Faced with ongoing consolidation, stepped-up marketing efforts from the competition and increasing counterfeit product distribution in the market, start-up designers and established businesses alike must work to protect their brands. Los Angeles-based attorney Maurice Pilosof works with clients on trademarks and licensing, and assists them in building relationships in the retail, design and hospitality industries. Securing domain names, negotiating product-licensing deals and developing brands are just a few areas of his expertise.
Pilosof’s clients range from the Bowery and Maritime Hotels in New York City and the Personality Hotel Group in San Francisco to new projects such as the World Jewelry Center in Las Vegas and up-and-coming lines such as Kowboys, Testament, Jet Lag jeans and Hale Bob. He was tapped as co-counsel to bring the first, freestanding Aaron Basha boutique to Tokyo, which opened in the spring. Most recently, he secured a deal to bring Paris nightlife hot spot Buddha Bar to Kiev, Ukraine (its first outpost in Eastern Europe). Pilosof discussed with WWD the importance of trademarks, product licensing, branding and proper deal structuring within the retail, fashion and design communities.
WWD: How important is it for rising brands and designers to be aware of trademark and licensing laws?
Maurice Pilosof: The foundation for protecting a particular brand is obtaining trademark rights and securing trademark registrations with respect to that particular brand. Certain trademark filings should be initiated that will enable a brand to branch out from its initial line. As an example, a clothing brand should file trademark applications in the international class that covers handbags, or the international class that covers cosmetics. This will enable a brand to either enter such a field on its own or through a licensing arrangement. A client’s attorney should have responsibility for the laws that relate to licensing a “mark” in a particular country. The attorney can then bring this knowledge to the table in the structuring of a particular license deal.
WWD: What are common obstacles some of your clients face, and how do you assist them?
M.P.: Trademarks are, for the most part, territorial, which means that trademark rights in the United States do not carry trademark rights in other countries. One common obstacle occurred recently with a new client that has been selling apparel items in the United States for over five years. My client decided to expand its line into Japan, but did not secure trademark protection rights for its brand in the country. Trademark rights to that mark are owned by an unrelated third party. We are now faced with a situation of trying to negotiate to secure the rights held by a third party in order to be able to expand the brand into Japan.
Another common issue is attempts by unrelated third parties that seek to obtain trademark registrations for a client’s mark in a particular country.
As an example, trademark attorneys enlist a watch service for a client who alerts them when applications are filed or published for opposition that are similar to the client’s mark. Trademark watch services are something that all clients need and should have. If an identical or similar mark is published for opposition in a certain country, meaning that the mark is going to be registered, I or another attorney can then work with local counsel to initiate an opposition proceeding against that application to prevent it from being registered.
I frequently encountered situations like this while working as in-house counsel for George V Restaurants in Paris. In that case, third parties were not only applying to register trademarks for the Buddha Bar mark, but also opening an unauthorized Buddha Bar in a particular city. I developed a plan, which included the filing of a lawsuit when necessary, to shut down the unauthorized establishment and the filing of oppositions proceedings against the offending marks.
WWD: How does domestic licensing differ from international licensing?
M.P.: The foundation for a domestic license and an international license are the same for a particular brand. A critical issue in an international license is the pricing of the products of the license. As an example, the retail prices of a product in Japan are a certain multiple higher than the retail prices in the United States. There are also the issues of currency fluctuation that may impact the deal. The structuring, the appropriate price points and payment terms are critical. There is also the particular governing law to be applied in an international license deal, and sometimes local requirements that may require a trademark license to be recorded in that country. In such a case, a redacted version of the trademark license is recorded with the applicable governmental authorities.
Of a more substantive nature, sometimes there is a certain language that needs to be included in a license deal concerning termination issues. It is important for a client’s counsel to be aware of these local nuances so that he can discuss them in an intelligent fashion with his local counsel.
WWD: What should designers be aware of when looking to enter international markets?
M.P.: Before a designer can enter an international market, he or she must ensure that their brand can be established in that particular market. Also, in certain countries such as France, where the actual designs of an apparel item can be protected, the designer needs to be aware of such laws. The designer also has to be aware of whether there are any laws that regulate the repatriation of royalty income. The designer should also determine whether it is best to enter a particular market through a distribution agreement or a license agreement.
WWD: How do you help already-established brands take their vision or product to the next level?
M.P.: On occasion, I’ve been involved in identifying a potential distributor or licensing agent for a particular client. Similarly, I have a client that distributes certain luxury brands in a particular country, and we are currently in talks with other brands that might be a good fit for the client. Together, we have been able to identify a particular brand and initiate ongoing discussions. Most recently, I negotiated to have Kowboys apparel worn on shoots for “Young Hollywood.” Hosts of the site younghollwood.com will make reference to the line. This is an example of brand and product placement.