Will Implied Licensing Unravel Copyright Protection for Fashion Designers?

Entertainment companies are constantly at odds with the legal system for a multitude of reasons; copyright being one of the main ones. Content clearance is an essential practice in the entertainment industry. To avoid liability, for any copyrighted piece of work featured in their production, producers of streaming video content must obtain a license from the designer before the production or television show airs. A designer can only grant a license, however, if the design is copyrightable, namely if the design is conceptually or physically separable from the piece of clothing on which it is displayed.

Netflix recently found itself proxy to legal trouble when James Concannon, an indie designer, filed a complaint against LEGO for using a custom design without his permission. LEGO would not have access to the design if it weren’t for a television personality on a hit Netflix show wearing it without permission. However, there is a difference between explicit and implicit permission especially in the context of copyright. LEGO argues that Concannon gave Netflix implicit permission to use his designs as well as distribute them to third parties. The issue before the court will be to determine whether this is true or not. Implied licenses are still fairly new in the legal world. Implied licenses do not require written, explicit permission from a creator but are harder to enforce. Unlike exclusive licenses, implied licenses are typically analyzed according to the business relationship between the two parties. Exclusive licenses always exist in contractual form, therefore there is less of a need for the court to evaluate a business relationship. The outcome of the Concannon case will likely clarify developing law surrounding the difference between implied and exclusive licenses.

Fashion Designers Right to Copyright Protection: Star Athletica

It is notoriously difficult for fashion designers to receive copyright protection for articles of clothing. While underlying design sketches of a garment are undoubtedly protected as a pictorial work under the Copyright Act, courts are reluctant to recognize copyright in clothing because it is a “useful article,” serving the functional purpose of clothing an individual.¹[1]See Copyright Act of 1976, 17 U.S.C. § 101 (2018). Useful articles do not receive copyright protection because functional items are seen as more suitable for patent protection.

But in the landmark copyright decision Star Athletica, LLC v. Varsity Brands, Inc., the U.S. Supreme Court held that a design on a piece of clothing enjoys copyright protection if conceptually separable from the clothing. This means that the design must be able to stand alone as a separate piece of art protectable under the Copyright Act.²[2]U.S. Copyright Office, https://www.copyright.gov/register/va-useful.html. A designer may register their copyright with the Copyright Office, but registration is not a necessary component of gaining copyright protection because copyright is created when the designer fixes their work in a tangible medium.

Star Athletica established a separability test to determine whether artistic elements of a useful article are copyrightable: “a feature incorporated into the design of a useful article is eligible for copyright protection only if the feature can be perceived as a two- or three-dimensional work of art separate from the useful article, and it would qualify as a protectable pictorial, graphic, or sculptural work, either on its own or fixed in some other tangible medium of expression, if it were imagined separately from the useful article into which it is incorporated.”³[3]Star Athletica, L.L.C. v. Varsity Brands, Inc., 137 S. Ct. 1002, 1007 (2017).

How the Concannon Case Began: Relationship with Netflix

Netflix⁴[4]Netflix, https://www.netflix.com/. found itself in a tricky legal predicament regarding a designer’s copyright when a host of its popular show, Queer Eye, wore a design on the show without first receiving explicit permission from the designer. James Concannon, an indie designer, recognized Queer Eye host Antoni Porowski wearing one of his jacket designs on the show. While Concannon had previously licensed his designs to Netflix to use on Queer Eye, Concannon had gifted the jacket at issue to Porowski without granting a license to Netflix for its use. Soon after Porowski wore Concannon’s design, LEGO⁵[5]LEGO, http://lego.com/. released a LEGO set based on Queer Eye and its personalities, featuring Porowski’s figurine wearing Concannon’s jacket design.

On December 17th, 2021, Concannon commenced an action against LEGO. In Concannon v. Lego Systems, Inc., Concannon alleged that LEGO did not have permission to use his design in its toy set. LEGO argued against Concannon’s claim, stating “by gifting the Concannon Jacket to his friend Porowski knowing that Porowski would wear the jacket on Queer Eye, Concannon was granting an ‘implied license’ to Netflix to use the jacket in any manner it pleased—including sub-licensing the work to LEGO.”⁶[6]Complaint at 12, Concannon, (No. 3:21-cv-01678).

Copyright Law: Exclusive vs. Non-exclusive Licenses

Under the Copyright Act, a copyright infringer is defined as “anyone who violates any of the exclusive rights of the copyright owner.”⁷[7]17 U.S.C. § 501. Copyright is established at the time of creation and attaches certain exclusive rights to the creator, including the right to transfer ownership of the copyright to others.⁸[8]Id. § 201. Copyright owners can grant exclusive or nonexclusive licenses to enable others to use their protected works, a practice that enables creators to profit from and publicize their works without relinquishing total ownership of their copyright.

An exclusive license is an explicit agreement made between the owner of the copyright and another person or entity, granting the licensee sole permission to exploit the copyrighted work. The licensee can reap the benefits of any exclusive right belonging to the copyright owner and provided to the licensee in the exclusive license.⁹[9]Id. § 201(d)(2). This may include the sole right to use and distribute the work if these rights are explicitly stated in the agreement. Exclusive licenses must be in writing to be valid and must specify which of the exclusive rights listed in § 106 of the Copyright Act are granted to the licensee.¹⁰[10]Id. § 204.

In contrast, nonexclusive licenses can be granted to more than one person or entity for different purposes. For example, a copyright owner may grant a nonexclusive license to one person to wear his or her design on one show and then grant another nonexclusive license to another person to wear the same design on a different show. Moreover, nonexclusive licenses do not need to be in writing to be enforceable.¹¹[11]Id.

Implied Licenses in Depth

Nonexclusive licenses can be implied by conduct, giving rise to an implied license. The Eleventh Circuit Court of Appeals decision Latimer v. Roaring Toyz, Inc. recognized implied licenses as an up and coming legal concept, which are becoming increasingly popular options as digital media expands.¹²[12]Latimer v. Roaring Toyz, Inc., 601 F.3d 1224, 1235 (11th Cir. 2010).

Implied licenses are recognized as a scenario where “when one party creates a work at another person’s request, delivers the work to that person, and intends that the person copy and distribute the work.”¹³[13]Id. Implied licenses are ambiguous, as “a [creator] thinks she has permission to use copyrighted material in the absence of a clear contract, based on surrounding facts.”¹⁴[14]Martin Adams, Implied Licenses in Copyright Law, AUTHORS ALLIANCE (May 27, 2020), https://www.authorsalliance.org/2020/05/27/implied-licenses-in-copyright-law/. This ambiguity may be especially prevalent if the two parties in conflict have an existing professional relationship. Determining whether an implied license exists is based on the facts surrounding the use of the copyrighted content. Although courts have not decided the precise circumstances under which an implied license may be found, most courts generally agree that the correct test is whether “the totality of the parties’ conduct” indicates an intent to grant permission to use the copyrighted work.¹⁵[15]Jose Luis Pelaez, Inc. v. McGraw-Hill Glob. Educ. Holdings LLC, 399 F. Supp. 3d 120, 141 (S.D.N.Y. 2019). If two parties have a successful working relationship spanning many years, they may not need a contract explicitly stating which rights the parties have pertaining to a copyright.

Implied Licensing in Concannon

Implied licensing is at the heart of the Concannon case. Due to the established business relationship between Netflix and Concannon, Concannon thought nothing of Netflix’s failure to obtain permission. According to LEGO, Concannon thus granted an implied license to Netflix. Previously, when Porowski expressed interest in wearing Concannon’s designs on the show, Netflix would send Concannon a release form to authorize the use of his designs. This release form gave Netflix sole permission for Porowski to wear the designs on the show and in any related advertising. In other words, Concannon granted Netflix an exclusive license to display his designs on multiple prior occasions.

Netflix and Concannon had discussed the use of his designs on Queer Eye for several years, specifically between 2017 and 2021.¹⁶[16]Complaint at 5, Concannon, No. 3:21-cv-01678 (D. Conn. 2021). Netflix, however, did not ask Concannon for permission to display the gifted jacket design when Porowski wore it on the show in 2018. Concannon’s positive reaction to Netflix’s unauthorized use of the design allows LEGO to argue that an implied license existed because, following the unauthorized use in 2018, Netflix continued to seek written permission from Concannon to use his designs until the filing of this suit. Given that Concannon did not raise the issue of Netflix using his jacket design without written permission, LEGO believes that Netflix did not have to formally seek Concannon’s permission to display his designs.

LEGO’s case may hinge on this assumption in its answer when it is filed since it was briefly brought up in the complaint.¹⁷[17]Id. at 12. Regardless, Concannon never explicitly allowed Netflix to sublicense his work to other major companies like LEGO. It is unclear how LEGO plans to rebut this fact. At this point in time, the complaint has yet to be answered by LEGO.

Implied Licenses for the Future

Given the frequent impracticability of obtaining permissions in advance due to the fast-paced nature of the entertainment industry, implied licenses may become more commonplace. Talent will typically act first before getting clearance from production if they really want to do something. Implied licenses may enable production to allow talent to act fast without fearing severe legal repercussions associated with the unauthorized use of another’s intellectual property.

Written by: Serena Miranda
Serena is a 2023 J.D. Candidate at Brooklyn Law School