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Wednesday, March 22, 2023

How fashion brands can protect their intellectual property in the retail market

The fashion industry is responsible for around 10% of global greenhouse gas emissions, but consumers are increasingly prioritizing sustainability in their purchasing decisions.

This is particularly true for younger consumers, many of whom pay more for sustainable products, underscoring that sustainable fashion and transparency about those efforts will remain important for years to come.

Consumers are not the only ones calling for carbon-friendly production. Corporate boards are driving environmental, social and governance initiatives that factor green production into global processes. In this environment, there are ways that resellers and brands can mitigate IP risks, even with the help of an attorney.

Recycled Fashion

This sustainability drive has grown the resale or re-trade market, reducing clothing waste and extending garment life cycles, thus contributing to the circular economy. The resale market is currently worth $36 billion, with resale clothing expected to make up 27% of consumer wardrobes by 2023. Luxury brands, which have generally been skeptical of resale, they have also prepared themselves for trade.

Reselling creates authentication challenges for both resellers and brands and their IP advisors. While trademark owners generally cannot control the resale of their authentic, unaltered products, their failure to comply against counterfeiting could result in the dilution or loss of trademark rights. Counterfeits also present significant risks to resellers, including infringement liability and even shareholder lawsuits.

Association with resellers and retailers

To meet consumer demand, some brands have established their own resale programs. For example, Patagonia, Eileen Fisher, lululemon, and Levi’s allow consumers to re-sell, trade, and/or buy gently used clothing.

Partnering with re-trade retailers is another way brands can boost sustainability metrics while mitigating infringement risk. For example, Gucci, Burberry and Stella McCartney have partnered with a popular reseller, The RealReal, for years.

These partnerships allow brands to participate in the product authentication process, helping to avoid brand dilution while still enjoying the benefits of participating in the circular economy. Of course, these associations also increase the legitimacy and trustworthiness of the reseller.

Using Blockchain to combat counterfeiting

Brands are also looking to blockchain and non-fungible tokens (NFTs) to fight counterfeits. A blockchain, a digital ledger that securely records and tracks information that cannot be changed, is a promising tool to fight counterfeiting.

For example, NFTs (blockchain-based unique assets) can be linked to physical products, so they can be used to differentiate authentic from counterfeit products. A major player in this space is Arianee, who says she provides “NFT digital passports for luxury goods” that display digitized service history and repair information.

Luxury goods company LVMH’s Aura Blockchain Consortium similarly issues digital certificates of authenticity with information about product sourcing and sustainability. Digital passports are often combined with attachable smart tags that use radio frequency identification (RFID), quick response (QR) codes, or near field communication (NFC).

Digital passports can help combat counterfeits in the resale market, which in turn can help prevent brand dilution and increase consumer confidence.

Trading and Registration Agreements

Intellectual property advice can help brands navigate the commerce landscape in a number of ways. They may negotiate contractual protection agreements for brands that are associated with third-party retail retailers. With their expertise, they can help establish guidelines governing the proper use of brand owners’ intellectual property, as well as product authentication processes to ensure strong brand protection and mitigate activities that dilute or tarnish your intellectual property. .

The attorney can negotiate licenses associated with blockchain authentication technology and branded passports. May conduct and coordinate global trademark clearance searches and filings of program names, slogans, and other marks associated with internal remarketing programs.

Companies should also make use of the consultancy to develop comprehensive compliance programs and strategies to address counterfeiting and other violations on re-trading sites. These strategies are typically comprised of online and offline monitoring programs, evidence preservation processes, and procedures to address counterfeits through informal and formal measures, such as letter campaigns, negotiations with re-trade retailers, takedown requests, and litigation.

Finally, IP advisors can secure comprehensive trademark registration and protection for current or legacy brands, including proprietary trademarks, logos and trade dress, which will help strengthen association, licensing and licensing and trademark compliance.

Consumers are increasingly looking for sustainable and eco-friendly products, and fashion brands are meeting the demand by entering the resale market. By leveraging trusted IP advice, brands can increase their sustainability metrics while maintaining brand integrity and fighting counterfeiting.

This article does not necessarily reflect the views of The Bureau of National Affairs, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or their owners.

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Author Information

colleen ganin is counsel at Perkins Coie, focusing her practice on trademark and copyright clearance, prosecution, licensing, and enforcement, advising clients in a variety of industries, including fashion, finance, sports, entertainment, consumer goods, consumption and technology.

park look is an associate of Perkins Coie. She advises clients on brand protection and compliance strategy. Her practice focuses primarily on the clearance, prosecution, and enforcement of US and international trademarks.

grace han stanton is a member of Perkins Coie’s Intellectual Property practice and former chair of the Trademarks, Copyright, Internet and Advertising practice. She advises clients from startups to Fortune 500 and other public companies in a wide variety of industries.

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