Image source: https://blog.ipleaders.in/all-you-need-to-know-about-intellectual-property-rights-transfer-agreements/

This article has been written by Sakshi Jain pursuing the Diploma IPR, Media and Entertainment Laws from LawSikho.

Introduction

The fashion industry is one of the most innovative and emerging sectors of India. It plays a significant role in depicting a symbolic societal status, by bringing with it new products and ideas every single day. Be it T-Shirts of Peter England, Jeans of Mufti, Watches of Raymond, or ethnics of FabIndia, all these products are a result of applied creativity and skills in the fashion industry.

However, one cannot deny the fact that the industry that is known for its innovation and passion is also infamous for its ubiquitous instances of copying. The industry is majorly based on the creativity and intellect of an individual. But sadly, today it has become a hub of the proliferation of profit and duplication. People are easily flourishing by imitating industry leaders’ designs and selling them to the general public at cheaper rates. 

This superfluous growth of the industry has led to an added concern regarding the protection of one’s intellectual innovation and original creativity. Thousands of people in the industry complain about their innovations being imitated on a regular basis. There are a number of Intellectual Property Rights that are available to people who have faced such issues. But sadly, only a handful of people are fully aware of these government-enforced incentives of limited exclusiveness that are born in the process of designing any fashion apparel.

The object of this article is to look into the take of Intellectual Property Rights in Fashion Conglomerates in India, and how they play a major role in protecting the original designs and products of these Fashion Conglomerates.

The significance of IP in fashion

The term “Fashion” is a diverse word. It is a form of art, a way of expressing oneself. Fashion is not just limited to garments and apparel. A fashion conglomerate has the ability to build and monetize a distinctive brand, by way of different valuable assets, ranging from distinctive branding elements to print and patterns and proprietary design.

Fashion design refers to a form of art that is dedicated to the creation of lifestyle accessories. To create these accessories, one must have a keen eye and artistic thinking. To quote a few examples, the bridal wear collections of Manish Malhotra and Sabyasachi Mukherjee, perfumes of the Chanel No. 5, T-Shirts of Peter England, jeans of Mufti, and watches of Raymond, these are all products that are the result of applied intellectual creativity and skill in the fashion industry. 

Innovations and new ideas are the key factors of the fashion industry. However, one must not forget that in order to survive in the market, a designer should not only focus on expanding his creativity and learning, but also on protecting them, and hence, no one can doubt the tremendous value of Intellectual Property in providing a tool to facilitate protection to these designers for their creativity. Nevertheless, the utter importance of Intellectual Property in the fashion industry is relatively low. It is a commonly misinterpreted body of law, as the malpractices of “Counterfeits” and “Knock-Offs” have taken the front seat.

Take, for example, the beautiful designer lehenga by Sabyasachi Mukherjee, which was worn by Anushka Sharma at her wedding. As of this day, thousands of its copies are sold in Gaffar Market in Delhi, at much cheaper and affordable rates. This is just a single instance. The practice of Duplication of designs results in a major loss to the fashion industry. Therefore, Intellectual Property plays a very crucial role in protecting the creativity of these designers, by bringing an action against such duplicate products, and it is very crucial to be aware of the same.

The tale of duplication and copying in the fashion industry

Piracy has been one of the most frequent practices in the fashion industry. It refers to unauthorized copying or causing an imitation of an original work by a Fashion designer. It is categorized into two heads:

  1. Knockoffs: A knockoff refers to close copying or imitation of an original fashion design, but it is not identical. The product is sold under a different label from that of the original product, at a cheaper and affordable rate. Since this practice does not amount to passing the original product, it is not an illegal practice as per law. But, if it is proved that the resemblance is close enough to deceive the public in general, then an action can be brought against such an act.
  2. Counterfeit: A Counterfeit, on the other hand, refers to an act of identical copying or imitation of the original product, and selling the same at a cheaper and affordable rate, with an explicit intention of infringing the Trademark of the Original designer of the product. Counterfeiting is an illegal practice as per law, and millions are spent on litigation by the government and the original designers to restrict the sale of such products.

Protection under Designs Act, 2000

Fresh designs are the heart of fashion. Among all the Intellectual Properties, the protection of designs is the most relevant for fashion conglomerates. If a designer intends to seek exclusive protection for his work, then he must get it registered under the Designs Act, 2000. Unregistered designs are not protected under the Act. This implies that nobody can claim damages for their unregistered design. Therefore, it is very crucial to get the design registered for being entitled to be protected under the Act.

The criterion to get a work registered under the Act is that such work must be new, it must not have any prior publication, and the design must reflect the novelty of the artist. Once such work gets registered under the Act, the proprietor is entitled to enjoy the monopoly and exclusive rights on his registered design, not only against copies of the design but also against products that he may come across that are substantially similar. The Act grants protection to the design, shape, color, and pattern of the product for a period of 10 years. Subject to certain conditions, this period is extendable, for a period of 15 years, in total.

If for instance, a Saree designed by Manish Malhotra is registered under the Act, then Section 22 of the Act states that in case of piracy of that design, the infringer will be liable to pay Manish Malhotra a monetary compensation that is not exceeding Rs 25,000, which is recoverable as a contract debt. On the other hand, if Manish Malhotra chooses to bring up a lawsuit for the recovery of damages for any breach of right, or injunction against repetition of such an act, then damages will be awarded to him and such person will be restrained by injunction.

Protection under Copyright Act, 1957

Famous designers frequently face copyright issues, since small-scale retailers often indulge in making duplicate copies of their designs and sell them to the customers at affordable prices. An artist is entitled to protect his artistic work under the Copyright Act, 1957. Such work is eligible to be protected not just for the lifetime of the artist; it continues to be held even after his death, i.e. for 60 years from the year following his death.

However, it is pertinent to note that the Copyright Act and the Designs Act overlap each other when the issue is of design protection. Section 15 of the Copyright Act states that copyright shall not subsist in any design, which is registered or capable of being registered under the Designs Act. Therefore, one should know that, once a design is registered under the Designs Act, the Copyright Act will not apply to such design, and in that case, the work will only be entitled to enjoy protection under the Designs Act.

According to Section 15 (2) of the Copyright Act, if a design, which is capable of being registered under the Designs Act, has not been registered, then it will be entitled to be protected under the Copyright Act. However, one should be aware of another important parameter of this provision that copyright in a design shall immediately cease once any such article gets reproduced more than 50 times in an industrial process by the copyright owner or any authorized person. 

Protection under Trademark Act, 1999

Brand name plays a crucial role when it comes to the fashion industry. Big Fashion houses immensely value their brand equity, and trademark plays a major role here. They develop a bond with the potential customers in the market with the help of their brand names and fiercely protect them after getting proper registration of their trademarks. A trademark emulates the role of protecting the brand name, image, logos, design, and features of the fashion attires, under the Trade Marks Act, 1999. It also helps to distinguish genuine products from copied products.

However, the role of a trademark is useful in a fashion design solely in situations where it is outwardly integrated into the design in such a way that it becomes an element of the design. And because of the same, nowadays, there is a mushrooming tendency among fashion designers to incorporate their trademarked logo on the outside of the product at the time of its creation. To quote an example, a Louis Vuitton handbag always exhibits its well-known logo ‘LV’. This practice of the company has become an indispensable part of the fashion for the handbag. In circumstances like these, the logo becomes an essential part of the design, resulting in the trademark providing significant protection against copying of the design. 

Trademark helps the owners in protecting not only their brand name but also other distinctive features of their products. By getting their trademark registered, fashion Designers are entitled to enjoy a monopoly over the distinctive features of their products. For example, the US Navy recently got a trademark registered on the camouflage pattern that exists on its uniforms. Another instance can be Bettina Liano, which has registered its distinctive pocket stitching on the garments as a trademark. When it comes to the fashion industry, consumers are happy to pay premium prices out of their pockets for products of their choice, bearing trademarks of their preference.

Protection under Patent Act, 1970

A patent may not immediately strike into our minds when talking about the fashion industry, as artistic creations are not eligible to be patented, but the technology that is used for making these designs can be patented under the Patent Act, 1970. A patent is a kind of IP that protects new technology and inventions which are ‘novel’, ‘non-obvious’, and are capable of being applicable for industrial use. Technical innovation plays an important role in putting a fashion business ahead of its competitors. 

Artistic works can obtain protection under copyright in the fashion industry. However, patentable rights are available to those individuals or companies who come up with their new technical inventions to boost up the competition in the market. In today’s modern-day scenario, with the rapid advancement in technology, individuals and companies come up with inventions that safeguard their products and help them outshine their competitors. 

Protection for a period of 14 years is granted for design patents and 20 years for utility. After this protection ends, it falls under the public domain and the general public gets free to exploit it commercially. Though patent inventions can be extravagant and tedious in nature, they can be used to secure innovations, which in turn can be used in the fashion industry for ages. They will not get outdated if the innovation is novel in nature and the process can be repeated.

The company NOVOZYMES is an example of an impressive success story that depicts the benefits of getting protected through patents. The company patented a technology for treating ‘stone washed’ denim jeans, a process that helped in removing some of the indigo dye from the fabric, to give it a worn look. As of this day, this method is being licensed worldwide and the company enjoys enormous revenue from the royalty that it receives from the same.

Protection under Geographical Indications Act, 1999

The Geographical Indication of Goods Act, 1999 under its Fourth schedule provides for the classification of the goods that are eligible to be protected under the Act. Till date, 15 sorts of GI’s have been registered in India in respect of fashion textiles like Sujini Embroidery from Bihar and Kutch Embroidery from Gujarat. The designers of India have counted on traditional and indigenous designs to fabricate their garments and have realized the preservation of the same in the International market from Fashion Piracy.

Protection under Trade Secrets

In addition to designs, copyright, trademarks, patents, and geographical indications, there are also trade secrets, which protect certain information that includes a formula, program, compilation, pattern, device, method, technique, or process. A trade secret gives the scope to gain an economic advantage over competitors who are not aware of it. Trade secrets often make up a notable chunk of almost every business, including the fashion business, something which results in making their embezzlement particularly tricky.

Trade secret protection is a complement to patent protection. Patents compulsorily require the inventor to provide detailed disclosure of the invention in exchange for the right to exclude third parties from practicing the invention. But one must not forget that patents do expire after some time, and when that happens, the information contained within is no longer protected. This is not the case with Trade Secrets on the other hand. The decision is totally of the manufacturer to choose between the two.

The take of IP on fashion conglomerates- recent trends

  • Ritu Kumar vs. BIBA

The case of Ritu Kumar vs. BIBA is an outcome of the muddled understanding of the Designs Act and the Copyright Act among the fashion conglomerates. Both the parties of this case were famous apparel designer brands of India. Plaintiff brought up the suit against the defendant on the ground of infringement of its Copyright concerning the garments that were produced by the plaintiff. The defendant in its defense contended that owing to the production of the product more than 50 times in the industrial process, the plaintiff was no longer the owner of Copyright, as per Section 15 (2) of the Copyrights Act. Since the design in dispute was not registered under the Designs Act, Plaintiff was left with no means of protecting its design. On the grounds of Section 15 (2), the Delhi High Court, in this case, ruled its judgment in favor of the defendant. This case reminds every fashion conglomerate out there that it is very crucial to have proper knowledge of IP Laws; else one might end up losing rights in one’s own design, just like the plaintiff did in this case.

  • Christian Louboutin v. Mr. Pawan Kumar & Ors.

The case of Christian Louboutin v. Mr. Pawan Kumar & Ors can be referred to as one of the landmark cases that created awareness among the general public about the Fashion and Intellectual Property Laws. This case involved Christian Louboutin and his red sole shoes. Louboutin’s products were well protected under the trademark law. The goodwill of this brand existed even before the brand formally entered the Indian market. The defendants of the case started selling counterfeits of these much-celebrated red sole shoes, but with different color schemes, wherein the soles of the sole were red but the other parts came in different color schemes. The Judge of the case ruled its judgment in favor of Plaintiff. Christian Louboutin was declared as a well-known mark (a significant tag for any brand owner). The infringement of Louboutin’s trademark and the successful prosecution of the defendants are the best examples as to how every fashion conglomerate out there needs to protect its trademark.

  • Louis Vuitton Malletier vs. Atul Jaggi & Anr.

In the case of Louis Vuitton Malletier vs. Atul Jaggi & Anr., as per trademark infringement and passing off laws, the Delhi High Court, awarded a permanent injunction to the Plaintiff, thereby restraining the Defendants from using selling any product bearing the famous trademark of the Plaintiff “LOUIS VUITTON”, or any other mark deceptively or confusingly similar to it. The Court further directed the defendants to destroy the goods that were seized by the local commissioner on a particular date, in the presence of the plaintiff or any representative of the plaintiff. Additionally, the Defendants were also directed to bear the costs.

  • People Tree v. Dior

The Case of People Tree v. Dior deals with an act of plagiarism of designs by Dior. Plaintiff of the case alleged that Defendant had plagiarized some block printing designs that were made by Plaintiff in collaboration with some artisans from Rajasthan. The Geographical Indication of Goods Act could have protected the rights of the artisans, the reason being a GI Tag of Rajasthani artistic work has been granted by the Government of India. However, the flaw, in this case, was that the ‘Dabu’ technique that was used by Plaintiff did not have any GI protection. This flaw was very cleverly used by Defendant in this case, leaving no legal recourse for Plaintiff. 

Conclusion

Lack of awareness is one of the pressing issues that hinder legal protection to creativity/innovation. It is high time for Indian Fashion designers to be cautious about their IP and to immediately take steps against the infringer of their designs. With the rising importance of IP, brands ought to become more open to registration. It is crucial for the counterfeiters, as well as for the creators to know the repercussions of illegally copying someone else’s work. One can create one of the most beautiful and ingenious designs, but it only takes intellectual property rights to amplify its monopoly and prevent it from counterfeiting.

While it cannot be denied that it is impossible to completely eradicate the practice of counterfeiting and preventing others from imitating, it also cannot be denied that if creation is protected in the right manner, it definitely helps in reducing the chances of loss by reducing the damage. Hence, it is very crucial for the creators of IP to remain alert and to get the right kind of protection for their creation. Moreover, the government needs to consider this mushrooming trend of counterfeiting and pass sui generis laws specifically applicable to the fashion industry, to protect the Intellectual Property of these fashion conglomerates.

References

  1. https://www.jstor.org/stable/10.2979/indjglolegstu.24.2.0575#metadata_info_tab_contents.
  2. https://www.wipo.int/wipo_magazine/en/2005/03/article_0009.html.
  3. http://docs.manupatra.in/newsline/articles/Upload/DFD5D01C-E3A6-4833-9C2B-B1B06464C354.pdf.
  4. https://www.iipta.com/new-trend-season-role-ip-fashion-industry/.
  5. https://www.candcip.com/fashion–ip.
  6. https://lexauxilium.com/2020/12/15/role-of-ipr-in-fashion-industry/.

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