Introduction

The concept of fashion has made its distinct position in the commercial world today and is an evolving field in the sectors of Business and Finance. The concept of fashion in India has advanced over time and especially the affluent class needs the most recent to stay aware of patterns and searches for optimistic items. Therefore brands have understood the intensity of web-based social networking and are using these stages to help their associations energize their commitment and give support to such people associated with the same. The developing affinity of Indian purchasers towards quick form is enabling the brands and retailers to offer their items all year. Also, custom-fit attire has started picking up and brands have started focusing on specialty clients.

The general public identifies the fashion industry with fashion weeks organized in the major fashion capitals of the world such as Paris etc. But in reality, the fashion industry and its formation are much more diverse and complex. Business in the fashion industry goes through major issues faced by fashion industry participants, including designers, suppliers, manufacturers of apparel and accessories, retailers, and many more which may include the following:

• The considerations involved in starting a fashion house or a boutique, including developing a business plan, the structure of the legal entity, and obtaining finance:

When an entrepreneur plans to start his/her own venture generally there are certain requirements which need to be met such as finding a suitable place for the kind of organization that needs to be set up and availing the same either vide leave and license or purchase in accordance of which agreement needs to be made and registered. Also, a business strategy needs to be in place and permissions pertaining to the same requirements to be obtained such as in the case of fashion house which is a company or a partnership firm, it will require to be registered accordingly with the necessary body and in the case of a company all the further necessities will require to be met with such as minimum Board of Directors along with independent directors, Memorandum and Articles of Association, Balance sheet, minutes of annual general meeting, details of shareholders, term sheets in respect of the same, etc and such other timely submissions will be required to be made in respect of the same to such regulatory bodies and it will have to obtain a certificate of incorporation. Also in the case of a proprietorship boutique, certain permissions may be required to be obtained depending from place to place.

Also availing finance from setting up such business vide availing loans etc from a bank is another aspect as well as for the capital which may be required in setting up of such business.

• Registering Patent, trademark, and copyright laws in respect of goods to protect them from counterfeiting :

Brand counterfeiting is the illegal activity of producing and selling a cheap copy of a popular product using the brand name of the original product.[1] Hence to protect such copying of fashion designs various types of intellectual property protections are available to such owners as under:

1. Trademarks:

Section 2(zb) of the Trade Marks Act, 1999, defines a trademark as a mark capable of being represented graphically and which is capable of distinguishing the goods or services of one person from those of others and may include the shape of goods, their packaging, and combination of colours. The trademark law additionally protects the trade dress such as product packaging. However, the trade dress is an essential component of a design of fashion apparel. Trade dress involves the total image of a product including size, shape, colour or colour combinations, texture, graphics, or even particular sales techniques and thus it is protected by law under trademarks.

2. Copyright & Designs

Copyright is not an absolute right of the owner. Positioning the proprietor’s aspiration to restrict access of his copyrighted works to those ready to remunerate for such access and the public’s interest in freely using the copyrighted work remains a significant issue under Copyright law. . The term of copyright protection is 60 years.

The provisions of the Indian Copyright Act, 1957 enables protection with respect to Fashion Designs when it comes to the definition of Artistic works. However, Section 15 of the Designs Act, 2000 provides Copyright shall not subsist under this Act in any design which is registered under the Designs Act, 2000. The class of articles/goods which may be protected under the Designs Act, 2000 are laid in Schedule III of the Design Rules, 2001.

3. Patents

Patents provided safeguards to such inventions that can be integrated into products. With respect to the Fashion Industry, various examples wherein Patent protection has been granted include the technology used to manufacture CROCS shoes, wrinkle-free fabrics, UV filtering textiles that are resistant to fire, and water-repelling textiles. Nike is one of the top 10 design holders of U.S. design patents.[2] However, fashion designers do not opt for protection under the Patents law as such. The trends in fashion are dynamic and change rapidly; therefore getting a patent is not the best option for fashion designers.

• Discussion of e-commerce:

In today’s digital age businesses develop creative and innovative methods to draw more customers to their products. Electronic means and technologies to conduct commerce in the retail industry have grown exponentially with platforms like Myntra, Firstcry, etc and e-commerce continues to expand its influence and capabilities globally. User-friendly retail websites are a convenient way for time-poor consumers to buy what they need without having to make a trip to the mall or a fashion boutique. Thus accordingly discussions need to be made with such platform owners and business contracts require to be executed pertaining to the same keeping in mind the share of each party and the products and their packaging, delivery, and overall supply chain.

• The legal issues involved in leasing and licensing with retail stores:

A licensing agreement is a written contract between the owner of the brand, trademark, copyright, or patent and such other person who wants to sell the goods of such owner in exchange for a fee or royalty. Such agreements can be exclusive or non-exclusive in nature.

Also, there are contracts wherein rights of contractual nature are assigned by one party to another so as to enable the assignee to be able to receive the benefits which arise under a contract.

There are also legal contracts in which well-established business consents to provide its brand and required another party to set up & run a similar business in exchange for a fee and some share of the income generalized. These agreements are legally binding and set obligations for franchisee and franchisor and not uniform and differ from case to case.

There are various other types of agreements which are required to be executed by the owner of a fashion brand depending upon the nature of his/her business such as manufacturer agreements, vendor agreements, supplier agreement, distribution agreements, etc.

• Labour and employment issues that relate to the fashion industry:

Employment contracts are entered into by business owners with designers and other creators to bring in new talent or to change the business strategy. Brand owners attend various graduate-level fashion shows to get their hands on fresh talents. However, brands should work well on drawing comprehensive employment contracts to ensure there is no scope for uncertainty to arise in respect of the rights of parties involved. Also at every stage, a non-disclosure clause is need of the hour to keep the sensitive information confidential and protect Intellectual property and retain the labor force. Also, a non-compete agreement clause is may be included to prevent the employee from competing with the employer for a particular period.

Also, there are independent contractor agreements that are entered by brand owners if they are working with creative consultants or freelancers like fashion show choreographers, event organizers, social media managers, etc who mostly work on a project basis and may enjoy more flexibility in their nature of work.

There many other people working in the apparel industry such as tailors, their assistants, sales representatives, clerical and accounts and maintenance staff, etc in the organization of a brand owner/designer who has their significant roles in such organization and to ensure the safety of their rights and to keep up the growth of fashion industry and hence a legal contract must be executed in respect of such employees specifying rights and duties and such other terms and conditions of all the parties involved in such employments and the employer so as to also ensure there is no exploitation of labor, as well as the organization and specifically, Non-disclosure clause, should be included in every employment contract so as to protect the trade secrets and such other confidential information.

• Advertising issues:

The promotion of fashion has its specifics originating from prominent models, sports personalities, and additional renowned specialists creating it. However, all the necessary precautions require to be taken care of as regards arrangements of selection whether through any social media agency or such other consultancy, the secrecy and in addition to lawful limits of employing minors. Also, contracts of requisite nature are required to be signed with advertising agencies or event management agencies in case of promotional campaigns and other people associated with it. Also, it is required to be taken care that the advertisement and the message it tries to give is not against the general principles of society or does not cause unrest/instability among people in the society because in certain cases such promotions may cause loss to brand owners and bring the brand and product under wrong light and also in certain cases the organization owning the brand may require to stop showcasing such advertisements.

• Fashion shows:

A fashion show is like any artistic performance a presentation of the apparel launched or designed by a designer wherein models walk the ramp in the outfits styled by the designer. The models have to strictly wear and carry the outfits the way they are styled and any changes made to the same may result in something unwanted. Also, it has been seen in a few cases in the past that models have suffered from anxiety and stress and there may be certain agencies that may ask models to reduce their weight, etc. Therefore vide arena of legal rights and duties get involved here to be ensured that commercial contract rights and intellectual property rights of the designer as well as the models are protected.

In the past few years considering the global approach towards fashion law and protection of interests of people engaged in the fashion industry, industries like Fashion Foundation of India, Fashion Design Council of India, and Apparels Export Promotion Council were established. All these organizations work to foster the growth of the fashion industry in India and try to support individual designers in some or other manner. Also in 2008, the Government set up a body called Indian Fashion Council.

Fashion lawyers perform a broad range of duties from drafting and negotiating contracts to addressing and litigating trademark, copyright, and other intellectual property issues. They\’re in charge of forming and dissolving business entities and advising on branding development and protection. Fashion lawyers also consult on design protection, import-export, licensing, and other issues. 

Conclusion

Fashion generates and influences cultural perception and needs to be regulated and safeguarded by the legal sphere being a concept sensitive to social changes and realizing such significance and foreseeable legal complexities the brand owners, designers, and/or stakeholders associated with them should always take a cautious and actively responsible towards it by addressing issues beforehand.

– Adv Vaidehi Harshad Samant

(Advocate, Mumbai)