NAT-A-PORTER NO MORE!

The shock-resignation of Natalie Massenet from Net-A-Porter, just before the merger with Yoox Group was due to take place, has sent shock-waves through the fashion industry!

Starting out

Massenet’s start-up story is a familiar one. Founding the company in her spare room in 2000, the ultimate Fash Tech entrepreneur saw a gap in the market for an online platform supplying luxury fashion. This led to the birth of Net-A-Porter and forever changed the way we shop online!

Massenet is an American-born former journalist who began working for Women’s Wear Daily and Tatler, which is where her idea of an e-commerce website in a magazine format began. However, the glitz and glamour of the early stage setup was not so high-brow, as Massenet initially stacked the signature Net-A-Porter black packaging in her bath! How times have changed!

bathtub+vintage+image+graphicsfairy002c

Perhaps Natalie’s bathtub will no longer look so rosy!

In Natalie’s words

So what happened? In her own words this week, Massenet gave us an insight into her decision, saying:

“The completion of Net-a-Porter Group’s merger with Yoox Group is the right time for me to move on to explore new ideas and opportunities…The business I started in 2000 could not be in better shape today. Having joined forces with Yoox Group, the company will be bigger, stronger and superbly well positioned under Federico Marchetti’s leadership to lead the industry and create the future of fashion. As a continuing loyal customer I will be excited to see the next chapter for this amazing business.”

natalie-massenet-vogue-9sept13-pr

So long Natalie!

The FTL verdict

Is this really such a surprise? Well, given the fashionista’s position following the merger was to be restricted to an editorial and communications role, perhaps it’s not completely unexpected!

If all had gone to plan, Ms Massenet would have become the executive chairman while Mr Marchetti stepped into the chief executive role. To add fuel to the fire, over lunch with the Financial Times in May this year Mr Marchetti was quick to clarify where the power would lie. There was to be only one boss, he said, “And that’s me”.

Marchetti

In the wise-words of the Godfather of Soul: “Paid the cost to be the Boss!”

Yet to be seen is how the merger between these two rivals will work in practice, in a marketplace that has become increasingly crowded and competitive. For example, is it business-savvy to retain The Outnet, Net-A-Porter’s cut-price site that directly rivalled Yoox? Most definitely not, but which of the two will bite the dust?! There are many questions surrounding what the future holds for Yoox-A-Porter (by the way, I highly doubt this will be the new branding!), but what’s certain is that the new group will have to act decisively to retain shareholder confidence.

Both companies have faced mounting pressure from new businesses entering the luxury e-commerce space, as well as from traditional brands beginning to sell their products online to consumers directly. With big brands reeling from the ongoing economic slowdown in China, and the feeling that the days of rapid expansion are behind them, the mood of the luxury industry, as a whole, is far from sanguine.

NAP bag

Will the branding change post merger?

Also, despite Ms Massenet’s diplomatic statement, it looks like this was a rather contentious departure: Bloomberg reports that Massenet leaves with over £100 million ($153 million) after the sale of shares in her company. The Financial Times reported that the sum came as a result of a dispute over the value of the Net-A-Porter Group that led to her quitting.

The FTL concludes a trouble at the mill scenario, what other explanation could there be for such a sudden departure?!

Do you know what really caused this turn of events? Do you have an opinion on the matter? If so, we’d love to hear from you via the comments box below!

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IN VOQUE?

VOGUE versus VOQUE, “strike a pose VOGUE, VOQUE, VOGUE…”

I know what you’re thinking…it’s only her second week and Fash Tech Lawyer has committed the blogger’s cardinal sin, a typo! Or not…

As I sit here bleary eyed after a looooooong night reviewing a laborious software agreement and sipping a double espresso, I find myself having to double take. Am I going mad? Am I seeing this right? Does that say “VOQUE or VOGUE“?!

Vogue collage

Vintage Vogue from June 1950 (left) and Christmas 1985 (right).

Condé Nast’s opposition

VoQue Limited is a wholesale fashion company with a UK registered office. The company is two years old and reported a 2014 turnover of £10,000.

In September 2013 it applied to register the logo below as a UK trade mark for leather goods; clothing, footwear and headgear. As we know from the Louis Vuitton case (posted here last week), once a trade mark is registered, it will enjoy a presumption of validity until challenged. However, sadly for VoQue it didn’t get that far…

VoQue

No longer “Queen V”!

Hot on VoQue’s heels, the fashion bible VOGUE was not too happy about this and quickly opposed the VOQUE application in December 2013.

Condé Nast, which owns VOGUE, said that the VOQUE mark:

• is confusingly similar to VOGUE, and if registered or even used, would take unfair advantage of VOGUE’s success (if you’re really interested, the relevant law can be found under Section 5(2) (b) and 5(3) of the Trade Marks Act 1994); and
• would cause misrepresentation and damage to the holier than thou publication under Section 5(4)(a) of the Act!

VoQue bites back

In response to this, VoQue said:

• VOQUE and VOGUE carry out totally different activities;
• the typeface used by the VOQUE mark is completely different to the VOGUE mark; and
• VOQUE means “evoke” or “awaken” in French and is different to VOGUE’s “fashionable” or “popular” meaning.

Drum roll please….and it was decided…

No surprises, Condé Nast’s opposition was upheld. Nice try VoQue!!

In July 2015 a decision in favour of the fashionistas’ handbook said:

• the two marks are confusingly alike and have an overall degree of visual, aural and conceptual similarity; and
• VOGUE is distinctive given its reputation and the fact it is not entirely descriptive when used on the iconic publication.

Founded in 1892, Vogue has been at the forefront of fashion publications for well over 100 years! This example is from the 1920s Art Deco era.

Founded in 1892, Vogue has been at the forefront of fashion publications for well over 100 years! This example is from the 1920s Art Deco era.

The application for the VOQUE mark was therefore dismissed and VoQue Limited was ordered to pay the costs incurred by Condé Nast.

The decision also noted:

• the fact that VoQue’s mark has a large crown element around the letter “Q” does not matter, as the average shopper would not see it as sufficiently different;
• the word “Vogue” is a well-known English word meaning “in fashion” and when used in relation to leather goods and clothing, for which the VOQUE mark was registered, alludes to such goods being “of the moment”, which draws parallels between the two marks; and
• the typeface used by VoQue is not unusual, in fact, Condé Nast would be well within their rights to use their VOGUE mark in the same style.

Interestingly, had VoQue managed to slip this one past VOGUE (unlikely!) thereby obtaining registration status, only for VOGUE to then challenge the registered mark at a later date, VOQUE would have been revoked (ironic huh, or just a really bad joke!?)!

Final thought

After reading the case first and foremost, I’m pretty pleased I don’t need my eyes testing, but the lesson to learn from all of this is that it’s risky business basing your branding on a similar, earlier and well established registered mark. There’s only one VOGUE!

Jean-Genious! Levi and Google develop jeans that text

Fashion and tech continue to merge in thrilling ways. One of the most exciting has been born out of a recent collaboration between Levi Strauss and Google.

Levi Strauss is not well-known for its tech ventures, yet there’s something about the partnership that makes perfect sense. What do the iconic denim brand and the tech super-power have in common? Simple – both brands have delivered undeniably iconic products and become global household names.

Project Jacquard aims to develop interactive fabrics that empower wearers to use their phone by simply tapping or swiping their clothes. Soon, silencing a call or sending a text message could be as easy as a shimmy or a shake!

Retro Orange Tab makes a come back this season

Retro Orange Tab makes a come back this season!

An opportunity to be present in the moment without the invasion of screens and technology is emerging and the simplicity of the production method makes it ever sweeter. How is this done? Via a standard loom, replacing the normal thread with a conductive yarn.

Such insight suggests Levi’s contribution is far more involved than may appear on the surface. The 1853 established company is the daddy of denim: it’s globally renown for its heritage Orange Tab flares to its 501 Originals! In line with this is Google’s reputation as our go-to search engine.

Levi’s presence will be a crucial factor in the credibility and design of the future product, a much-debated topic in the fash-tech sphere! Customers who might normally be put off by a function over style concept might be swung by a warranted trust in the Levi’s brand.

jacquard2x

Of course, this is just the beginning. With interactive fabric now developing into a relatively easy concept to pursue, partnerships such as Levi Strauss and Google could fuel many more similar collaborations. Might we be observing the birth of the ‘Super Jean’?

Louis Vuitton’s “Damier” in the Dog-House

Louis Vuitton has lost its Trade Mark protection for the famous chequered pattern, the Damier.

In addition to its “LV” monogram, the French fashion giant Louis Vuitton has been using the brown and beige check – known as the Damier Ebene – since 1888. It successfully registered a European-wide Community Trade Mark (“CTM”) in 1998, and for the cream and grey Damier Azur ten years later. However, Nanu Nana, an online gift item supplier, filed a legal claim to remove protection for these patterns in 2009.

The Damier Azur and Damier Ebene, side by side

The Damier Azur and Damier Ebene, side by side

Nanu Nana argued that Louis Vuitton could not legally protect the Damier pattern because it was:

  • descriptive;
  • devoid of distinctive character;
  • an established practice of trade; and
  • consisted exclusively of a shape giving substantial value to the goods themselves.

If a Trade Mark is found to be any of the above, it will be refused protection under the Community Trade Mark Regulations (Article 7). In eight of the 27 European Union countries, Louis Vuitton could not prove it had acquired distinctive use of the Damiers. In other words, it could not prove that the Damier was distinctive enough for people to automatically associate it with its origin, being the Louis Vuitton official brand. The Courts therefore cancelled the Trade Mark protection of both the Ebene and Azur Damiers.

After a few rounds of appeal by Louis Vuitton, it all boiled down to the decision of the General Court. The decision was handed down in April 2015 and said:

  • The marks lack inherent distinctive character. They are too basic, too common and have a long-standing link with leather goods for which they were registered.
  • The evidence provided by Louis Vuitton did not prove distinctive character throughout the European Union (in all 27 countries).
  • Photos of celebrities holding Louis Vuitton merchandise did not prove the brand had acquired a special or well-known distinctiveness through use.
Just because celebrities - like supermodel Miranda Kerr - use a particular product, doesn't mean that the design can be protected under law!

Just because celebrities – like supermodel Miranda Kerr – use a particular product, doesn’t mean that the design can be protected under law!

Without a protected Damier, Louis Vuitton will now have a harder time going after counterfeit products.

What could the brand have done differently?

Louis Vuitton’s crux has been lack evidence. Had the brand provided sufficient proof, showing acquired distinctiveness of the Damiers in every EU country, perhaps the Damiers would still be protected. Louis Vuitton now has the opportunity to appeal to the Court of Justice for the EU, which is a route the luxury designer brand will likely take to protect the patterns. Let’s watch this space!

What does this case teach us?

  • A mark must be distinctive throughout each and every one of the EU countries in order to be granted an EU-wide protection.
  • Even marks that have been used for over a century can be vulnerable to invalidity claims. The key to protection, as always, is evidence. If sales, PR and marketing data is maintained for all EU territories, distinctiveness and use are easier to prove.
  • Trade Mark erosion is when a trade marked name or pattern becomes generic (think “Hoover” or “Kleenex”). You can help prevent this with savvy marketing, to include identifying and adding a durable distinctive element to the core design. This will help to withstand opposition or cancellation proceedings from competitors.
  • Where a Trade Mark constitutes a valuable asset, businesses should always have a strategic approach to registering multiple marks in their core markets.

I’m setting up a fashion business: where do I start?

Establishing a fashion business can be electrifying and a roller-coaster journey. To avoid pitfalls, read on…

Think of an amazing brand name, and protect it!
A catchy brand name can make all the difference, as it’s the basis on which your business will be established and will flourish. It’s therefore crucial to first ensure your name is unique, and avoids confusion with other names already out there. Once you’re clear on this, get the brand name and any logo associated with it registered as trade marks. This will allow you to protect your brand from copycats, and safeguard the value of the goodwill you generate.

What can the quarters of a burgeoning fashion startup look like? This is the Everlane Studio in San Francisco

What can the quarters of a burgeoning fashion startup look like? This is the Everlane Studio in San Francisco

What legal structure is most suitable for you?
Three most common business structures are below:

Sole Trader: you run your business as an individual, retain all profits post tax and can employ staff. You are accountable for the business and personally responsible for any losses your business makes. For tax purposes, you are considered self-employed.
Partnership: responsibility is shared between you and your business partner (or partners). The profits of the business can be shared between all partners in the business. Each partner pays tax on their share of the profits.
Limited Liability Companies: a company is a separate legal entity owned by shareholders. The company is responsible in its own right for everything it does and its finances are completely separate from your personal finances. Any profit made by the company, after payment of corporation tax, can be distributed between the shareholders.

Have you thought about your location?
Some of the most famous start-ups have begun in a back bedroom, but as you expand you might need to relocate to an office or shop space. Space is often bought via leasehold, but don’t be too eager to sign without ensuring you fully understand and agree to the terms. A more cost effective strategy might be to trade over the web. If doing so, it’s a great idea to get expert advice on trading over the internet as there’s a whole host of complex laws and regulations surrounding this.

Make sure to do your homework before starting your fashion business, which includes having the correct contracts in place with partners or staff.

Make sure to do your homework before starting your fashion business, which includes having the correct contracts in place with partners &/or staff

Do you have the right agreements in place?
Before entering into a business relationship, you should ensure that you have all of the appropriate agreements in place. For instance, if negotiating with a third party – such as a supplier or developer – you should have signed a non-disclosure agreement to protect any confidential information you may exchange. Having the right contracts set out from the beginning is essential, particularly to avoid complexities in the event of a dispute!

For more information on setting up your business don’t hesitate to contact me.

Technology in Fashion: Fad or Future?

The appointment of Burberry’s Chief Executive Angela Ahrendts at Apple suggests the company does not simply plan to dip its toe in the fashion pool, but intends to fully submerge itself. With the current hype over the marriage of the fashion and technology industries, Sarah Simpson, Associate at Taylor Vinters and fashion law expert, asks whether the collaboration between technology and fashion will really take off, or whether it’s just the latest fad. Sarah also looks at the serious data protection implications that designers and developers of fashion-led technology need to be aware of.

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