The stunning models on the fashion runways of Paris, Milan and New York are glamorous and trendy with the latest designs. But fashion is more than glamour and paparazzi. Fashion is also a business that is operated by both large companies and smaller entities. Many of the day to day issues of the fashion industry are legal problems that are handled by attorneys. In fact, it is prudent to consult a lawyer who has experience in the fashion business before embarking on a business venture involving fashion.
There are many legal issues involving fashion. These include:
Legal Protection of Designs
What legal protections are available for fashion designs? Should I trademark my logo or company name? Can I get copyright protection for my fashion or jewelry designs? Is it possible to patent a design?
Generally, the shape or style of fashion designs cannot be protected through copyright because clothing is a “useful article.” However, designs that are imprinted on clothing can be copyrighted, as can original jewelry designs. Moreover, logos and company names or slogans are eligible for trademark protection. Even design patents can be used to protect some fashion creations.
Should a brand license its trademarks and designs? For example, Calvin Klein has been very successful in licensing the Calvin Klein trademarks. Calvin Klein’s annual revenue from licensing reportedly exceeds $200 million.
Counterfeiting and Infringement
What are the risks to a brand from counterfeiting and infringement? How do I keep my brand from being “knocked off” or imitated? Billions of dollars of counterfeit products are available on the internet. How does a brand owner or designer protect itself from this overt theft? Copying of fashion designs is rampant throughout the world. Some retail stores specialize in selling cheaper copies of the latest designs. As noted above, it is diffi cult to protect the design of apparel; however, it is illegal to copy a trademark that appears on the apparel. Examples include Chanel, Burberry, Prada, Gucci, Dolce & Gabbana, Nike, Louis Vuitton and many others. It is both a criminal and civil offense to engage in trademark counterfeiting. The FBI, U.S. Customs and local police are watchful for violators of these laws.
Launching a Business
How do I launch a successful fashion business? What business entity should I choose? The choices include sole proprietorship, partnership, corporation, or limited liability company.
License or Franchise?
Should my stores be licensees or franchisees? Benetton adopted an approach where its stores were licensees, but Benetton did not charge a royalty or franchise fee. Benetton thereby avoided the onerous franchise disclosure requirements under U.S. law.
What employment issues will I encounter? Is there a danger of employment discrimination suits? In 2005, Abercrombie & Fitch settled two class action lawsuits brought by the Equal Employment Opportunity Commission (EEOC). The EEOC charged Abercrombie with racial and gender discrimination. Similarly, Wal Mart has been sued for sex discrimination for alleged unequal pay to men and women.
The Model’s Rights
What are the rights of a model to control the uses of his/her image in advertising? Contracts used by modeling agencies are very short and contain few legal provisions. The advertiser may feel free to use the model’s image in many different media, while the model may believe the uses are limited. These issues require consultation with an attorney.
Retail Store Leasing
Many prominent fashion companies prefer to make their sales through dedicated stores that bear their name. This requires fashion companies to enter into commercial leases for retail stores. Should I select a prestigious location, such as Rodeo Drive in Beverly Hills or Newbury Street in Boston? Or can I place my retail store in a less expensive location?
Fashion companies need to consult with real estate experts before making this decision. They should select a competent and honest broker and a lawyer experienced in retail leasing. If the store is in a mall, the tenant may wish to have an exclusive or a radius restriction, which restricts the landlord from having similar competing stores in the surrounding area. The glamorous and upscale world of fashion and couture has many different business and legal aspects. If you are engaged in the fashion world, it is prudent to have an experienced and knowledgeable counsel who can guide you through the maze of potential problems.