Val Colbert: Who’s got the button?

A great all-around IP question is raised by Marty Schwimmer.  [UPDATE:   Note that the link to the words “sites like this one is now to a pretty much dead page.]

Here’s an interesting fact pattern. Who is the source of the jewelry pictured above? This jeweler. Jewelry companies purchase luxury clothes and ‘re-purpose’ the buttons (bearing the logo) into jewelry, and sell them on sites like this one. [Button Jewelry by] Val Colbert[, which manufactures this,] has brought a [declaratory judgment] action against Chanel.

Here is a post from Prof Goldman’s blog on the First Sale doctrine with several useful links.

The button designs might be copyrightable, too. If you’re so inclined, you can begin your reading with Lee v A.R.T.

This is law-school-exam-quality stuff.  What’s the role of a potential dilution claim here?

Let’s do some issue-spotting, then.  Here’s the money quote from the Goldman link:

In our article, Mr. Wilson and I argue that, in the context of the Internet secondary market, whether the distributor is affiliated with the manufacturer is irrelevant as long as the goods are genuine. Courts should apply a presumption of no affiliation between the reseller and the manufacturer, and for any successful Lanham Act claim, actual deception regarding this affiliation should be required. We also propose the elimination of initial interest confusion as a cause of action under the Lanham Act, as well as legislatively strengthening trademark first sale and nominative fair use doctrines, so that making use of those defenses does not create a higher bar to scale when the resale occurs online versus in a brick-and-mortar setting.

Of course, they had me at “no chance of affiliation” but I’ll take a double “kill initial interest confusion and make it practical to defend infringement claims” chaser any time.

The labels we apply to this business can be confusing, and this is true whether we analyze the problem via copyright or via trademark.  The claim of the Big Brand Equity player — in this case, Chanel — would hit these points, I imagine:

1. You didn’t build that — Chanel did.  Your jewelry confection would have no value to the consumer and produce no revenue to you if it didn’t integrate not just our product but all the brand messages [trademark] and originality [copyright] Chanel has invested in that object.
2. You say the consumer won’t be confused [classic trademark] and won’t believe that Chanel has approved, endorsed or is affiliated with [latter-day trademark] you or your product, but how can you say that in an era when the extent of IP enforcement rights are so well articulated?
3. Finally, your use of our trademark is in connection with fashion-related merchandise.  Your “repurposing” argument, Val Colbert, would never impress us — but it would be bad enough if you were repurposing buttons from our clothes on goods that are unrelated to to our market, if such a thing exists.  We don’t have to even figure out if such a thing exists, however, because you’ve hardly “repurposed” at all.  This stuff is right in our breadbasket, and if anyone’s going to make a Chanel bracelet it’s going to be Chanel… which we already do.

The responses?  Maybe Val Colbert says this:

1. You built it, all right, and you did a nice job doing so.  Then we, or our predecessor, bought it.  You got paid, and we’ve got the buttons. Thanks!
2. Your consumer expectations argument proves too much,  It would essentially bring the line of where consumers will or won’t be confused to infinity.  Decades of brand overreaching, even where it has been successful, shouldn’t effect a change in the law.
3. You’re forgetting about the heart of the first sale doctrine, Chanel.  That doctrine is not in the least offended by use of an IP-encrusted doodad in the same or similar category of goods by a subsequent purchaser as by the original markholder and seller; in fact, it’s more or less the premise of the doctrine.  So button it up!

Great pickup, great issues.

Despite my normal orientation, however, on both the law and the litigation reality of it — given, after all, that the Second Circuit and Google aren’t involved — I think Chanel wins this one.

I’m not even sure I wish I were wrong.

UPDATE:  Well, we’ll never know!