Founder and academic director of the Fashion Law Institute, Professor Susan Scafidi, was interviewed by COMPLEX about what it means to own a trademark but have no ownership in the business using that trademark.
“Trademarks are the most valuable asset of any fashion company. Designers live and die, seasons come and go. Products come in and out of style, but the trademark is forever,” says Scafidi. “The trademark is where the value of a fashion company lies. So licensing a trademark to another company is a big deal.”
Scafidi points to Donna Karan as a case study on what happens when a designer doesn’t own their trademarks. Karan sold all of her trademarks to LVMH for $450 million in 2000. When she stepped down as the chief designer of Donna Karan International in 2015, LVMH suspended the higher-end “Donna Karan” line and then sold it to the apparel group, G-III. After it was sold to G-III, Public School, who were hired by LVMH to reinvigorate Karan’s DKNY line, were canned. Karan currently operates Urban Zen and has zero control over her name as a business entity and brand. The same thing happened with Helmut Lang.
We spoke to professor Scafidi on the importance of Abloh owning the Off-White trademark and how the brand could be impacted now that it’s been acquired by Farfetch.
How would you explain what a trademark is exactly?
A trademark is a form of intellectual property. And like any other property, you can lease or rent it out. If you own the building, you could lease the floors or apartments in the building. If you own a trademark, you can lease the trademark. So, the relationship between Off-White and New Guards is that of the trademark owner and the lessor and the lessee. In other words, you might say that New Guards is essentially renting the Off-White trademark. Now, obviously trademark is different from an apartment. You can only rent an apartment to one person or one group of people together. But a trademark, you could rent out a license to lots of different people at the same time.
However, what’s important about the relationship between Off-White and New Guards is that this is an exclusive relationship. So for a period of years anyway, and we don’t know how long because that’s their business, Off-White has agreed to license its trademark to New Guards. So New Guards essentially takes the trademark and in partnership with Virgil and Off-White, kind of does the work of developing the brand. Distributing it, manufacturing it, all of those kinds of things. That’s a pretty common relationship in the fashion industry in particular.