NYLJ “Out of ‘Vogue’: Southern District Analyzes the Commercial Use of Images From ‘Runway Shows’”
By Steve Kramarsky & Jack Millson
In recent years, the concept of technological “disruption” has become so common that it is practically a punchline. Typically, it describes the fundamental transformation of an existing business by a technology that removes barriers between providers and consumers or otherwise makes commerce easier: “Uber, but for … whatever.” Investors love these kinds of technologies, and they can sometimes provide very real gains for consumers and producers as well. But they can also present substantial legal challenges that can be hard to foresee until the business is well underway.
Many of these challenges arise out of the regulatory and intellectual property rights issues effecting a purely digital business—even one that looks, on its surface very much like a physical storefront. For example, in the United States, a digital music streaming service and a terrestrial radio station playing the exact same song pay different amounts for different sets of rights, likely owned by different people or entities. The law simply does not treat physical and digital businesses the same way.
These structures of rights and regulations can be complex, but they exist—at least in theory—to ensure that content producers and providers are compensated for what they do. That includes making sure customers know what they are getting and who is providing or endorsing it.
One of the unfortunate aspects of the move to purely digital business model is that it can increase the chance that consumers will be misled, intentionally or otherwise. We all know someone who has clicked a link purporting to be from a trusted source, only land at the website of an imposter—or worse. The removal of barriers to commerce through the internet can be a boon for consumers, but given the growing complexity of web sites and apps, it can also make it very hard to know what is genuine, to distinguish content from advertising, and to know which links are endorsed by the source and which have been added by some other party.
A recent case in the Southern District of New York considered, under the Lanham Act, the extent to which the use of hyperlinks to connect a website displaying images of plaintiffs with a third-party shopping website created consumer confusion regarding the plaintiffs’ endorsement of that third-party website. Champion v. Moda Operandi, 2021 WL 3430670 (S.D.N.Y. Sept. 22, 2021).
This article first appeared in the New York Law Journal on November 24, 2021. Stephen M. Kramarsky, a member of Dewey Pegno & Kramarsky, focuses on complex commercial and intellectual property litigation. Jack Millson is an associate at the firm.