IP enforcement in the fashion industry

The fashion world is fast paced and continually evolving. Constantly changing trends drive the development of new products, which are often on the shelves for only a short period of time. The transient nature of fashion products means that, unlike for typical brands, traditional brand protection methods are not always appropriate.

While trademark protection remains an important way of protecting a company’s house brand, it may be largely ineffective against lookalike or copycat products, which are often the biggest threat to fashion brands. Copycat products often come to market very quickly after the launch of a new fashion line. Trademark protection often lags behind or is insufficient to tackle adequately lookalike products that do not use the actual brand names.

Therefore, in seeking to protect fashion products against IP infringement, an agile approach must be adopted, with a strategy which is sufficiently flexible to keep pace with the ever-evolving fashion industry. A rights holder must also tailor its strategy to fit its particular niche within the fashion business – a strategy developed for a luxury fashion brand will not necessarily fit or be cost effective for a large-volume high-street retailer.

While lookalike products are a major issue, counterfeit products (ie, products which employ the trademark) remain an ongoing issue for fashion companies. In 2012 8% of all counterfeit products detained by customs authorities were clothes, while 3% were cosmetics. That equates to millions of dollars of potentially lost revenue each year.

This chapter considers some of the key IP rights available to tackle counterfeit products, taking into account the unique challenges faced by the fashion industry. It also looks at how the position may vary globally across Europe, the Americas and Asia, and how this may affect a brand owner’s strategy when it comes to global IP enforcement.

Using trademarks to protect fashion brands

Fashion brands are not immune to traditional counterfeiting. It is still common for counterfeiters to copy clothing and fashion products because they are often relatively easy to manufacture (as against more high-tech products) and can be sold with a relatively high mark-up by relying on the reputation or cachet associated with a well-known brand.

For these straightforward counterfeit goods, where a fake product incorporates a well-known brand name, trademark enforcement remains the most useful and effective tool. Fashion brands, like other brands, will invariably register their house brand name and key sub-brands around the world. For true counterfeits, this provides the most effective protection as enforcement is generally straightforward and trademark rights are, for example, well recognised by customs authorities and law enforcement agencies.

It is therefore important that key brand names and new sub-brands be registered as trademarks as early as possible in the development of the brand. Fashion brands must consider not only where they intend to launch products initially, but also plans for future expansion, tailoring their trademark registration programmes accordingly. Many jurisdictions (eg, most civil law countries, such as China) operate a first-to-file registration system for trademarks. Therefore, there is a risk that a fashion design or brand name launched in one region could be recorded as a registered right by a third party in another. It is common, for example, for trademark pirates to file trademark applications in China for marks in classes not covered by a brand owner’s trademark registrations. In addition, trademark pirates may file trademark applications for variations of the registered marks and/or unofficial nicknames adopted by members of the public.

While avoiding unnecessary cluttering of the register, brand owners should consider filing broader, more defensive trademark registrations for important marks in classes relating to their core business (even if they are not doing business in those classes at present). Past experience suggests that it is always cheaper and more effective to do this rather than trying to recover or cancel objectionable applications or registrations through opposition or invalidation actions.

However, trademark protection alone is insufficient to address all of the enforcement issues faced by fashion brands. While a comprehensive registration and enforcement programme is sensible when it comes to core brand names, often the design or distinctive features of a fashion product will be copied, leaving out the well-known house brand. Ultimately, trademarks can be relied on only to the extent that an objectionable product incorporates a mark that is similar to a relevant and enforceable registered trademark.

Of course, it is possible to register trademarks in many jurisdictions for a wide variety of design elements. Logos, patterns, colour combinations, two-dimensional marks and three-dimensional (3D) marks are registrable in many jurisdictions around the world. In May 2014 China introduced new trademark legislation which now recognises a wide range of non-traditional trademarks, including patterns, colour combinations and 3D marks. For the fashion industry, it may be wise to seek trademark registrations for key design features (eg, the shape of a product or a pattern).

However, there is a clear balance to be achieved between investing in trademark registrations for seasonal designs and relying on unregistered rights such as copyright. While fashion brands can protect their designs by registering trademarks for key design features, and should certainly register brand names and sub-brands, it is not generally practical and often not possible to obtain trademark protection for more generic fashion designs.

Therefore, fashion brands must consider a flexible strategy which can be varied across jurisdictions. In Europe, for example, if a product design is sufficiently distinctive to act as a source of origin (and therefore qualify as a trademark), it can enjoy a wide scope of protection which will assist with tackling both straightforward counterfeits which employ principal brand names and lookalikes which copy the style or design of a fashion product. The broadest protection arises where it can be shown that a mark has a strong reputation. This may be possible for very well-known fashion designs; if this is the case, then copycat designs which create a link in the minds of consumers with the original registered trademark and take unfair advantage of its reputation will infringe. However, this still all depends on there being an underlying trademark registration in the first place and a sufficient reputation that has developed in the fashion design as opposed to, for example, the brand name itself.

Using other IP rights – copyright

As registered trademarks are often inappropriate for fast-moving industries such as fashion, a company must consider alternative IP rights protection. For creative industries such as fashion, where designs and products are fast moving and regularly changing, reliance on copyright has certain advantages. In many jurisdictions, copyright is an unregistered right which arises automatically.

Where a copycat product copies the look of a fashion design without using the brand name, and where it is not possible or cost effective to seek or claim design protection, copyright offers an additional avenue of claim, although this is not without difficulties. For a design to be protected as a copyright work, it must be original and capable of being protected by copyright. In the United Kingdom, for example, a fashion design must constitute an “artistic work” or a “work of artistic craftsmanship”. While some fashion products featuring distinctive graphical motifs or designs may qualify, in many cases a fashion design simply does not meet this threshold.

In other European jurisdictions, there are no specific categories of copyrighted work, so protection may be broader. However, it is still necessary to show that designs are original and what constitutes ‘original’ varies by jurisdiction. Through its decisions, the European Court of Justice has harmonised the approach so that a work will be original if it represents “the authors’ own intellectual creation”. This is seen as a higher threshold than, for example, in the United States, where a work is considered original if it contains a “modicum of creativity”. The United States also employs a copyright registration system so that it is possible to record and document copyright works, such as fashion designs. However, the protection of fashion designs in the United States is often complicated by the provision under the Copyright Act that “pictorial, graphic and sculptural works” are protected only if the design can be separated from and exists independently of the usefulness of the article. In the United States, fashion designs are generally seen as utilitarian.

There have been attempts to provide further protection under US copyright for fashion designs. The Innovative Design and Protection Act was originally introduced into Congress in 2006 and was intended to amend Chapter 13 of the Copyright Act to include fashion design as a protected art form. However, this attempt was defeated in 2012, when it failed to pass into US law.

It is also more difficult to monitor potentially copyright infringing products. While in many jurisdictions well-established regimes grant powers to customs authorities to seize and destroy counterfeit (ie, trademark-infringing) products, relatively few jurisdictions allow Customs to do the same in respect of copyright-infringing products, especially when it comes to creative industries such as fashion (rather than, for example, pirated music or software).

The new EU customs regime allows copyright works to be recorded with Customs. This can be a significant advantage for fashion brands, which can record fast-changing ranges with Customs and rely on copyright to prevent lookalike products from entering the European Union. However, in common with other jurisdictions globally, the EU customs enforcement regime requires rights holders to indemnify Customs for any losses suffered if products are incorrectly seized and destroyed. While it is relatively straightforward to determine whether a product infringes a trademark, it is harder to be absolutely confident that a product infringes copyright as the validity of the copyright claimed may be more susceptible to challenge. In addition, Customs is generally more accustomed to spotting trademark-infringing products rather than those that may infringe copyright, so more intensive customs training along with detailed product information may be required to help Customs to recognise similarity between designs.

Using designs to protect fashion products

Design protection is often seen as a middle ground between seeking registered trademarks and relying on unregistered rights such as copyright. While not available in all jurisdictions, design protection generally provides a cheaper and quicker way to obtain a registered IP right and often protects features that are prominent in fashion brands, such as design or decoration.

The limited lifespan of various fashion lines and products often renders traditional trademark protection less useful in the battle against unauthorised products, especially in those jurisdictions where the prosecution process itself is relatively long (eg, Brazil). Further, infringers often avoid using house marks or any similar trademarks altogether, instead opting to produce lookalike products which require more investment to enforce against than the traditional raid and customs routes available for pure counterfeits.

Design protection can therefore usefully supplement a fashion house’s IP portfolio, providing an additional route for enforcement. In the European Union, Community design registrations are relatively quick (around two weeks) and relatively inexpensive to obtain. The EU regime affords designers up to three years’ unregistered design protection and up to 25 years’ registered protection. It defines a ‘design’ as “the appearance of the whole or a part of a product resulting from the features of… the lines, contours, colours, shape, texture… or its ornamentation”. In the United States, a design patent affords up to 14 years’ registered protection for any “new, original and ornamental design for an article of manufacture” and can generally be obtained within 10 to 12 months – in some cases, this can be expedited to as little as six months.

It is also possible to record design registrations with Customs in a number of jurisdictions globally, including across the European Union, where national customs authorities are well versed in dealing with products incorporating such rights. Where available in connection with design registrations, enforcement via Customs can be an effective tool against unauthorised products, especially as a design registration can be obtained for only part of an object, such as a distinctive handbag fastening, pocket design or design feature attached to a line of perfume bottles. This can be useful in the fashion industry, where new lines may sometimes incorporate a novel feature only in one or two aspects of a garment or product. Unregistered Community design protection, which arises automatically when the necessary criteria are satisfied, is more limited in its scope of protection and cannot, for example, be recorded with Customs.

Design registries around the world generally have a global novelty requirement (usually 12 months from the first public launch anywhere in the world), so it is key to seek such protection promptly. Where feasible, regular meetings with the brand’s design team ahead of each season debut or the planned launch of new designs or products allow IP counsel to identify features meriting protection at a sufficiently early stage. The question of whether to proceed with seeking registered design protection then becomes a matter of judgement – it is not cost effective to seek protection for all novel designs, and predicting the likely success of a particular design feature is hardly an exact science. The task is easier for fashion brands with a clearly defined customer following, as they are more likely to be able to predict what will be popular with their customers. The key is to identify and protect the novel design features of products that will achieve a large following or spark new trends before the infringers do.

Another advantage of registered design protection over trademarks is that registries typically do not publish the designs ahead of grant, so the secrecy or exclusivity of a design is thus preserved until a registration is obtained and published. While this potentially leaves a registered design vulnerable to invalidity proceedings post grant (the opportunity to challenge by third parties not having arisen previously), such challenges are more likely to come from legitimate competitors rather than dealers in knock-offs, who usually prefer to focus resources on selling unauthorised products rather than challenging IP rights.

Comment

Different IP rights provide different advantages and challenges when protecting fashion brands and fashion products. Infringers are becoming ever more sophisticated and, while counterfeiting is still a major problem, more subtle lookalike products now often present an equally important issue for fashion brands.

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James Whymark

Senior associate

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James Whymark is a senior associate in Baker & McKenzie’s IP team in London. His practice covers both contentious and non-contentious aspects of intellectual property, including trademarks, designs, copyright, unfair competition and patents. He has a particular focus on brand protection and anti-counterfeiting, and advises a wide range of clients on IP enforcement issues. He has been on a number of in-house secondments, including to Unilever and the Organising Committee for the Olympic and Paralympic Games, where he assisted the brand protection team.

He also has extensive experience conducting IP litigation in the UK courts and manages global enforcement and customs programmes coordinating enforcement actions in the United Kingdom, throughout Europe and worldwide for a variety of clients in many sectors, including pharmaceuticals, technology and luxury brands.

Tania D’Souza-Culora

Senior associate

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Tania D’Souza-Culora’s practice covers a range of trademark, copyright and design matters, including local trademark prosecution, litigation and global anti-counterfeiting programmes. She manages global anti-infringement programmes for clients in the pharmaceutical, technology, consumer product and fashion industries, and advises on strategic brand protection considerations across the globe regarding civil, criminal and/or customs enforcement, defensive measures including bolstering IP rights portfolios and global customs protection. Ms D’Souza-Culora also oversees litigation cases for global technology and fashion/consumer goods clients. She is experienced in managing administrative proceedings and also advises on criminal actions, working with police and other bodies as appropriate. She is a frequent writer and presenter on IP enforcement and strategy considerations.

Andrew Sim

Partner

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Andrew Sim is a partner of the IP group in the China offices of Baker & McKenzie. His practice covers both contentious and non-contentious IP law in mainland China, including trademarks, copyright, trade names, unfair competition, designs, advertising and labelling. Mr Sim has extensive experience in assisting brand owners in strategising their IP portfolios in China, with a particular focus on anti-counterfeiting, including domain names and internet-related issues.

Mr Sim advises a broad spectrum of clients from various industries, including luxury brands, fashion and design, consumer goods, food and beverage, electronics and technology.