Suits Are Suddenly Hot Item for Retailer

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Forever 21 has gained the attention of shoppers for its trendy fashions, but now it’s beginning to receive unwanted attention from designers, manufacturers and retailers who claim that its popular wares mirror theirs too closely.


Since January, the Los Angeles-based retailer, which sells casual women’s and men’s clothing under its private label, has been sued at least 22 times in Los Angeles and New York federal courts for alleged violations of U.S. copyright law, according to a Web site that tracks court cases.


The cases which allege the retailer has copied prints, logos and specific, unique garment designs have been brought by an assortment of famous and lesser-known figures in the fashion world, from designer Diane Von Furstenberg, to singer Gwen Stefani to retail competitors such as Bebe.


The lawsuits gained notoriety when designer Anna Sui, who has sued the retailer, stuffed t-shirts that included caricatures of Forever 21 owners Do Won “Don” Chang and his wife, Jin Sook Chang, in the goody bags she distributed at her New York Fashion Week show. Stripped across the front of the shirts were the words, “Forever Wanted: Don Cassidy & the Sundance Jin, Reward $21,000,” and at the bottom read, “Thou shalt not steal’, Exodus 20:15,” apparently in reference to the Changs’ Christian faith.


Forever 21 Senior Vice President Christopher Lee would not comment about specific litigation, but acknowledged that the company may have sold some garments with copied designs.


“We are a retailer. We buy from the market hundreds of styles, and some slip through the crack,” said Lee, in a telephone interview. “It is not an excuse, but because of the speed of the market we go through, we can’t check to see if everything is registered copyright.”


The Changs declined to comment.


Forever 21, which has 400 outlets mostly in malls, is a leading “fast fashion” retailer. It essentially sells knock offs of popular fashions on a fast turn-around basis, shortly after being seen on runways. The company also sells knock off clothing that is popular at retailer competitors.


This is not the first time that Forever 21 has run into problems because of similarities between its designs and others on the market. It was sued eight times last year according to the Web site called Justia Federal District Court Filings & Docket. But the number of suits has been rising along with the company’s revenues.


Forever 21 was founded 23 years ago but has seen explosive growth after switching to the fast-fashion format about a decade ago. It has doubled its store base since 2005 and had estimated sales of $1.04 billion in 2006, up from about $924 million in 2005. It ranks No. 20 on the Business Journal’s list of largest private companies in Los Angeles County. (The List begins on Page 55.)


Douglas Lipstone, an intellectual property lawyer at Buchalter Nemer, attributes the rise in litigation directly to the retailer’s success.


“Forever 21 is out there in the marketplace and they make no bones about what they do. They don’t flaunt it or stick their tongue out at anyone, but their model has proven to be successful and growing. As I tell a lot of clients, you know you’ve done well when you become a target,” he said.


“When the market is doing well people view the threat of litigation as a profit source. They are willing to go through it because they might get some money out of it.”


Buchalter Nemer has represented Forever 21 suppliers that have been accused of copyright violations, but also has represented companies in the past that have sued Forever 21, Lipstone said.



Celebrity litigants

Among the pending litigation is a New York case brought in March by famous designer Diane Von Furstenberg, who accused Forever 21 of copying her $325 “Cerisier” dress with its “Sabrina” smock dress, which sells for under $40.


And Stefani, who has a second career as a fashion designer, claimed that Forever 21 stole a design from her Harajuku Lovers Line, using a heart logo, and changing “Harajuku” to “Forever” and “Lovers” to “Love.” The lawsuit claimed the details were “virtually indistinguishable,” and “confusingly similar.”


One local company, L.A. Printex Industries Inc., which makes textile fabrics for the apparel industry, sued Forever 21 in May in Los Angeles. It also has sued more than a dozen other retailers this year including Ross Stores, Mervyn’s, Burlington Coat Factor and Deb Shops for allegedly ripping off its designs.


Steve Doniger, an outside attorney who has represented the company in copyright lawsuits, said Printex usually reaches out-of-court settlements with most of the defendants and hopes to reach one with Forever 21.


“It’s a purely domestic company. In the U.S. they are paying an average worker $1,500 a week,” said Doniger, who is also representing United Fabrics International in a case against Forever 21. “When someone else takes their design and ships it off to China where people are making $50 a week and then ships them back for sale, they can’t compete.”


Doniger said the copyright cases are usually settled for tens of thousands dollars each.


Those kinds of settlements would indicate that the number of lawsuits Forever 21 faces would not pose a serious financial threat, and instead may be viewed by the company as a cost of doing business.


Indeed, Ilse Metchek, executive director of the California Fashion Association, said Forever 21 and other big players in the fast fashion industry, such as Stockholm-based H & M;, have revolutionized the fashion industry with their success.


Now, instead of two seasons a year, customers can visit a fast fashion outlet and see fresh clothing every 10 weeks or so.


“They find what is hot in the retail market and they take it as a trend. No one says that every garment manufacturer or retailer is a creative genius. They are adapting that which is already in stores,” she said. “They re-make what is already hot at retail.”


However, if the lawsuits won’t materially affect Forever 21, they may result in some changes to its business practices.


Lee said that when the retailer has been named in previous lawsuits it has investigated to see if there was a copyright violation and has asked its manufacturers to stop any illegal practices.


“We are being named in suits, but every time we ask the manufacturers to step up do what’s right and resolve the issue,” said Lee. “We work very, very hard to provide a right style, right cut, right fit at a very good price.”

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