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SEPHORA’S CHALLENGE TO FEDERATED, MACY’S SEEN AS UPHILL FIGHT.

WWD August 13, 1999 | Young, Vicki M.

NEW YORK — When Sephora took the unusual step of filing a trade dress infringement suit against Federated and Macy’s West on Wednesday, it became the latest case in a line of high-profile intellectual property disputes.

As reported, Sephora charged Federated and Macy’s West with copying Sephora’s store layout and shopping experience. The charges concern Macy’s new Souson freestanding, open-sell fragrance and cosmetics stores, as well as recently renovated beauty departments in Macy’s stores in California.

Sephora is seeking a preliminary injunction to bar Macy’s from opening any new Souson freestanding stores or opening renovated beauty departments in other Macy’s stores in California.

Sephora is also seeking a permanent injunction to eliminate every aspect of the allegedly infringing trade dress features, and unspecified damages.

Experts agree that winning the case will not be easy for Sephora. According to prior court decisions, the plaintiff — Sephora in this case — must show that its overall look or product configuration is either “inherently distinctive” or has acquired a “secondary meaning.” That means that through outside factors such as advertising and length of use, consumers identify the style or design with a single source, which would be Sephora. see here sephora coupon code

In addition, the plaintiff must prove that consumers are likely to be confused between the original and the knockoff.

According to Theodore C. Max, a litigator specializing in intellectual property disputes at Phillips Nizer Benjamin Krim & Ballon, “If Sephora can show an intent by the defendants to wrongfully take and copy the [Sephora concept], that may be strong evidence of trade dress infringement.” He noted that showing intent could include the allegations by Sephora that the defendants attempted to photograph and sketch the Sephora store layout.

Max said that Sephora will likely try to show bad faith by the defendants, capitalization on the reputation of Sephora and confusion between the two store concepts. He added that Sephora would need to show at least a strong likelihood of consumer confusion.

Joe Dreitler, a trademark litigator at Vorys, Sater, Seymour & Pease in Columbus, Ohio, observed: “Sephora couldn’t have picked a better [court] circuit to file its lawsuit.” He was referring to the filing in a San Francisco federal district court, which is part of the Ninth Circuit Court of Appeals. He explained that this appellate court has already dealt with the issue of trade dress infringement in cases involving layout and design in restaurants.

He pointed to one case in which a restaurant had a particular layout which contributed to the way in which patrons selected their meals. The federal appellate court held that the restaurant’s “trade dress” was protectible and competing restaurants would not be allowed to copy the format.

Dreitler added, “One interesting question is will the [defendants] be able to show that there are other retailers that do the same thing?” He noted that even though Sephora had first established its concept overseas, that might not help prove a U.S. claim. “The issue under U.S. trademark law is who has the U.S. rights first,” he explained, adding that Sephora would need to show that it was first to use the concept in the U.S.” As the Sephora suit has shown, companies are becoming increasingly protective of their creativity as the battle for market share gets more intense. And the issue of confusion in the marketplace is crucial for companies because quality and image issues can hurt a company’s reputation in a way that can’t be measured.

Recent cases include the Calvin Klein suit against Ralph Lauren, charging that the Ralph Lauren Romance bottle was a copy of Calvin Klein Eternity; the MAC suit against Tony & Tina for patent infringement in the design of a lipstick tube; and the Abercrombie & Fitch case against American Eagle Outfitters over American Eagle’s alleged copying of the Abercrombie brand and business practices.

In two of the three cases, the defendant prevailed. Calvin Klein lost its battle for a preliminary injunction because the judge ruled that Klein “failed to establish a likelihood of confusion” by consumers over the two bottles, and Klein is still considering its appeal options.

Abercrombie lost its battle when a judge decided that the elements A&F complained about could not be protected because they were generic and descriptive, and that forbidding other clothing retailers from adopting similar methods of advertising would be “unduly anti-competitive.” Abercrombie said it will “aggressively appeal” the decision.

As for the Tony & Tina case, it’s still pending.

Meanwhile, Sephora — interestingly, one of the most copied retail concepts in Europe — has already filed court documents in support of their preliminary injunction request. One document is an affidavit filed by Sephora’s expert witness, Bernd H. Schmitt.

Schmitt said in the affidavit that sensory experiences, or aesthetics, can be used to build a distinct image and identity for a corporation and its brands. Those experiences, he pointed out, “result in multiple benefits for the company in the marketplace such as increased customer loyalty, premium pricing, and product and brand differentiation.” Style, Schmitt continued, is the manner of expression.

“Yet, customers perceive these individual design elements and attributes as a whole, and this whole — the style — is more than the sum of the parts. Therefore, it is not necessary that all elements are identical (e.g., exactly the same color or shape) to produce the same style impression,” he noted.

He also noted in the affidavit that there are five experiences that are similarly used in the Sephora and Souson store concepts: sense, feel, think, act and relate. sephoracouponcodenow.com sephora coupon code

Schmitt explained: “Sephora stores result in holistic experiences…The service is unobtrusive but helpful (FEEL). Because the Sephora stores are a new way of selling cosmetics and fragrances, Sephora gets the customers to think creatively about how to select and buy cosmetics (THINK). Sephora stores provide the selling environment for a modern lifestyle focused on beauty, health and relaxation (ACT). The name symbolism and the store design evoke a European, and specifically, French approach to selling these products (RELATE).” He continued: “Like Sephora, the Souson stores result in holistic experiences…The approach of Souson’s salespeople is relatively unobtrusive and helpful (FEEL). By imitating Sephora’s new way of selling cosmetics and fragrances, Souson gets customers to think creatively about how they select and buy cosmetics (THINK). Like Sephora, Souson stores provide a selling environment for a modern lifestyle focused on beauty, health and relaxation (ACT). The Souson name and store design evoke, just like with Sephora, a European, and specifically, French approach to selling these products (RELATE).” He acknowledged that there are certain differences between the competing retail stores, but pointed out that what matters is how the individual elements are “used as a whole to create a certain style of store and customer impression and to induce a certain customer experience.” Schmitt also contended that Macy’s had other options available to them. He pointed to Shiseido’s 5S stores as an example.

He explained: “Like Sephora, the 5S store also provides a holistic experience; like Sephora, the store and section is also quite different from the typical cosmetics counter in a department store; indeed, one might argue that 5S, like Sephora, redefines the selling of cosmetics and the typical cosmetics store experience.” “However,” Schmitt added, “the actual design and implementation of the experience does not imitate Sephora. The 5S store in New York uses high ceilings and pale wood floors. Products are displayed, in an art-like fashion, on individual round counters with bar stools in front of them. There are stand-alone display racks on which products are openly displayed. Video screens play serene images of nature (rather than product display and product information) and are used for atmospheric reasons….There is an emphasis on recycling and on environmental concerns throughout the store.” Schmitt concluded, “Macy’s could have easily used many other design options that would not have infringed on Sephora’s distinctive design, identity and experience, an approach that would have avoided customer confusion.” Officials from both Federated and Sephora declined to comment.

Young, Vicki M.