New Things to Think About: Financial Stability in the Coming Economy and Brand Protection in the Social Media Universe

1. Deceptive endorsements: “Paying an influencer must be clearly spelled out. People do it wrong all the time, and the penalties can be severe. The bigger the brand, the more particular the FTC will be with the deal, and there are even some cases involving class action suits.”

2. The right of publicity: “Everyone has the right to publicize their own name and likeness. If a company uses somebody’s image, from a celebrity to a customer, it must have a model release from the individual.” Metchek reminded everyone that an agreement with the photographer, who may own the photo, is also necessary.

Having a firm grasp on your company’s financial health — including the metrics that build value — and legal position is key to protecting and growing a brand in today’s complex marketplace. Ilse Metchek, President of the California Fashion Association led a discussion about financial and legal concerns in the modern market that featured the expertise of Gino Clark, Managing Director, White Oak Commercial Finance, and Morgan Pietz, Partner, Pietz & Shahriari LLP. Metchek pointed out that having a great idea isn’t always enough to get the financing that a fledgling company needs. Clark explained that the process involves evaluating companies and their ability to grow by leveraging all forms of assets. The three-legged stool he looks at for evaluation includes the ability to repay the money, the management team (experience), and collateral (especially Intellectual Property).

One chief takeaway from the session was for newly established companies to surround themselves with professionals that will complement their structure, creating a budget for a lawyer and an accountant from the very beginning. Pietz raised some legal issues that have become very important in the apparel industry recently, including:

3. The Metabirkin Metaverse: Pietz and Metchek used the ongoing legal action involving the Metabirkin — where an artist created fur covered Birkin bag NFTs and was sued by Hermés, creator of the Birkin bag — and the Adidas vs. Thom Browne as case studies for trademarking and appropriation. One key takeaway? “Any established brand that has an existing U.S. trademark, or any that are planning to do business in the NFT space, should register it in categories that cover NFTs,” Pietz advises.