Keeping Control Over Your Brand

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In the movie A Hard Day’s Night (1964), unscrupulous menswear marketers lure George Harrison into their office, there to assure him that the two new shirts they put into his hands are essential to his self-esteem. When George says the goods are frightful, the head marketer comforts his team that, “within a month, he will be suffering a violent inferiority complex and loss of status because he isn’t wearing one of these ‘nasty’ things.”

The point was that the guiding spirits of the generation of the 1960s formed up against the commercialism and consumerism that were behind marketers’ attempts to pass off “nasty” goods as status symbols for insecure youth. How times have changed. Someone with a device in his pocket that pitches out brands and branding stories faster than summer rain drenches a field views branding and the commercial motives behind it in a much more positive light. Brands ignite consumer interest as never before, and brands win when they have good stories to tell—stories that create interest and become viral once consumers are engaged. Brands are, after all, nothing but good will with consumers, and once that is obtained, the message is spread most effectively by consumers imitating each other and aspiring to what each other has. The bad news that follows from the good is that consumers, in exchanging with each other messages about brands they know, are becoming as important in the control of a brand’s destiny as the brand’s owner—and its marketers.

For that reason, never has the creation and the protection of strong trademarks been more important for the fashion business. The value of the trademarks is applied directly to the bottom line in the form of good will. There are terrific fashion brands that own little else but their trademarks and related domain names—not the factories that make the clothes, not the stores in which they are sold, not even the photocopy machines in the corporate office. What they have are strong trademarks protected throughout the areas of current use and expected operations. The moral of the story: work with your trademark lawyer to develop, as early as possible, a solid and workable trademark protection program, and then stick to it by carefully searching and analyzing all new prospective trademarks and by registering them promptly as soon as the anticipated need arises. What have you to lose by not doing that? Only everything you may have.

Credit:  Alan Behr


Seeing Red–and Your Brand

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One of the ways to build brand identity in fashion is to create strong customer recognition of a particular color as a signature of the brand. That has value across all lines of commerce. We can be sure, for instance, that no one will consider starting a worldwide package delivery service that uses solid-brown trucks and driver uniforms. In fashion, there are many examples, from Tory Burch’s orange doors to the red outsoles of Christian Louboutin footwear—the latter of which became the subject of important litigation in the United States.

In the Louboutin case, Louboutin v. Yves Saint Laurent Am. Holding, 696 F.3d 206 (2d Cir. 2013), the Second Circuit Court of Appeals held that Louboutin could retain its trademark registration for red lacquered outsoles for “women’s high fashion designer footwear” in which the outsole and upper were of contrasting colors. What that means is that, if your competing shoes are monochrome, as was the YSL style (which had a red heel and insole as well), you can use red lacquered outsoles. But for all other such footwear, Louboutin owns the exclusive right in the United States to use lacquered red for outsoles. Both sides in the case were therefore able to claim victory: the particular Yves Saint Laurent style did not infringe the Louboutin trademark because it was indeed all red, but the Louboutin trademark was not stricken from the register, simply limited to what Louboutin has mostly been doing all long—which is to put lacquered red outsoles on women’s footwear with contrasting uppers.

It is not often that litigation ends in such a win-win scenario, but the message remains the same in any situation: If you have an important color that you believe is part of your brand’s “signature,” work with counsel to structure efforts to seek protection of that color as an element of both a trademark (a brand identifier in the form of words and logotypes) and trade dress (a brand identifier in the form of particular elements of product packaging and, with a bit more effort, the products themselves).

There are related issues. One is the color spectrum: if you are claiming the color blue, what range between blue-tinted white to midnight blue, on one hand, and green-blue to gray-blue, on the other, are you claiming as your true blue? Another issue is the business spectrum: what are the product categories and the markets (by type of customer, price point, etc.) for which you are claiming exclusivity for your color? And as the Louboutin case shows us, much may ride on the positioning of your “signature” color on products (and packaging) and your ability to prove that the marketplace understands that the signature is yours alone.

The takeaway from all this remains much the same as with other questions concerning branding in the fashion and accessories sectors: marketers should work closely with lawyers and get them involved as early as possible in the decisions that they make.

Credit: Alan Behr


Do More But Restrain Yourself Too

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Luxury, being the thematic opposite of necessity, must be at least as much about what you desire as what you need. Building a brand to fill that role requires both diligence and self-restraint.

A luxury brand and its products should be readily identifiable as superior to both existing and aspirational customers. That is not to say that that non-luxury brands and their products do not require legal protection; we are simply recognizing that the luxury premium adds a new class to the market—those aspirational customers—whose perceptions and desires are vital to the future of brands in the luxury sector. For that reason, and many others, it is particularly important for luxury brands to work with counsel to identify and protect all the important proprietary elements that are capable of being protected. That includes protection, where appropriate, by trademark (and trade dress) registration, design patent registration, and—something rather unique to the United States—copyright registration.

With few exceptions, it is generally better to err on the side of more rather than less when it comes to registrations. Styles and style names that will only be in the catalog for a season or two are usually not worth the trouble, but anything of medium to long-term consequence to the bottom line and brand value almost certainly is. In these posts, we will go into more detail about various forms of legal protection, but a key guideline is this: once each season, have a look at what engages the public with your brand and your products and how that engagement might lead you to adjust your legal protection program. There is probably no more important work that marketers and counsel can undertake together in order to make your protection program both thorough and cost-effective.

This year, the International Trademark Association held its annual meeting in Hong Kong, giving the world’s intellectual property lawyers the opportunity to congregate in an important commercial city where branding is all. Once a playground for bargain hunters for, consumer electronics and rapidly cut and stitched men’s suits, Hong Kong has become a destination for consumers of luxury goods. Indeed, I cannot remember seeing another city in which almost any international luxury brand I can think of had more than one boutique. What was particularly interesting this time is that, for various reasons, visitors from the mainland were uncommonly absent, with the result that, in every store in which I had a look, the sales floors were empty of patrons. That may be a temporary problem, but it raises a bigger question: as surely as luxury is about something greater than necessity, it is also about relative inaccessibility; it is an experience over and above the ordinary that is made all the more desirable by its very lack of ubiquity. When luxury is everywhere, can it start to look commonplace? The risk is that new entrants will have a chance to succeed (in no small part due to their newness and limited production) in poaching customers sated by what has become too familiar. That may be healthy for the marketplace but not for you if you have a valuable brand.

There are no perfect formulas, of course, but here is a general reflection that might well apply when protecting a luxury brand and its products: under law, more is better; when preserving the reputation of a luxury brand and its products in a business sense, less may sometimes indeed be more.

Credit: Alan Behr

Photo Credit: Iskciedlam (Creative Commons)


A Wobbling Thought on Shoes

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As I was crossing Fifth Avenue the other day, I found myself behind a very tall and well-dressed woman who took her strides in chic stilettos. Each time a foot hit the pavement, the leg wobbled before gaining its firm grip; and so did she strut westward: heel to the pavement, wobble, steady; next heel down, wobble, steady, and so on. Fortunately, she was young and quite fit; indeed, her calf muscles looked like prize-winning eggplants. Enter the laws of physics: the heels and soles of those shoes were undoubtedly manufactured to uniform specifications for both short women and tall ones. Assuming you are (as this lady was) over six feet tall, even if you are thin (as she was), you are putting a lot more weight on those heels and offering them a much higher center of gravity on which to balance the whole of you than would a similarly proportioned woman one foot shorter than you. Although I had to admire the lady’s determination to wear what she liked, I had to wonder if there was perhaps a fashionable alternative—Salvatore Ferragamo pumps or Tory Burch ballet flats—that would prevent every stride from looking as if it were an invitation to a trip and fall scenario. Or is it that we men, bound as we are to heels that look like horses’ hooves, cannot fully appreciate what woman are prepared to go through with their shoes and why they choose to do it?

Credit:  Alan Behr


License Agreements: Aim for Fairness — But Words Have Meaning

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It can be said that a licensing arrangement is inherently symbiotic in nature, with the good faith efforts and cooperation of both the licensor and the licensee being necessary for success. The licensor provides its trademark, perhaps some degree of design expertise (particularly in the fashion field), and perhaps also brand customer relations and certain advertising and promotional assistance; and the licensee contributes its expertise in the particular industry covered by the license and possibly its customer relations, its organizational structure and capital resources. The resulting relationship, in a very practical sense, is that of a joint venture or a partnership. Although on one level the negotiation and drafting of a license agreement must be approached as an adversarial process, both parties also should recognize that they will be more likely to view their arrangement ultimately as a success if it strikes a balance, on the one hand, between the licensor’s legitimate concerns for the maintenance of its image and quality standards, for the protection of its trademark and for fair compensation for the rights it has granted and, on the other hand, the licensee’s legitimate desire to exploit the rights granted to it in an economically advantageous manner consistent with industry norms in the applicable market segments and without fear of termination if it is performing in good faith. Ideally, therefore, the parties should approach the negotiation and documentation of the license agreement from the perspective that each of them is looking to make the venture a success for both of them and should recognize and attempt to satisfy the other’s needs.

That said, no matter how much the parties aim for “fairness,” there almost surely will be provisions that a licensor perceives as necessary to protect important interests which a licensee considers unfair, unduly burdensome or overreaching. Before proceeding with an agreement, a licensee must remember that words have meaning and a licensor can seek to force the licensee to conform in its performance to what the agreement says. A licensee cannot rely on its business sense (or gut) to assume that a licensor would “never do that,” even if the licensor assures it that the licensor never has done so before. There also can be no great comfort in the thought that the provision might not be enforceable, since the time and cost involved in adjudicating the issue can be enormous, even if the licensee succeeds. If the agreement requires certain conduct or prohibits certain acts, a licensee should assume that those words control and that, if it ignores them and its licensor’s demands for conformance, it does so at its peril.

Credit:  Jonathan R. Tillem


License to Kill (Your Business)

Licensing represents an opportunity for a fashion brand founded on one or a small number of product lines to stretch into almost any clothing, jewelry, beauty or accessories category—and beyond.  Moving into a broad range of products and services has been an especially successful strategy for luxury brands.  Consider that Ralph Lauren started as a maker of men’s neckties and that Hermès began as a maker of harnesses for carriage horses.  Although you sometimes hear the saying that, “No one ever got rich licensing a brand,” licensing can be a useful, even necessary tool to build brand awareness among both old and new classes of customers.  When you leap into categories that have specialized production requirements, unique distribution methods or simply just high barriers to entry—consider timepieces, fragrances and eyewear—licensing is about the only sensible way to make it happen.

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But what is a legal article without a warning about pitfalls?  (Just as designers are paid to create and merchants are paid to awaken and satisfy customer desire, lawyers are paid to worry.)

  • For the licensor, a key concern is that its licensing agent or licensees themselves may prove unmotivated or unable to bring the brand’s image to new product lines.  A licensor can find itself devoting an inordinate amount of time to servicing the product development needs of its licensees—to the point that, in extreme cases, the licensor can start to feel as if it is working for its agent or licensees.  On the other hand, licensees’ successes may kindle the temptation to over-license, risking dilution of the brand.
  • For the licensee, pitfalls can include disapprovals of products by the licensor that result in missed shipping dates, lost markets or revenue, confusing or incomplete branding direction or support (especially after a change of control at the licensor), and all the potential dangers that come from devoting your business to enhancing the goodwill of someone else’s brand.

Any one of those concerns can cause serious—and in extreme cases terminal—problems for participants in the licensing game.

In subsequent posts, we will review the ins and outs of licensing in more detail.  As with a good story, where the art is in the telling, with a good license, the art is in the drafting.

Credit:  Alan Behr