Business and Legal Tips for the Emerging Designer
Just this past Friday, I got the magnificent opportunity to sit on a fashion law panel, hosted by the Fashion Law Society at John Marshall Law School in Chicago. It was a great event, and now the 3rd time I've presented at one of their Symposiums. Always a great time.
As I, and the 3 other attorneys on the panel took questions, we were asked everything from the best way to set up a fashion business, to the means for protecting a brand once it's up and running. We gave many tips and cautions, but it reminded me of the information right here to share with designers and brand managers for protecting what's rightfully yours.
Here are some of the tips we've shared in the past. Take a look, and let us know what else you'd like to see.
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Essential Tips from Lawyer to Fashion Designer
Fashion Law & Why You Should Care
Fashion Law & the Local Economy
What's In A Name? More About Trademarks
5 Legal Issues for Fashion Shows
B.A.F.F.L.E.D. Fashion Law
The Battle of Counterfeits in Big Cities, Part 2--
Last week we talked about the fight big cities are having against counterfeits. Places like Chicago, New York, and Atlanta--largely because of their transportation centers--are consistently working to keep the counterfeit market in check within their borders. Today, we're going to talk about how the counterfeit chain begins.
How do counterfeits come to the market in the first place?
Counterfeits are considered products purporting to be part of a popular designer brand, but sold in what we'll call a shady way. Designer items are sold directly from their source, or through licensing agreements permitting items to be sold in other outlets. An example of such licensing would be Christian Louboutin shoes being sold at Bloomingdale's. Bloomingdale's has an agreement with Louboutin allowing them to sell their shoes in the store.
What happens in the counterfeit market is contrary to direct sales or licensing agreements. Items which look a lot like the real deal show up in places the designer has not authorized, and the price is always far less than the true value or market price of the item. Often, counterfeits circulate through the market innocently, when consumers buy them from sources they trust, like friends having "purse parties" or donations to charitable organizations. However, the source to these innocent consumers is far from innocent. They may start at a place like Canal St. in NYC or boutiques claiming to have deals on designer items. The items come in in droves. Here's how the chain starts.
Gray Market Production
We know the black market is where items are sold illegally. Well, the gray market is somewhat similar. The gray market is created when factories licensed to produce designer goods under certain terms and conditions step outside those boundaries and create their own, infringing items.
As an example, a factory is licensed to produce Chanel bags under the protocol provided by Chanel. Bags are to be made from 9am local time to 5pm, using specific materials and methods. At 5:30, the production continues, but the items are 1) unauthorized by Chanel, and 2) produced in such a way to make consumers believe the goods are Chanel, but protect the infringing bag-maker from a quick infringement, contracting, and licensing lawsuit. The goods get shipped, and in the best cases, they're stopped at customs to protect designers and consumers from infringing products. No worries, the lawsuit does come later.
This gray market method is one of the largest sources of counterfeit goods and is the baseline of a billion-dollar market. To curb the negative effects of this market, a myriad of things must be done: legislation, brand vigilance, accurate contracting, policing, and more.
Share with us how you feel about counterfeits, fakes, and knockoffs. Let's keep the conversation going.
Stay tuned for more on international production and fashion labor.
*Designer goods is a fairly loose term when used in this article. It does not describe high priced goods only, it includes items at any price point, but specifically those protected by a trademark or brand recognition in some way. Price is not a factor.
Last week we talked about the fight big cities are having against counterfeits. Places like Chicago, New York, and Atlanta--largely because of their transportation centers--are consistently working to keep the counterfeit market in check within their borders. Today, we're going to talk about how the counterfeit chain begins.
How do counterfeits come to the market in the first place?
Counterfeits are considered products purporting to be part of a popular designer brand, but sold in what we'll call a shady way. Designer items are sold directly from their source, or through licensing agreements permitting items to be sold in other outlets. An example of such licensing would be Christian Louboutin shoes being sold at Bloomingdale's. Bloomingdale's has an agreement with Louboutin allowing them to sell their shoes in the store.
What happens in the counterfeit market is contrary to direct sales or licensing agreements. Items which look a lot like the real deal show up in places the designer has not authorized, and the price is always far less than the true value or market price of the item. Often, counterfeits circulate through the market innocently, when consumers buy them from sources they trust, like friends having "purse parties" or donations to charitable organizations. However, the source to these innocent consumers is far from innocent. They may start at a place like Canal St. in NYC or boutiques claiming to have deals on designer items. The items come in in droves. Here's how the chain starts.
Gray Market Production
We know the black market is where items are sold illegally. Well, the gray market is somewhat similar. The gray market is created when factories licensed to produce designer goods under certain terms and conditions step outside those boundaries and create their own, infringing items.
As an example, a factory is licensed to produce Chanel bags under the protocol provided by Chanel. Bags are to be made from 9am local time to 5pm, using specific materials and methods. At 5:30, the production continues, but the items are 1) unauthorized by Chanel, and 2) produced in such a way to make consumers believe the goods are Chanel, but protect the infringing bag-maker from a quick infringement, contracting, and licensing lawsuit. The goods get shipped, and in the best cases, they're stopped at customs to protect designers and consumers from infringing products. No worries, the lawsuit does come later.
This gray market method is one of the largest sources of counterfeit goods and is the baseline of a billion-dollar market. To curb the negative effects of this market, a myriad of things must be done: legislation, brand vigilance, accurate contracting, policing, and more.
Share with us how you feel about counterfeits, fakes, and knockoffs. Let's keep the conversation going.
Stay tuned for more on international production and fashion labor.
*Designer goods is a fairly loose term when used in this article. It does not describe high priced goods only, it includes items at any price point, but specifically those protected by a trademark or brand recognition in some way. Price is not a factor.
B.A.F.F.L.E.D. Fashion Law
The Battle of Counterfeits in Big Cities: Part 1--
Is your city struggling with the counterfeit market? Mine is. Chicago, like many other cities is doing its best to protect the intellectual property of fashion designers. Because the counterfeit industry is a billion-dollar market, both the federal and local governments must stay on their toes in this battle.
The Legislature and Fashion Law: Partners Against Crime
Just recently, NYC Councilwoman Margaret Chin again filed an ordinance to punish purchasers of counterfeit goods. Canal Street in New York, as well as various other locations are widely known for their stock of counterfeit goods. Many put this shopping spot on their itinerary when heading to the Big Apple. Will this legislation deter tourists from heading to NYC?
Although her legislation has not reached the point of passing, she's quite adamant about the need. Designers surely agree. Concerns have come up about the reason for punishing the consumer, but the sale of counterfeits is already a punishable offense. And to be honest, consumers know when they're buying a fake. There are so many signs. Chin said. “If you go into a back room, basement or van, you probably know what you’re doing is not legal.” Well put Councilwoman.
As we've noted before, designer products are in the market in 4 classes:
(1) The real thing
(2) The real thing....but the designer finds something about it imperfect for sale
(3) A great fake; looks real, but it's not. This item is a counterfeit.
(4) A terrible fake. Sellers and buyers should know and do better. These are knockoffs, when Coach "C"s become Gs, Gucci "G"s look like Cs, and maybe this bag is sold at a mall kiosk. Tell tale signs are evident it's not real.
This diagram from our friends at Fox Rothschild helps determine a fake Louis Vuitton. We'll share more tips as this series continues.
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Law Enforcement Does Their Part: My beloved Chicago is also fighting the battle against fakes. From September 2011 through the same time in 2012, Chicago saw more than 100,000 fakes seized, totaling to more than $5million. In conjunction with the U.S. Immigration and Customs Enforcement's Office of Homeland Security Investigations, the Cook County Sheriff has worked to follow the trail of the counterfeit, often leading them to flea markets and even purse parties. They are then often able to follow the trail back to the source.
The trail of the counterfeit is what makes this phenomenon so interesting. The route is quite interesting and includes pieces like contracts, licensing, and labor agreements.
Stay tuned for next week's Part 2 on counterfeits in big cities, where we'll trace the trail of counterfeits to their source.
The Legislature and Fashion Law: Partners Against Crime
Just recently, NYC Councilwoman Margaret Chin again filed an ordinance to punish purchasers of counterfeit goods. Canal Street in New York, as well as various other locations are widely known for their stock of counterfeit goods. Many put this shopping spot on their itinerary when heading to the Big Apple. Will this legislation deter tourists from heading to NYC?
Although her legislation has not reached the point of passing, she's quite adamant about the need. Designers surely agree. Concerns have come up about the reason for punishing the consumer, but the sale of counterfeits is already a punishable offense. And to be honest, consumers know when they're buying a fake. There are so many signs. Chin said. “If you go into a back room, basement or van, you probably know what you’re doing is not legal.” Well put Councilwoman.
As we've noted before, designer products are in the market in 4 classes:
(1) The real thing
(2) The real thing....but the designer finds something about it imperfect for sale
(3) A great fake; looks real, but it's not. This item is a counterfeit.
(4) A terrible fake. Sellers and buyers should know and do better. These are knockoffs, when Coach "C"s become Gs, Gucci "G"s look like Cs, and maybe this bag is sold at a mall kiosk. Tell tale signs are evident it's not real.
This diagram from our friends at Fox Rothschild helps determine a fake Louis Vuitton. We'll share more tips as this series continues.
.jpeg)
Law Enforcement Does Their Part: My beloved Chicago is also fighting the battle against fakes. From September 2011 through the same time in 2012, Chicago saw more than 100,000 fakes seized, totaling to more than $5million. In conjunction with the U.S. Immigration and Customs Enforcement's Office of Homeland Security Investigations, the Cook County Sheriff has worked to follow the trail of the counterfeit, often leading them to flea markets and even purse parties. They are then often able to follow the trail back to the source.
The trail of the counterfeit is what makes this phenomenon so interesting. The route is quite interesting and includes pieces like contracts, licensing, and labor agreements.
Stay tuned for next week's Part 2 on counterfeits in big cities, where we'll trace the trail of counterfeits to their source.
B.A.F.F.L.E.D. Fashion Law
The Fashion Law Symposium- By Guest Editor, Shelley Whitehead, Esq.
First, I just want to sincerely thank V for allowing me this platform as a guest writer on her blog. V and I were introduced by a mutual friend back in August 2012 when I first moved back to Chicago and she quickly became one of my dearest and most supportive friends. She was the inspiration for me to hit the ground running in helping to put Chicago fashion law on the map and was one of my biggest cheerleaders when I decided to recently launch my blog The Legal BombSHELL. Both V and I were afforded the tremendous honor in being a panelist/presenter at the 1st Annual John Marshall Law School (“JMLS”) Fashion and Design Law Symposium held on Friday, April 12, 2013. Hopefully if you are in Chicago, you got a chance to check it out. If not, here’s a recap of this historic event.
For the panelists, our experience actually started Thursday evening when JMLS’s Fashion Law Society hosted a dinner for us at Pazzo’s, an Italian eatery. I swore off bread and pasta for the month of April, so it was quite the struggle as I watched the bread and olive oil being passed around and all of the pasta dishes being sampled. Nevertheless, I stayed strong and my grilled salmon dinner was divine. I will definitely be dining there again come May. But I digress. There were panelists who flew in from literally all over North America to take part in this momentous occasion. It was truly a pleasure being able to network with so many of the movers and shakers in fashion law. By the time I got home, I was riddled with anticipation for the day to come and had my clothes laid out like it was the first day of school.
My Friday began by arriving to JMLS relatively early as I was part of the very first panel. Once the symposium commenced, my über fabulous co-panelist Shara Harris, Esq. of WFML, P.C., and I presented on “Legal Issues in the Fashion Industry: Creating and Protecting Your Intellectual Property”. Our presentation pretty much laid the foundation for the panels to come by giving an overview of the business and legal aspects of the fashion industry— a fashion law 101 if you will. The following panel featured your amazing blog host V and two other panelists, Ashlee Froese from Toronto, Canada and Roberto Frias from Mexico City, Mexico. Their presentation compared the similarities and differences as to how fashion law and intellectual property is regulated in each country’s jurisdiction. You should be super proud of V. Since you follow her, you already know what a fashion law guru she is and she definitely showcased her vast knowledge on Friday. During the lunch intermission, all of the morning panelists took pictures with the symposium’s photographer, with State Street as the backdrop.
After lunch, there was a panel featuring Washington, D.C. attorney Mariessa Terrell and Chicago attorney Aleksandra Volk who sat with Chicago-based designers Anastasia Chatzka and Lara Miller to discuss the impact trademarks and marketing had on their brands. One of the highlights of the panel was Lara Miller wowing the audience with her demonstration of one of her “flip sweaters”. This sweater can be worn multiple ways — once as a cardigan and then by just flipping it upside down, it can be worn as a shrug. While I can honestly say I enjoyed every single panel, I must say this panel was particularly refreshing because we got to hear a designer’s perspective. As attorneys, we can talk all day long about the law, but it’s nice to hear from the proverbial horses’ mouth how those laws actually positively or negatively affect the designers.
The following panel was conducted by New York attorney Frances Hadfield, Esq. and Chicago attorney Michael Hode, Esq. who gave us a tremendous overview of some of the more overlooked aspects of fashion law: importing and exporting goods, taxes and even the tags in our clothes. The last panel was with Philadelphia attorney and Wilhelmina model Tracy Agyemang, Esq., California based attorney Kanika Corley, Esq., and Wilhelmina Model’s General Counsel Ali Grace Marquart, Esq. who gave an insightful and entertaining presentation on labor issues in the modeling industry and rights of publicity. Overall, the symposium had something for everyone. Even if you thought you knew everything there was to know about fashion law, you certainly left out of there feeling like you learned something new. To learn more about the incredible panelists that presented, please check out the Chicago Fashion Law Update.
After the symposium, there was a cocktail reception for the attendees which included hors d’oeuvres, a wine bar and fashion show. The designers represented included Suzanne Opara of 828 Collection, LaTonya Williams of Elizabeth Smith Fashions, and hats from the Goorin Brothers. The models were actually law students from the Loyola University Chicago School of Law, which was a nice and unexpected touch.
This symposium was everything I could have dreamed of and more. Natalie Laczek, Michon Stuttley and the lovely ladies of the John Marshall Fashion Law Society put together a phenomenal event. I was truly impressed with how well-organized and well-planned the event turned out. Every “i” was dotted and every “t” was crossed. The marketing and publicity for the event was incredible, as the symposium was sold out and people were actually begging for tickets (my dad being one) and even asking to be put on a waitlist. As you know Chicago is often overlooked in just about everything fashion-related, despite it being a huge and thriving metropolis. The astounding interest and success of the symposium is a testament that there is a market for fashion here and all that was needed was the proper platform. That platform was definitely showcased on Friday. Therefore, I believe it is safe to say there will be a 2nd Annual JMLS Fashion and Design Law Symposium next year.
Thanks again for having me V! I truly enjoyed sharing with your readers!
Shelley