A text transcription follows.
This transcript is for anyone with a hearing impairment or who for any other reason cannot listen to the MP3 audio file.
The following is the text spoken by OUT-LAW journalist Matthew Magee.
The problem we have with the consumer, we used to call them customers, is so many people do not regard buying counterfeit fashion items as being a real crime.
Hello and welcome to OUT LAW Radio, the talking outpost of the OUT-LAW empire where we discuss the pricing technology law issues of the day with the finest experts around. Remember you can read breaking news at OUT LAW.COM where we keep you bang up to date with news, snippets and insight into technology law. It is 29th July 2010, my name is Matthew Magee and this week we talk to one UK fashion boss who thinks clothes firms need to do more to stand up for their intellectual property rights.
The fashion industry has many things: glitz, excitement, a short attention span, but it also has a certain totemic power in the sometimes unglamorous world of intellectual property scholarship. Whenever someone questions the very fundamentals of IP law arguing that it is not a prerequisite for creativity, the rag trade comes up. Here the argument runs is an industry founded on creativity that just does not bother trying to enforce IP rights. They just get on and innovate. Here is Washington University academic Michele Boldrin speaking to OUT-LAW Radio last year.
Michele Boldrin: In the whole fashion industry, that you like or not does not matter, the most creative industry around by force because every three months they are supposed to produce something new, works absolutely without patents in a sea of imitation and copying each other from the boots to the shoes to the skis to the tiles, the small entrepreneurs are very creative to the furnitures, they all imitate each other.
One fashion expert wants to challenge this orthodoxy though. Manny Silverman was once the boss of Moss Brothers and of Norman Hartnell. He is now a consultant in fashion retail and a frequent expert witness in clothing related court cases. Ahead of an address to a conference on fashion and IP later this year, he outlines his view that it is high time that the fashion industry started to enforce its rights. Unstoppable social and economic changes are making it vital that the clothes industry stand up for itself, he says.
Manny Silverman: In the last decade there are two things that have affected in particular the clothing fashion industry more than anything, one is globalisation and the other is the internet but in my experience I think one of the biggest problems is that management certainly in the fashion industry to me seemed to me not to realise the value of what they have got in terms of intellectual property and then tend only to be reactive rather than proactive in defence.
Counterfeiting is nothing new. Silverman tells of a wine stopper from 27 B.C. that shows it is an ancient art but internet advertising and distribution and the increasingly borderless markets that fashion operates in are raising the stakes in the cat and mouse game against fakers.
Manny Silverman: And the problem we have as far the market is concerned with the consumer, we used to call them customers, with brands is so many people do not regard buying counterfeit fashion items be it clothing or accessories as being a real crime, you know after all who gets hurt is the question, but it is a form of stealing. You have seen adverts I am sure, they come up on the screen saying: buy a range of this merchandise from us very, very competitive prices and you can go into business yourself on the internet. Again, I think that is eating very, very deeply into our business and I think it is causing a lot of credibility.
Companies said Silverman need to think about changing about their approach to their IP rights.
Manny Silverman: Everyone gets excited if there is a design infringement but the impact of having a design infringement is relatively small because even with the supply chain management almost being immediate these days, in the main it is my design, I have got it on the market, I will have taken most of the benefit. What I think really is important is brand management because if someone steals your design, there are lots more designs and if you are going to be around a long time and particular these days where we are seeing many in between 8 and 10 collections a year coming out, there is always new stuff coming in the market, so design comes and goes, but branding goes on forever if you do it right.
Silverman believes that the basic way that fashion companies deal with fakers has to change. They must stop chasing the latest bit of trouble and try and get on top of the whole issue.
Manny Silverman: I think the biggest problem certainly for the fashion industry is, as I said earlier, the industry tends to be reactive rather than proactive and I think bearing in mind the intensity of competition in the market place now I think fashion people, whichever end of the market they are in, need to be more aware of potential threats and be proactive in seeking legal protection. If there is a greater understanding of why retail of fashion managements only really wants to consider some form of protection once they have been attacked rather than prevention, then I think that is the way forward.
So what are the practical steps that clothing firms should take? If counterfeiting is happening on a new scale, what should be the new kind of response from fashion houses?
Manny Silverman: They should be more proactive. For instance if you have got a strong brand you should be prepared to invest in having some sort of monitoring service on the internet to see what people might be doing with your brand. It is an early warning system. Another thing is that when you are getting goods made to be sure that you have got proper indemnities from whichever the aspect of the supply chain that you are working with.
Some of these actions will be enough to prevent infringement, but some cases will inevitably come to court. There says Silverman, he has seen first hand as an expert witness that the intricacies of garments and the sometimes opaque nature of the law mean that rulings can sometimes seem puzzling in the cases that do make it that far.
Manny Silverman: I had a case where the judge himself in high court said I accept Mr Silverman's argument, these items are identical but in the interpretation of the design right your both UK and European design right law, it is not a replica.
Nonetheless, it is vital that the industry turns around its approach and stops turning the occasional blind eye to infringement, Silverman insists. If laws to protect the people making the £700 handbags are not upheld, the whole trade could be at risk, he says.
Manny Silverman: But there have to be some sort of code of conduct otherwise there will be total anarchy in the business. What will happen eventually I suppose is that if people go out of business at the more expensive level of the market, where is the opportunity for those people who are making money out of producing versions of what is already on the market. Where are they going to get their creativity from?
That's all we have time for this week, thanks for listening.
Why not get in touch with OUT LAW Radio? Do you know of a technology law story? We would love to hear from you on radio@out-law.com.
Make sure you tune in next week but for now, goodbye.
OUT LAW Radio was produced and presented by Matthew Magee for international law firm Pinsent Masons.