Safir Anand, senior partner and head of trademarks, Anand & Anand pens an analysis of the continuing change of fashion industry that pre-existed, and will succeed, post the pandemic.
The world is enduring a continuous and unanticipated transformation. One such industry that has taken a hard hit and is going through a massive makeover seems to be the fashion industry. Multiple factors ranging from displacement, counterfeits to disrupted supply chains have led to a change amongst the stakeholders and their mindsets. Some have made small swings, while others have been forced to make fundamental deviations.
While the current situation may have impacted the functioning of certain kinds of businesses, it has also led to the creation of newer businesses and in turn newer intellectual property (IP). This has occasioned in various unique and new emerging trends, that can be witnessed already. This article captures a snapshot of the contemporary fashion regime and briefly touches upon some recent Indian initiatives being taken to endure it.
A successful entity has the capacity to create and monetize a distinctive brand with IP rights. In this regard, the economy as a whole has seen pooling in of IP.
There are unprecedented collaborations in the country being spurred for the purpose of commercialization and monetisation. A fashion brand is seen in collaboration with various other brands which are not per se engaged in fashion.
Many such synergistic partnerships in the industry are brewing. In India, for example the Indian Fashion Designer, Gaurav Gupta worked with IBM’s Artificial Intelligence (AI) platform, Watson, to create an AI sari gown. Similarly, Anita Dongre, another famous Indian designer has collaborated with Paperless Post, a design-driven e-commerce company to create eco-friendly and artsy digital e-invitations primarily for traditional Indian weddings.
There is a creative push where the brands are more involved in collaborative IP over unilateral protection of intangibles.
The business models seem to have evolved and rather displacement of such models can be seen. For instance, the alcohol companies whose traditional model was to make spirits, have displaced their traditional functioning and have evolved into a new business stream of manufacturing hand sanitizers. Even the French conglomerate, LVMH has directed its perfume and makeup factories to make hand sanitizers.
Similarly, the big fashion houses have streamed into the manufacturing of face masks. Nobody could have ever anticipated that face masks could have evolved into fashion accessory, until now. Be it an unnamed mask or a branded mask, it has not only created new IP but also added to the aspirational value around it.
The businesses have aligned their functioning with the current priorities, in order to survive and this displacement is leading the future of IP.
New IP in Fashion
There has been a wave of newer IP protection that is being witnessed. From Louboutin's red sole mark now the colour protection has also reached the new players in the industry. In the sense that an organization as young as Glossier has filed a trademark application for its Pink Pouch.
This is critical given that a considerable lot of the organizations that have been successful in claiming unconventional rights over their marks have been in business for many years and have invested hundreds of dollars in such deals. Thus, the outcome of this application will be critical in the growth of unconventional trademark filings.
In fact, Bettina Liano’s distinctive pocket stitching, Burberry’s check pattern, etc were just the start of unconventional protection, now the virtual intervention such as digital catwalks, 3D Designs, et al in fashion comes bearing new IP protection.
Emergence of multiple IP
IP will not be seen in isolation anymore. The world has completely changed, people’s functioning has completely changed, working of brick and mortar stores have also completely changed, which has led to an absolutely transformed way of operating.
For instance, someone who was only into manufacturing of garments earlier, did not need to protect their trademarks in relation to a mobile application or an online retail service. But now that the business models have completely changed and the way that the manufacturer or a company has to approach its customers has shifted, additional IP filings for ancillary classes are making more sense.
Thus, the future of IP is actually an interwoven web of intellectual property which includes a combination of all, such as trade secrets, trademarks, copyrights, amalgamation of several laws and layers including data privacy, branding, unique algorithms enabling better searches, or even digital advertising.
Increase in IP Related Frauds
Even the counterfeiters have been quick to exploit consumer fear and anxiety in the light of the pandemic. This has not just been limited to the healthcare sector in terms of face masks, disinfectants, etc but also pierced in the world of fashion with the increased adoption of e-commerce by fashion and luxury brands.
In an operation called #iocomprodacasa (#ibuyfromhome) in Naples, more than 2,000 fake clothing items worth €200,000 of brands including Valentino, Burberry, Ralph Lauren, Givenchy, etc. were seized.
In an attempt to prevent such pseudos’, the Milan-based fashion brand, Valentino recently collaborated with Amazon in an effort to take down the counterfeits. Thus, other brands should similarly consider partnering with the relevant platforms/marketplaces in order to adequately enforce their rights.
Rise in FashTech
Zeal around wearable tech has certainly accelerated towards the end of the decade. Paradoxically, technology and innovation are playing an important role in the fight against piracy and counterfeit goods.
Various brands are affiliating with tech companies that digitise physical clothing and accessory designs. QR and RFID authentication is a very effective weapon against the counterfeiters which cannot be replicated easily. Many famous brands such as Coca-Cola, Amazon, etc have already incorporated QR Codes on their packaging.
The RFID tag curated by Fijitsu is another piece of technology that can be sewn into a piece of clothing like any normal label and enable consumers to scan the tag for verification through their phones.
Moreover, the traditional entails have shifted to the modern virtual fashion weeks, e-fashion magazines, virtual clothing, digital try on services and what not.
Indian Consumer Legislation in relation to e-commerce platforms
In India, there has been an encouraging support from Courts, Government and even online platforms in their pursuit to defeating the counterfeit. Indian jurisprudence on intermediary liability has progressed immensely over the last few years.
There have been various recent developments around the e-commerce arena lately. The Consumer Protection (e-commerce) Rules, 2019 have been notified on July 23, 2020 as a part of the Consumer Protection Act, 2019. These Rules will be applicable to all electronic retailers offering goods and services to Indian consumers whether registered in India or overseas. The Rules lay down obligations wherein every e-commerce entity is required to provide information relating to return, refund, exchange, warranty and guarantee, modes of payment, grievance redressal mechanism, payment methods, etc. which are necessary for enabling the consumer to make an informed decision before purchasing anything from the platform.
Information Technology (IT) Act Amendment
India is also on its way to amend the Information Technology (IT) Act. Intermediary liabilities, including of e-commerce platforms, are being strengthened. This will be massively beneficial for the IP regime because the intermediary platforms will now become much more accountable and cannot hide behind the existing safe harbour protection anymore.
Contractual Obligations and Clauses
This global pandemic has not just forced the fashion brands to evaluate their existing contractual terms but also alerted the smart ones to deliberate creating valuable pandemic-specific policies for the future.
In order to cope with the fleet of temporarily shut brick-and-mortar stores and the disrupted supply chains, certain contractual law concepts such as force majeure, doctrine of frustration, et al, which tend to be last resort considerations in regular dealings are demonstrating to be common references today.
Design, copyright overlap
There has been an express need from the design and fashion trade regarding issues of overlap between design and copyright law in India, which at times hit the interests of the fashion industry to enforce or seek damages.
As per the law, any design not registered under the Designs Act, and that is produced more than 50 times through any industrial process, loses both the right to copyright and design (protection). Therefore, various associations are sending their representations to the government to consider amending the law.
Sensitizing the Brands
In a world where rampant copying exists, there seems to be inadequate protection. This gap needs to be bridged by sensitizing the fashion industry.
Back in 2019, in one of its endeavours, the Fashion Design Council of India (FDCI) in collaboration with Anand and Anand, at the India Couture Week organized a Masterclass on Design Protection to urge fashion designers to protect their original creations against fakes under IPR laws.
Similarly, to sensitize its members, FDCI and Anand and Anand also conducted a podcast on Covid-19, Force Majeure and Commercial Contracts. Such initiatives are a must to spread awareness amongst the community.
The world is in the midst of an enormous transformation and brings with it, legal challenges of its own. Thus, it is important to be aware not only as a brand but also as a consumer and to ensure necessary compliances for protection of the intellectual property. Awareness and action, as a community will help us fight through this pandemic and the challenges it brings with it.
Safir Anand is senior partner and head of trademarks at Anand and Anand.