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LLSMA

Luggage and Leather Goods

Manufacturers of America, Inc. 350 Fifth Avenue

New York, New York 10118 212:695-2340

June 22, 1988

STATEMENT OF THE LUGGAGE AND LEATHER GOODS MANUFACTURERS
OF AMERICA, INC. ON THE NEED TO ENACT DESIGN
PROTECTION LEGISLATION

The Luggage and Leather Goods Manufacturers of America, Inc. (LLGMA) is grateful to Chairman Kastenmeier for holding hearings on H.R. 1179, legislation to protect the designs of manufactured goods. As several U.S. luggage companies have sadly experienced firsthand, there is a gaping hole in U.S. intellectual property laws to protect the industrial designs of their products.

Design piracy is a growing problem which hurts U.S. companies and U.S. competitiveness. American luggage companies invest hundreds-of-thousands of dollars each year to develop new designs, and in far too many instances they are robbed of the rewards of these efforts by copyists. Without adequate redress, U.S. producers will lack both the resources and the desire to innovate or develop new designs. Consumers are also deceived and hurt in this process when they buy look-alike products, expecting quality, and getting instead products that are often of inferior components and construction. Thus, we strongly urge Congress to act in this area. It is of the utmost importance to the continued competitiveness of U.S. luggage and leather goods producers.

The Typeface Design Coalition

c/o High Technology Solutions, P.Q. Box 3426. Poughkeepsie, New York 12603 Telephone 914/452-3000, ext. 275 Telefax 914/454-1985

FOR IMMEDIATE RELEASE

Typeface Design Coalition Endorses
Industrial Design Bill
June 22, 1988

Today the Typeface Design Coalition announced its support of the
Industrial Innovation and Technology Act, H.R. 1179, in anticipa-
tion of the hearings scheduled for June 23, 1988 in the House
Judiciary Committee. The Coalition coodinator Cynthia Hollands-
worth said, "The design of typefaces, which is acknowledged to
be a serious art form, has never had legal protection in the
United States, in contrast to most other industrialized countries
such as France and Germany. We believe enactment of H.R. 1179
will finally provide some assistance to designers who have seen
their most popular typeface designs pirated with no
compensation."

Hollandsworth continued, "Patents have not been an acceptable form of protection for typeface designers, as they are prohibitively expensive. Typeface designs are held to patent standards of difference that simply doesn't apply in a subtle design form. The fact that over 10,000 typeface designs exist indicates that, for example, a letter "A" can have an infinite number of variations, any of which have potential commercial value."

Coalition spokesman Paul Stack, counsel to the Monotype Corporation of Chicago, emphasized the threat to typeface design in the new technology. "In the days of metal typesetting, the duplication of a typeface took a year. In today's digital technology, when typefaces are stored in computer memory and drawn by lasers,

the pirating of a typeface takes at most, minutes, with inexpensive equipment. We are particularly concerned with the threat of

overseas piracy of innovative designs, which can then be dumped into the domestic market at a fraction of the price of legitimate vendors' designs."

The Typeface Design Coalition, an industry-wide association, was formed in 1987 to work for the legal protection of typeface designs. Members of the Coalition include the Monotype Corporation, Linotype Company, Varityper Corp., International Typeface Corporation, Adobe Systems Inc., the Type Directors Club of New York, and the National Composition Association.

For more information please contact Cynthia Hollandsworth at 914/452-3000, ext. 275.

SGMA WASHINGTON

THE SPORTING GOODS INDUSTRY'S COMMUNICATION LINK TO GOVERNMENT

SPORTING GOODS MANUFACTURERS ASSOCIATION • SUITE 900 1825 K STREET, NW, WASHINGTON, D.C. 20008 • (202) 775-1782

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Sporting goods manufacturers have been directly and financially affected by the current weak patent laws. In 1982 alone, the sporting goods industry lost 9,289 U.S. jobs and $600 million in sales because of copied goods. Designs for gym equipment, golf clubs and golf balls, hand weights, bats, gloves, footwear and apparel are frequently copied.

Sporting goods companies spend millions of dollars in new design technology, which is patented to protect large investments in production and advertising. However, these designs are easily duplicated without permission and then imported and sold in the U.S. Under the current system, the copier may ignore the patent until the designer files suit and proves the validity of the patent. In two-thirds of court cases, design patents are proved unenforceable. The designer risks not only legal costs and the loss of a useful patent, but the court time involved usually loses the market as well. In the trendy world of sporting goods, a new design could lose its utility before a patent issue is settled. In many cases, the manufacturer's market is destroyed by imitations before the legal process of a court action is completed. This confusion costs American companies an estimated 20 billion dollars a year, and gives low-wage foreign competitors an edge in the U.S. market.

The Sporting Goods Manufacturers Association supports the strengthening of inconsistent patent laws through H.R. 1179. This bill will amend the current copyright laws to ease application requirements of U.S. businesses, place foreign and U.S. competitors on an equal footing, and lessen the risk involved in trademark investment. The results of this legislation will help reduce the trade deficit, increase American jobs and regain the competitive edge of American innovators.

NATIONAL ASSOCIATION OF MANUFACTURERS

Issue Brief

A PUBLIC POLICY SUMMARY

U.S. Industrial Designs Must Be Protected

Technological innovation is a prime ingredient in the fuel that has driven the American economic engine in the 20th Century. As we approach the 21st Century, it is becoming even more important to U.S. industrial competitiveness. Because it is so important to our economic health and national security, adequate protection of U.S. intellectual property rights is essential. In many areas. however, the United States falls short in this protection--industrial designs being an example.

ISSUE

Should Congress enact legislation that would extend protection to industrial designs under U.S. copyright law?

NAM POSITION

NAM strongly supports the strengthening of intellectual property rights, particularly those in areas that have been subject to piracy and infringement. NAM policy states "The U.S. has a clear national interest in promoting more effective protection of intellectual property rights both at home and abroad." Extending adequate protection to industrial designs under the copyright statutes is a logical and necessary step in this direction.

RATIONALE

Industrial designs are original and distinctive designs embodied in a utilitarian article (the shape and appearance of a product as opposed to its functions or workings). Examples of industrial designs include automotive grills, fender and bumper configurations. computer terminals, telephones, eyeglasses, containers and other articles with a distinctive concept. Standard geometric or commonplace designs (a ball, for instance) would not be covered.

Historically, the protection of industrial designs in the United States has fallen under the patent statutes and therein lies the problem. To be eligible for a patent, one must prove the invention is "useful," "new" and "unobvious." It is this "unobvious test that most industrial designs fail, thus leaving them without protection and subject to unauthorized use by others. Even when designs are patented, their protection is far from assured if subjected to litigation (nearly three-fourths of challenged design patents have been invalidated).

The United States is virtually alone in the world in applying patent-type protection to industrial designs

rather than copyright-type protection. Needless to say. this puts U.S. designers at a serious disadvantage compared with their foreign counterparts. In 1984. for example, 3,428 design patents were granted in the United States. Comparable numbers for the Federal Republic of Germany were 61,270; Japan 33,523; France 13,803; and South Korea 6,428. The difference is not in the abilities of our designers, it is in our treatment of them.

STATUS

Legislation to amend the copyright statutes has been introduced in both houses of the 100th Congress. In the House. Rep. Carlos Moorhead (R-CA) introduced H.R. 379, the "Industrial Innovation and Technology Act of 1987." on January 6, 1987. This bill had two titles: one for the protection of industrial designs, the other for the enforcement of patents, copyrights and trademarks in international trade. On February 19, Rep. Moorhead also introduced H.R. 1179, which was H.R. 379 stripped of its title II language. A hearing on H.R. 1179 is to be held June 23, 1988, before Rep. Robert Kastenmeier's (D-WI) Subcommittee on Courts, Civil Liberties and Administration of Justice of the House Judiciary Committee.

Companion legislation to H.R. 1179 (S. 791) was introduced in the Senate by Sens. Dennis DeConcini (D-AZ) and Orrin Hatch (R-UT) on March 19. 1987. DeConcini's Subcommittee on Patents. Copyrights and Trademarks held a hearing on March 26. 1987. Since then. however, the bill has languished in the subcommittee with further action unlikely this Congress.

Major points of the H.R. 1179:

Title 17 USC is amended by addition of a chapter for the protection of industrial designs of useful

articles."

• Protection of the design will be for a period of 10 years from the date of registration.

• Creation of a design notice for protected designs

NAM 1331 Pennsylvania Ave., NW Suite 1500

North Lobby

Washington, D.C. 20004-1703 (202) 637-3000

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