IPPro Issue 24

ISSUE 24

25 June 2019

Disrupting classic licensing models Keith Bergelt on the OIN’s milestone success

Deals in heels

Rebecca Delaney on the unique challenges of fashion licensing

In this issue

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Editor: Barney Dixon barneydixon@blackknightmedialtd.com +44 (0)208 075 0928

Reporter: Ben Wodecki benwodecki@blackknightmedialtd.com +44 (0)208 075 0926

Designer: James Hickman jameshickman@blackknightmedialtd.com +44 (0)208 075 0930

Contributors: Rebecca Delaney Account Manager: Bea Ipaye

News Focus: US group registration

Community Update: OIN

The US Copyright Office is proposing a group registration option for musical works, sound recordings and graphic works contained on an album

beaipaye@blackknightmedialtd.com

Keith Bergelt of the Open Invention Network discusses the company’s milestone success of 3,000 business licensees as it challenges licensing models

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+44 (0)208 075 0933

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Associate Publisher: John Savage johnsavage@blackknightmedialtd.com +44 (0)208 075 0931

Publisher: Justin Lawson justinlawson@blackknightmedialtd.com +44 (0)208 075 0929

Fashion Licensing

Latest Events

Fast fashion and influencer culture have had a knock on effect and perpetuated the unique challenges of fashion licensing

Pick up your copy of IPPro, meet the team, and discover the world of intellectual property at these industry events

Office Manager: Chelsea Bowles accounts@blackknightmedialtd.com Published by Black Knight Media Ltd Copyright Š 2018 All rights reserved

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News Focus Jer123/shutterstock.com

IPOS launches IP insurance covering infringement costs The Intellectual Property Office of Singapore (IPOS) has launched a new IP insurance initiative for innovators.

The Intellectual Property Insurance Initiative for Innovators (IPIII) was launched by IPOS alongside Lloyd’s Asia. The policy is being underwritten by Antares Underwriting Asia, on behalf of Syndicate 1274 at Lloyd’s of London.

US Copyright Office proposes group registration option for albums The US Copyright Office is proposing a group registration option for musical works, sound recordings and graphic works contained on an album.

The option, referred to by the office as ‘Group Registration for Works on an Album’ (GRAM) will allow up to 20 musical works or sound recordings to be contained in an album if they are created by the same author or have at least one common author and the claimant for each work in the group is the same.

In cases where the sound recording and musical work share a common author, one sound recording and one musical work will count as a single work for the purposes of the group’s 20 work cap, “notwithstanding the fact that a sound recording and the work embodied in that recording are separate works”.

The prospective GRAM rule will also allow the registration of associated literary, pictorial, and graphic works in the album authored or owned by the claimant, such as cover art, liner notes, and posters.

Music producer and engineer Bobby Owsinski wrote on the Music 3.0 Music Industry Blog that it was “ironic” that the copyright office is addressing this option “now that albums are being de-emphasised thanks to streaming”.

He wrote: “It’s a solution where the problem may well have been already solved. That said, it would be the perfect solution for a concept album if anyone ever does one again.”

The initiative will provide businesses with insurance coverage for legal expenses that may be incurred in IP infringement proceedings worldwide.

Holders of Singaporean IP rights can now take up the insurance policy which is intended to save them money when either enforcing or defending their rights.

Aon and the Ponemon Institute reveal companies lack intangible asset insurance The IPIII initiative was announced by Singapore’s minister for education Ong Ye Kung during the keynote address at the Singapore Bicentennial 1819—2019.

Bernard Ong, group director of policy and engagement at IPOS, commented: “IP has been growing at a faster pace than the world population in the past decade. Yet, insuring IP is still nascent to a market that has witnessed multi-milliondollar patent litigation and trade disputes over IP theft. The new insurance initiative is timely in a global economy increasingly powered by the new currency of intangible assets. Cutting edge initiatives such as IP insurance will anchor Singapore’s position as a financial and legal hub, and support our innovators and entrepreneurs as they expand into overseas markets with their IP.” Yeo Li Shan, CEO of Antares Underwriting Asia, added: “Antares has been an integral part of the development of the memorandum of understanding between Lloyd’s Asia and IPOS.”

The copyright office is seeking comment regarding the proposed option. The deadline for submissions is 19 July.

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News Focus

Andrew Cline/shutterstock.com

Rubio bill bans Huawei patent action US senator for Florida, Marco Rubio, has filed an amendment that would prevent Huawei from bringing legal action over patent infringement in US courts.

A statement on the senator’s website reminds the NDAA has been “successfully used … in past years to crack down on the Chinese firm”.

The change to the National Defense Authorization Act (NDAA) proposed by Rubio is part of annual amendments that set policy spending by the Department of Defense.

Two of US president Donald Trump’s attorney generals have attacked Chinese firms over alleged theft of trade secrets and intellectual property.

Rubio filed the legislation on Monday (16 June). It would stop Huawei and other listed companies from seeking relief over US patents as well as stopping them from obtaining damages.

Attorney general, Mathew Whitaker, charged individuals from Huawei with stealing trade secrets from T-Mobile.

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News Focus Bakdc/shutterstock.com

SCOTUS: Government not a ‘person’ in AIA proceedings The US Supreme Court has ruled 6-3 in favour of Return Mail in its high profile patent dispute against the US Postal Service.

Return Mail held a patent for the processing of mail items that are undeliverable that was invalidated by the US Patent Trial and Appeal Board following a complaint from the US Postal Service.

your argument on the statutory language because I think if this were presented to Congress and the issue before Congress was do we want a federal agency to initiate one of these AIA proceedings in the open, in accordance with the law, or do we want to allow them to pick up the phone to the USPTO … Do you think they chose the latter?”

The US Postal Service argued that the patent was invalid due to its ineligible subject matter.

Alito referred to the entire case as “indulg[ing] the possible fiction that Congress actually gave a second thought to the issue that’s before us”.

Return Mail contended that the federal government is not a ‘person’ who may petition to institute review proceedings under the America Invents Act (AIA).

In the opinion of the court, however, justice Sonia Sotomayer wrote that the court concluded the government is not a ‘person’.

The Supreme Court ruled in favour of Return Mail reversing a US Court of Appeals for the Federal Circuit ruling.

Justices Ruth Bader Ginsburg, Stephen Breyer, and Elena Kagan dissented.

She said that excluding federal agencies from AIA proceedings “avoids the awkward situation that might result from forcing a civilian patent owner (such as Return Mail) to defend the patentability of her invention in an adversarial, adjudicatory proceeding initiated by one federal agency (such as the Postal Service) and overseen by a different federal agency (the USPTO)”.

Breyer wrote the dissent, stating: “The fact that the word ‘person’ does not apply to the government where that application is close to logically impossible proves nothing at all about the word’s application here.”

The case has now been remanded for further proceedings.

During the oral arguments, Return Mail had argued that the term ‘person’, in this instance, does not extend to include the government because other branches rely on the Dictionary Act definition of person and this court’s presumptive definition of ‘person’ to not include the government.

Beth Brinkmann, co-chair of law firm Covington’s appellate and Supreme Court litigation group, who argued the case on behalf of Return Mail, commented: “The court’s decision confirms that federal agencies do not get an extra chance to challenge privately held patents under the AIA.”

Return Mail claimed that this “is a stable framework that’s critical to that communication between the branches”.

Covington partner Richard Rainey, who co-led the team with Brinkmann called the victory “a significant victory for Return Mail and for all technology companies and patent holders that may find themselves in the government’s crosshairs”.

However, chief justice John Roberts took issue with Return Mail’s questioning of whether the director of the US Patent and Trademark Office (USPTO) should be able to initiate AIA proceedings following a phone call from the government.

Justice Samuel Alito voiced similar concerns to that of Roberts. He said: “That’s an argument that makes me doubt 6 IPPro

He continued: “By excluding federal agencies from AIA review proceedings, the court’s decision limits the government’s ability to bring duplicative challenges to the validity of privately-owned patents.” www.ippromagazine.com

News Focus US Justice Department to review 75-year-old copyright licence decrees The US Department of Justice has opened a review into the consent decrees used by the American Society of Composers, Authors and Publishers (ASCAP) and Broadcast Music, Inc. (BMI).

parties are unable to agree on an appropriate price for a license, the decrees provide for a “rate court” proceeding in front of a US district judge. Neither decree contains a termination date.

The decrees have governed the processes that ASCAP and BMI use to license rights to publicly perform musical works.

Makan Delrahim, assistant attorney general for the antitrust division commented: “The ASCAP and BMI decrees have been in existence in some form for over seventy-five years and have effectively regulated how musicians are compensated for the public performance of their musical creations,”

The Justice Department’s review aims to determine whether the 75-year-old decrees should be maintained, changed, or terminated.

The review will be conducted by the Antitrust Division of the Department of Justice.

“There have been many changes in the music industry during this time, and the needs of music creators and music users have continued to evolve.”

Both are the largest performing rights organisations in the US. The decrees that both ASCAP and BMI have been in since 1941 were modified in 2001 and 1994 respectively.

The decrees require ASCAP and BMI to issue licenses covering all works in upon request from music users. If the

Delrahim concluded: “It is important for the division to reassess periodically whether these decrees continue to serve the American consumer and whether they should be changed to achieve greater efficiency and enhance competition in light of innovations in the industry.”

The period for public comment ends on 10 July 2019.

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News Focus IP5 agree to launch AI and emerging tech task force Five of the largest patent offices in the world have agreed to create a task force dedicated to emerging technologies and artificial intelligence.

The director general of the World Intellectual Property Organization (WIPO), Francis Gurry was also present at the meeting and acted as an observer.

Senior officials from the Korean Intellectual Property Office (KIPO), European Patent Office (EPO), Japan Patent Office (JPO), China National Intellectual Property Administration (CNIPA) and US Patent and Trademark Office (USPTO)— dubbed the IP5—agreed the annual task force during their annual meeting in Incheon, Korea.

The IP5 handle around 85 percent of the world’s patent applications.

EPO president António Campinos said that cooperation with other IP5 offices is “a key to building an efficient and effective global IP system by establishing more aligned procedures worldwide”.

The task force will expand new initiatives to match the changing technology landscape.

He continued: “IP5 cooperation is a success story.”

Also agreed at the meeting were plans to improve the IP5’s structure in order to achieve greater efficiency within the group’s overall cooperation.

“The EPO and its partner offices are now entering a new phase of their cooperation where we should think about further strengthening IP5 co-operation and promoting a more comprehensive IP agenda, in order to better respond to our users’ needs who handle comprehensive IP portfolios with bundles of IP rights.”

Present at the meeting was KIPO commissioner Park Wonjoo, who chaired proceedings; EPO president António Campinos; JPO commissioner Naoko Munakata; CNIPA commissioner Shen Changyu; and USPTO director and Under Secretary of commerce for IP Andrei Iancu.

The next IP5 heads of office meeting will be hosted by the CNIPA in 2020.

C H A N D R A K A N T M. J O S H I INDIAN PATENT & TRADE MARK ATTORNEYS (Established in 1968)

SOLITAIRE-II, 7th FLOOR, OPP. INFINITY MALL, LINK ROAD, MALAD (WEST), MUMBAI-400 064, INDIA Tel.: +91-222 888 6858 Fax: Fax No: +91-222 888 6859/65 Email: mail@cmjoshi.com info@cmjoshi.com Web.: www.cmjoshi.us Our law firm has been exclusively practicing Intellectual Property Rights matters since 1968. The clientele of the firm includes multinationals, Research Institutes, Private and Public Companies. The law firm represents its global clients not only in India but also in many other countries around the world. Our law takes pride in its ethical standards, quality of services and best law practices. The firm has specialists in the field of Chemical, Pharmaceutical, Biotechnology, Electronic and Mechanical Patent Law and Practice in India.

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News Focus Premier League is ‘most active user’ of UK High Court The Premier League is the most active user of the UK High Court as it cracks down on businesses breaching copyright law, RPC has revealed.

According to research from the law firm, the Premier League filed a total of 36 claims between 31 March 2018 and 31 March 2019.

The majority of claims were filed against business owners of pubs, bars and restaurants that used piracy platforms to stream football matches and music tracks.

This follows the imprisonment of three business owners in January of this year for providing pirated streams of Premier League matches to over one thousand UK pubs and bars.

The Premier League currently uses live blocking orders following a High Court extension, which was issued following the successful block over 200,000 illegal streams during the 2017/18 football season.

It is predicted that this could “open floodgates” for other organisations to implement similar live blocking orders, as this tactic has already been adopted by Matchroom Boxing, Queensbury Boxing and UEFA.

Doom creators oppose DC Comics’ Doom Patrol trademarks id Software, creator of the first person shooter game Doom, has opposed two DC Comics trademark filings for a ‘Doom Patrol’ web series.

DC filed two US standard character marks (87942991 and 87942900) covering the name of the show. The show follows on from the events of Titans, DC’s live-action reimagining of Teen Titans Go. The ‘991 mark covers goods and services in classes 21, 23, 26, 36, and 38, whilst the ‘900 mark covers entertainment services. id Software filed the oppositions on the grounds that the marks are confusingly similar to the name of its video game series.

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Paul Joseph, partner at RPC, commented: “Football authorities have made a concerted public effort to let illegal streamers know that they are on their case. They will hope that those considering breaching copyright law will think twice before doing so.”

“Rights holders will continue to use court action as a way of shutting out businesses who ‘steal’ their product for as long as is necessary. However, they will now hope that internet providers help them.”

He added: “The internet created huge, almost existential, challenges to business models of owners of music, films and other content so it’s not surprising that rights owners and bodies that represent them do all they can to protect their businesses.”

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Open Invention Network • Community Update Chinnapong/shutterstock.com

Disrupting classic licensing models Keith Bergelt of the Open Invention Network discusses the company’s milestone success of 3,000 business licensees as it challenges licensing models How significant is 3,000 business licensees for the Open Invention Network?

We recognise that every day, we break new ground and set new precedents. Our founding members—IBM, NEC, Novell, Philips, Red Hat and Sony—were true visionaries in that they pledged patents and financing to get the Open Invention Network (OIN) community started. In the last few years, we have been further bolstered by Google and Toyota joining as members.

We have disrupted classic licensing models in both intent and in practice. The intent was to provide a means of building and protecting a community of businesses and organisations that understand the value of shared innovation. Having community members agree to share the innovation in the foundational building blocks, allows them to focus the majority of their energies and resources on higherorder technologies.

This, of course, is the largest benefit derived from Linux and other open source projects: building a set of core, shared technologies where innovation can occur rapidly. Linux and other operating systems have been the catalysts of unparalleled changes in the financial services, automotive, communications and entertainment industries, among many others.

This really is unprecedented. For OIN to have a community of 3,000 global businesses, across a spectrum of industries, 11 IPPro

that have agreed to practice patent non-aggression is amazing. Fairly recently, we have added companies across a spectrum of industries and geographic regions. They include Microsoft, Alibaba, Tencent, Caterpillar, Heidelberg, Johnson Controls and Tyco International, Medtronic and Infosys.

In practice, we have also been disruptive because our licensing model is so different. Our value is derived from our royalty-free cross licence, enables patent peace in core technologies and supports innovation in Linux and other particularly important open source projects. Every community member receives royalty-free access to the Linux System patents of the 3,000 other licensees. OIN’s community members in aggregate own more than two million worldwide patents and applications.

We also have our own portfolio of 1,300 strategic patents that can be used as a deterrent should organisations look to impair our community’s progress through patent aggression.

There really is no analogue to OIN in history.

When you became CEO of OIN what were your goals? Would you say you have achieved these?

That’s an interesting question, because goals can change over time. My original mandates were to purchase strategic patents in order to disrupt bad actors from leveraging their IP against the open source community, increase awareness and www.ippromagazine.com

Open Invention Network • Community Update membership in the OIN community and help evangelise the value of Linux and adjacent technologies and projects.

Those mandates continue, and while we have achieved great success, Linux and open source continues to grow in scope and proliferation. They are arguably the most strategic building blocks in the software landscape. As they grow, our community has expanded, the technologies our licence addresses has increased, and our patent portfolio has shifted to ensure is value to the community.

While OIN is focused on ensuring a level playing field for all major open source and Linux projects, we continue to see the internet of things, blockchain, intelligent automotive platforms and network function virtualisation (NFV) as increasingly strategic for areas where Linux and open source continue to become critical and foundational technologies.

Through our continued deterrence against patent aggressors and community growth initiatives, we look to ensure a fair playing field for open source technologies, like Open Platform for NPV/Open Network Automation Platform, through the LF Networking Fund, Automotive Grade Linux, the Open Container Initiative and Hyperledger. Our overarching goal is to ensure continued collaboration and innovation in these technologies, ultimately strengthening the marketplace through the unhindered development and sale of the best products and services.

We have a number of key initiatives that we will continue to support while keeping an eye on potential IP issues that bad actors might look to exploit. We are very focused on ensuring that Linux and open source-based projects continue to grow and thrive in a patent-aggression free environment. We also want to understand the emerging technologies that will be relevant to our community several years from now, although that might not be on many people’s radar at this moment in time. In this case, we acquire what we believe will be strategic patents, in order to keep our portfolio fresh and of value to our community. We will continue to partner with innovative IP organisations like the LOT Network. Finally, we will continue participating in shaping the ways that IP laws and litigation are conducted in the US and other countries.

community, influencers in Washington and the US Patent and Trademark Office to increase the quality of patents granted, institute prior art improvements and other ways to remove the foodstuffs of patent trolls. We believe OIN, along with other organisations, has played a role in limiting the effects of patent trolls and businesses that have looked to impair the growth of open source through patent aggression.

However, non-practicing entities continue to look for ways to leverage IP aggressively, attempting to gain significant financial returns on their investments.

We continue to examine their activities and plan strategies that we can implement to protect our community.

What is the future of the Open Invention Network?

As I just mentioned, we live in a dynamic world where nonpracticing entities and bad corporate actors exploit IP to hinder the shared innovation derived from Linux and other key open source projects.

We will continue to expand our community within key technologies, industries, and geographies.

As we add additional members, the whole community is strengthened through the intrinsic value afforded by our cross-licence. This means we will address and protect an ever-expanding set of key technologies and industries. This will further inhibit the actions IP-aggressors.

There may be other programmes that we will layer onto our existing activities. As we do, we will share them with you.

With a gradual decline in so-called ‘patent trolls’, would you say the OIN and organisations like it have succeeded in protecting innovation and the integrity of the patent system?

Since our founding, we have looked to implement programmes that would support the open source community and help it to thrive given the realities of worldwide patenting, while also deterring patent aggressors. Non-practicing entities have always been in the mix. We have worked with our 12 IPPro

Keith Bergelt CEO Open Invention Network

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AIPPI

London 2 0 19

2019 AIPPI World Congress – London September 15 - 18, 2019

London

has progressed to be a global leader in arts, commerce, entertainment, tourism and development. In recent years London has pushed to become one of the most innovative and business driven nations in the world, which is why we find it a suitable location to debate the latest topics of IP. Whether you are visiting for the first time or returning once more, you will discover a city full of unforgettable landmarks, exciting things to do and extraordinary cuisine around every corner.

Take advantage of the Early Bird discount, register by June 12 to secure a reduced registration rate.

We look forward to seeing you in London, September 2019.

The programme boasts a vast range of topics covering the entire field of intellectual property: PHARMA DAY

LUNCH SESSIONS

• Wait! Pay for delay

Lunch Sessions 1

• Patent Linkage: an international perspective

• An update from USPTO Director Andrei Iancu

• Hot and hostile: recent developments in SPCs and patent term extensions • Antibodies and epitope/competitive claims PANEL SESSIONS • The art of IP – museums & architecture • In-house perspectives on IP enforcement • Describe your best defense: trade mark infringement or not?

Lunch Sessions 2 • It’s natural … or is it? Greenwashing fashion Lunch Sessions 3 • Africa and innovation

• Protecting trade secrets in the EU – new and improved?

PLENARY SESSIONS

• A platform for discussion: liability & safe harbour

• Copyright in artificially generated works

• Forming portfolios for FRAND licensing: who decides?

• Consumer survey evidence

• Keep your hands off my brands

• IP damages for acts other than sales

• Patents and Artificial Intelligence: what’s next?

• Plausibiltiy

• BREXIT & IP: an update • Seize the day – customs & border control • Right on the money – IP & finance • Post-grant amendments: flexibility or certainty?

• Designs on trial

More information on www.aippi.org

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Fashion Licensing • Feature

Deals in heels: brand licensing in the fashion industry Fast fashion and influencer culture have had a knock on effect and perpetuated the unique challenges of fashion licensing Rebecca Delaney reports The broad landscape of fashion licensing has undergone dramatic cosmetic surgery in the past decade. A global licensing survey conducted in 2018 found that fashion licensing accounted for $32.1 billion in retail receipts, with apparel and fashion accessories comprising the largest share of product categories.

According to Alan Behr, partner at Phillips Nizer and chair of the firm’s fashion practice, this can be attributed to “a massive alteration in available channels of merchandise”.

Globalisation has generated changing expectations concerning the distribution of fashion merchandising in both physical and online retail outlets, meaning that licensors are “increasingly obliged to grant worldwide licenses across product categories”, Behr explains.

Furthermore, the fashion industry has seen an increase in minimum advertising expenditure, divided between both traditional media and online ‘influencers’, predominantly in the form of product giveaways and loans, whether for sponsored posts or on the red carpet. Behr reiterates that “a good licence agreement will take all of that into account, wherever applicable”. This accelerated industry shift towards online purchasing has been somewhat detrimental to luxury brands, owing to the fact that finer quality is more difficult to convey online; as Behr points out, “a polo shirt looks like a polo shirt online whether it costs £20 or £200”.

Social media advertising has affected the structure of the fashion industry by encouraging broader international brand recognition; therefore, licensors can no longer confine their sales to a specific small geographic region, for risk of provoking a negative reputational impact to their brand.

It is important to note that branching out into international markets places greater responsibility on the licensee, who has a duty to adjust the products to ensure they meet with local regulations, as well as translation of product labels and instructions. But can the rise of fast fashion and influencer culture bring positive effects to fashion licensing?

“Fast fashion has helped high-end and bridge-priced brands go to a lower price point without damaging their reputations,” affirms Behr.

However, this is contingent on partnering with the right licensee to deliver the right style at their price point. When executed correctly, it can change market perceptions of fast fashion and ‘cheap chic’ within a usually high price point brand.

Behr adds: “Influencers have profoundly changed the way in which brands reach customers. They are typically selfeducated amateurs who have turned professional, which is a challenging set of talents for a brand to harness for its own benefit.”

Digitalisation of fashion merchandising has also affected licensing agreements in terms of their geographic scope.

Licensors must therefore be aware of who influencers are working with and/or for, as well as ensuring to incorporate flexibility into licensing agreements to accommodate the short lifecycle of influencer careers.

Behr notes: “It used to be easier to assess current styles and what retailers were willing to sell in a more concentrated region”.

Fashion licensing is already a unique practice, regardless of the rise of influencer culture. Behr explains: “As opposed to industrial or other consumer product licensing, brands have

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Fashion Licensing • Feature a story. The licensee must ‘get’ the story of a particular brand and translate it into a new product line, which is not as easy as it might sound.”

“For example, a licensee that might be able to understand Milanese Giorgio Armani minimalism may not be able to do the same thing for the Ralph Lauren American style. Particular individuals within the licensee organisation who ‘get’ the brand are people that the licensor may insist stay on for the duration of the process.”

However, fast fashion has created concerns over quality control. Although the licensor must operate as what Behr describes as a “gatekeeper”, the quick turnover of styles and trends means that they cannot always be aware of what is happening at all stages of the production process. This could potentially be unfavourable to a brand’s reputation, because mistakes are now in a global context.

Timelines are shorter to ensure that the products reach the global market quicker before a particular style becomes obsolete. Licensees provide pre-production samples for licensor approval before initiating manufacture, but fashion as a seasonal industry means that there is less scope for contentions during this part of the process, so quality control may be overlooked.

Discrepancies in quality control are most likely to be in sizing, as licensees cannot reassure with absolute certainty that there will be no deviation in sizing from licensor-approved prototypes. Fabric from different batches could easily have variations, while accessories such as buttons or zippers may have to be substituted.

While quality control remains a critical consideration during production, Behr emphasises the importance of ensuring the approval process is as efficient and streamlined as possible.

Licensors must learn how to balance “control over their brand while permitting licensees to get new styles to market”.

Therefore, licensing agreements ultimately rely on trust that cannot be fully written into a contract.

What can be drafted in licensing agreements must be very exact in the description of the goods covered by the licence, because warranty of ownership only applies to what is specifically listed. This includes the products, distribution (domestic and/or international), availability in retail outlets, maintenance of quality control, exclusivity and renewability of the agreement, attribution of the licensor, and the time frame.

It is also important for licensors to monitor licensees, owing to the greater access to copyright law to protect “patterns and certain three-dimensional design elements”, as described 15 IPPro

by Behr, following recent rulings by the US Supreme Court and US Copyright Office, which could potentially lead to a greater chance of copyright complaints.

Fashion was traditionally difficult to protect in licensing agreements under copyright law because, to be protectable, an item cannot be functional. The very definition of a brand as a name, term or symbol that identifies the manufacturer or seller of a product from its competitors counteracts this.

A brand as an intangible asset can use trade dress trademark laws to protect the visual elements of a design, such as colour, original pattern or unique design characteristics. For example, Louboutins own a valid trademark in the US for red sole shoes as they were deemed to be “inherently distinctive” by having acquired a “secondary meaning”.

Although the licensee is responsible for the design work, Behr highlights the importance of monitoring on the part of the licensor, to ensure that the design is not heavily “referenced or inspired by” an existing product. A potential resulting copyright lawsuit would name the licensor as a co-defendant, which could bring reputational risk to the brand.

“The new realities of the digital era mean that you should seek better information from the licensor about its own media and influencer contacts, the channels in both physical and electronic retail, and the relative success of other licensed products,” advises Behr.

Since licensors can no longer rely on reputation and basic sales data when selecting a licensee, Behr recommends “the best protection that a licensor can give itself is only to form agreements with licensees that have a history of originality in creating designs”, which will allow the licensor to develop its latent value while meeting existing demand.

It should be noted that licensees also benefit from displaying originality in their designs; more high-profile brands will be attracted to enter into a collaboration, allowing them to gain industry knowledge, as well as easier access to both national and international brand networks through the marketing power of the brand. This ensures that both parties benefit from a fashion licence, whether a simple licensure into a new product category, or a complex integration of branding and design across different product categories.

Whether the effects of globalisation continues to impact the structure, scope and formation of fashion licensing agreements in this way remains to be seen. If fast fashion and influencer culture continue to dominate apparel sales, particularly online, brands may find themselves struggling to keep up with the quick turnover of styles. www.ippromagazine.com

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Industry Events

Industry Events 2019 AIPPI World Congress London London

aippi.org

15-18 September 2019 AIPF 2019 Annual Meeting Virginia

aipf.com

22-24 September 2019 Marques Dublin

marques.org

17-20 September 18 IPPro