Sustainability trends and intellectual property issues for fashion brands

Sustainability trends and intellectual property issues for fashion brands

The fashion industry is one of the most polluting industries in the world and is responsible for approximately 10% of global greenhouse gas emissions. Many factors contribute to this problem, including pollution from textile factories, depletion of water resources and waste of goods.

Young consumers are increasingly prioritizing sustainability efforts in their buying decisions. In fact, 74% of millennials and 62% of Gen Z are willing to pay more for durable goods. Consumer demand has caused a noticeable and welcome shift towards sustainability in the fashion and apparel industry. This underscores that the sustainable fashion and transparency of these efforts will be increasingly important in the years to come.

To that end, below are some ecocentric trends and related intellectual property (IP) issues that fashion brands should consider to pursue their sustainability goals while maintaining brand value.

Recommerce—Enhancing sustainability while maintaining brand integrity

Consumers are reducing their waste by buying durable and increasingly second-hand goods. The resale market, or “recommerce”, contributes to the circular economy by reducing clothing waste and extending the life cycle of clothing. The second-hand market should reach $77 billion by 2025 and resale apparel is expected to make up 27% of consumers’ wardrobes by 2023. Even the luxury sector – a former skeptic of resale – has warmed to recommerce.

That said, the many environmental and economic benefits of resale can come with a trade-off, namely uncertainty as to the authenticity of the product. The threat of counterfeits poses challenges for both retailers and brands. While the first-sale doctrine prevents brand owners from controlling the resale of genuine, unmodified branded products, the lack of control against counterfeits could result in the dilution or loss of the brand owner’s rights. Counterfeits also present significant risks to resellers in the form of counterfeiting and even shareholder court case.

Brands can improve sustainability measures and address infringement risks by partnering with recommerce retailers. For example, brands like Gucci, Burberry and Stella McCartney have been partnered with popular retailer The RealReal for years. By partnering with recommerce retailers, brands can participate in the authentication process, allowing them to avoid brand dilution while reaping the benefits of participating in the circular economy. Of course, the cache and credibility of brand partnerships also builds the reputation of resellers.

Brands are also increasingly setting up their own resale programs. For instance, Patagonia, Eileen Fisher, lululemonand Levi’s allow consumers to resell, exchange and/or buy gently used clothing. This approach also satisfies consumer demand for fully authenticated pre-owned products. Brands can also consider expanding their trademark filings to cover sustainable or circular market offerings. For example, Nike and Madewell have applied to register some of their trademarks in association with promoting the public interest and raising awareness of environmentally sustainable practices.

Blockchain technology – Fight against counterfeits and communicate sustainability measures

A blockchain is a digital ledger used to record transactions and track assets. Once information is added to a blockchain ledger, the information effectively cannot be deleted or changed, ensuring transparency and reliability. This makes blockchain a particularly powerful tool both for fighting counterfeiting and for substantiating sustainability claims.

For example, non-fungible tokens (NFTs) – unique blockchain-based assets – are most commonly used to represent digital goods and have revolutionized the fashion industry by digitizing physical goods and potentially reducing the need for physical resources, distribution and manufacturing. Indeed, brands are filing more and more filings to protect their key brands in association with NFT products.

However, NFTs can also be linked to real-world products, so they can be used to combat the ever-increasing sale of counterfeit products that has been accelerated by the rise of second-hand fashion. Specifically, NFTs can be used as digital “passports,” which include blockchain-based ledgers that verify the provenance of associated physical products that facilitate authentication efforts. Key players in this space include Arianee, which is rolling out “digital NFT passports for luxury goods” that will digitize service and repair histories, and LVMH’s Aura Blockchain Consortium, which issues digital certificates of authenticity that also detail product sourcing and sustainability parameters. Digital passports are typically paired with smart tags using radio frequency identification (RFID), quick response (QR) codes, or near field communication (NFC), which are attached to associated physical products.

Digital Passport NFTs are a potential win-win for brands. Their authentication technology will help consumers avoid inadvertently purchasing counterfeits, reducing brand dilution and increasing consumer confidence. Additionally, their ability to communicate and verify information about a product’s production and origin helps verify a brand’s sustainability claims, which, again, fosters consumer trust and loyalty. .

Sustainability brands – Transparently conveying green commitments

Trademarks identify the origin of products, but they also convey brand values ​​- the emotions, missions and goals that a brand represents. Thus, brands are particularly effective in communicating about sustainability.

Luxury brands are increasingly adopting brands to communicate the sustainability of their products. For example, Prada’s line of Re-Nylon™ bags are made with recycled nylon. Louis Vuitton too adopted an Upcycling Signal logo— which is a combination of the LV logo and the recycling symbol — for products that are either recycled or contain at least 50% recycled and biosourced materials. Likewise, Valentino recently introduced a durable version of its iconic Rockstud sneakers, which bear the branding an ecocentric version of its V logo.

Trademarks communicate a company’s values ​​and signify its reputation. However, to avoid backlash and reputational damage, brands need to be transparent and not overstate their green commitments. For example, each of the above brand owners is transparent about their sustainability practices, fiber sourcing, and/or environmental footprints. Fashion and retail brands can achieve similar success by tying their branding efforts to achievable goals and transparent messaging.

Take away food

There is consumer demand for eco-friendly products, and fashion brands have certainly shifted to meet this demand through re-commerce and enhanced messaging around their eco-friendly commitments. That said, brands should be careful to consider the various pitfalls that can arise in this space.

Intellectual property counsel can help brands address these issues, including negotiating contractual agreements with recommerce partners and selecting, approving, and protecting brands that accurately reflect sustainability practices and green policies.

The authors would like to thank summer associate Michelle Zaurov for her contribution to this update.

© 2022 Perkins Coie LLP


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