What Do You Think?

I saw this article last week and it raised some interesting questions. And here.

An arrest was made at Fook On Sing Funeral Supplies in Chinatown in Manhattan. Wing Sun Mak was charged with criminal copyright infringement. The store sells cardboard cutouts – such as mansions, televisions and Louis Vuitton and Burberry luxury goods. These items are given as symbolic gifts and burned at Chinese funerals.

According to the news report, the arrest report claims the defendant was observed selling counterfeit handbags with Burberry and Louis Vuitton trademarks. I fail to follow how the defendant was charged with criminal copyright infringement on these grounds.-- unless the trademarks are also copyrighted (which is possible under certain instances). However, apparently, the defendant also sold handbags and loafers that had similar print designs to Louis Vuitton and Gucci. (It is possible to copyright fabric designs.)

The problem arises where the buyer clearly knows the goods are not real but are merely made of cardboard. I wonder if the store sells the goods with a luxury brand name or design for more than a more generic cardboard cutout. Although, it also raises the question: Why couldn’t the store simply sell the cardboard versions without the copyrighted material and/or trademark?

It raises an interesting question on fair use. Under the four factor test in Section 107 of the Copyright Act, courts consider: (1) the purpose and character of the use, including whether such use is of a commercial nature or is for nonprofit educational purposes; (2) the nature of the copyrighted work; (3) the amount and substantiality of the portion used in relation to the copyrighted work as a whole; and (4) the effect of the use upon the potential market for or value of the copyrighted work.

Presuming the copyright infringement is based on the fabric design, it would seem that there is a commercial use of the copyrighted work by the funeral supply store, although its use would not necessarily be the same commercial use as the actual goods bearing the copyrighted works. Under factor #3, the funeral supply store would be attempting to take the copyrighted work as a whole. But factor #4 would favor the defendant. Selling a cardboard cutout is not likely to effect the market for Gucci or Louis Vuitton goods bearing copyrighted works. When viewed in light of the purpose of burning the cardboard cutouts as part of a funeral ritual, it becomes more apparent that defendant’s actions should not affect sales of copyrighted luxury goods.

At the same time, it seems unfair for these businesses to capitalize on the goodwill and artistry of others without remuneration. I come back to the fact that these designs and trademarks do not have to appear on the cardboard cutouts to sell them but it seems that the use of these materials must have additional commercial than those without the designs and trademarks. While a close question, I think this factor weighs more heavily in not allowing the fair use defense to apply.

What do you think?