Imitation is the sincerest form of flattery – unless it’s business

Fashion and apparel. It’s fast paced. Competitive. Creative … and can be lucrative.

It also presents challenges from an intellectual property (IP) perspective, but they can be navigated. With a sound IP strategy in place you can protect your brand and fashion designs from exploitation by others. Below we discuss some common pitfalls relevant  to the fashion and apparel industry – and how to overcome them.

Various IP rights are likely to be involved in any garment – trade marks, registered designs, copyright, know-how and sometimes even patents. This matrix of IP rights protects your designs and gives designers and business owners exclusive rights and helps to foster creativity and innovation.

As a designer, it is important to identify key IP rights, ensure you own them (not the staff and consultants involved in the design), seek protection for these early and importantly ensure you are not infringing existing rights in any particular market. If done correctly; this helps you to:

  • protect your designs with legally enforceable IP rights
  • build value in your business (this approach adds value to your business which is important if you decide to sell or seek investors)
  • create a platform to export and do business overseas
  • exercise greater control over your designs.

Global expansion – export strategy

Before taking your designs to the international stage, it is crucial that you:

  • ensure you are free to use your brand, designs and other IP in your overseas target markets without infringing others’ rights; and
  • protect your IP in those countries by registration of rights where possible.

It is up to you as the new market entrant to ensure you are not infringing others’ rights.

Registration formalities differ for each type of IP right from country to country so getting advice early on is important:

  • Unlike New Zealand, other countries often do not provide copyright protection for your designs so if the design is sufficiently important consider registered design protection.
  • With registered designs, depending on the country, you can lose the right to register if you have already launched your product so it is important that it is dealt with early in the product design life cycle.
  • Even if you decide not to register your designs, you will want to register your brand in key countries as a minimum.
  • It is very important that all arrangements with contributors to your designs are on the basis that you own the copyright, and that they waive any “moral rights” they have in the design.

Traps many New Zealand businesses fall into include being unaware that:

  • often major retailers/wholesalers overseas require local trade mark registration before they will deal with you;
  • selling via online platforms often requires secure IP before contracts can be signed; and
  • registering copyright in China requires all contributors to your designs to sign documents, so make sure they are contractually required to assist and available to do this.

As a designer, it is important to identify key IP rights, ensure you own them, seek protection for these early and ensure you are not infringing existing rights in any particular market.

Inspiration or imitation?

Copyright is a fundamental IP right in the context of fashion – and other creative industries. It protects the expression of an idea from unauthorised copying. However, it does not prevent another person independently creating the same or a similar design. While in New Zealand it is an unregistered right, in some countries you may need to register some copyrights as well, for example USA and China.

The other issue is that in various countries (including Australia) copyright does not protect normal day to day fashion and apparel designs. For example, in Australia to have enforceable rights in a dress design that you have mass produced you need to obtain a design registration in Australia. In a seasonal fashion cycle, this is often not practical or cost effective so the design is essentially unprotected other than through brands.

Copying is rife in the fashion world. Frequently high end fashion designs are almost immediately available in local chain stores or online platforms. While flattering, this can raise business and reputation issues for designers. While all designers draw from inspiration somewhere there is a legal difference between copying a design and taking inspiration from one. Where that line lies though is not black and white, but it is crossed on occasion so care is needed if your designs are influenced in this way.

A local example is the copyright case that G-Star Raw brought against Jeans West where G-Star claimed that Jeans West infringed its copyright in one of its jean designs that included a number of distinctive features of stitching, knee pads and heel guards which were in the Jeans West jean. G-Star claimed that these features were distinctive and the Court found Jeans West had infringed its copyright.

The impact of copying can be reduced by a good IP policy including strong trade mark rights for the brand and sometimes key elements of design. On the flip side – take care you don’t infringe these things. For example:

  • In the USA, Burberry has commenced action against Target which has “check print” scarves that Burberry claims infringe its registered rights in its check trade marks. It will be interesting to see which side of the line the US Courts determine Target is on – inspiration or imitation.
  • Dr Marten’s iconic boot is recognised for its yellow stitching, shape and air cushioned sole. It actively defends its intellectual property rights taking action against others including for trade mark infringement and has challenged for example Chinese Laundry, Vans and Urban Outfitters.
  • Christian Louboutin has spent significant sums of money trying to increase protection around the world for its shoes by efforts to trade mark its distinctive red sole.

Counterfeits are a major problem:

  • Counterfeits differ from “imitators” as counterfeits are designed and then sold as if they are the originator’s product.
  • Copyright, the Fair Trading Act 1986, passing off law and trade marks are all used to combat counterfeits (with similar laws used overseas).
  • Although rare, criminal prosecution is also possible in New Zealand. A criminal prosecution was brought against two individuals in 2012 for distributing counterfeit jeans. The two distributors sold counterfeit True Religion jeans online and in pop up stores. The New Zealand distributor of the US True Religion jeans, Guru Denim, chose to prosecute the individuals under the Crimes Act 1961, rather than intellectual property legislation such as the Trade Marks Act 2002 or Copyright Act 1994. The individuals were sentenced to 3 months’ community detention, 300 hours of community service and required to pay $20,000 in reparation each.

While all designers draw from inspiration somewhere there is a legal difference between copying a design and taking inspiration from one.

Brand chatter – Make or break

While your designs, logos and trade marks can be protected against unauthorised use, the popularity of your brand can be dependent on word of mouth. Social media has meant that comments made by celebrities and “influencers” can have an unprecedented impact on the public’s perception of brands and products.

As an example, in February this year, it was widely reported that reality star Kylie Jenner tweeted just 18 words that wiped US$1.3bn (6%) off Snapchat’s market value in one day. Recent polls have indicated that bad news about a brand or product will cause consumers to avoid that brand or product. Kylie Jenner has over 25 million Twitter followers, so she can, on a whim, make or break a brand in 140 characters.

This kind of intangible risk is especially relevant to the fashion industry, and is difficult to insure against. However, there are a range of approaches to mitigate these risks – from product diversification to buying endorsements from prominent influencers. Sensible counters to the whims of social media are to maintain a strong social media presence yourself, engage often with followers, and use data to help build trust and relationships with your target customers.

Made in New Zealand tag

Generally, new clothing and footwear sold in New Zealand must be labelled with a country of origin. Some brands use this requirement to help with brand positioning, and to justify premium prices. In recent years, several companies have been prosecuted by the New Zealand regulator for making false or misleading country of origin claims. However, given the global approach to clothing manufacturing, country of origin can be difficult to pin down – for example, should an article of clothing that is assembled in New Zealand from fabric made in Indonesia, which is turn made from American cotton, be labelled as ‘Made in New Zealand’?

New Zealand’s country of origin labelling requirements are set out in regulations which, if breached, can lead to prosecution under the Fair Trading Act 1986. Companies that mislead customers as to country of origin can be fined up to NZ$600,000 for each breach. Country of origin claims must not be false or misleading – at a minimum, to justify a “Made in New Zealand” tag, articles of clothing made from imported materials must go through a significant manufacturing process in New Zealand.

When considering labelling, clothing businesses should focus on clarity: “Made in New Zealand from Italian fabric” for example. Regulations vary from country to country. It is up to you to ensure that you are not breaching laws in each relevant country so take care especially with labelling when exporting.

 Top tips
Identify your key IP rights – both in your designs and your brands
Have contracts with all contributors to your designs and brands – ensure you own all IP rights and that contributors have waived any moral rights
If your designs use others for inspiration, make sure you do not infringe copyright
Clear brands and key design elements for third party IP rights before selling your products – this requires brand clearance checks in key countries
Register your brands as trade marks in New Zealand and your key export markets
Ensure country of origin labelling complies with local laws

About the authors

Chris Young heads the firm’s IP practice and has extensive experience in the fashion and apparel industry having worked closely with many well-known local and international fashion and apparel brands and start-ups for many years on a wide range of aspects of their business including developing and implementing IP strategy, managing local and worldwide IP portfolios, licensing and commercial contracts and enforcement.

Sophie Thoreau is a Senior Solicitor in our IP team and has worked with New Zealand and overseas apparel brands, local fashion retailers and designers to protect their IP, develop strategy and enforce their IP rights.

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