. And amazingly, with a Sears refrigerator, you not only 

get one door, you get two doors that are both painted and installed. 

The fact is, computers and refrigerators are cheaper and better 

today for one simple reason: competition. 

In the early 1990’s, the car companies came to Congress and 

asked you for special design copyright protection on these replacement parts, and Congress said no. Our concern today is that the 

car companies are now using design patents not for the important 

and legitimate protection of the overall design of their vehicles, but 

to prevent competition when it comes to getting the parts that we 

need to get our cars repaired. 

Over the past several years, there has been an enormous spike 

in the number of design patents on crash parts obtained by companies like Honda, Toyota and Ford. In December of 2005, Ford actually filed a case at the ITC for alleged infringement on design patVerDate Aug 31 2005 11:21 Sep 04, 2008 Jkt 000000 PO 00000 Frm 00040 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\021408\40745.000 HJUD1 PsN: 40745
37 

ents for parts for their 150 pickup. The result? The ITC banned the 

importation of these parts and eliminated competition for seven 

needed repair items. 

Now, there are hundreds and thousands of owners of F-150 

pickups who have no choice other than Ford when it comes to replacing a headlight or any of the other six parts. Ford can now 

charge consumers whatever they want in the absence of competition. 

What is particularly disturbing about this new business strategy 

is that the car companies are only selectively putting design patents on those parts where competition, albeit limited, is available. 

So what does this mean for consumers? First of all, there is the 

cost. High repair costs will lead to more cars being totaled. Consumers who owe more on a car than it is worth will be left with 

debt payments on a non-existent car. More totals means fewer jobs 

for body shops, and needlessly totaled vehicles can harm our environment. 

However, the most tragic irony in the lack of competition is what 

I call the automaker’s double-whammy. Not only will the lack of 

competition allow the car companies to charge whatever they want 

for the parts that we need to fix our cars, but when they charge 

so much that the car is totaled, our only recourse is to go back to 

them and buy another one of their products. 

High repair costs will also lead to higher insurance premiums, 

and then there is the safety factor. As the cost of needed repair 

parts rises, many consumers will be forced to forego or delay replacing a headlight, a side mirror, or a brake light, leaving them 

with a vehicle that may not offer the needed safety. 

I am not surprised to hear that the car companies come before 

you today and say they don’t want competition. First of all, the 

mere presence of competition reduces the price that they charge us 

for the parts that we need. The elimination of competition from the 

independent-brand crash repair parts would add an estimated $1 

billion a year to their coffers. And guess who will be paying that 

$1 billion? 

There is a solution, and we are asking for congressional leadership to keep the market open to competition by providing a repair 

clause in design patent law. Such a repair clause would establish 

a narrow, practical exemption to the design patent law so that the 

car company receives a design patent on a product. Independent 

companies could still make competing parts for the sole purpose of 

repairing that vehicle. 

Such an exemption to the design patent law would not, and 

rightly should not, interfere with an automaker’s right to prevent 

competing car companies from using their patented vehicle and 

part designs. We understand that design does play an important 

role in a consumer’s original choice of cars. However, when we 

plunk down our hard-earned dollars for a new car, we are doing 

just that—buying a car, not a lifetime of indenture to the car companies to buy their parts. 

Finally, other markets have successfully addressed and solved 

this problem. Nine European countries, the European parliament, 

and Australia have enacted laws that specify that making a 

matched exterior auto part to repair an automobile is not an act 

38 

of infringement, even though the original part is patented. The 

American consumers deserve no less. 

Thank you very much. 

[The prepared statement of Mr. Gillis follows:] 

PREPARED STATEMENT OF JACK GILLIS


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Mr. BERMAN. Thank you very much, Mr. Gillis. 

I am going to recognize the Ranking Member initially for 5 minutes. 

Mr. COBLE. Thank you, Mr. Chairman. 

Gentlemen, good to have you all with us. 

Mr. Rodriguez and Mr. Maiman, I am told that fashion groups 

are attempting to negotiate a compromise. What is the status of 

this exercise and what are the parameters? 

Mr. RODRIGUEZ. As I understand, there has been a negotiation 

over the past 11⁄2 years. I am hopeful that something could be 

worked out within the next month. 

Mr. COBLE. That is encouraging. I am glad to hear that. 

Mr. RODRIGUEZ. Yes. I am very excited about that. 

Mr. COBLE. Mr. Maiman, do you want to weigh in on it? 

Mr. MAIMAN. I think there may be something in the area of compromise on this bill. I just wonder what it is that can be done to 

avoid a litany of litigation in a business that in the last 5 years 

has had more litigation than ever. 

Mr. COBLE. Well, hopefully maybe that can be resolved as the 

compromise progresses. I am the eternal optimist. Mr. Berman I 

think is as well. 

Mr. Gillis? 

Mr. GILLIS. Yes? 

Mr. COBLE. I am told that there was a significant spike or increase in the number of design patents on crash parts obtained by 

the major auto marketers, I think beginning in 2003 and I believe 

continuing today. Why all of a sudden the increase in 2003, (A), 

and is it possible that the ITC, the International Trade Commission, may have had an impact. If so, what was it? 

Mr. GILLIS. I think there are two things, Mr. Coble. First of all, 

the car companies are desperate to keep competition out of the 

market. They suddenly discovered with the recent ITC case, when 

Ford filed that case, which was around 2002 or 2003, that this had 

the potential for keeping other companies from competing in the 

marketplace. So there is no question that there is a relationship between the ITC decision, which was very, very damaging to the 

American consumer, and the fact that car companies are seeing an 

opportunity here to prevent competition by what I consider hijacking design patent laws. 

Mr. COBLE. Mr. Olsen, do you want equal time? 

Mr. OLSEN [continuing]. The ITC case, because the vehicle didn’t 

come out until 2004, so the dates of the ITC case I think was 2006. 

I don’t know why patents were spiked in 2003, as you allege. I 

have no idea. I am a designer, not a lawyer. I represented Ford in 

the ITC case and found that—well, for me, the single most important ingredient is art or design is an activity that needs protecting. 

The cost of developing these products is in excess of $100 million 

just for the design patent end of the work. Just let me complete 

with one—— 

Mr. COBLE. Thank you, Mr. Olsen. Let me go to my friend the 

professor, who was with us, Mr. Chairman, some years ago. Mr. 

Fryer, it is good to see you. 

Professor, it is obvious that expanding protection to automotive 

or fashion designs benefits individuals who work within the conVerDate Aug 31 2005 11:21 Sep 04, 2008 Jkt 000000 PO 00000 Frm 00050 Fmt 6633 Sfmt 6601 H:\WORK\COURTS\021408\40745.000 HJUD1 PsN: 40745
47 

fines of these industries. What is the impact on businesses and 

workers who compete against these brand designers? What about 

the impact on consumers? Many consumers—they don’t like this 

idea at all. 

I see more good than bad in it—but what do you think? 

Mr. FRYER. It is a tough call. You have friends on both sides. 

Mr. COBLE. And so do we. 

Mr. FRYER. Yes. Well, as a consumer myself, I see the impact, 

but the intellectual property law has many purposes, and for limited periods of time it is to prevent the unfair business practices 

that might give a certain advantage to people who actually have 

access to the tools and equipment to make low-cost products. That 

gives them really a distinct advantage and discourages people from 

innovating and creating. So on balance, I think you have to give 

some respect to both sides. 

Could I make a comment about the ITC? 

Mr. COBLE. If you hurry, because I want to beat that red light 

before the Chairman admonishes me, but go ahead. 

Mr. FRYER. Okay. ITC is a procedure. Basically it follows the 

same laws. What they do is allow you to essentially approach the 

litigation collectively and deal with it swiftly. So it really is not any 

change. The increase shows ITC activity on designs. There are 

more imports and more copies coming in. This fact is why the ITC 

court has been successful. 

Mr. COBLE. Thank you, sir. 

Let me come back to Mr. Gillis with a final question, Mr. Chairman. 

Mr. Gillis, I have heard it said by several observers: Why don’t 

manufacturers of non-OEM or non-name brand crash parts simply 

modify their designs to hopefully avoid infringement? What do you 

say to that? 

Mr. GILLIS. Well, the problem, Mr. Coble, is the fact that we consumers want that part to look exactly the same. We want the car 

to look the same, to perform the same, and have the same quality 

characteristics. You wouldn’t want to put a Ford headlight, a different type of headlight, in the Ford F-150 that doesn’t look like 

the original headlight. 

Mr. COBLE. Thank you, sir. 

Mr. Chairman, do you award credit? I just barely beat the red 

light. [Laughter.] 

Mr. BERMAN. For you, Mr. Coble, always. You would be the last 

person I would ever admonish. [Laughter.] 

Mr. COBLE. Thank you, sir. 

Mr. BERMAN. I will recognize myself for 5 minutes. 

Maybe this is sort of between Mr. Rodriguez and Mr. Maiman. 

This whole notion—I mean, Mr. Rodriguez, in your testimony, you 

talk about your traveling to get ideas and inspiration for your designs. You are affected by what you see out there. My guess is you 

are not out there to copy what somebody else has done. For you, 

it is like so much else, I am sure. Previously written music affects 

new music, but it is not copied. 

Mr. Maiman, you talk about—well, let me ask you. In your business, do you sell products which you have essentially, ‘‘I saw this 

48 

hot design out there; we are going to sell this’’—my designers go 

out and basically copy that design because we think this will sell. 

Mr. MAIMAN. What we do is—— 

Mr. BERMAN. If I could just get both of you engaging on this 

whole notion of where is the line between inspiration and copy. 

Mr. MAIMAN. Well, we do what most other designers do, and 

even the high-end designers. We send a staff to Europe five times 

a year. They go to Japan. We subscribe to fashion reports out of 

Europe and trend services. Trend services is similar to this, where 

they send pictures of runway reports from Europe and sketches of 

the trends that are running in Europe. 

I think we all go to Europe right about at the same time. We all 

rush back to our design rooms and we take these trends and interpret them into what we think is next. We are not trying to interpret them into what is happening today, but we have to figure out 

what is next. 

So we are all doing it the exact same way. All design inspiration 

is not internal, but it comes external. Personally, I don’t think anything is truly original. It is just an interpretation of something. At 

our company particularly, we don’t interpret things exactly because 

we are on to what the next phase is anyway. 

Mr. BERMAN. Mr. Rodriguez? 

Mr. RODRIGUEZ. Well, I know what it feels like to design something truly from a voyage to Asia and scouting temples, not scouting stores. I don’t subscribe to any of those services which basically 

show my clothes to people who have—maybe not designers who can 

create things that are original, but want to be in the swing of 

things. 

I want to clarify something. I think there are two issues that I 

don’t know if Mr. Maiman knows about or not. One is a trend. One 

is something that is a feeling. We all feel things. All the designers, 

whether it is at a high level or a low level, we want floral prints 

for spring, and everybody does them because everybody feels them 

wherever we saw it. That is a trend. That is fine. 

For me, it is a bigger problem when you buy my dress and you 

take it apart and copy the pattern pieces and sell it exactly the way 

that I made it, because it took me a long time to create that dress. 

That to me is theft. 

Mr. BERMAN. ‘‘Pattern piece’’ means something different than a 

print, I take it. 

Mr. RODRIGUEZ. Yes. I am sorry. A pattern piece is like the actual bits and pieces that you cut to put it together. That to me is 

theft. I have seen it. I am not talking about inspiration. People 

draw inspiration in very different ways. For me, the inspiration is 

more ethereal, and I can create something completely new, even 

though it is still a skirt. 

Mr. BERMAN. You don’t call xeroxing an inspirational act? 

Mr. RODRIGUEZ. No. [Laughter.] 

Or when the manufacturer that you have entrusted to make your 

shoes, makes two copies—one with your label in it and one with 

his label in it. His is in his store before yours is ever shipped to 

the United States. That is bad. We are now protected against anything like that. 

Mr. BERMAN. My time has expired. 

49 

Mr. Schiff? 

Mr. SCHIFF. Thank you, Mr. Chairman. 

Whoever designed this podium didn’t design it with these chairs 

in mind. I feel like I have lost several inches in height. I know nobody at this table would be responsible for that. 

It seems to me that what we are really debating—and I want to 

focus, I guess, on the outmoded design issues or more of the technology than the fashion, at least for the moment—is a balance. We 

want to encourage innovative design on the one hand, and not discourage it by allowing people to copy the design and undermine the 

creative effort that went into it. 

On the other hand, where there isn’t a substantial design component, or the design is of a far less significance than the function, 

we don’t want to undermine the ability of people to supply a useful 

part and bring about that competition in price. The question I have 

is, it seems to me that we have had a patent system that was rarely used in this field until recently. 

Is the standard that is out there striking the right balance? Is 

it not striking the right balance because of the increased prevalence of design patent litigation? I think the ultimate question is 

how do we maximize this for the consumers, but that doesn’t necessarily mean that you allow every copy, because you don’t want 

to undermine the design process. 

So I guess the question is, how do we set up a standard for our 

patent judges to apply, or the patent examiners? Do we have the 

right standard? How do we encourage that kind of innovation? At 

the same time, how do we keep costs reasonable where the design 

component, the style component, is really of far less significance 

than the functional component. 

So I would open up anyone who would care to comment. 

Mr. OLSEN. Could I just come back to this. I got cut off and I 

was—— 

Mr. SCHIFF. As long as it won’t be on my time. 

Mr. OLSEN [continuing]. This august Committee. 

No, it is great to say that the automobile industry is abusing the 

privilege of the design patents by charging exorbitant prices, when 

the copycatters have not paid any development costs. They are 

working in low labor-cost countries, so naturally they have a builtin price advantage. 

If anything is going to discourage innovation, it is the fact that 

the automobile manufacturer can’t get a reasonable return to reinvest in new product. 

Mr. SCHIFF. Of course, I haven’t framed the issue that way at all. 

I am asking you, what is the proper standard to be applied? Does 

the law today set up enough guidance where we maximize the consumer benefit, both from encouraging innovation and also allowing 

competition? Or are we too skewed I one direction or the other? 

That is really, at least for me, the question that I am wrestling 

with. 

Mr. GILLIS. Well, Mr. Schiff, if I may, Consumer Federation of 

America and the other consumer groups really believe that the design patent laws provide very important consumer protection. It is 

important to protect the designers of a car from keeping another 

50 

automobile manufacturer from copying that car. That is a very important design protection that needs to be preserved. 

What we are calling for is something slightly different in that 

when the European Community looked at this problem and they 

saw these carmakers charging outrageous prices for small components of the car, they said, well, let us allow consumers some 

choice in terms of shopping around for those parts, but still protect 

the design that Mr. Olsen, for example, has worked on. That is an 

important protection. 

Mr. SCHIFF. But is it all or nothing? Is it an issue where you can 

design and patent a car, but not any part of the car? Are there 

some components of the car that are far more design-oriented than 

functional, and in fact may not have a functional component at all? 

They may be completely a design attribute. 

Mr. GILLIS. I think again it is important to allow the carmakers 

to patent parts of a car as well. For example, Ford needs to patent 

certain parts of its car to keep General Motors from copying those 

parts of its car. What we think is important is that we as consumers need the right for choice when it comes to repair that car. 

That is the beauty of a repair clause. It allows the carmakers to 

patent the car. It allow them to patent the individual parts, but 

keeps the market open for competing manufacturers for the simple 

repair parts that we need and gives consumers choice on those simple repair parts. 

Mr. SCHIFF. Are you saying that the current law doesn’t permit 

you, because of the way the courts have recently been interpreting 

design patents, doesn’t allow you to provide replacement parts? 

Mr. GILLIS. Well, the recent decision by the ITC has caused a 

great deal of consternation among those limited competitors that 

there are right now. What the ITC has essentially done is inhibited 

the importation of these parts so consumers have no choice. 

Mr. SCHIFF. Can I ask one last question, Mr. Chairman? 

Mr. SHERMAN. [Presiding.] One more. 

Mr. SCHIFF. Thank you, Mr. Chairman. The Chairman has 

changed. 

Mr. SHERMAN. They have been confusing Berman and Sherman 

for so long, I am surprised you were able to notice the difference. 

Mr. SCHIFF. The Chairman is now better looking. The Chairman 

is more astute. The Chairman is more generous with the time for 

his Committee Members. [Laughter.] 

That will buy me about 45 seconds. 

Should there be a different legal standard for a repair shop or 

a parts manufacturer that is different in kind than a different 

automotive manufacturer? Why should the standard for the Acme 

Repair Company and its ability to produce a part, be different than 

the rival GM Company’s ability to produce that part? 

Mr. GILLIS. Primarily because they are two totally different functions. The function that we want to keep open is our ability to have 

choice in getting our cars repaired where we want, when we want, 

and with whatever parts we want. When we don’t have those 

choices, then the cost of car repair is going to go up. 

On the other hand, the carmakers themselves need protection 

from their competitors—that is, other carmakers from copying the 

51 

designs that they have invested, as Mr. Olsen said, enormous 

amounts of money in. 

Mr. SCHIFF. Of course, they consider you one of their competitors—not you, but the people you are advocating for. 

Do you want a chance to answer? 

Mr. OLSEN. I would like a chance, yes, because the total cost— 

I mean, Mr. Gillis has used the word ‘‘repair.’’ If he is going to be 

more accurate, it is ‘‘replace.’’ ‘‘Repairing’’ means putting a bit of 

Bondo on a fender or polishing a headlamp lens. The point I would 

like to make is that the cost of the part after an accident, relative 

to the overall cost of the repair, is relatively small. It is the labor 

costs, the finishing of the part, that adds the cost up. So the differential between what the companies charge and the foreign copycat rip-offs charge is relatively small in terms of the overall cost 

of a typical body repair. 

One more point I would like to make. J.D. Power did research 

on automobile repairs after accidents, and 62 percent of all the people who had the accident want OEM parts. They don’t want 

knockoff parts. People feel they have been ripped off by having 

knockoff parts installed. For the insurance company, they are likely 

to lose renewal business, and the job shop who has done the job 

is likely to lose any new business they are going to get from them 

because they feel cheated they don’t have OEM parts. 

Mr. SCHIFF. Thank you, Mr. Chairman. 

Mr. SHERMAN. Thank you. 

The gentleman from Virginia? 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

Mr. Chairman, I have an opening statement I would ask be submitted for the record. 

Mr. SHERMAN. Without objection, it will be entered in the record. 

[The prepared statement of Mr. Goodlatte follows:] 

PREPARED STATEMENT OF THE HONORABLE BOB GOODLATTE, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF VIRGINIA, AND MEMBER, SUBCOMMITTEE ON

COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

Mr. Chairman, thank you for holding this important hearing on design protection. 

Article I Section 8 of our Constitution lays the framework for our nation’s copyright laws. It grants Congress the power to award inventors and creators, for limited amounts of time, exclusive rights to their inventions and works. The founding 

fathers realized that this type of incentive was crucial to ensure that America would 

become the world’s leader in innovation and creativity. This incentive is still necessary to maintain America’s position as the world leader in innovation. However, 

most types of designs do not enjoy this protection. 

The specific area I would like to focus on today is fashion designs. Most industrialized nations provide legal protection for fashion designs. However, in the United 

States—the world’s leader in innovation and creativity—fashion designs are not protected by traditional intellectual property protections. Copyrights are not granted to 

apparel because articles of clothing, which are both creative and functional, are considered ‘‘useful articles,’’ as opposed to works of art. Design patents are intended 

to protect ornamental designs, but clothing rarely meets the criteria of patentability. 

Trademarks only protect brand names and logos, not the clothing itself, and the Supreme Court has refused to extend trade dress protection to apparel designs. 

Thus, if a thief steals a creator’s design, reproduces and sells that article of clothing, and attaches a fake label to the garment to market it, he would be violating 

federal law. However under current law it is perfectly legal for that same thief to 

steal that same design, reproduce and sell the article of clothing if he does not attach a fake label to it. This loophole allows pirates to cash in on others’ efforts and 

prevents designers in our country from reaping a fair return on their creative investments. 

52 

Furthermore, the production life cycle for fashion designs is very short. Once a 

design gains popularity through a fashion show or other event, a designer usually 

has only a limited number of months to effectively produce and market that original 

design. Further complicating this short-term cycle is the fact that once a design is 

made public, pirates can now virtually immediately offer an identical knock-off piece 

on the Internet for distribution. Again, under current law this theft is legal unless 

the thief also reproduces a label or trademark. Because these knock-offs are usually 

of such poor quality, these reproductions not only steal the designer’s profits, but 

also damage his or her reputation. It is simply common sense that these creators’ 

works be protected. 

Chapter 13 of the Copyright Act offers protection for the designs of vessel hulls. 

I have introduced, along with my friend Representative Bill Delahunt, H.R. 2033, 

the Design Piracy Prohibition Act, which protects designers by amending Chapter 

13 of the Copyright Act to include protections for fashion designs. Because the production life cycle for fashion designs is very short, this legislation similarly provides 

a shorter period of protection that suits the industry—three years. This legislation 

further establishes damages for infringing a fashion design at the greater of 

$250,000 or $5 per copy. 

A hearing was held on this legislation last Congress and it has broad support 

among those in the fashion and apparel industries. However, constructive criticism 

has been expressed by some fashion manufacturers, and I am pleased to report that 

negotiations are ongoing to address those concerns. Indeed, I am hopeful that that 

an agreement may be reached in the next few weeks to address many of the concerns of those manufacturers. 

While I agree that the Subcommittee is right to examine the design protection 

issue in general, it is my hope that the Subcommittee would move forward with consideration of H.R. 2033, which is the product of almost three years of discussion and 

debate, and is a modest effort to help protect a creative, developing industry in the 

U.S. 

As America’s fashion design industry continues to grow, America’s designers deserve and need the type of legal protections that are already available in other countries. The Design Piracy Prohibition Act establishes these protections. 

Thank you again for holding this important hearing. I look forward to hearing 

from our expert witnesses today. 

Mr. GOODLATTE. I welcome all the witnesses. This is a very interesting hearing, but I feel like it is a bifurcated hearing almost. The 

issue is quite different between fashion design and automobile 

parts design. I am very interested in what you have been discussing, but I would say that over here in the fashion design industry, there is not the same consideration. There is not, to my knowledge, any significant after-market for shirtsleeves or pants legs 

that would be replacement parts to go on a designer piece of clothing. 

As many of you know, I have joined my friend Bill Delahunt in 

reintroducing the Design Piracy Prohibition Act, which protects 

fashion designers by amending chapter 13 of the Copyright Act to 

include protection for fashion designs. This Subcommittee has held 

a hearing on this legislation. 

There has been constructive criticism expressed by some fashion 

manufacturers. I am pleased that those negotiations are going forward, and I am hopeful that an agreement may be reached in a few 

weeks that would address many of those concerns. I hope that that 

will allow this Subcommittee to move forward on the legislation 

that Congressman Delahunt has introduced, because I think this is 

an important issue dealing with the question of piracy. 

In that regard, I would like to turn to a few questions. First, Mr. 

Maiman, you stated in your testimony that creating new copyright 

protection for fashion designs threatens to split America into two 

classes of people—those with money who can buy copyrighted designs and those who can’t afford them. I wonder, you have noted 

53 

that much of the information about new designs—you showed us 

the magazines and so on—came from Europe. 

Have you seen evidence of this splitting into two classes in Europe, the Europeans, where there is protection for fashion designs, 

have good choices when it comes to fashion? Or is the European 

market a one-size-fits-all market that is dull when it comes to new 

fashion designs? 

Mr. MAIMAN. The European market surely is not dull. And no, 

in Europe I have not seen any evidence of that. But I think over 

here, what is going to happen is when you have to copyright your 

designs, and you will probably have to copyright every one of them 

just as a matter of course when you design a garment, you have 

to copyright it, and to do the research. 

What we are questioning in our company is how do we determine 

if a design that we come out with is copyrightable. Even if, let us 

say, we have never actually bought a garment, taken someone 

else’s garment apart, put it back together with our fabrics—— 

Mr. GOODLATTE. But in answer to my question, the consequence 

has not occurred in Europe, where they do have fashion design protection. 

Mr. MAIMAN. Not to my knowledge, no. 

Mr. GOODLATTE. Mr. Rodriguez, would you be interested in answering that? 

Mr. RODRIGUEZ. You know, I think it has actually helped because 

the lower markets in Europe have great design integrity. So a person who is following the trends and wants to look fashionable can 

go to whatever store she shops at, buy beautifully made, good quality, inexpensive stylish clothes. 

Mr. GOODLATTE. I was going to say, we are starting to see that 

in the United States, too, where you have fashion design labels—— 

Mr. RODRIGUEZ. Yes, it is happening here. 

Mr. GOODLATTE [continuing]. In Wal-Mart and Target and other 

department stores that appeal to a broader cross-section of the population. So I am not of the opinion that attempting to protect these 

original designs would yield the result that you describe. 

Mr. Maiman, let me follow up on that. Do you believe that manufacturers should be able to make exact copies of a fashion design 

for profit without obtaining the permission of the original designer—an exact copy? I know you talked about trends and whether you could see what was coming next, but I also know that you 

can go online virtually the day after the Academy Awards and 

order an exact copy of some of the designs that went right down 

the runway. I wonder if you would think that that should be prohibited—that exact copy? 

Mr. MAIMAN. Well, it is hard to say because what you have to 

do is you have to wonder where the inspiration for that Academy 

Award design came from. Did that person just wake up and create 

it in their mind? Or did they look at someone else’s—— 

Mr. GOODLATTE. Well, let us assume we had a system where that 

designer would be accountable to somebody else for that. But the 

person who is now making an exact copy of the design that came 

down the runway, and assuming it was an original that didn’t violate somebody else’s rights—an exact copy—would we be well advised to prohibit that? 

54 

Mr. MAIMAN. Well, I think an exact copy of a dress—let us say 

it is a dress we are talking about—would most assuredly end up 

in a different market segment than the people who can afford to 

pay for the original design. So I would not be against copying designs that are out there. 

Mr. GOODLATTE. So you would say that being able to do that, 

which is perfectly legal today and which is why we have introduced 

this legislation—you wouldn’t prohibit even an exact copy? 

Mr. MAIMAN. I would not. No, sir. 

Mr. GOODLATTE. Mr. Rodriguez, do you want to respond to that? 

Mr. RODRIGUEZ. I am appalled. I mean, that is appalling. I mean, 

that is theft. You know, I do wake up and I do work on a mannequin, as do many other creators. They create original garments 

and those garments do go down red carpets or wedding aisles. They 

are copied the next day, before I can commercialize that gown and 

put it on my collection and sell it at a better price, at a lower price, 

or at a very high price, it has already flooded the market. 

So to steal something, to copy it, whatever you want to call it, 

to copy my DNA and diffuse it into a lot of prints—I mean, I think 

it is just completely wrong. I think it is very honorable that companies like Target have hired creators to create good product and sell 

them in mass quantities. 

Mr. GOODLATTE. And in most of the other developed countries of 

the world, particularly Europe, you could take steps to protect that. 

Mr. RODRIGUEZ. Everywhere. Nothing gives me greater pleasure 

than to go to Spain and buy cheap underwear at the big chain store 

there because their quality, their design is far superior to some of 

the most expensive underwear in Europe. 

Mr. GOODLATTE. And it is protected under the law. 

Mr. RODRIGUEZ. And it is protected under the law. It is unique. 

It is wonderful. It is not to say someone else can’t make a great 

white plain T-shirt, and I am not going to buy it from them, for 

more money or less money. It is a plain white T-shirt. But that 

particular one is fantastic and it is respected and not copied by 

anyone. 

Mr. GOODLATTE. Thank you. 

Thank you, Mr. Chairman. 

Mr. SHERMAN. I will now turn to the Chair of the full Committee, 

Mr. Conyers. 

Mr. CONYERS. Thank you very much. 

I apologize for not being here. I had committed myself to Liz Robbins to be here from the very opening of the first witness. The previous Chairman and I had business on the floor. We stayed until 

the end. I apologize. 

I see our former Illinois colleague Marty Russo. I don’t know 

what part of the industry he is in now, but he championed the universal single payer health care bill for many years when he represented his state of Illinois so ably. I am glad that he is here. 

Thus far we have received mixed reaction on this proposed legislation Part of the automobile industry is not that keen on it. People 

representing the consumers I think, not having heard your testimony, don’t seem to be that keen on it either. 

Have I reached too quick of an assumption about what is happening here? 

55 

Mr. GILLIS. Well, Mr. Chairman, from the Consumer Federation 

of America’s perspective, we are really not commenting on the fashion design issue. As Mr. Goodlatte said, these are two pretty different issues and pretty distinct issues. Our concern is simply from 

the consumer perspective in that we really believe the car companies have the right to copyright their cars or to design-right their 

cars, to the design of certain parts, but we just think the consumers need the choice in the marketplace to shop around for different parts. 

The best example of this is really in the mechanical parts arena. 

Thank goodness we have the choice of Midas muffler versus Chrysler mufflers, or certain types of shock absorbers. These choices provide not only consumers with fair prices, but they establish competition and they get these manufacturers to start competing 

against each other, and the quality ends up better. We would like 

to see that same competition in the area of fenders and hoods and 

the things that we need after a crash. 

Mr. CONYERS. Well, are you in agreement, Mr. Olsen? 

Mr. OLSEN. Not at all. 

Mr. CONYERS. Not at all. Okay. Explain yourself. 

Mr. OLSEN. I think that we are dealing with a competitive situation that is untenable for the OEMs. The people who are making 

the parts, which as I already have mentioned, in terms of the total 

costs of a crash repair, they are a relatively small part of it. So the 

advantage or disadvantage of having OEM in financial terms is relatively small. 

I got lost on my point here. Excuse me. I will rest there. 

Mr. CONYERS. Okay. 

It seems, Mr. Rodriguez, that there is some unanimity around 

the fashion aspect of this legislation. I want to commend you for 

that. 

Mr. Maiman, do you have anything positive to say about this legislation? 

Mr. MAIMAN. Well, one of my main things about this legislation 

is that I think it might stifle some of the creativity that is coming 

out of, maybe not the designers at Mr. Rodriguez’s level, but certainly a lot of the designers that are coming into the industry and 

selling to middle America. 

Mr. Rodriguez is higher in the design industry, and probably accounts for less than 5 percent of the annual American volume 

spent on clothing. Everybody else does get—most of the styles do 

trickle down. They don’t trickle up. The higher-end designers are 

not going to go to Target stores, Macy’s, Dillard’s, Kohl’s and Sears 

and Penney’s to get their inspiration. It all works from the top 

down. 

Mr. CONYERS. Let me just get a reaction from Mr. Rodriguez before my time is expired. 

Mr. RODRIGUEZ. A reaction? Well, you know, I do not agree with 

that at all because the young talent in the United States that is 

emerging would be hurt if they didn’t have a bill like this in place. 

They are creating new things. I myself have had a struggling company for 10 years, until recently, and I have big partners now who 

can protect me. 

56 

But the young designers in America need this bill more than the 

big designers in America—not the wealthy designers. They are creating and they are bringing freshness and newness to middle 

America. They are inspiring us bigger companies to do new things 

and think of things, and think of our work differently. That is fantastic. That is a trend. That is inspiration. 

What happens is with the new emerging talent that Mr. Maiman 

may have misunderstood, what happens is the companies come in 

and cannibalize them, cannibalize their aesthetic, their design 

ethic, their everything—their look—and sell it, manufacture it 

overseas. 

Jobs are lost and two talents, three talents, many talents are lost 

and never have an opportunity. I have seen it with a really, really 

talented denim manufacturer, a couple of artists who lived and 

worked in L.A. They lost the most beautiful denim line I ever saw. 

It was stolen from them. It was stolen from their dryers and they 

couldn’t work anymore. Now, they have to work for someone else. 

I don’t want that to happen anymore. It is too painful to create something and see it mass produced for $14 by someone else, and 

your career is gone. So that is a very heartfelt answer to your question. 

Mr. CONYERS. Well, thank you so much. 

I thank all the witnesses. 

Thank you, Mr. Chairman. 

Mr. SHERMAN. Thank you. 

I recognize the gentleman from North Carolina. 

Mr. COBLE. I have already been heard, Mr. Chairman. 

Mr. SHERMAN. You have already been heard? Okay. 

Mr. Rodriguez, and I will also ask Mr. Maiman. I am trying to 

get a feel for where we draw the line between original designing, 

which is of course influenced by everyone else. I mean, I see Mr. 

Rodriguez is wearing black. Other people have worn black. It has 

been done. 

So let us go back to Levi Strauss. The story is that he was the 

first man to take canvas and make pants. He made them blue, and 

he had a particular design. Let us say we had good laws in this 

country and it was back at the Gold Rush, and he filed for the appropriate protection. 

Should we allow somebody else to make canvas pants? Should 

somebody else be allowed to make blue canvas pants? Should somebody else be allowed to make blue canvas pants that were indistinguishable by a lay person from Levi’s own design? Assuming everything Levi did was unique, what do we let the next person do? 

Yes, Mr. Rodriguez? 

Mr. RODRIGUEZ. I was dying to answer that. I have traveled 

quite a bit and worked with many different mills in South America, 

in Europe, and seen—— 

Mr. SHERMAN. I will ask you to give the abbreviated version. 

Mr. RODRIGUEZ. Yes, I know. I have seen that blue canvas, which 

was made for decades by everyone. 

Mr. SHERMAN. I am going to ask you to think back as if you were 

right there at the Gold Rush. You have never seen blue canvas 

pants before. 

Mr. RODRIGUEZ. Should he be the only one allowed to make it? 

57 

Mr. SHERMAN. Yes. 

Mr. RODRIGUEZ. No. Blue canvas is fabric. Blue canvas was out 

there. He just chose to make a certain style of pants out of it. 

Mr. SHERMAN. But no one else had ever used that fabric for 

pants, so it would be okay to do blue canvas pants. If somebody 

comes up with the first idea of using blue canvas pants, now he 

had a particular stitching on the pocket. Would you allow somebody else to use that same stitching? 

Mr. RODRIGUEZ. Maybe not if it had my name on it. 

Mr. SHERMAN. Well, obviously, if you are able to integrate your 

trade name into your physical good, you are going to get the maximum possible protection. But assume it is just a geometric design 

on blue canvas. Nobody had ever made blue canvas pants before. 

Nobody had ever used that design before. What do we let the next 

person do? 

Mr. RODRIGUEZ. Whatever they want. If they are inspired by blue 

canvas pants, they can make blue canvas pants. You respect 

Mr.—— 

Mr. SHERMAN. They use the exact same design—the pocket exactly as wide, the stitching the same squares and circles interlocking, or whatever? I am making that up. Levi didn’t do that. 

Mr. RODRIGUEZ. Well, the design—— 

Mr. SHERMAN. One of your handlers is trying to correct your answer. While you take a look at your notes, I will ask Mr. Maiman. 

Mr. MAIMAN. I do believe one of Levi’s—— [Laughter.] 

Mr. SHERMAN. Perhaps we need the lobbyist testifying. Go on. Go 

ahead. 

Mr. MAIMAN. I am sorry. Was it not my turn? 

Mr. SHERMAN. It is your turn. Go ahead. 

Mr. MAIMAN. Okay. What I do believe as far as it applies to Levi 

Strauss, he was probably the first one to come out with—you are 

talking about blue denim, the canvas. 

Mr. SHERMAN. Yes. 

Mr. MAIMAN. Everybody, everybody, everybody does blue denim, 

and we know that. Levi Strauss, if we come out with a five-pocket 

western, which Levi was the first to come out with, with the four 

pockets and the little coin pocket, the five-pocket western has been 

the mainstay of the industry and Levi did invent it. Should we 

all—and I don’t make denim jeans so I am just talking about the 

rest of the business—should the denim manufacturers have to pay 

a royalty, or be subject to litigation from the Levi Strauss estate 

when they make a five-pocket western? Should he have been able 

to copyright that? 

Mr. SHERMAN. You are doing a good job of asking the questions, 

but we are elected to do that. 

Mr. MAIMAN. Okay. 

Mr. SHERMAN. I need some answers, or at least your own opinion, obviously. 

Mr. MAIMAN. The opinion is, fashion always regenerates itself 

and people will do versions of the Levi pant. I agree that it should 

be entirely illegal and protected by trademark and copyright to put 

a tag on there that resembles Levi or resembles Guess With the 

little triangle, because then it will create a likelihood of confusion 

between who made the product. But as far as the fabric, the shape 

58 

of the garment, the fit of the garment, I think it is fair game in 

the world, not just the United States. 

Mr. SHERMAN. Okay. Let me ask Mr. Gillis, if I go buy a car and 

they tell me a lot about the car. There is a sticker on the car. One 

of the things they don’t tell me is, we have a monopoly right to 

make the replacement hood panel on this car. So if you dent this 

car and you need a new hood, be prepared to pay monopoly prices 

for the replacement. 

Should we require that those who are selling cars to inform consumers when they are using our intellectual property laws to give 

themselves monopoly power and monopoly pricing over replacement parts, and some idea as to which replacement parts there 

isn’t going to be a competitive market for? 

Mr. GILLIS. Absolutely. But the better solution, Mr. Sherman, is 

to simply allow the competition to exist, as this country is well 

known for. That would solve the problem. Again, they have a 

right—— 

Mr. SHERMAN. So you are saying, for replacement parts, allow— 

but you don’t draw the same line with regard to newly manufactured cars. In other words, you can make the argument, you know, 

if we only got rid of these design patents, Sherman can replace his 

dented bumper cheaper, which is moderately important to me. But 

if we took it all the way, we would say, well, get rid of all the patents, then I could buy a car cheaper. Why allow some rival company to give me a cheaper hood, but not to give me a cheaper car? 

Mr. GILLIS. Because fundamentally, design patents are very, very 

important corporate protections, and as a result, consumer protections. That creates competition between General Motors, Ford, Toyota and Honda. And that competition is good for consumers and 

consumer depend on those different designs in order to pick a car. 

So it is not right to allow Honda to copy Toyota’s overall design. 

The problem, though, is if we had a repair clause, you wouldn’t 

have to have the disclosure that you are talking about because 

then there could be competition on simply the parts we need to repair the car, not the car itself. 

Mr. SHERMAN. Well, I would like to save 80 bucks on a replacement hood, but if I could get something that looks like a Bentley 

and only pay $30,000 for it, that would be even better. I know 

Chrysler comes close. 

Mr. GILLIS. Well, interestingly enough, Mr. Chairman, if you 

ever looked at the cars today, it is pretty hard to tell one from the 

other, so that design difference is kind of melding together, but 

that is the choice of the carmakers to have those cars look very 

similar. 

Mr. SHERMAN. Why don’t I yield—— 

Mr. OLSEN. Can I respond to that? 

Mr. SHERMAN. My time has expired. We are going to hear from 

the gentleman from North Carolina, and then I will ask a couple 

more questions, then we will adjourn. 

Mr. COBLE. Thank you for your generosity, Mr. Chairman. I just 

failed to mention this earlier. I want to revisit Mr. Gillis and Mr. 

Olsen. 

The Europeans have implemented an exemption to the design 

protection known as design clause. Now, I don’t know whether that 

59 

would be appropriate or not, but what do you two say about the 

design clause feature, maybe to better understand the ins and outs 

of design law in the auto parts market? 

Mr. GILLIS. Well, I have to say at the outset that I am not a design patent attorney. I am a consumer advocate. However, all we 

are asking for is actually a repair clause. Design patents are fine. 

We just want consumers to be able to have choices when it comes 

to repair those cars, and Mr. Sherman’s dented bumper. If he has 

two choices, not only will he get a fairer price, but those two companies will compete with each other and produce a better quality 

product. 

Mr. COBLE. Do you want to be heard, Mr. Olsen? 

Mr. OLSEN. Yes, I would like to make two points. 

Mr. COBLE. Thank you, Mr. Gillis. 

Mr. GILLIS. Thank you. 

Mr. OLSEN. The European Automobile Manufacturers Association 

did costs on replacement parts for the Volkswagen Golf, the largest-selling car in Europe. They have the prices from countries like 

Britain, which don’t subscribe to design protection in their country, 

and Germany and France. The interesting thing is that the lowest 

cost parts for the Volkswagen Golf come from the countries that 

are protected, and not from the countries that are not protected. 

Another point I would like to make is that when you design a 

car, and you are in the clay model stage and you are in a design 

studio trying to get out a car, you know what this car is going to 

retail for. The corporation brings in their insurance lawyers, adjusters, to look at that design, analyze it, and project what will be 

the repair costs on that car. 

If the insurance man—the person representing the insurance industry analyzing the design—gives a price which is higher than the 

class the manufacturer wants to be in, then design staff are obliged 

to change that design and get it into a situation where the costs 

meet the requirements to have the proper insurance rating. 

Mr. COBLE. Thank you, Mr. Olsen. 

I see Mr. Gillis is writing rapidly. Do you want to be heard, Mr. 

Gillis? 

Mr. GILLIS. Thank you, Mr. Coble. 

I just want to say that for the car companies to say that to give 

them a monopoly would assure consumers the lower prices and 

high quality simply flies in the face of any economic logic theory 

that I have ever heard of. Competition is the consumer’s best 

friend, and that is what we are calling for. 

Mr. SHERMAN [continuing]. Car manufacturing business expects 

to get a certain profit from selling the car and a certain profit from 

selling the parts. They have certain design rights with regard to 

selling the car and they expect a certain profit. And then they will 

know that I am going to dent the thing, and then they expect certain profits there. All those profits to into designing the car, and 

one wonders whether we want to tell them, okay, go ahead and you 

get intellectual property protection for when you sell the car, and 

you can make your profit there, but you have to make a smaller 

profit when you sell the replacement parts. 

I am just beginning to learn these issues. One thing I do know 

and should announce is that we are going to keep the record of this 

60 

hearing open through the close of business Wednesday for submissions by both witnesses and Members. Perhaps there are even others that would make submissions, but that would be at the discretion of the Chair who, as Mr. Schiff has pointed, is almost as good 

looking as I am. 

Mr. Fryer, I am glad you haven’t fallen asleep. We haven’t asked 

you any questions yet, but with Mr. Coble’s permission, I will ask 

a couple. 

Mr. COBLE. Sure. 

Mr. SHERMAN. Regarding vessel hull designs, how do you foresee 

applicants applying for protection under the Senate amendment? 

Will one be able to secure protection for a hull, a deck, a hull and 

deck, all in one application? Is this your understanding? Will applicants have to do something to indicate that they want protection 

for each of these elements? Or do they want them only as they fit 

together? What is your understanding? 

Mr. FRYER. Mr. Chairman, this vessel hull law is administered 

by the Copyright Office. It is a separate statute. The regulatory 

part will be determined by them. My vision—I think I put it in my 

statement—was that to make it simple for the person who is applying. The people applying are the boat companies. Usually, they are 

not attorneys, sophisticated design patent attorneys. So my suggestion would be to have a choice, if you want the bottom part or you 

want the upper part, which is now the hull or the deck, or both. 

So you can choose. And that is exactly what the statute now provides, and it would be supported by the statute. 

In the alternative, the present regulation says that you can show 

the whole design and then use what is called a ‘‘broken line’’ technique. They use it in trademarks and design and patent, and you 

can actually show what you don’t want to protect, kind of like a 

white-out thing. That would then give them an option. That would 

be the patent attorney or someone who is skilled in that an option. 

But I would give them both options. This approach would be my 

advice. 

Mr. SHERMAN. Thank you. You mention that there has been little 

litigation over vessel hull design protection. My question is, is that 

relevant to determining how much litigation we would see if we 

provided protection for fashion designs? 

Mr. FRYER. That is an excellent question. I feel like I am in the 

classroom with you, as my professor. It is a nice change. 

The point is, I think all these questions that you have asked 

about various industry concerns are important. They have to focus 

on is what does the statute really say. There are absolutely minimum limits of what can be protected. You can not protect common 

design. You can not protect purely functional features. 

By the time you go through analysis, you get to a design that is 

distinctive—something that you can recognize. I think a lot of this 

discussion is operating down in the lower level where frankly these 

features are not going to be protected. As is true for fashion, since 

they all basically have a common mother—you know, the origin of 

the Chip Act and the Vessel Hull Act. They all came from the same 

cut. And so what we are looking at now is the standard is substantially the same. 

61 

When you are thinking about that, I suggest what you are saying 

is that an infringing design looks the same. You say ‘‘identical.’’ I 

say ‘‘similar.’’ But what I am really saying is, it is the same. It is 

like Mr. Rodriguez—I couldn’t do it better—he said, you know, you 

are going to take my dress apart and you are going to lay it out 

and you are going to make a copy and reproduce it. I mean, that 

is identical, but it is a visual kind of an observation. 

It is very easy to work with designs because you can kind of visually see it is the same. There is really not much doubt. You don’t 

really have to go through the Patent Office delay problem. That led 

to the other question, that I wanted to answer, which is why are 

we having trouble with the design patent system? Why do we need 

something more? The fact is that design patents do not protect anything until the patent issues. 

Right now in the Patent Office, we have a lot of backlog. It is 

all part of the same system. You don’t have a separate window you 

go to to buy your design protection. You go to one office, one filing 

system. You do not have protection for maybe 2 years. We really 

need something in between or before, I guess is what I am saying. 

Mr. SHERMAN. Thank you. 

I will just make a closing comment. I think the professor is right, 

that anything we do in the fashion industry has got to have immediate effect before government review, as do copyright, for example. 

Because I think there will be a lot of people who will want to buy 

a copy of whatever is worn on the red carpet at this coming Academy Award. But I don’t know anybody who is scurrying around trying to find a copy of what was worn two red carpets ago. 

The other thing I will point out is that if we wanted to provide 

an absolute minimum level of protection, because it is hard for me 

to say what is inspired by going to Spain and looking how people 

are dressed, versus what is a copy of a particular original item, 

that there are at least two indications that something is a deadringer copy. One is, if you sell it that way. If you are up on the 

Internet saying, ‘‘this is a copy of what Britney—no, somebody 

else—wore, or this is a copy of——’’ 

The other thing that would indicate it is if you put the garment 

next to the other garment and a lay person could not point to a design difference. The harder part will be what if somebody takes a 

dress and they make it just like some of the other dress, but they 

put one tassel in a different place, or they make a pair of pants 

without belt loops and the original had belt loops. 

I don’t want to put our courts or our administrative agencies in 

a position to try to say, well yes, I can tell the difference between 

this and that, but they are damned similar. It is clear that whoever 

made that was looking at this. 

I will allow a comment from any witness on that, who has a real 

strong desire, because all fashion is inspired by other fashion. All 

fashion mimics other fashion. If you can tell the difference between 

two garments, but it is clear that one was highly inspired by the 

other, should we prohibit that? 

I see Steve has a question. Yes? 

Mr. MAIMAN. Well, I was just going to say that I think we are 

getting into very nebulous territory to try and establish what is 

substantially similar, versus what is sort of similar. Like you say, 

62 

sure, we could see the inspiration, but at what point can the law 

actually quantify what is ‘‘substantial.’’ 

Mr. SHERMAN. Right. I think ‘‘substantially similar,’’ you are 

going to need brighter people than me to know where to draw that 

line. Indistinguishable by a lay person or claiming to be a replica— 

those are two tough legal standards. If we are going to go beyond 

that, we are going to need some really clever legal draftsmanship 

from people that we will have to hear at another hearing because 

this hearing is over. 

Thank you. 

[Whereupon, at 5:19 p.m., the Subcommittee was adjourned.] 

(63) 

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD

PREPARED STATEMENT OF THE HONORABLE SHEILA JACKSON LEE, A REPRESENTATIVE

IN CONGRESS FROM THE STATE OF TEXAS, AND MEMBER, SUBCOMMITTEE ON

COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

Thank you, Mr. Chairman, for your leadership in convening today’s very important hearing on intellectual property. I would also like to thank the ranking member, the Honorable Coble, and welcome our panelists. I look forward to their testimony. 

The subject of today’s hearing is ‘‘Are Special Provisions Needed to Protect Unique 

Industries?’’ It will focus upon whether the current means of protecting designs are 

adequate for industries that make significant use of new designs to attract customers and whether the scope of vessel hull design protection should be expanded 

to include other subject matter like auto parts and apparel. 

This hearing could not be more timely, Mr. Chairman. 

This hearing will explore the necessity of comprehensive intellectual property reform to minimize piracy and counterfeiting, and will address whether inadequacies 

in the current intellectual property system hamper innovation and hurt the American economy. Deficiencies in the current system have the ability to erode the innovation and competitiveness of U.S. designers and manufacturers, whose newest and 

most original creations are imitated and duplicated within hours of first being presented to the public. 

The Constitution mandates that we ‘‘promote the progress of science and the useful arts . . . by securing for limited times to . . . inventors the exclusive right to 

their . . . discoveries.’’ In order to fulfill the Constitution’s mandate, we must examine the system periodically to determine whether there may be flaws in the system 

that may hamper innovation and competitiveness, including the problems described 

as decreased quality, prevalence of knock-offs and counterfeit merchandise, and increased litigation. 

Europe is more advanced in its intellectual property protections, and specifically 

in its protection of fashion design, than the United States. International obligations 

to establish industrial design protection were called for in the 1887 Paris Convention on Industrial Property. In the U.S. intellectual property system, we have the 

following protections: design patents, trade dress or trademarks, copyright and vessel hull design protection. None of these types of protections apply to fashion design. 

Fashion design is not protected under current U.S. law because of the general rule 

of exclusion of ‘‘useful articles’’ from the scope of Copyright protection. Generally, 

industrial designs are applied to, found on, or otherwise part of useful articles to 

make them more attractive or appealing. However, copyright is meant to protect artistic and literary expressions, not useful articles. As such, the Copyright Act prohibits the use of copyrights in protecting useful articles. This is done by requiring 

the work of authorship to be physically or conceptually separable from the article 

on which it is found. For instance, copyright protection can be used to protect an 

artistic silkscreen image on a t-shirt (i.e., a picture of a rose), but if the work is 

the physical design of the t-shirt (i.e., the t-shirt has a unique cut, sleeves, etc.), 

copyright protection may not apply. 

While there are many ways in which industrial designs may be protected in the 

United States, groups have argued that the products of their industry often cannot 

be effectively protected by the available mechanisms. This argument has been made 

by automakers, furniture makers, and more recently fashion designers. 

In spite of the general rule excluding copyright of ‘‘useful articles,’’ in 1998 Congress passed an amendment to the Copyright Act to provide limited statutory protection for useful articles. The first design enumerated for this protection was the 

design of a vessel hull. In the 110th Congress, the Design Piracy Prohibition Act, 

64 

HR 2033, was introduced and amends the underlying vessel-hull language to extend 

the protection it provides to unique and original articles to apparel. The bill is intended to protect only those original designs that are unique and it bars third parties from manufacturing or importing for sale or use in trade protected designs. The 

bill provides exclusions for sellers and distributors who act without knowledge and 

for reproduction for teaching or analysis. In addition, there are other broad exclusions for acts without general knowledge. The bill has features which provide for 

frivolous lawsuits, such as the exclusion from protection of commonplace designs 

like button-down shirts or bell-bottom pants, which are commonplace, lacking in 

originality, and part of the public domain. 

I laud the principles underlying this bill. I believe that there should be an end 

to piracy of intellectual property, especially in the areas of fashion and apparel. I 

would like to bring an end to knock-offs, counterfeiting, and the importation of pirated designs in apparel, where after importation in the United States, a label is 

affixed to the apparel, and the good is subsequently sold. I like fashion and the absence of such protections is not good for American creativity, innovation, or the 

economy. I believe that there is room for improvement in our design protection laws. 

Mr. Chairman, if these improvements are properly implemented, they would bring 

the American intellectual property protections up to speed for the twenty-first century and may also bring American law into a closer harmony with that of foreign 

countries. Instead of remaining a hindrance to innovation and economic growth, the 

U.S. intellectual property system should work for innovators and with competitive 

market-forces, ensuring America’s intellectual property protection will be one of the 

best in the world and prevents risks to innovation. 

Again, thank you Mr. Chairman for holding this hearing. I look forward to hearing from our distinguished panel of witnesses. I yield back my time. 

f 

PREPARED STATEMENT OF THE HONORABLE LAMAR SMITH, A REPRESENTATIVE IN

CONGRESS FROM THE STATE OF TEXAS, RANKING MEMBER, COMMITTEE ON THE JUDICIARY, AND MEMBER, SUBCOMMITTEE ON COURTS, THE INTERNET, AND INTELLECTUAL PROPERTY

Today we revisit design protection to determine whether the Subcommittee should 

expand existing law to help the fashion and automotive industries. 

Proponents of greater protection argue that current law provides insufficient help 

for innovators who want to prevent the misuse of their designs. 

For example, Chapter 16 of the Patent Act allows an inventor to earn a design 

patent for any new, original, and ornamental design for an article of manufacture. 

However, the chief limitation on the patentability of designs is that they must be 

primarily ornamental in character. 

If the design is dictated by the performance of the article, then it is judged primarily functional and ineligible for protection. 

Combined with the high cost of patenting, this reality explains why some inventors, such as automobile companies, file for relatively few design patents. 

In addition, Chapter 13 of the Copyright Act provides 10-year term protection for 

the owner of an original design that makes a useful article attractive or distinctive. 

The law defines ‘‘useful article’’ as a ‘‘vessel hull.’’ This was done in 1998 to combat ‘‘hull splashing,’’ a method by which copycat manufacturers would attempt to 

duplicate the hull designs of luxury yachts. 

The statute is nonetheless a template—it can be easily amended to include design 

protection for other useful articles. 

And both the fashion and automobile designers want the vessel hull law amended 

to cover their industries. 

In fact, one bill, H.R. 2033, the ‘‘Design Piracy Prohibition Act,’’ has been introduced at the behest of fashion designers. 

Fashion designers claim that apparel and footwear anti-counterfeiting costs them 

billions in lost sales each year. 

They believe their creativity, labor, and risk-taking go unrewarded. 

Similarly, auto manufacturers assert that automotive suppliers lose upwards of 

$12 billion annually to counterfeit products. 

And at least one prominent car company invests $100 million or more in the design of each new car line. 

Like the fashion designers, car manufacturers want a higher return on their investments. 

But the legislative process is like Newton’s Third Law of Motion: for every action 

there is an equal and opposite reaction. 

65 

Amending either the Copyright or Patent Act invites opposition from others who 

work in the fashion world and automotive after-parts industry. 

We heard from the fashion critics at a Subcommittee hearing in 2006. 

They maintain no one can define originality in the fashion world because current 

fashion is the product of generations of designers refining and redeveloping the 

same items and ideas over and over. 

This is the ultimate intellectual property paradox: they argue that design protection would inhibit innovation since the fashion world is driven by unfettered access 

to styles and trends that are later reinterpreted. 

Likewise, garage owners who are not affiliated with the auto makers fear they 

will go out of business if Chapter 13 of the Copyright Act is extended to auto designs. 

They represent only 15% of the after-parts market; enhanced design protection 

has the potential to put them out of business, granting a monopoly to the auto makers. 

The Subcommittee must therefore weigh these competing interests and the consequences of establishing such a precedent. 

All of us understand the Constitutional mandate to protect the intellectual property rights of American citizens and those who fairly deserve to reap the benefits 

of their creative contributions. 

At the same time, we must also ensure that our legislative efforts do not have 

an adverse impact on economic growth for other segments of the economy. 

When we allow goods to be taken out of the marketplace and assign ownership 

rights to one individual or company, we should examine the fairness of doing so and 

the impact it will have on the market. 

We must explore the economic impact of expanding designer protection for the 

fashion and automotive industries and the related burdens placed on the Copyright 

Office and the federal court system. 

I remain open-minded on this issue and look forward to the testimony we will receive. 

Thank you, Mr. Chairman. 

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