Trademarks in the fashion industry. Digest # 03, 2020

Tatiana Lipovaya, Ph.D. , Alyona Chernoknyzhnaya, Alexander Fomenko, Anna Muradian, Nikolay Burak
Trademark Counsels for IPR GROUP

Fashion is a social phenomenon. The main purpose of fashionable goods is to satisfy aesthetic needs and to demonstrate the social status of their owner. Fashion serves to demonstrate the differences of one person from another, affiliations to different social groups, as well as distinguishing their needs and preferences, in expressing their individuality. For example, youth fashion can set apart people of different age groups, and personal selection of luxury goods emphasizes self-expression and the individual status of a person.

At the same time, expansion of fashionable goods is associated with increasing of publicity of a lifestyle. If the consumption of food and washing clothes were purely private processes in the past, in modern society it is not only clothes, shoes or accessories, which represent goods of 18th and 25th classes of the Nice Classification of Goods and Services, that can be named as fashionable goods. Moving from the narrow to the broader interpretation, it is worth mentioning that almost all personal goods consumption; including cars, furniture, pens, etc. can be linked to fashion.

The fashion industry is unique from other fields of manufacturing as it is managed largely by its fluid change. Major features like dynamics and intensity of production processes, quick response to  market demands and new trends, high competition and the importance of establishing and maintaining a positive reputation, can describe this market, which has a significant influence on the consumer’s behaviour and decisions – which goods and of which manufacturer to buy.

The fashion industry nowadays, is a separate full-fledged sector of economics. The companies involved in the production, sale and service of fashionable products, including advertising and promotion services through advertising agencies and mass media, represent a gigantic industry, generating billions of dollars in annual revenue, but also requiring huge amounts in investments. According to certain estimates, the fashion industry has taken 5th place among the most capital-intensive sectors of the modern economy.

According to the estimates of Western European experts’, consumers spend about 10% of their income on the purchase of fashion industry goods (in a narrow sense of this concept), in the USA – 5%. If we include all types of goods in the fashion industry that satisfy mainly aesthetic and social prestige, rather than narrow utilitarian needs, then their purchase, according to experts, account for about 40% of the expenses of family budgets of citizens of developed countries.

The fashion industry was formed as a phenomenon of  Western European civilization, and up to the end of the 20th century, it was not affected by foreign cultural influences. Globalization in the 20th century, led not only to the expansion of European fashion around the world, but also to the penetration of Eastern influences into this industry from Japan, China, South Korea and other Asian countries. In the 21st century, the impact of oriental culture will further grow.

In the countries of our jurisdiction – former Soviet Union republics such as the Russian Federation, Ukraine, Belarus, Kazakhstan and others, which are now called the CIS, the fashion industry in the usual perception of this concept began to develop only in the early 90’s after the dissolution of the USSR.

The development of the domestic fashion market was strongly hindered by the need of a large amount of startup capital. Ergo, fashion market goods of foreign firms dominated in the CIS. More than 80% of luxury clothing was delivered from  Western Europe, and about half of all imported clothing from Italy. At the same time, the domestic production of fashionable goods began to develop, creating domestic popular brands. However, the strong Western influence on the domestic market of fashionable goods is perceptible, a number of the domestic brands have names in Latin (like “VOVK”, “Braska”, “Krisstel”, “DolceDonna”, “Week” “Gloria Jeans”, etc.)  This fact could be also be explained not only by the implantation of western trends, but the intention of  domestic designers to expand their activities to the international market.

The fashion industry can be conditionally divided into three major areas: “haute couture” or high fashion, “prêt-à-porter” and the mass-market; features of which would need to be eventually taken under account by manufacturers when developing new brands and enhancing their protection.

“Couture”-class products are exclusive, luxury goods created by a designer in a single copy from high-quality fabrics and accessories, often according to the client’s personal order. “Haute couture” brands are protected names that may not be used, except by firms that meet certain well-defined standards and pass  certification before the Fédération française de la couture. The desire of fashion houses to obtain this status and to participate in shows at  world fashion weeks is primarily a long-running marketing move, although the main income of fashion houses come from prêt-à-porter.

Ready to wear (prêt-à-porter) is clothing of standardized sizes, designed for wider production and sale. Fashion houses usually combine both high fashion and prêt-à-porter, for the luxury segment of the market. Clothing of this class is divided into two sub-classes: prêt-à-porter de lux products and simple prêt-à-porter.

The prêt-à-porter de lux product group is more expensive. Products of this group are named after the designer, the company must have its own mono-boutiques (Gucci, Prada, Armani, Versace, Christian Dior, Cavalli, etc.).

Goods from a simple prêt-à-porter group do not necessarily have the name of designers on their brands and sell mostly through multi-brand boutiques.

The third niche of the fashion industry is the mass-market, which is characterized by clothes of average level of quality with affordable prices and under slightly known or non-registered brands.

The 4th industrial revolution characterized by integration of production, network communications, and the introduction of artificial intelligence, definitely has a large influence on the fashion industry. The quickly-evolving 2D and 3D tools for apparel design, development and merchandising, special software to pre-collect and analyse various requests for creating new clothing lines, personal computer stylists’ assistants; have taken not only designers, but developers, production and marketing professionals to a new level and determine the dynamics of  modern development in the fashion industry.

In the course of intensive growth and modern industrial development trends, recognizing peculiarities of the fashion industry in each part of the world, focusing on new trends and the needs of target social groups – consumers of  fashion brands, it is necessary for manufacturers of fashion brands to pay increased attention to securing  their rights. 

The rapid development of the fashion industry does not eliminate problems associated with the protection of intellectual property rights, but make them even more acute. Fashion designers frequently complain about their designs being imitated and copied, while brand owners suffer from brand faking (counterfeiting).

It is obvious that it is much easier for infringers to copy fashion products, as such goods are relatively easier to manufacture,  compared to the high-tech devices. Also, such goods can be sold with a high markup due to the goodwill or reputation associated with a famous fashion brand that they copy.

In the meantime, legal disputes may also  arise between luxury brands and mass-market manufacturers, who might try to bring their products visually similar to eminent brands and, thus, try to attract more customers. One example that can be mentioned, is the lawsuit of  fashion house GUCCI, filed against  American brand, GUESS. Litigation between the companies dates back to 2009. The subject of the dispute was the use by  American company, Guess of a logo with the letter “G” and a pattern in the form of rhombs’
(see Image 1).

Image 1

In 2012, GUCCI won a lawsuit in the United States and sued GUESS designs for $ 4.7 million in damages. . GUCCI also filed lawsuits against GUESS in many other countries, where not all cases were ruled in favor of GUCCI. In 2018, the companies ended their long-standing dispute and reached an agreement, as both parties had put in countless hours and spent untold sums of money over the years.

The above-mentioned “GUCCI vs GUESS” case illustrates the infringement connected with one company imitating the goods of another company, with the intent to take advantage of the superior value of the imitated goods.

When we discuss fighting against brand counterfeiting, comprehensive legal framework, courts, and border measures; all together these provide effective solutions for protecting  right holders and bona fide producers.

Thus, the effective protection of  Intellectual Property Rights in the fashion industry is the best way to prevent  third parties from benefiting from the  work of others, by copying or using  a pattern or product without the permission of the owner.

For the general  public, we are advising, while for IP practitioners we are just reminding, that the most relevant to the fashion industry objects of Intellectual Property are: industrial designs, copyrights and trademarks.

The fashion industry invests huge sums to create new and original designs. Such designs might be protected by registering the industrial designs. The registration of the industrial design helps the owner to prevent others from using its design, which may relate to a three-dimensional feature, such as the shape of a bag, or a two-dimensional feature, such as a pattern.

In some countries, fashion designs may be duly protected by copyright law. At the same time, not all fashion articles can be protected by a copyright. An example that can be mentioned is Dunhill’s copyright case: the company filed a copyright application to the US Copyright Office in order to register a pattern called “Engine Turn” (see Image 2), in 2019. However, the Office refused to grant protection, as the pattern was considered to be unoriginal, depicting
simple geometric shapes.

Image 2

However, bearing in mind the short product life cycle in the fashion industry – often no more than one season, the registration of industrial designs, as well as copyrights, might not justify the considerable time and financial costs involved.

Of course, some trends may never go out of fashion and some items may become classical pieces. For fashion items with a long life cycle, registering the industrial design or copyright may be a good  method for preventing others from using the author’s work.

In the meantime, bearing in mind the seasonality in the fashion industry,  it is our opinion that trademarks play one of the most important roles within the world of fashion. Consumers in the fashion industry tend to be brand-driven and trademarks are the best way to guide their buying decision. Trademarks allow consumers to associate goods with a particular style, range of quality, etc.

It is worth mentioning that trademark registration is not limited only to brand names and logos. Registering trademarks for key design features is also a common practice in the fashion industry. One of the most striking examples is the registration of the red sole of shoes as a trademark by Christian Louboutin (e.g. IR 902955 TM  , IR 759326 TM , etc.) The well-known tartan pattern, designed by Burberry, is also registered as a trademark (e.g. IR 732879 TM  in classes 03, 18, 25). Despite the unsuccessful attempt to register the copyright for the“Engine Turn”, the subject pattern has been registered by Alfred Dunhill Limited as a trademark (IR 1452431 TM  in classes 18 and 25) in EU and China.

Bearing in mind the above-mentioned, in our opinion, trademark registration is the most effective way to protect intellectual property rights in the fashion industry, while differences in examination approach should be considered in various jurisdictions.

In general, the set of absolute and relative grounds for a refusal in trademark registration, is similar worldwide; but in CIS countries the examination of a trademark is much strict than, for example,  the European Office, which on one hand, may pose a considerable obstacle for the applicants, and on the other hand, can be regarded as reasonable under certain circumstances.

The most significant difference is that in the EU, the applied trademark is examined only on the absolute grounds for refusal and published for the opposition period, during which  third parties may file an opposition against the trademark registration. If no opposition is  filed, then the mark is successfully registered throughout the EU. Meanwhile, in all CIS countries, the mark is examined on relative grounds, i.e. whether the mark is confusingly similar with  earlier applied and registered trademarks.

We will outline some peculiarities of trademark examination in the CIS countries:

In Russia,  trademarks are examined not only on their similarity to prior trademarks, but also  to  non-registered marks, which are already actively in use for  goods and services in the Russian market. In Armenia, the Examination  may also issue a refusal to a trademark that is identical or confusingly similar to marks which are unregistered, but actively used in Armenia or abroad; as in such situations, the trademark registration could result in the unfair use of someone’s reputation and may also mislead the consumers.

Also, in general, it should be noted that Examination in the CIS countries primarily pays attention to verbal elements, if any, in the trademark. However, in our practice we had cases where we drew the attention of the examination to the difference in the distribution channels and the circles of consumers, which was then taken into consideration by the examination when issuing a decision on the registration of the trademark.

Furthermore, using examples from our practice, we would like to share some interesting cases of trademark registration in the CIS countries, what obstacles arose and how we managed to overcome them.

PROVISIONAL REFUSALS ON RELATIVE GROUNDS

  • TM MAC DOUGLAS IR 1176121, UA

TM MAC DOUGLAS was provisionally refused in Ukraine for all applied goods in classes 18 and 25 because it was considered by the Examination to be confusingly similar to IR 563235 TM .

We should note that the owner of the opposed mark agreed to provide the Letter of Consent for the use and registration of the applied mark in Ukraine in respect of  goods in classes 18 and 25. However, according to the current trademark examination practice in Ukraine, filing of an Objection to the provisional refusal solely with a Letter of Consent, is not an efficient solution to overcome the refusal, as the Ukrainian PTO considers the Letter of Consent as a supplement to arguments, which could increase the chances for success. Therefore, along with the Letter of Consent, we also provided arguments on the different specializations of the parties involved, circles of their targeted consumers and trade channels. Since the applied mark trades mainly in goods made of leather and imitation leather, while Parfümerie Douglas GmbH (DE) (owner of the opposed mark) – is an internationally operating perfumery chain focused on the retail sale of cosmetics, perfumes and accessories.

  • TM BARACCO IR 1125124, UA

TM BARACCO (owner – HENDERSON S.R.L. (IT); until 2016 owner was – Gianluigi Baracco (IT)), was refused for  goods in class 25 (footwear in general, not for sports) due to earlier registered in Ukraine, TM  IR 438561.

In this case, our Objection was grounded on  arguments in favor of the dissimilarity of the marks in question by semantic and phonetic criteria, as the word «BARACCO» is the last name of the applicant, which does not bear any meaning in the Italian language and is also wide spread in Italy. While the words «BAROCCO ROMA» have a clear semantic meaning, i.e. «Roman Barocco – style in  European art».

In addition to  said arguments, we outlined the difference in the targeted circles of the Ukrainian consumers of both parties, as well as a brief history of their brands creations.

TM BARACCO has national registration in Italy (№ 0001496191) and in the European Union (№ 0100788032), while the counterparty – BAROCCO Rocco (IT) or other third party did not file the opposition against registration of the subject mark in mentioned jurisdictions, which could serve as an indication of absence of conflict of interest between the companies. We also used these arguments in the Objection to the provisional refusal.

This strategy was successful and the applied mark received legal protection in Ukraine.

  • TM , UA, RU

In order to describe significant difference in Examination approach in the CIS countries, we would like to share our experience regarding provisional refusals of this mark in Ukraine and Russia.

In Ukraine, IR 1111582 was refused for all applied goods and services in classes 25 and 35, because it was considered by the Examination to be confusingly similar to TM  IR 1125753 and TM , Certificate No. 107938.

We built our argumentation in the Objection based on, first of all, visual dissimilarity of the marks in question since the applied mark creates a completely different overall impression in comparison with the opposed marks. The applicant – CONDORPELLI S.P.A. (IT) is a world-famous company that produces and sells luxury fur clothing, while in our opinion, the relevant circles of consumers cannot confuse goods under the mark with any other manufacturer or a trademark.

Despite the fact that the marks in question are phonetically similar, due to the common verbal element «MANZONI», we successfully overcame refusal in Ukraine with use of the aforesaid arguments.

At the same time, in Russia, the client received the provisional refusal with a citation of eight earlier trademarks, which all contained the common verbal element, «MANZONI» and owned by the same owner, AMELHILL SERVICES LTD. (CY).

Due to the common verbal element «MANZONI», filing of the Objection based on the arguments in favor of dissimilarity was not an efficient solution as the chances for success were limited in Russia.

Nevertheless, the client  decided to proceed with the given chances, which resulted in the refusal of the registration of the applied mark in Russia. As to a Letter of Consent, it would not have been accepted by the Russian PTO in this situation, as the Russian PTO imposes strict requirements  to the consent documents issued for closely similar marks with the aim to ensure protection of the consumers’ rights.

The applicant also decided to contest the final decision with the Appeal Board of the Russian PTO by filing an Appeal grounded on the same arguments in favor of dissimilarity. As we predicted and informed the client, the same strategy did not give a positive result and the trademark was again refused in Russia.

Unfortunately, in this particular case in Russia, there were insufficient chances to obtain legal protection for the applied mark solely with  arguments, unless the opposed marks were cancelled or assigned in the name of the applicant.

  • TM INTREND IR 1428732, RU

Our client – MAX MARA INTERNATIONAL S.A. has received partial provisional refusal for TM INTREND for the goods in class 25 due to TM  IR 674457, earlier registered in Russia in class 25.

The likelihood of confusion is, first of all, estimated by the Trademark Offices of the CIS countries as to the similarity of the verbal elements of the conflicting marks, on which, in their opinion, the attention of  consumers is primarily focused and accordingly, the overall impression of the mark is created.

There is a considerable range of similarity between the applied and opposed marks, as the wording «TREND» fully enters into the applied mark. Therefore, we recommended that the applicant  obtain a Letter of Consent from the owner of the cited mark, as it was a more reliable option to overcome the refusal.

Negotiations were successful and the Letter of Consent was obtained from the counterparty, which resulted in a successful Objection and the mark was registered in Russia for all applied goods in class 25.

  • TM  IR 1288699, AM, AZ

TM ZANELLATO of GRUPPO ZANELLATO S.R.L. (IT) was partially refused in Armenia and Azerbaijan for  goods in classes 18 and 25, because the Examination considered the applied mark to be confusingly similar to IR 966864 TM ZANELLA, earlier registered in both jurisdictions for  goods in classes 18 and 25.

The applicant was keen on achieving legal protection in respect of goods in class 18, since its core business activity is production and sale of leather hand bags, backpacks, briefcases, etc.

The most reliable option to overcome the refusals in both Armenia and Azerbaijan was to obtain a Letters of Consent from the holder of the opposed mark – ZANELLA IP HOLDINGS, LLC (US).

After negotiations with the opposed party, the Letters of Consent were obtained and the refusals in respect of classes 18 and 25 were successfully overcome.

PROVISIONAL REFUSALS ON ABSOLUTE GROUNDS

  • TM (B BOGGI MILANO CASA FONDATA NEL 1939), UA

IR 874293 TM , filed in the name of BBB S.p.A. (IT), was refused for all applied goods and services, because it was considered by the Ukrainian Examination that the applied mark is deceptive and capable to mislead the consumers in respect of the company which produces goods or renders services.

The refusal was based on the fact that owner of the mark is an American company – DARWELL LLC (US) while the mark contains the name of  an Italian city – Milan. However, this international registration was assigned in the name of the client in 2010 from the previous owner – BBB S.p.A., which is an Italian company.

There are many brands that originate from Italy or France, however they are owned not only by their founders, but by large corporations from other countries. As an example, one can mention Valentino who sold his brand to RCS MediaGroup S.p.A. in 1998, or Takada Kenzo who sold his business to LVMH.

LVMH, though is a French company, which also owns such brands as (DKNY DONNA KARAN NEW YORK),  (LOEWE Madrid 1846) and  (PINK Thomas Pink Jermyn Street London). Most of these trademarks also include names of cities where the production began or the city where the founder lived.

Moreover, all clothes, shoes and accessories under the applied mark are still designed by the Italian maestro – Alessandro Matteoni who works and lives in Italy. For the Objection we  also received from him a letter which confirmed  this information.

All of this information and accompanying arguments were outlined in the Objection. The Examination accepted these arguments and issued the decision on grant protection.

  • TM dress for the moment IR 1139875, KZ

The applied mark (applicant – New Yorker Hungary Kereskedelmi Kft. (HU)) was partially refused in Kazakhstan in class 25, because it was considered by the Examination that the trademark has no distinctive ability, being merely descriptive in respect of goods in class 25, and therefore, not eligible for protection.

The only way to overcome this refusal was to prove acquired distinctiveness of the applied mark in Kazakhstan. The trademark was registered in respect of all applied goods, as we convinced the Examination with an Objection based on arguments and evidences that the applied mark had obtained the distinctive ability as a result of its active use on the territory of Kazakhstan and, therefore, had become recognizable and identifiable by  Kazakh consumers.

  • TM  IR 1221416, TJ

It is worth mentioning that the provisional refusal  received by our client Philipp Plein (CH) in Tajikistan, where the Examination considered the applied mark to be contrary to public interest, was due to the very conservative and tradition-oriented life in Tajikistan.

We prepared and filed an Objection with arguments that behind the applied mark was the designer’s idea that a skull is a symbol of life and fearlessness in the face of death.

Furthermore, we mentioned that skulls are among the most widely used symbols all over the world and through all epochs with different meanings, especially in the youth culture while Mr. Philip Plein’s goods are first of all targeted at the younger generation.

Our arguments were accepted by the Examination, and we  obtained a positive decision from the Tajik PTO with registration of the applied mark in respect of all applied goods and services, including for goods in classes 18 and 25.

We should note that in our practice we have a number of successful cases, where the applied mark was initially refused on such grounds in Tajikistan, however our arguments were accepted by the Examination.

  • TM  IR 1266910, UZ, TJ, KG, KZ

TM applied in the name of GIORGIO ARMANI S.P.A. (IT) for  goods in classes 18 and 25, initially received  provisional refusals in the mentioned jurisdictions on  absolute grounds.

We should note that the verbal element «le sac» translates from French into English as «the bag».

In Uzbekistan, the provisional refusal was issued because the verbal element «Sac» was considered by the Examination to have no distinctive ability, being deceitful in respect of all applied goods, while the element «11» had no distinctive ability and should be disclaimed. After filing  the Objection, the Uzbek PTO issued a decision where our arguments where partially accepted. The protection was granted for all applied goods in class 25 with a disclaimer of the element «11» and for goods in class 18 with a disclaimer of the elements «le Sac 11».

In Tajikistan, partial provisional refusal was issued only for goods in class 18, because the applied mark was considered by the Examination to have no distinctive ability, being merely descriptive with regard to goods in class 18. We tried to overcome the decision of the Examination twice, through filing of the Objection (which was not successful), and contesting the final decision of the examination. Finally, the Appeal Board of Tajikistan accepted our arguments and the trademark was registered for all applied goods in classes 18 and 25.

In Kyrgyzstan, the mark was partially refused for  goods in class 18, because it was considered by the Examiner to have no distinctive ability, being merely descriptive in respect of goods in class 18. Filed grounded Objection, IR 1266910 was registered for all applied goods in classes 18 and 25 with a disclaimer of element «Sac».

In Kazakhstan, the applied mark was refused for goods in classes 18 and 25, because it was considered by the Examination to have no distinctive ability, being descriptive in respect of goods in class 18 and capable to mislead the consumers as to the rest of goods, which are not related to bags.

We  tried to overcome the refusal and provided arguments in favor of the fanciful character of the applied mark and its original stylish representation with emphasis on the worldwide fame of GIORGIO ARMANI S.P.A. Furthermore, we pointed to the fact that French is not an official language in Kazakhstan, therefore the applied mark was unlikely to be considered by  Kazakh consumers as a French word.

However, the Examiner did not accept our arguments and issued a final decision with refusal for all applied goods.

CONCLUSIONS

 Upon careful analysis of our experience in achieving trademark protection in the fashion industry, we can outline the following conclusions:

  • it is strongly recommended, before applying for a new trademark, to conduct a preliminary search in order to reveal possible prior rights for similar marks with the aim of trying to avoid a provisional refusal;
  • it is always advisable to carefully consider the inclusion of a descriptive wording or phrase and to use fanciful words or phrases for fashion trademarks;
  • if a trademark application receives a provisional refusal on relative grounds, it is recommended to seek the assistance of an experienced trademark attorney to assess the possible options and chances for success in overcoming the refusal and obtaining legal protection;
  • trademarks in the fashion industry are quite often refused on absolute grounds, such as misleading character of the applied mark as to the place of manufacture of the applied goods due to inclusion of elements, which represent geographical names of cities and countries, while the applicant is from another country. Since such elements are usually non-protectable, it is recommended to carefully consider their inclusion in the trademark.

We hope that this overview, as well as example cases of trademarks in the fashion industry in  CIS countries, might help IP practitioners and fashion designers/companies to protect fashion brands more effectively.