Asos has agreed to pay out a £20.2m cash settlement to cyclewear manufacturer Assos of Switzerland and German menswear retailer Anson’s, to put an end to long-running trademark disputes with the firms.
The deal restricts Asos from selling cyclewear and opening shops in Germany. However, chief executive Nick Beighton pointed out that cyclewear “has never been a focus” for Asos, and it has no intention of opening bricks-and-mortar stores.
He said the settlement was the “right commercial decision” for Asos.
Anson’s and Assos were both trading when Asos changed its name from As Seen on Screen in 2002. They launched trademark infringement cases against the etailer in 2010 and 2011 respectively.
Asos had successfully defended its case in the UK up to the supreme court, but there are outstanding cases in France, Germany and the US.
Beighton pointed out that these are “big strategic and important markets” for Asos. He added: “All litigation is unpredictable and, although we’ve successfully defended our brand to date, there is no certainty we would continue to do so.
“Intellectual property law is enormously complex, and frankly hasn’t kept up with the realities of ecommerce. The law can vary hugely between countries. With this in mind we decided to reach a settlement that gives us absolute clarity on a global basis from this point on.”
The settlement will be treated as a non-recurring exceptional item in Asos’s accounts for the financial year just reported.
“While we recognise this is a significant sum, within the overall context of Asos and its overall cash balance this sum is not material to the future performance of the business,” said Beighton. “Losing one of the cases in one of our major markets could have had been very significant.”
He continued: “Importantly, [the settlement] confirms the right and removes the risk of litigation, which enables us to focus squarely on the trading opportunities ahead of us, particularly in the significant and growing fashion leisure or athleisure market.”
“Trademark issues come with being a very fast growth ecommerce business, especially one that’s been internationalising at the pace we’ve been internationalising.
“We’ve learned a huge amount about protecting our brand in the process and the likelihood of us ever having to go through this again is extremely remote.”