SuperGroup: Fashion, Recession and IP

It seems quite a long time ago that this Kat confidently described intellectual property as the most recession-proof area of legal practice and, while he's sure he's right in principle, he can't say hand-on-heart that the facts are always as correct as the theory they're supposed to support.  Anyway, he hasn't been writing as much about IP and the R-word as perhaps he should have, so he's grateful to his respected friend Fredericka Argent for penning the piece below, which reflects on the effect of recession on the balance between original design, investment and playing safe by copying:

SuperGroup: Fashion, Recession and IP 
Times are tough in business, and none more so in the fashion industry. Newspaper pages are filled with tales of woe: high street stores suffering from declining sales, lack of consumer interest and, in a few cases, insolvency. However, some stores are managing to buck the trend. Those that do tend to be either low cost ‘fast fashion’ retailers or, at the other end of the spectrum, luxury designer brands. It is rare to find a mid-range high street store that is truly flourishing in these austere times. And yet, one such retailer can claim to be doing just that – the all-conquering Superdry. 
Superwho? 
Superdry is the casual-wear label du jour. The brand is easily-spottable with its bright colours, contemporary designs and distinctive Japanese characters emblazoned on everything from T-shirts to rucksacks. It was set up in 2003 by the very un-Japanese-sounding Julian Dunkerton and, despite competition from similar style retailers on the market, such as Abercrombie & Fitch, Jack Wills and Uniqlo, to name a few, SuperGroup has recently revealed pre-tax profits of £50.2 million. Yet, even with success in the UK, Europe, the USA and Australia, SuperGroup is not complacent about the need to stand out amongst rivals in the highly competitive market for casual clothing. As such, it has adopted a tough approach to protecting its brand –- essentially, issuing legal notices to all those that seek to “copy” its designs. 
Cunningly disguised as cats,
Superdry bodyguards keep a
watchful eye out for unwanted
visitors
In 2009, The Times ran a story about Superdry’s approach to high street imitations: at a trade fair in Germany, the company employed two bodyguards to prevent unaccredited buyers from entering and photographing its clothing. SuperGroup claims – arguably sensibly – that it is cheaper to employ such methods than enter into legal battles. Overall, they spend around £1 million per year protecting their designs. Says Julian Dunkerton: “we are probably the most copied brand in the UK and these cases are becoming all too frequent... we are determined in protecting our intellectual property.” 
In January 2011, it was reported that SuperGroup was pursuing nearly 100 legal actions for breach of its copyrights or design rights. There have been some obvious infringers, such as ‘Superfly’ and ‘Silverdry’, makers of counterfeit Superdry products. But SuperGroup has been equally forceful about pursuing other, mainstream retailers who they believe have infringed either their copyrights or design rights in individual pieces of clothing. 
Some examples of recent cases: 
·         May 2009: The Guardian ran a piece covering SuperGroup’s allegations against Primark, accused of copying key features of Superdry’s famous leather jacket, ‘Brad’, as worn by David Beckham. A financial settlement for an undisclosed sum was agreed out of court and Primark agreed to stop producing the jacket. 
·         January 2011: The Telegraph reported that SuperGroup was awarded £45,000 in the High Court against a Lancashire fashion group, Rhodi, who it claimed had breached design rights in their range of Lumberjack-style hooded shirts. Rhodi did not file a defence and, following judgment in SuperGroup’s favour, they were ordered to cease and desist from selling the infringing shirts and surrender their stock. 
As recently reported by The Daily Mail, the latest focus of Superdry’s litigious attention is the Arcadia Group, owned by Sir Philip Green. One amongst this group is the store, Burton, which currently sells a ‘Navy Wool 2-in-1 Funnel Coat’ coat (right) that SuperGroup deems to be an infringement in the design rights of its ‘Jermyn Street’ trench coat. SuperGroup has issued a writ through DKH Retail Ltd, its subsidiary, against Arcadia Group, alleging ‘close similarities’ between the two competing coat. It claims that ‘various small and immaterial alterations’ have been made to Burton’s coat in an attempt to ‘avoid a charge of blatant copying’. SuperGroup is seeking damages from Arcadia Group as well as the destruction or delivery-up of the offending goods. 
Protecting the design 
Clothing has always been a tricky area when it comes to intellectual property protection, partly because fashion is so transient that the period of protection may outlive the clothing line itself. Designs in the UK can be protected by copyright and/or a design right. An unregistered design right, like copyright, arises automatically. Alternatively, a design may also be registered under UK or European Community law. 
Without access to the court documents, it is not possible to know the scope of protection around the Jermyn Street trench coat. It seems likely that as an international company, SuperGroup would choose protection as a registered design under the Community Design Regulation 6/2002. A design will be protected under this regime if it is ‘new’ and has ‘individual character’ (Article 4(1)). Registered design protection lasts for up to 25 years and would give SuperGroup the exclusive right to exploit their design and prevent unauthorised copying. 
Comments on the legal battle 
I am in two minds about SuperGroup’s case against Arcadia. On the one hand, I look at the two items in question and see a fairly generic men’s woollen coat, which could have been designed by any one of the many mainstream high street stores. I also wonder how ‘creative’ a designer can really be when designing a coat that has to look simple, serve a functional purpose and fit the average man. 
On the other hand, perhaps the reason why I, as a consumer, think that the coat is generic is because of the abundance of copycat men’s winter coats on the market. This would point to a fundamental lack of creativity in the retail industry at the moment and widespread and open counterfeiting. Certainly, this is something that Dids McDonald, CEO of ACID (Anti-Counterfeiting In Design) seems to think. Regarding the Superdry v Primark battle, Dids had this to say: 
The investment incentive is not there for some retailers do the design, research and development; instead retailers look at what’s selling – and it tends to be design-led companies that bring out the hottest stuff – take it, change it a bit and hope that’s OK.  To bring a product to market takes time, investment and creative skills.  There are a lot of companies out there that are free-riding on another’s designs as a fast track to market. It has to stop!” 
It is sad to think that this may be the case. The fashion industry contributes some £21 billion to the UK economy and this year’s London Fashion Week has shown how the UK breeds some world-class designing talent. For all designers – be it creators of high fashion clothing or those creating everyday wear for the big retail chains, intellectual property is one of their most important and valuable assets. Where this asset is threatened by rivals perhaps they should be encouraged to robustly defend their rights. 
However, it is important not to confuse counterfeiting with healthy competition which, from a consumer’s point of view, leads to choice in the market. A balance must be struck in the protection of design rights: counterfeiting – be it blatant or subtle – is unacceptable. It is with regret that I read reports, such as that by the UK’s IP Crime Group detailing the high levels of counterfeiting in clothing in the United Kingdom. But, equally, I would question whether all of SuperGroup’s claims against its rivals can be strictly justified. Are Burton’s designers lazily free-riding on the success of a popular Superdry coat, or is this simply a case of two designers creating similar but independent articles of clothing in response to consumer demands? Only time will tell how (or indeed, if) this question is answered. In the meantime, I’d be interested to hear readers’ thoughts on this matter.

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