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USFIA Fashion Forward: San Francisco

USFIA Fashion Forward: San Francisco

February 16, 2017

Join the United States Fashion Industry Association for a full-day discussion on the future of trade policy, compliance, and supply chain…

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State of the Industry Virtual Townhall

State of the Industry Virtual Townhall

January 5, 2017

The United States Fashion Industry Association (USFIA) is kicking off 2017 with a members-only, townhall-style webinar to discuss key trade…

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Recap: DiplomacyXDesign

Recap: DiplomacyXDesign

State Department & ELLE Promote Fashion & Diplomacy

“Fashion can bridge the gap between seemingly great divides in the way no meeting can,” said Ambassador Peter A. Selfridge,…

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USFIA Third Annual Fashion Industry Benchmarking Study

USFIA Third Annual Fashion Industry Benchmarking Study

Industry Executives Optimistic Despite Uncertainties, Rank Market Competition Top Challenge

In June 2016, the United States Fashion Industry Association (USFIA) released the third annual Fashion Industry Benchmarking Study, a survey of…

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About Us

The United States Fashion Industry Association (USFIA) represents the fashion industry: textile and apparel brands, retailers, importers, and wholesalers based in the United States and doing business globally. Founded in 1989 as the United States Association of Importers of Textiles & Apparel with the goal of eliminating the global apparel quota system, USFIA now works to eliminate the tariff and non-tariff barriers that impede the industry’s ability to trade freely and create economic opportunities in the United States and abroad.

Headquartered in Washington, D.C., USFIA is the most respected voice for the fashion industry in front of the U.S. government as well as international governments and stakeholders. With constant, two-way communication, USFIA staff and counsel serve as the eyes and ears of our members in Washington and around the world, enabling them to stay ahead of the regulatory challenges of today and tomorrow. Through our publications, educational events, and networking opportunities, USFIA also connects with key stakeholders across the value chain including U.S. and international service providers, suppliers, and industry groups.

USFIA's Premier Partner

PwC

The United States Fashion Industry Association is pleased to announce that PwC has been named our Premier Partner for 2016/2017. PwC will continue to help us deliver timely, critical information to global brands and retailers as well as develop innovative educational and networking events to help advance the industry’s goals. Click here to read more about the partnership and our activities.

USFIA's Additional Partners

The United States Fashion Industry Association (USFIA) has two additional major partners for 2016/2017: Innovation Partner Amber Road and Customs Broker Partner GEODIS. Click here to read more about these partners and our activities.

Supreme Court Gets Fashionable; China In No Hurry on Currency Issue

By Brenda A. Jacobs and Pete Kasperowicz, Sidley Austin LLP

In this TDM:


Supreme Court Gets Fashionable

NFL Fumbles Antitrust Exemption for Headwear IP License,
But Supreme Court Withholds Touchdown for Apparel Maker

The U.S. Supreme Court unanimously ruled today that the National Football League is not a single entity immune from the antitrust laws when it comes to giving a manufacturer or brand an exclusive license to produce merchandise for all of the teams in the league.  It will be up to a district court, however, to decide whether the collective action of the teams is reasonable and therefore permissible under the antitrust laws.

The case was brought by American Needle, which until 2000 was one of a number of non-exclusive licensees permitted to manufacture NFL apparel.  When the league, through National Football League Properties (NFLP), an entity created in 1963 "to develop, license and market" the IP of the 32 individual teams, decided to grant Reebok an exclusive 10 year license, and canceled its contract with American Needle, the company sued, charging that the Reebok deal was an illegal restraint of trade in violation of the Sherman Antitrust Act.  American Needle – which was just one of many companies that saw their contracts canceled -- argued that the NFL and NFLP were in violation of Section 1 of the Sherman Act, which makes illegal "every contract, combination in the form of a trust or otherwise, or, conspiracy, in restraint of trade."  The NFL and NFLP, and virtually every other major sports league from soccer to basketball to hockey to stock car racing, countered that the licensing company was incapable of conspiring within the meaning of Section 1 because it was a single entity.

 The Supreme Court refused to simply accept the NFLP as a single entity, insisting upon looking at "substance rather than form."  The issue, said the Supreme Court, "is whether the agreement [by the NFLP] joins together ‘independent centers of decisionmaking.' . . . If it does, the entities are capable of conspiring under Section 1, and the court must decide whether the restraint of trade is an unreasonable and therefore illegal one."  The Supreme Court concluded that the conduct of the 32 individual teams is subject to Section 1 "at least with regards to its marketing of property owned by the separate teams": 

To a firm making hats, the Saints and the Colts are two potentially competing suppliers of valuable trademarks.  When each NFL team licenses its intellectual property, it is not pursuing the "common interests of the whole" league but is instead pursuing interests of each "corporation itself."  . . . Decisions by NFL teams to license their separately owned trademarks collectively and to only one vendor are decisions that "depriv[e] the marketplace of independent centers of decisionmaking" . . . and therefore of actual or potential competition.

While the Supreme Court concluded that the decisions by the NFLP regarding the teams' separately owned IP constitute "concerted action" for purposes of the antitrust law, with the NFLP considered an "instrumentality" of the teams, it remanded the case back to the lower court for an analysis of whether the restraint activity is permissible under a "Rule of Reason."  That is a flexible test under which the legality of a restraint is judged by whether it "merely regulates and perhaps thereby promotes competition or whether it is such as may suppress or even destroy competition."  That battle, which will focus largely on the facts, means that American Needle may have a long way to go to get over the goal line.

Watch Out For Copyright Decision

It is also worth noting that the Supreme Court has agreed to consider yet another issue of direct relevance to the fashion industry, this time involving gray market goods.  Costco Wholesale Corp. appealed to the Supreme Court when the Ninth Circuit Court of Appeals ruled that Costco had infringed the copyright of Omega SA by importing into the U.S. and distributing watches in the U.S. that had been manufactured abroad.  The watches bear Omega's  U.S. copyrighted "Omega Globe Design" on their underside. 

Under copyright law, a copyright holder's rights extend only to the first sale of a copyrighted good – the so called "first sale doctrine."   At issue is what was the first sale for these U.S. copyrighted goods.  Costco says the first sale occurred when it legally purchased the watches outside the U.S., which would "exhaust" Omega's copyright claim.  Omega, however, argues that the first sale doctrine does not provide a defense against the infringement because the watches were made overseas; that would make Costco's sale of the watches to its customers the first sale, which would be unauthorized.   

The Supreme Court has previously held that the first sale doctrine provides a defense where U.S. manufactured goods were first sold overseas and then imported back into the United States without the authorization of the copyright owner.  Now it will decide whether there same defense applies to foreign manufactured goods bearing a U.S. copyright.


China Still Indicating it Will Move at its Own Pace on Currency

Secretary of State Hillary Clinton and Secretary of the Treasury Timothy Geithner appear unlikely to bring back any readily apparent victories from Beijing. On the first day of the U.S.-China Strategic and Economic Dialogue (S&ED) meetings in Beijing, Chinese officials continued to indicate that they will move on currency reforms at their own pace, despite growing pressure in the U.S. for an immediate appreciation of the renminbi.

In his opening statement of the May 24-25 meetings, Chinese President Hu Jintao said China would only make gradual process on currency, and did not promise when this move might take place. Hu said China would "steadily advance" reform of its exchange rate policy, "under the principle of independent decision-making, controllability and gradual progress."

China is not expected to announce any currency reforms during the S&ED meetings, since China is reluctant to give the impression that reform is due to U.S. pressure. Additionally, China's recent agreement to consider an Iran sanctions resolution in the United Nations is widely seen as something that will make it harder for the U.S. to pressure China on currency. China's cooperation on Iran may also explain the overall lower expectations for any progress with China this year on economic issues, although China in recent weeks did appear to scale back an innovation program that the U.S. argued favored Chinese companies.

In his opening remarks, Geithner did not refer to currency specifically, but he said the U.S. and China share the goal of ensuring global economic stability. The Administration has long argued that China can contribute to stability by unpegging the renminbi from the dollar, which would give China more control over its interest rates. In a possible reference to currency policy, Geithner added that countries need to ensure competition on a level playing field.