Skipping Starbucks: Stigma and Shame Surround Ubiquitous Luxury Trademarks during the Recession

Laura Nastase — Thu, 01 Oct 2009 15:45:06 +0000

At the beginning of the recession, New York grand dames, fearful that their lavish spending habits might prove shameful in these difficult economic times, began scurrying out of Tiffany’s with baubles hidden in brown paper bags. One story holds that around Christmas last year, Kathy Fuld, wife of Lehman Brothers Dick Fuld, asked sales clerks at Hermes to put purchases into plain white shopping bags, instead of their famous orange ones.¹ This phenomenon nicknamed “luxury shame” or “stealth wealth” saw the affluent hiding their purchases in an effort not to seem boastful of their wealth while others suffered massive job losses.²

Forbes even ran an article describing conspicuous consumption as “gauche,” and offering tips on how to “stealth shop.”³ One of their tips: “If a person buys a monogrammed Gucci handbag, or diamond earrings shaped like Chanel’s double Cs, everyone knows where she made the purchase. If, instead, she chooses one of Bottega Veneta’s braided satchels…which has no visual branding, she doesn’t look like she’s showing off.”⁴

As the old adage goes, one man’s “visual branding” is another man’s trademark. A trademark is a word, phrase, symbol, design or a combination of those which allows consumers to distinguish the goods of one merchant from those of another. Trademarks can be so powerful that counterfeiters across the globe labor long and hard to stitch logos onto fake handbags and clothes. The buyers of these counterfeit goods purchase them for many reasons: because they think they’re the real deal, because they’re trying to fool their friends, because they need a souvenir from Canal Street.

Amazingly, trademarks like the ones belonging to Coca-Cola, McDonald’s, Apple, and Disney are worth billions of dollars but are, in essence, nothing more than squiggles on a page. In the United States, trademarks are vigorously protected by the Lanham Act.⁵ Internationally, the Madrid Agreement serves as a system for the international registration of trademarks.⁶

An interesting phenomenon during this recession is not an increase in lawsuits over these trademarks, but rather, a change in consumers’ psychological responses to them. Million-dollar trademarks are losing their value not because of infringement by counterfeiters, or a perceived loss of quality in the goods, but because they have become psychologically undesirable to see.

Like any good trend, this too has trickled down from the affluent socialites to the middle class who so eagerly imitate them. Recently, Starbucks scraped its iconic name and symbol off the windows and cups in one of its Seattle stores and renamed the store 15th Avenue Coffee and Tea.⁷ While Starbucks still owns the locale, the goal is to give the store more of a neighborhood feel, which is currently more appealing to middle class consumers. Carting around a Starbucks cup which loudly announces to the world that you paid $5 for a cup of coffee is considered tacky and wasteful.

Let’s hope this is one trend which will soon fade away. The value of trademarks is that they allow consumers to easily identify quality goods, and therefore reward industries which produce items of very high quality, by spending money on purchasing those items.
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¹ Maureen Dowd, Mind, Body and Organic Martinis in Miami Beach, N.Y. TIMES, Jan. 18 2009 at
² The wealthy turn stealthy as economy weakens, The Associated Press, Jan. 27, 2009.
³ Lauren Sherman, Ten Ways to Buy Luxury, Discreetly, FORBES.COM, Nov. 10, 2008.
⁴ Id.
⁵ 15 U.S.C. 22.
⁶ Madrid Agreement Concerning the International Registration of Marks art. 1, Apr. 14, 1891, revised, July 14, 1967, 828 U.N.T.S. 389.
⁷ Steve Johnson, Stealth Starbucks: Seattle-based coffee giant opening neighborhood shops in disguise, Chicago Tribune, July 17, 2009.

iPod for the Queen: The Inter-Continental Copyright Kerfuffle

Laura Nastase — Tue, 21 Apr 2009 15:05:39 +0000

By: Laura Nastase¹

President Barack Obama’s April 2009 trip to Europe has been exhaustively chronicled from political, fashion, and protocol perspectives. But commentators have skipped almost entirely over the fact that President Obama may have breached both copyright law and the iTunes licensing agreements by giving Queen Elizabeth II an iPod. True, these are not matters of national security, but surely they deserve at least as much news coverage as the First Lady’s hemline.

Creators and users of content protected by intellectual property laws are currently grappling with the question of how to apply United States copyright law, specifically the First Sale Doctrine, to digital media. Complicating matters in this case is the iTunes licensing agreement, which restricts what a user can do with lawfully purchased digital products.

So was President Obama’s gift to the Queen of an iPod filled with photographs and video of her 2007 trip to the United States, as well as songs and accessories protected by the First Sale Doctrine?²

The First Sale Doctrine was drafted to ensure that gift giving and resale of books and other copyrighted media does not open an individual up to prosecution.³ It allows individuals who own books, dvds, computer programs, and other copyrighted works to give their originals away as gifts, or even resell them, despite the fact that the copyright owner has the exclusive right of distribution. However, can the First Sale Doctrine work in a world where there is one copy of a song on a White House computer, and another on the Queen’s iPod? After all, the item that has been purchased from iTunes, has not been fully transferred to the Queen of England. A portion of it remains in bits and bytes on a hard drive. Even if the data on the hard drive is deleted once it is transferred to the iPod, what about the notoriously ambiguous iTunes licensing agreement?

The agreement states that iTunes products are only available for personal use. Is a gift to the Queen of England a personal use? Gifts to heads of state are generally public gifts. While they are presented to one particular person, the understanding is that they are gifts to an institution of leadership. Thus, how can a gift, purchased with public funds and given in an official capacity from one head of state to another be merely a personal gift for personal use?

The laws and licensing agreements are sadly inadequate in answering these questions. Let me clarify, it is not the gift of an iPod which is a problem, but rather the accompanying legal entanglements. In a digital world where the most important property is intellectual, leaving these questions unanswered is a recipe for disaster. Congress should act quickly to ensure that the principles of the First Sale Doctrine are upheld in the face of evolving technology.
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¹ Fordham J.D., 2009; Proudly served as Senior Articles Editor, Vol. XIX, Fordham Intellectual Property, Media & Entertainment Law Journal.

² Helene Cooper, Obamas Give Queen Elizabeth an iPod, N.Y. TIMES, Apr. 2, 2009, at A13.

³ 17 U.S.C. § 109

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Skipping Starbucks: Stigma and Shame Surround Ubiquitous Luxury Trademarks during the Recession

iPod for the Queen: The Inter-Continental Copyright Kerfuffle