APPAREL MONTH: Guidance for brand owners

The apparel industry has long had its own lexicon, as suggested by its self-styled name of the rag trade.
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So much so, that a hypothetical briefing for a raid by Customs and Excise using industry colloquialisms, would seem like a different language:

“The target premises have mixed use, mostly as a stock house but with some tied CMT. They buy in cabbage to produce shells for counterfeit luxury-brand schmutter. Make sure you get the lays and dockets, not just the pieces. Take samples of the incidentals and any paper trail and computers. We need to time it when the runner visits but ideally whilst any cutters and finishers are off-site.”

As my translation was nearly 200 words, I decided not to reproduce it here but instead to offer a bottle of champagne to the most apt and original response received by my next article, courtesy of Hamlins.

But it begins to illustrate the simple fact that the apparel sector is distinct from other areas. Other reasons for this distinction can also be put down to a number of other features; speed-to-market, short shelf-life and a demand for continuous creativity in response to the numerous collections typically required throughout the year (rather than just for summer and winter as of old), together with the realisation that it is often considered usual to take inspiration from other peoples designs - producing look-a-likes.

All of this adds an importance and complexity for brand-owners to adopt appropriate strategies to protect their clothing ranges by intellectual property, both in terms of the vital clearance work needed to ensure a range won’t infringe other people’s rights and for identifying the best intellectual property protection which is realistic and obtainable. Adopting the usual intellectual property strategies and expectations will not always to do the job. A review of these intellectual property rights is provided in my Need to Know article.

The trouble is that the brand owners problems do not stop there. Even once your designs are in shape for IP protection, if brand owners and those they licence can’t identify fakes or copies swiftly without error or significant cost and, just as importantly, persuade auction websites and enforcement authorities to do so as well, then enforcement can become too difficult or costly to remain realistic.

At the Brand Licensing LIMA Essentials seminar last autumn, Trading Standards officers from the London Borough of Tower Hamlets all but announced that resources were so strained that their anti-counterfeiting work was often effectively limited to brand owners who held registered intellectual property and could help officers identify fakes with ease and certainty.

However, if the enforcement authorities can be given an armchair ride on a raid with the brand owner feeding them with all of the necessary intelligence and evidence of intellectual property infringement, results can be dramatically improved. On a recent raid orchestrated by my firm with the local trading standards team, nine lorry loads of infringing goods were taken away from a warehouse. The raid took place after only two weeks planning, which included identifying the target company and directors, making test purchases and providing statements setting out all the IP rights. The matter is now proceeding to a criminal prosecution and will hopefully be largely self-funding by means of criminal compensation orders.

Technological developments haven’t helped the fashion clothing industry either. The ability to produce high quality replicas at relatively low costs, even mimicking some of the more common anti-counterfeiting devices, has made it harder for brand owners to identify the copies for themselves, never mind for enforcement agencies. Whilst security devices are being developed (particularly radio frequency identification tags) these are rarely commercially viable on High Street ranges, for the present at least.

Tackling counterfeit product at point of sale into the UK is a good start, but the ultimate goal must be to stop the copying at source. And here again the fashion clothing industry throws up yet further obstacles, due to diversity of production being a common feature.

Typically, garments are the product of a number of different businesses; for example, cloth-cutting, sewing together, adding trimmings, labelling and finishing can each be the responsibility of different companies. At each stage of development aspects of the range are capable of being copied and the oldest trick in the industry of producing a considerable amount of licensed overruns for own use is still seen as a legitimate perk of the business by some unscrupulous suppliers.

This all adds to the difficulty of not only monitoring quality control but also policing the backdoor exploitation of product. Often the first time a problem becomes apparent is when significant quantities appear on eBay or at market stalls and car boot sales. Not only does this devalue the range but it may create legal difficulties if a retailer has been promised an exclusive new range.

It would also not be right to fail to mention that sweated labour issues have been a hot topic for the apparel industry. Anyone marketing a clothing range will want to be sure to avoid the type of hostile press for example recently directed at GAP and Primark.

But as much of what was said in the toy industry article last month on the issue of ethical production is equally relevant here, I won’t expand on this, other than to say that it’s not just adverse publicity which may result from this concern. Freight companies won’t always handle clothing consignments unless certification can be produced to say that no unsafe dyes or toxins have been used. Also, carbon imprints for sourcing is an issue for an increasing number of retailers, with the result that some have refused to accept consignments which have been sent by air.

Finally, the effect of buyer-insolvencies merits a mention. The loss of business for sellers is bad enough, but insult is added to injury for any seller who supplies stock before payment and fails to retain title to the garments via the sale contract. This unfortunate situation is now commonplace following the recent clutch of household-name retailers entering administration.


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