What can smaller brands learn about licensing from the high street?

 

After the flurry of creativity at this season's tradeshows, a new season of design ideas have been offered up to the eyes of the industry and public. Whilst only the nation’s best dressed men may be able to afford the haute couture originals, the styles will inevitably filter down to the lower end of the market. There are various IP rights applicable to the fashion industry; copyright in sketches, design documents and in the 3D articles themselves, registered and unregistered design rights and trademarks, and passing off in relation to logos, brand names and other badges of origin.

And, imitation being the sincerest form of flattery, a certain amount of copying is accepted. Once a high-end designer shows a new collection, they can expect within a couple of months to find items ‘inspired by’ (or, in some cases, shamelessly copied from) those designs on the high street.

However, for such an IP-heavy industry, there seem to be a disproportionately low number of infringement disputes in the courts – the big fashion brands tend to focus instead on combatting counterfeiters. Of course, there have been some high profile IP cases in recent years but, understandably, designers and brands tend to worry more about protecting their name and consistent design features or logos, which have longevity, rather than protecting each season’s individual designs. Examples of this include Christian Louboutin’s much-publicised battles over his red soles or Jack Wills’ recent victory against House of Fraser in respect of its pheasant logo. This general lack of litigiousness is certainly due in large part to the nature of the industry, centered on transient trends and high turnover of designs. Bringing expensive and time-consuming legal actions for copyright or design right infringement over a design which is literally ‘over’ may not be a very attractive option, or a sensible investment. 

The more interesting phenomenon is perhaps the characteristically creative way the industry has dealt with the demand for a slice of luxury at everyday price tags - by designers collaborating with those who may otherwise be tempted to ‘borrow’ their IP.

It’s almost impossible not to have noticed the growing trend for designer/high street collaborations – (Alexander Wang x H&M, River Island x Baartmans & Siegel and, this Spring/Summer, Uniqlo x Lemaire). More and more, a taste of the high end luxury dream is being made available (in some form at least) to the mass market and, on the whole, it is very commercially successful for those brands and businesses involved.  For the high-end brands, it is one way of controlling (and taking a share in the profits of) the process of the filter-down of design ideas. It can also gain them huge brand exposure and reach into a new market, developing the next generation of fans of the brand who may well graduate from the high street to the high prices of the brand’s luxury label in a few years’ time.

So, what can smaller brands learn about licensing deals from these major partnerships? Well, the plus points are obvious: collaborations are great platforms for exposure to new markets not to mention the financial rewards.

However, there are risks. Loss of control is the big one – what will be the quality of the articles if they are to be mass-produced? What sort of quality controls will be in place? How will your new partner merchandise the products? What will you agree about how and when products are discounted if they do not sell as well as expected? These details could easily affect the reputation and goodwill of your brand.

If there is an inequality of bargaining power, for instance between a fairly unknown designer and a large store, the larger player may adopt a “take it or leave it” attitude, leaving little room to negotiate for the designer, if they wish to take advantage of the commercial benefits. However, designers can at least make sure they understand the agreement and the commercial risks they are taking by entering into it.

Although not an industry where claims are particularly common, if another designer asserts a claim of infringement against you when you have a small number of the offending articles in a couple of outlets, they can be taken off the shop floor or website before the damages reach significant proportions. However, if designs “inspired by” other people’s creations are selling throughout the country (or the world) in large quantities, the investment and the stakes are higher. The extent to which the parties in a licensing agreement can rely upon designs being original is more important. Before investing, the larger player will want some assurances that they are not likely to be on the receiving end of a claim and will therefore usually demand some warranties and indemnities. Whilst a designer may be confident that their work is their own, where there is more than one party inputting to the process (for example, if you have bought in a fabric design), it may be more difficult to be sure. It is therefore important to keep a clear paper trail of the design process in case you are called upon to prove copyright ownership, or to defend an infringement action in the future.

It is also important to think about your IP rights enforcement strategy. The first time another designer copies you, it may be tempting to take it as a compliment or chalk it up to experience and let them ‘get away with it’. However, a permissive attitude may encourage other infringers in the future, whereas adopting a restrictive, pro-active attitude to infringers early on may pay dividends in strengthening your brand.

There is also the issue of retaining control over original designs - if you licence your designs to a larger player in the market they are likely to want exclusivity. Which is fine unless one of your designs in that collection becomes wildly successful (perhaps after making a FROW appearance on Nick Grimshaw). Not only will your business partner be more likely to assert their rights over the design, preventing you from using it, or a substantial part of it, in future projects, but the design will attract more attention, perhaps inviting claims of copyright or design right infringement from third parties. But, hey, in the meantime start calling it the ‘Grimshaw series’ and use the extra cash for your next collaboration.

Article by Elaine O’Hare, Senior Associate.
First published in CWB Magazine, March 2016
 

Contact our experts for further advice

Elaine O'Hare

Search our site