To Plan or Not to Plan

modern and fashion clothes store

In most cases, a new store tenant will require work to be done to make the premises suitable for its purposes. As a rule, a landlord will insist that no work can be done without prior approval. That puts the prospective tenant on the horns of a dilemma while negotiating a lease: if an architect is hired to design the plans while negotiations on the lease are ongoing and the lease is not ultimately signed, time and money invested in the premises will be lost. If the plans are not prepared, however, the opening of the store may be delayed as the landlord goes through the approval process, or worse, the landlord forces the tenant to change the plans. The result: the tenant may not get the store it wants on the date the tenant needs it.

Whether or not to advance the money for plans is always an individual consideration, depending on the relationship with the landlord and the time pressure to open the store.

Even if the tenant prepares the plans and the landlord approves, there is still the issue of getting the approval of the local authorities. Estimating the time that it will take to get approvals is crucial in calculating when the store will open. Without that information, planning for seasonal inventory can be thrown off, with potentially serious business consequences. Ideally, a tenant would have a contingency in every lease for cancellation if the plans are not approved by the authorities. However, it can be difficult to get landlords to agree to that in good measure because of an inability to predict what plans the prospective tenant will submit and what the official reaction to them will be.

However, if the plans are already completed and approved, the municipal authority will likely have someone who would be willing to meet with the tenant’s architect to give an indication of whether there will be problems and to provide an estimate of how long the approval process might take. In some cases, the government representative would also be able to alert the tenant as to any existing problems in the building, especially if the landlord has not been cooperative. It is, therefore, often a good idea to pay a visit to the local building department once plans are completed and approved.

Credit: Steven J. Rabinowitz

Steve is counsel in Phillips Nizer’s Real Estate Law practice.


Those Empty Young Eyes

young elegant fashion model staring into camera

Recently, in American Photo, the photographer Robert Polidori reflected on the things he does not like about fashion photography: “One is the psychological stance. Eyes are the window to the soul, or at least to the psychological state. In the great majority of fashion photography in the past, say, 40 to 50 years, they have zombielike eyes. They look at the viewer-or at the photographer, who is the metaphor for the viewer-to-be—like, ‘I’m not looking at you. I do not value you.’ There’s a sense of denial that runs through it. I always wondered, why does denial sell clothes?”

As both a fashion lawyer and as a photographer, that touched a nerve with me. That empty stare of models in both advertising and editorial shoots has been a staple of fashion photography for about as long as Polidori suggests. It goes back at least as far as the “Sighs and Whispers” lingerie brochure photographed for Bloomingdale’s in 1976 by Guy Bourdin. Immediately controversial, it featured models looking lovely and catatonic in their perfect underwear. (I actually have a copy of that small but groundbreaking piece stored safely somewhere.)

The alternative to the blank eyes is the downright threatening “go thither” stare—as if the beautiful woman is either daring you to admire her and her clothes or pitying you for hoping ever to match her. As your basic straight and clueless guy (adjectives that, I am reliably told, are redundant in context), I also have to ask for what reason any of that sells clothes to women. (If anyone knows, please email us the answer, and we will consider it for future posts.)

I look at the women in fashion publications, and I reflect now on how completely different they are from those in publications aimed at straight and clueless guys. Take any well-done fashion editorial piece and compare it with say, the Playmate of the Month pictorial. Three messages are forcefully presented to women: First, to appeal to men, you do not need to spend all that much on clothes; indeed, if ever there were an illustration of the principle of less is more, here it is. Second, you do not have to be all that thin; the women in men’s magazines illustrate what evolutionary biologists have long been saying: whether they know it or not (probably not), men seek mates who have sufficient body fat to carry a pregnancy to term. The third thing you notice is that it really does pay to smile and to look interested in the guy who is looking you over. (Come on, admit it: your Mom told you that too, right?)

We get it that fashion photos for women’s apparel are not directed at men. Maybe that helps explain why we remain so clueless when it comes to choosing gifts for women. As to what our magazines say back to women, do we really feel comfortable sending the message that, no matter the season or what is showing on the runways, nothing equals the effect of a red thong and a pair of stilettos? And for evening, accessorize that with an engaging smile? I suspect women are no more interested in getting that message than men are prepared to understand why those lean and mean girls in fashion photographs appeal to potential customers. So much about romance will just continue to remain a mystery to us all.

Credit: Alan Behr


Millennials Sure Don’t Shop the Way Their Parents Did

Three Trendy Young Adults Selfie

I was struck by the news that Target’s limited edition Lily Pulitzer collection sold out within hours, after Target took its website off-line in the face of extraordinary demand when the collection went on sale. It is surprising that a sophisticated retailer and a well-known fashion brand did not expect either the demand or that it would manifest itself in a stampede to Target’s website. Can it be that fashion brands and retailers do not appreciate the fundamental shift in consumer behavior of which this is merely the latest manifestation?

As the mother of a daughter who is what the media has taken to calling a millennial, I have had a highly personal view of the change in what was once a fundamental consumer activity: shopping. For me, shopping, which includes searching for luxury brands at bargain prices, is a treasured leisure time activity. It was an activity I used to share with my daughter. The siren call of the mall in Florida, California or wherever else I might be where there was a mall was an essential not-to-be-missed feature of any vacation. And in Manhattan, which has no malls, a stroll on Fifth Avenue or Madison Avenue was a wonderful activity on a nice day.

That stopped when my daughter became a teenager. The one and only shopping trip we have taken in the last 5 years was to find a gown for the prom. That’s not to say that my daughter is not obsessed with fashion or is not an inveterate shopper. She spends more time shopping than I ever did. But the only stores she visits in person are Sephora, to play with cosmetics, the Apple store, to play with gadgets, and thrift shops and vintage stores to find that perfect ugly Christmas sweater or 60’s bargain accessory.

Instead, she shops on-line at all hours of the day and nighBeautiful woman making online shopping using digital tablett, particularly when she is procrastinating to avoid writing papers or completing other school assignments. She shops on her iphone, on her iPad and on her Macbook. She orders everything she is interested in on-line, preferring to try things on in the comfort of her own room, returning what doesn’t work and keeping what does.

For her, on-line shopping is also a highly social and communal activity. She sends links of potential purchases to friends and solicits their opinions. She takes selfies of herself in garments to poll her friends on what she should keep. She follows the brands she likes on social media so that she knows what’s coming and when the sales start.

None of this is new. It has been going on now for years. It is the reason why malls are dying and why some teen retailers have struggled while others have thrived. It has dramatic implications for fashion brands and retailers and important implications for lawyers who serve them. We all must master the internet, social media and the changes in distribution channels that these portend. So bear in mind all: this is the generation that killed the compact disc and record stores and is well on its way to killing iTunes, even though it consumes more music from all over the world than we ever did. It is killing the book store and books (college texts can be rented, ordered on-line and sometimes consumed electronically), although it actually reads more than we do. You’d better get with the “what I want, when I want it, without getting dressed” generation or you’ll soon be a relic of the past. And message to Target and other retailers: if you frustrate your customers and they see your goods as something unattainably dangled out of their reach, you’ve lost them as customers. Millennials do not take frustration well, and the web offers lots of alternatives that are more accommodating. Like Top Shop!

Credit:  Helene M. Freeman


The Conformist

Garment Manufacturing Asia

Have you ever had the experience of going into a fitting room and trying on two of the same item in the same size, perhaps only in different colors, only to find that they fit quite differently—to the point that one might not fit at all although the other did? Production line manufacturing may be efficient, but no one ever claimed it to be an exact science.

No one expects the retailer to guarantee that every item sold under the same SKU will fit exactly like every other item bearing that SKU in the same size. But in fashion licenses, that kind of elasticity in expectations can become the subject of negotiation.

It typically plays out like this: the licensee agrees to provide pre-production samples to the licensor for approval. The licensor either approves or disapproves; if it disapproves, the licensee is often entitled to a second try, adjusting the style to suit the licensor’s expectations. Once the styles are approved, the licensee initiates production. More typically in the fashion business, the licensee contacts someone else, often half a world away, and tells him or her to initiate production.

The licensor may demand, in the representations and warranties section of the license (which has been the subject of this series of posts), that the licensee warrant that production models will not deviate from approved samples. If the licensee is careful, that may be qualified by adding in any material way or by breaking the force of terms like will conform by dropping in the forgiving qualifier substantially. But bolts of cloth from different batches can easily have variations, and sometimes the chosen buttons, snaps and other accessories run out and others need to be substituted; the list of potential deviations goes on. In a seasonal business such as fashion, where a handful of weeks can make or break a SKU, a style, a look, a collection or even an entire business, the date on which finished goods are to be sent to retail doors is hardly the time to get into an argument over whether something already bought and delivered does or does not substantially or materially conform to the appearance or other attribute of an approved prototype.

The first rule of warranties applies here as it does to all others: for the licensee, never make a promise that you cannot keep; for the licensor, never ask anyone else to make a promise that you can be reasonably sure he or she will not be able to honor. To avoid surprises, it is useful for the parties to think through, and to talk through, contingencies due to variations in manufacture and to consider adding to the license, as a defined term, exactly what they mean when they say something must conform to what has been approved. Even if something is completely non-conforming, alternatives such as sale into outlets or other lower end channels, or outside the territory, perhaps with labels removed, can sometimes work.

In the end, however, all licenses, like all contracts, rely more on the element of trust (and forgiveness) than lawyers can hope to draft into them. Simply, a well-written contract can get you a favorable result in court, but working with the right people is a good way to help stay out of court.

Here as with most else in licensing, the name of the game is cooperation. The devil, as they say, will always be in the details.

Credit: Alan Behr

See previously published related posts:


Can I Use The Photographs? (Part 3)

Cannes - 'Dreamgirls' Premiere

These days anyone with a cell phone is a photographer and the internet is flooded with photos of celebrities that go “viral” on social media. A photograph of a star wearing your garment, carrying your accessory or holding your shopping bag can be of tremendous value to your brand. Indeed, brands shower celebrities with gift items for the promotional value in their use. And contracts to promote brands are lucrative for the celebrities and those who serve as matchmakers. So it is very tempting to copy photos found on the internet to your website, Facebook page or ad. But if you do, you may run afoul of what has been variously described as the right of privacy or the right of publicity.

There is no uniform national law which protects an individual from unwanted exploitation of their name or image. Each state, however, has afforded protection, either by statute or as a matter of judge made “common law”, and sometimes by both. New York has long prohibited the use of the name or likeness of every living person—celebrity or not—for purposes of “advertising or trade”. While the New York statute offers no protection against the use of the image of a deceased person, even if a celebrity, other states do protect celebrities against commercialization for extended periods after death.

Use of a name or likeness for non-commercial purposes, however, is not prohibited. Because of the constitutional guarantee of free speech, newspapers, magazines and even TMZ are free to report the comings and goings of stars, and also to publish that embarrassing photo of you at a Giants game, with impunity. Your daughter can tweet her cell LadyGaga-InSunglassesphone photo of Britney Spears walking on the street without make-up or post-it to Facebook, and like-minded celebrity-obsessed fans then can circulate it freely. These uses are not considered uses for purposes of advertising or trade and so are protected free speech.

But what of a business seeking to use a celebrity image on its website, Facebook page or other social media channels? Is this protected free speech, or is it instead a violation of the right of privacy or publicity? On the one hand, the use of the image in a paid advertisement is clearly a violation of the right of privacy and publicity, including under the New York statute. And use of the image on merchandise, even if given away for promotional purposes, is also a clear violation which can lead to punitive damages and not merely compensatory damages.

Closer questions are presented by posting a photo on your own website. A website is a business promotional tool and can be seen as an advertising use. But websites can also report news and events relating to the business, and truthfully communicating newsworthy events is behavior protected by the First Amendment. Where celebrities are seen and what they are wearing is considered legitimate subjects of public interest meriting First Amendment protection. Does this mean that if your daughter can tweet her photo of Britney Spears, you can retweet it and point out she’s wearing the hat and scarf you sell? On this question the judicial authorities have not yet spoken. Last year Katherine Heigl sued Duane Reade under the New York statute, for tweeting a photograph of her carrying a Duane Reade shopping bag. The litigation was resolved privately without a court addressing the legal issue. While it is sorely tempting to opine that this sort of communication of truthful facts should not be actionable, the burden and expense of defending against such a claim and the damages to which you could be exposed counsel caution.

Credit: Helene M. Freeman

See previous posts:


I’m A Good Neighbor–Most Places

fashion designer

When licensing a brand, a fashion licensee naturally wants to know not only that the licensor owns the trademarks that identify the brand to the public and the trade but that the licensee will be able to use the marks without having to contend with adverse claims from third parties. The last thing that a licensee wants is to have many thousands of units manufactured and, just as they arrive in ports and warehouses, get hit with an action for trademark infringement, alone or together with trade dress, copyright or design patent infringement. Indeed, an infringement action could contain any of those claims in combination, resulting in a rather complicated federal lawsuit. And if that is not quickly fixed, there goes the spring/summer season, and all those units, made at the licensee’s cost, might just as well never have been produced. As sub-optimal results go, that is about as low as they come for a new fashion collection.

To help protect against that from happening, counsel for the licensee will typically ask for a warranty of non-infringement. In the practical world of transactional law, there are no prizes for originality in draftsmanship, so all non-infringement clauses are like bees in a hive—they all look pretty much alike:

Fashion Company represents and warrants that the Licensed Manufacturer’s use of the Licensed Marks referenced in Exhibit A as contemplated under this agreement shall not infringe upon or violate the intellectual property rights or other rights of any third party in the Territory.

Of course, if things were that simple, licensees would not need lawyers. (Spoiler alert to licensors and licensees reading this series: Do not rely on what you read here as a substitute for legal representation. Please do not attempt to conclude a complex fashion license without benefit of counsel.)

Indeed, contractual law is about nothing if not the hidden complexity found in words and phrases. As signified by its capitalization, the word Territory should be a defined term. If the license is for a Territory defined as the “United States, its territories and possessions, and Canada,” the non-infringement warranty would cover claims made within those specific jurisdictions. Consulting the United States Patent and Trademark Office database to be sure that the licensor’s trademarks are registered and that there are no pending challenges to those registrations is good self-help for the licensee and a prudent caution for the licensor. But if the licensed Territory is defined more broadly—covering all of the Americas, Europe or even the entire world—the licensor may seek to limit the warranty of non-infringement to those portions of the Territory in which it is reasonably confident that it has protected its licensed rights.

And that is how licensees can find themselves with a predicament that is endemic but the fault of no one: there may be parts of the Territory where the licensor cannot be sure claims of infringement will not be made—as anyone who has seen, to his shock, that his trademark has been registered in another country by someone else for use on the same goods.

The solution? There are various methods that can be used here, but key is for the parties to identify the likely most important countries into which the licensed goods will be delivered (and where they will be manufactured—also an important consideration); they should work together to refine the warranty into something that is reasonable and fair under the circumstances. If that is done, the license should also provide a mechanism for the parties to cooperate in the event that the licensee will seek to introduce its products into areas in the Territory for which the warranty would not apply on execution.

The bottom line: It is a big world. Rights and remedies regarding licensed intellectual property can be very different from one nation to another. Care must always be taken to match the business plan for a license with the realities not only of the market but of the law. In the end, it is in the best interest of both parties to see that works out successfully. That proves again why all licenses are, if nothing else, documents of cooperation for the common good of the parties involved.

Credit: Alan Behr

See previously published related posts:


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