Written by: Steve Glista
Researched by: Darci G. Van Duzer
Edited by: Peter Fehrs, Lauren E. Trent

Global warming may be a fact of life, but fashion still changes with the seasons. Consumers of high-fashion clothing continuously demand new looks from designers like Armani, Chanel, and Christian Dior. A buyer who has spent thousands on a single item of clothing would not tolerate the embarrassment of showing up at a party in the same dress as the hostess. To prevent such faux pas from ruining anyone’s night, most couture designs are made in limited quantities and at exorbitant prices. Unfortunately, not even those precautions are guaranteed to avoid the problem. New York designer Oscar De La Renta crafted an $8,500 crimson gown and several socialites still managed to wear it to the same event in 2006.

For those of us who aspire to keep up with the latest trends, but are forced to hang our fashion sense from the clearance rack, there is a ray of hope: retail operations like Forever21 and PinkIce work in partnership with knockoff creators like Seema Anand to imitate each new design as soon as it crosses the runways of Paris or Milan. The imitators are so quick that sometimes the copied designs hit store shelves before the originals!

The dispute between designers and copycats has inspired scholarly papers and textbook chapters. A series of blogs have sprung up to chronicle the escalating friction between high-fashion designers and the retailers beating them at their own game. Widespread copying has forced some designers to turn to the courts to prevent the imitations from stealing their business. Anna Sui, for example, is suing Forever21 in New York federal court for “blatant and intentional” copying of “numerous” pieces of women’s apparel. She’s asking the court for lost profits and an order preventing Forever21 from imitating her work in the future. Can Ms. Sui rely on copyright law to stop Forever21?
Read the rest of this entry »

Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or a poor investment opportunity. This week’s word is the latter.

Written by Eric Wasik

Trophies, bridges, airports, or even an elementary school - all good things to have named after you. Two things you never want named after you are diseases and financial schemes: the former because you likely didn’t survive the eponymous disease and the latter because you likely got caught. Such was the fate of Charles Ponzi. An enterprising chap from Italy, Ponzi discovered a loophole of sorts in the international postage system. A person could purchase an international postal reply coupon (IRC), which acted as a kind of self-addressed stamped envelope, allowing the recipient to send a reply without having to pay the postage themselves. If the country you are sending the letter to was a member of the Universal Postal Union, the IRC could be exchanged for that country’s stamps to send the reply internationally. Ponzi discovered that the decreased cost of postage in his native Italy could allow IRCs to be bought at a lower price and exchanged for the more expensive American postage. Ponzi solicited people to invest the money needed to buy large amounts of IRCs with the promise of a return on their investment. He even gave them security notes to show their investment in his “company.”

Ponzi did pay off some of the first investor notes, but only by using the money he got from additional investors — not capital earned from his grand postage scheme. The payment of some initial notes, of course, created the appearance of a successful financial operation, enticing more investors. Ponzi never imported the IRCs and never paid many of the later notes. Eventually, Ponzi’s public relations agent discovered the impossibility of Ponzi’s stamp promises and sold his story to the Boston Post. A week later, Ponzi was in the hands of authorities, his scheme costing thousands of people millions of dollars.

Today, a Ponzi scheme can best be described as an investment structure that uses further investor capital to pay dividends to initial investors, creating the false impression of actual profit. By their nature, the scheme’s bubble will always burst, leaving some investors with without a profit and without their initial capital. The investor’s only hope of getting their money back is a suit against the scheme ringleader (if he or she hasn’t already skipped town for the Bahamas), likely for breach of contract or securities fraud. Judgments won often go unpaid by the schemer, who likely owes money to other investors. Duped investors are left without much to their name, and curse Ponzi’s.

Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or makes a great insult. This week’s word is the latter.

Written by: J. Aaron Landau

As any first year law student  struggling with the “reasonable person standard” can tell you, the last thing the legal world needs is more imaginative standards and tests. One novel concept, however, might be an exception: the charmingly named “moron in a hurry.” Like the “reasonable person,” the “moron in a hurry” is a legal fiction employed to represent the decisions someone might make under a given set of circumstances. That “someone,” however, isn’t reasonably prudent at all. Instead, it’s an imaginary conception of the least informed, least diligent consumer in a given market - and it’s making the transition from informal phrase to bona fide legal concept.

The phrase was first used in Morning Star Cooperative v. Express Newspapers in 1978. In that case, the People’s Press Printing Society sued Express Newspapers, alleging that Express’s tawdry new tabloid “The Daily Star” would adversely affect sales of their own Communist daily, “The Morning Star.” The Morning Star’s publisher argued that Londoners seeking to keep up on the daily news of the Communist Party might accidentally pick up the similarly-named celebrity gossip rag instead, besmirching the Morning Star’s good name and confusing its readers. 

The High Court of England rejected the claim, holding that “only a moron in a hurry would be misled” into confusing the two magazines. Today the two continue to publish under their respective titles, presumably with little confusion among readers.

In the U.S., the process of determining trademark infringement is largely similar. If Joe McDonald were to open “McDonald’s Sandwiches” in a market where McDonald’s Hamburgers also does business, he’d likely be sued for trademark infringement, given the “likelihood of confusion” that consumers would believe his sandwiches originated from the fast-food chain. By the same token, McDonald’s Hardware can operate without fear of legal action, since no consumer is likely to believe the company has suddenly branched out from hamburgers to hammers and nails.

In the grey area between those two extremes, the logic of the “moron in a hurry” test emerges. If there’s some possibility of confusion between two trademarks, but the only confused party would be a less-than-prudent consumer, the defendant’s mark should rightfully stand. As a Canadian court recently held, “it is not sufficient that the only confusion would be to a very small, unobservant section of society … [or] if the only person who would be misled was a ‘moron in a hurry.’” In 2006, Apple Computer used the same standard in successfully defending against the Beatles record label Apple Corps in the courts of England. Though the phrase hasn’t yet been employed by a federal court in the U.S., the concept is well-established: any “likelihood of confusion” isn’t determined upon the basis of just any consumer, but rather a reasonably prudent one. It’s only a matter of time before an artful attorney brings the “moron in a hurry” to the U.S. courts - and brings a chuckle to struggling law students.

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Written by: Rachel Sowray
Edited by: Stefanie Herrington, J. Aaron Landau, Amy E. Seely

The capitalist society of the United States glamorizes having money, and lots of it. The media covers the beautiful homes, jewelry, and entire islands owned by celebrities and millionaires around the world, and these stories get airtime because everyone dreams of living that life, too. The glitz and glamor of Las Vegas and other casino cities draw millions of people each year to see the splendor and — more importantly — gamble. The riches are sexy and exciting, so it’s no surprise many dream of hitting it big. Becoming a millionaire by just putting some money on the table, having lady luck smile down, and playing the odds against the casino’s advantage is glamorized even by Hollywood movies like “21.” Besides, who doesn’t want to have the celebrity lifestyle Kate Bosworth and Kevin Spacey embody?

Gambling isn’t just luck, though. A big part is being smart and knowing the odds so you don’t lose your shirt… but how far can a person go? Count cards? Work with friends? Use wireless earpieces to communicate about which tables are “hot”? How much can a player tip the odds in his or her favor before the casino can complain or even remove that player from the premises? Read the rest of this entry »

Each week we select a legal term or phrase that’s commonly misunderstood, interesting, or used by bank robbers. This week’s word is the latter.

Written by: Jeff W. Richards

Crime dramas frequently utilize the trope of a person reluctantly forced to commit heinous crimes because the criminal mastermind has taken his family hostage. The crimes may vary from simple burglary to (in the darker shows) murders or assassinations. This forces the person to live on the wrong side of the law, seeking to rescue his family and clear his name. But how can he ever be safe from the law after committing such dark deeds?

The answer is the concept of duress. Duress is an affirmative defense in both criminal and civil law.  The defendant admits to the court that the basis for the lawsuit is true. He did commit that crime, or sign that contract he is now accused of breaking… but! In his defense, he argues that he was forced to do such things by some other person. The defendant didn’t want to commit crimes or break contracts, but he had no choice due to another’s wrongdoing.

Duress is an absolute defense, meaning that if the court finds it caused the defendant’s actions, he will be cleared. Unfortunately, showing duress can be difficult. People are pressured in many ways without being subject to duress. To rise to the level that can clear a name, the coercion must be sufficient to overwhelm an ordinary person’s force of will. Typically, this means immediate threats of bodily harm to one’s self or loved ones. The threat must also be of such immediacy that the defendant has no other course of action available to him (a gun to the head, or a knife to a brother’s throat).

It is important that the duress both subjectively and objectively overwhelmed the defendant. If the defendant was not actually overwhelmed, or the court does not think an ordinary person would be overwhelmed, the defense fails.

This claim to the court is about equivalent to telling mom “he made me do it,” and will likely be met with the same scrutiny. It’d better be true duress if you expect any leniency from the court, and even that might not slip past “mom.”