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It seems barely a week has gone by in the last year without another fashion brand protection battle hitting the headlines.
From the High Court ruling in favour of Karen Millen in a dispute with its eponymous founder, to Adidas losing some of its protection in Europe for its three-stripe trademark, intellectual property is an increasingly hot topic for the industry. Add disputes to uncertainty around Brexit, a marketing landscape transformed by social media and innovations blurring the lines between fashion and technology, and now is the time for fashion retailers and brands to review their current protection and strategies and ask: is our intellectual property (IP) protection fit for the future?
What: The brand – More than just a name, an experience
Fashion retailers and brands invest heavily in protecting their names – the badge of origin that customers look for and rely on as a guarantee of quality, reliability, comfort, value, customer service, luxury, and anything else that has come to define the equity of the brand. However, as brands invest in innovation to put the spotlight on product, compete against fast fashion models and satisfy consumer demand for more personalisation and experience, the definition and recognisable elements of “brand” are expanding and, with it, protectable assets.
Anjhe Mules, founder and creative director of technical sportswear brand Lucas Hugh, told the Drapers Fashion Forum how the business is thriving in a saturated athleisure market by incorporating seamless fabric technologies into its luxury fashion garments. While many fashion lines have short product lifecycles, retailers are investing to ensure there is no compromise on the integrity and the performance of garments. After all, as John Lewis fashion buying director Christine Kasoulis says, consumers are beginning to buy less, but buy well. Those wanting to stay ahead of the curve will engage with their designers and technicians during new product development to identify innovations worthy of protection and ripe for maximising return on investment – whether by keeping competitors at a distance, attracting investors or exploring licensing opportunities.
Innovative new textiles can be protected by patent – one such example is the cork-based fabric Suberis by Italian company Grindi, which was patent protected in 2000 and blends functionality and comfort. The “look” or configuration of a garment, meanwhile, can be protected by registered design.
Given the higher cost of patents, when compared with trademarks and designs, they will tend to be the reserve of staple pieces. Timing is key – once disclosed the opportunity for patent protection is lost. This is the same for designs in some countries, such as China, although in others, including European Union nations, it will trigger a short window of time to secure protection.
Similar considerations apply for wearable tech. Those who already carry accessory lines might reasonably assume that their brand is protected for the technical functions of such products. This may not necessarily be the case. To ensure their trademark protection is fit for the future, retailers should undertake a review of current protection to ensure that their trade marks cover both fashion and function. A brand may have protection for “watches”. However, what about wearable computer peripherals, computer software or pedometers?
As the shop window moves from bricks and mortar to wrist-worn and hand-held devices, the future-ready retailer might consider protecting graphical user interfaces and icons to set its virtual shop window apart from competitors and prevent hijackers.
Where: Home and away – international expansion and cross-border commerce
The internet has opened borders. For many, it is easier to say which countries product is not delivered to than to list all countries where there are sales. Even in those countries where product might not be sold, chances are that the brand is being exposed there via social media. IP is territorial by nature. An IP portfolio that is fit for the future is one that has been developed as part of a broader strategy, taking into account retail trends, new market opportunities and problem ”hotspots”.
In some countries, failure to protect the brand name means the risk of not being able to sell product there at all. In China, for example, if a third party secures a trade mark registration for a brand before the legitimate owner, the latter can be prevented from selling its product there or risk being sued for infringement. Earlier sales by the legitimate brand holder will only be relevant to the extent that it has obtained a well-known status in China, or if they can be used to show that the third party has acted in bad faith. Even then, what we perceive as bad faith may not be acknowledged as such by the courts – there are high legal thresholds to meet. And costly. Mei Chen, International Business Development for Alibaba, told the Fashion Forum how there are 731 million internet users in China, and more than 460 million active consumers in the 12 months to June 2017. Is yours a luxury brand, or one steeped in British heritage? If so, and with figures like these, is your brand protection fit to take on China’s fast-growing upper middle class?
Ensuring protection for the future will clearly always involve a balance of risk and reward. In-house legal budgets will rarely swallow the cost of protection for countries where there are no actual or anticipated sales in a small-to-mid timeframe. Brands might prioritise countries notorious for counterfeits and/or trademark “trolls” and countries of manufacture, followed by those where digital statistics show an increasing interest in the brand, even if no sales have yet taken place there. For more cost-effective protection in a larger number of countries, consider using the World Intellectual Property Organization’s Madrid system of international registration, rather than direct applications to the national trademark offices. The Madrid system allows businesses to add countries to their international trademark registration as a territory’s relevance for a brand grows. Member states of the system include Australia, Switzerland, Mexico and the USA; Indonesia recently became the 100th member. Some, notable non-members include Canada, Hong Kong, Brazil and the United Arab Emirates.
Finally, it is important to consider if brands protected in the right language. Fashion retailers are increasingly recognising the potential for larger returns by communicating with overseas purchasers in their own languages and through digital cultural integration. If your brand will be presented to customers in a different language, protect it that way. Retailers should also consider registering alternatives to account for local literal translations, transliterations and, in some countries, adaptations. For example, the Chinese version of ‘Chanel’ is ‘香奈儿’, a phonetic translation, alluding to fragrance but with no dictionary definition. In some countries, if brands are only protected in Latin script and a third party applies for the translation or transliteration, the brand owner may be left without the ability to challenge the third party trademark and with an obstacle to their use in the alternative version.
Who: Owners, influencers and licensees – keeping hold and control of your assets
In stark contrast to the days of disparate and competitive franchising, brands are, nowadays, arguably more collegiate and collaborative than ever. From fashion brands sharing retail space with cafes to lessen the burden of city real estate cost, to celebrity sponsorships and social media influencers, it is important that businesses are careful to protect their brand DNA and reputation, building ventures on the foundations of strong IP protection and clear boundaries of responsibility and control. Failure to disclose sponsored ads can be costly. In the US, for example, it can result in a fine of up to $40,000. Therefore, brands must engage all parts of the business, not just legal, with the risks of non-compliant marketing and advertising. Stakeholders must be attuned to these risks when negotiating and entering commercial partnerships.
About the authors
Adjoa Anim and Katie Goulding are key members of the HGF retail and fashion team at leading intellectual property specialists HGF Limited. To keep up to date with IP stories and issues affecting the retail and fashion industry, join LinkedIn group Fashion+IP or visit www.hgf.com