Business lawyers specialising in technology and intellectual property law, management and commercialisation

Australian fashion law and industry trends

fashion_gowings_dept_store.jpgThere's a lot of name dropping in fashion, it makes the money go round in the clothing, footwear, perfume, jewellery and accessories markets. In fashion the name's the thing, it also helps to have good design, talent and images of models who are easy to look at.

This article examines trends and statistics relevant to commercialisation, management and legal practices in the fashion sector in Australia.

fashion_darling

Celebrity-based perfume brands have been big sellers globally in recent years and include products associated with Nicole Kidman, Britney Spears, Jennifer Lopez, Paris Hilton and Sara Jessica Parker.

Among the Australians who have built profiles or businesses in fashion are Greg Norman, Pat Rafter, Elle McPherson and Kylie Minogue. Between them they have numerous trade mark registrations in numerous classes of goods and services. Registration under the Trade Marks Act 1995 (Cth) adds to the legal protection available under the Trade Practices Act 1974 (Cth) to provide Kylie's backers, for example, with protection for her Darling fragrance launched Christmas 2006. DARLING and KYLIE MONOGUE DARLING are both trade mark of KDB Pty Ltd.The same goes for clothing fashions with Sharon Stone for Christian Dior's beauty line, Kim Basinger for Prada, Julia Roberts for Gianfranco Ferre, and Demi Moore and Madonna for Versace. fashion_raymond_weil

Care is needed for celebrity licensing contracts. The accompanying ad shows Charlize Theron wearing a Raymond Weil S.A. watch. In a New York Supreme Court breach of contract case begun in 2007 the Swiss watch maker seeks compensation on the basis that despite her May 2005 celebrity endorsement contract Ms Theron was seen on Websites and press photographs wearing and advertising watches and jewellry made by competitors like Dior and Montblanc. Paragraph 10 of the Complaint alleges a non-competition restraint exists in the contract as follows: "...Artist commits not to wear publicly any other watches other than RW [Raymond Weil] watches during the Term. Additionally, artist hereby agrees that during the term she shall not endorse or advertise watches or jewelry for any other person, entity or company."

3. Changing distribution practices and business models

However, the biggest story is not the increased use of big names. It is the change to distribution practices and business models affecting bottom lines. As we'll illustrate briefly, law has played a central role causing or influencing that change.

For example, luxury perfumes are now sold in increased numbers in Australian pharmacies, discount department stores, direct sales, speciality stores, grocery retailers and online. They compete with sales at salons, boutiques and department stores. Specially retailers (such as The Perfume Connection, The Perfume Shop, The Perfume King, PerfumeMart and Perfume Empire) have eaten into sales and it is claimed that perfume prices have also dropped 10 to 30 per cent in the three years to 2006.

Shoebridge and Tyndall report that "The 14-year-old The Perfume Connection, which is part owned by ANZ Banking Group's private equity division, opened 11 new stores during 2005, lifting its chain to 54 stores. Founder Pat McCarthy says ... 'The price drops [by mainstream retailers] have been between 10 and 40 per cent, so the same margin is not in it for the parallel importers' ".

4. Future developments and legal takeaway

Changing laws in Australia have shifted the ground for the fashion business and continue to do so as illustrated by items in the further reading list below.

A series of changes in Australia's copyright and trade mark laws in the last decade or so have made it easier for those who engage in parallel importation. We can define parallel importation as the practice of importing legitimate or non-pirate branded or copyright goods instead of buying them from an exclusive or authorised domestic distributor. Before these changes it was easier to use the law to block at customs or elsewhere the importation into Australia of legitimately produced products which had packaging or labeling which was subject to copyright and/or trade mark law.

There remains plenty of scope in fashion to combine marketing and management practices with law to legally:

  • protect textile, fashion and perfume innovation using trade mark, design, copyright, moral rights, trade secrets, trade practices and even patent law (eg in Australia a perfume scent can be a registered trade mark);
  • develop international licensing agreements and practices to secure revenue streams and brand protection;
  • develop the business models for talent, retailers, distributors and other players who need to establish or restructure enterprises or entities to capture and store value from their creativity; and
  • fight products which infringe intellectual property rights, otherwise known as counterfeits, pirate goods and knock-offs.

Emblamatic of many themes in this post is the Gowings Department Store building in central Sydney. A 1930s photo of the building leads this article.

Since 1868 clothing for men was the focus of the Gowings Department Store. However, in a strategic move in 2001, Gowings Bros Ltd shifted from being a retailing business to being a real property business. In making the change the company licensed out its valuable "Gowings" trade mark to an unrelated retailer to run with, Gowings Retail Ltd (now Retail Star Ltd). As the retailer expanded quickly opening several new outlets it seemed its new management knew what it was doing. Instead it fell in a heap, ending up in insolvency in late 2005. However, since the Gowings name was only used by it under licence, Gowings Bros Ltd got its name back... for future use. It is registered in six classes on the Australian trade marks register. In fashion the name's the thing.


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