When imitation flatters but undermines: 4 insider tips to beat counterfeit pirates

By / 9th of July, 2015
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Relentless years of hard work and sleepless nights lift new brands and businesses off the ground. When copycats steal your ideas it’s heartbreaking.

But with a little insider knowledge you can beat the counterfeiters.

Every day, thousands and thousands of counterfeit items make their way from the factories of China into online and street-based shop fronts.

The global trade in fake clothing has been estimated to cost brand owners USD$12 billion each year; in Australia, around USD$650 million is lost per annum.

It’s a reality that hit hard with South Australian clothing business Australian Fashion Labels. Starting off as a small home-based entity in 2007, the company now distributes multiple brands across Asia, Europe and the USA, and is worn by celebrities including Kim Kardashian and Solange Knowles. And the counterfeiters know it.

Company owner Mel Flintoft explains. “Around mid-2014 we experienced very high levels of copying,” she said. "It was absolutely heartbreaking – we’d walk into cash-and-carry fashion distributors in Sydney and see them using our original look-books to sell the copycat items!”

Overwhelmed by the sheer enormity of reigning in the clothing pirates alone, Mel along with husband and co-owner Dean Flintoft worked with an intellectual property protection company Madderns to take back control.

After talking with Mel and Dean along with Trade Mark Attorney Lucy Deane, here are four take-home messages for new businesses fighting to keep the counterfeiters at bay.

Tip 1. Know what to protect

Any original idea or item contains intellectual property. For inventions like technology, machinery or biomedical devices, a patent gives you the rights to commercially exploit your idea. In fashion, the process of protecting intellectual property has upfront and ongoing elements. A registered trademark protects the brand label you see in store, on a website, and that is attached to the garment. In the clothing, intellectual property is contained in newness and distinctiveness in both the pattern and ornamentation of the fabric, and the features of garment shape and configuration. You protect these elements as a registered design.

Protecting both brand and design has paid off for Australian Fashion Labels, who create 11 collections per brand each year.

“By taking this approach of protecting our fabrics and designs as well as our labels, we’ve seen a dramatic reduction in the amount of copying,” says Mel.

Tip 2. Do brand research early

Brand is the public face and personality of your business or label. Although at face value brand design appears to be fun and creative, spending time to conduct proper research and investigation early in the piece can be quite a major undertaking.  

It’s actually one of the most agonising parts of working in fashion, finding a unique brand name that works across the world,” Dean admits.  

By ‘works’, Dean means a name that resonates culturally and that is legally unique in all jurisdictions. For a new brand to be eligible for registration and protection, it must be distinguishable from others. As evidenced by the experience of a small town chocolate shop that came up against fashion giant Chanel recently, early pain and thorough research is better than costs and expense later on.

Relevant domain names and social media handles should be snapped up early too. Research into hashtags – words used on social media platforms like twitter, Instagram and Facebook to provide searchability and context for customers – is also advised.

“Early on we look to see if our ideal hashtag is already in use in the market, and whether it has existing connotations, including in other languages” explains Mel.

Tip 3. Make the trademark system work for you

Protecting your brand as you expand into numerous countries does involve research and trademark searches. However there are also time-savers and quirks to be aware of.

The Madrid system is an international registration process that streamlines trademark applications across 95 member nations, including Australia, China, India, USA and the United Kingdom. Additional individual nation trademark applications can also be filed as required.

But timing is everything. In Australia, protection is classified as a ‘first to use’ system, where the first user of a trademark takes precedence. In China and other nations such as Japan, Germany, France and Spain, it’s a ‘first to file’ system, where a trademark can be registered and owned by someone other than the designer. It means that if you’re viewed as the ‘next big thing’, your trademark could be snapped up from under your nose.

“If you have any desire or even just a thought to conduct business in China, get your trade mark applications filed before you even have discussions with distributors!” advises Trade Mark Attorney Lucy Deane.

Tip 4. Let the pirates know you’re watching

So once all your brand research and design protection is in place, what should you do if – like Mel and Dean – you spot copies of your products being sold? Answer: let them know you’re watching.

Many fashion brands now employ private investigators to scan the market for copied items and gather evidence – once infringement is confirmed, legal action in the form of ‘cease and desist’ letters can be filed. Additional protection measures include lodging trademark and copyright objection notices with Customs officials at both the supply and distribution ends of production networks.

“This approach does work,” says Dean of Australian Fashion Labels. “We’ve had product sent back, we’ve had people pay us, and some retailers of copied items even tell us who the wholesalers are.”

His partner Mel agrees.  “Once word got around that we were serious, we saw an impact,” she says. “Pulling in other resources has taken the burden off us to manage the counterfeiting. Now we can focus on being creative again.”

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Key contacts

Melanie and Dean Flintoft Managing and Creative Directors Australian Fashion Labels
08 7009 6000 info@auslabels.com.au www.australianfashionlabels.com.au
Lucy Deane Senior Associate, Madderns Madderns
61 8 8311 8311 lucy.deane@madderns.com.au