Fast Secrets: Trade Secrets In The Fashion Industry

Document Type

Book Chapter

Publication Date

2023

Abstract

It is extremely difficult to prevent the copying of fashion designs once the products that embody the design are sold to the public. The design of a skirt, the shape of a handbag, a new style of shoe—these are classic examples of “self-disclosing” innovations. Others can freely copy them upon release, absent patents, copyrights, or some other form of exclusive right. However, this chapter reveals that, under modern trade secret law, fashion designs, styles, and trends can be protected as trade secrets before they are released to the public. Fashion designs are “fast” secrets. They do not last forever or even for very long. But they are an essential form of intellectual property. The chapter shows that, in practice, fashion houses, such as J. Crew and Nike, have sued their own employees for misappropriation of trade secrets and breach of contract after they left the job, asserting that these employees threatened to take valuable fashion design secrets to competitors. One might wonder why fashion houses bother to bring these lawsuits. If a design will inevitably be disclosed to the public anyway, why incur the cost of litigation to protect it for such a short period of time? The chapter identifies two reasons. First, fashion houses can use trade secret law to secure their first mover advantage. They can extend the period in which they can charge higher prices and retain exclusivity. Second, fashion houses can use trade secret law to protect their goodwill. If competitors obtain a fashion house’s designs before they are released, and then release them first under the competitor’s own brand, consumers are likely to believe, falsely, that the competitor is the design’s creator. The U.S. Supreme Court has indicated that these “reverse passing off” claims are not available under trademark law in these circumstances. But trade secret law provides a range of remedies to prevent unauthorized disclosure of information and to restore the status quo when information is prematurely released by someone other than its creator. Trade secret law can help ensure consumers are not misled as to the source of fashion designs and protect fashion houses’ status as design innovators.

Publication Title

Handbook of Fashion Law

Comments

Editors:

Routledge, Eds. Irene Calboli and Eleonora Rosati

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