Keeping reign over your name

Article  \  9 Oct 2013

Trade marks are an important asset of any business. Choosing a trade mark is not something that should be done on a whim-it needs thought and careful consideration. This applies to any business, but particularly those in the fashion industry where it is common for a designer to use their personal name as their brand.

If your personal name is your brand, you should plan for the day when you may no longer be involved in the business. What will happen to the use of your brand? Many designers give this possibility no thought.

The fashion industry is littered with brands which are a personal name. This gives face and personality to the brand and the style of clothing behind the brand. We only need to think ALANNAH HILL, TRELISE COOPER, ADRIAN HAILWOOD, KATE SYLVESTER, KAREN WALKER, ANNAH STRETTON, to name a few, and we know that this is true.

But the fashion industry is competitive. Often it is a matter of survival of the fittest. Trading conditions are tough. Customers are embracing shopping online with fervent enthusiasm, giving them an ever-increasing array of options to choose from. This means competition is increasing and seasonal lines are blurring. Couple this with a relentless need-and often desire-of a designer to be creative with their ranges, and it is no wonder that many designers lament that their industry does not provide the fun and glamour they envisaged.

Staying alive is often a main consideration. We have seen many designers last the distance, often reinventing themselves along the way. But more so we have seen their demise. Several high-profile designers have recently hit the wall. Lisa Ho, Alannah Hill, and Kirrily Johnston are recent examples but there have been others, such as Elizabeth Emanuel, the designer of Princess Diana's wedding dress.

The common theme among these designers is the use of their personal name as their brand and the difficulties that arise when the person behind the name no longer has a connection with the owner of the brand.

Personal names can be registered as trade marks and often are. This makes good business sense as it allows the owner of the trade mark to control how it is used. But if ownership no longer rests with the person behind the brand, this can result in some limits on how the brand can be used going forward.

For Elizabeth Emanuel, her efforts to hang on to her name went to court in the United Kingdom. The ownership of the name ELIZABETH EMANUEL changed many times during the 1980s and '90s through a series of different businesses. When her employment with the last owner, Oakridge, came to an abrupt end, Elizabeth Emanuel did not want that company continuing to use her name. She argued that consumers and the public would be deceived, as she no longer had any links with the company. She lost the argument.

The court held that 'there is nothing to prevent the transfer of rights in respect of trade marks' and added 'there is nothing…to justify granting personal names special treatment'.

The question of what constituted deception was also discussed. The court said 'it is proper to ask whether the change in ownership of a trade mark comprising the name of its owner is deceptive in any circumstances. The answer must be 'no'.

Deception can be lessened by the new owner widely and publicly highlighting the fact there is no longer a connection between the new owner and the name holder.

Assigning away rights to a personal name that has been registered as a trade mark does not mean the name holder is completely prevented from using their own name. However the law limits the scope of what they can do with it once the assignment takes effect. The new owner can exercise the same rights against the name holder and against anyone else who uses the same name without the new owner's consent.

In the case of brand LISA HO, the administrators appointed to handle her voluntary administration tried to sell her brand LISA HO as part of her business assets. When there was little interest, they proposed to sell it back to the designer stating that 'one of the difficulties in the fashion industry was separating the designer's name from the brand'. While many would see selling the name LISA HO back to the designer as a no-brainer, others were concerned she could be 'phoenixing' her business - effectively cutting off any responsibility for bad debts by starting up again with a new corporate identity.

It remains to be seen what will happen to the ALANNAH HILL brand. Her ex-business partner seems intent on keeping reign over the name while Alannah Hill herself wants to ensure it is a 'brand that stands out from the crowd'. So watch this space…!

Designers wanting to use their personal names as brands should do so. But be mindful of the issues that can arise if your business fails and you no longer have the right to continue using your name as a brand. Seek advice from an intellectual property lawyer at the outset on how best to protect yourself.

An edited version of this column appeared in the September 2013 issue of Apparel Magazine.