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‘Fashiontech’ hits the catwalk

The popularity of wearable technology has seen a number of collaborations between technology companies and designer brands looking to launch the next big thing in the ‘Fashion Tech’ space. This summer Levi’s Commuter Trucker jacket came on the market, which has Google Advanced Technology woven into the jacket, allowing the wearer to wirelessly access their phone to use apps, end a call or listen to music simply by touching their sleeve. This article looks at some of the issues and opportunities from the perspective of a new technology company (the “TechCo”).

Fashion Tech collaborations are clearly advantageous for new technology companies seeking to commercialise their first wearable product. Such technology companies can benefit enormously by being linked to a big name brand with an established reputation and loyal following. The designer and luxury brands also benefit from avoiding the time and cost of the several years of research & development required to bring a new wearable to market.

Initial discussions with a potential business partner may require that TechCo discloses important details regarding its product. The TechCo will want to demonstrate its product has a unique selling point that distinguishes it from its competitors. This will require going into some detail about its technology. The fashion brand may already have some design ideas in mind and will want to understand if TechCo’s technology is compatible with its vision.

Trade secrets protect information that is confidential in nature (e.g., product features and design elements if not generally known) and communicated in circumstances of confidence. The length of protection of confidential information can be (potentially) unlimited, but only if proper procedures are in place to maintain confidentiality. This should be a serious consideration for a company with limited resources as trade secrets can be difficult to enforce as it is often hard to identify the confidential information that has been misused. Non-disclosure agreements (“NDAs”) can therefore be important to protect against disclosure of protected information.

TechCo will need to demonstrate that its technology cannot be easily replicated by third parties. TechCo will therefore need to consider what IP rights it can obtain. Certain technological areas have been excluded from patentability. In Europe there are exclusions for computer programs and presentations of information. Recent US court decisions have established a similar position in the US where the ability to patent computerizing “abstract” ideas, such as common or fundamental business processes has been restricted.

Even if an invention seems at first to fall entirely within an excluded area, it is sometimes possible to emphasize the technical aspects of the invention. It is also worth noting that a novel combination of existing technologies can also be patentable. Even if patent protection is possible, to have value, a patent must be enforceable. Consumer-facing “front-end” features may be policed more easily. When protecting innovations through patents, TechCo faces a trade-off between disclosing information and obtaining a temporary exclusive right for commercialising their inventions. If the valuable invention is in the “back end”, enforcement becomes more challenging. It is more difficult to tell if someone has copied it. If disclosing information in patent applications could help competitors to develop competing innovations based on a similar technological approach, TechCo may opt to keep its inventions secret.

Another reason patents may not be appropriate is the length of the application process. Obtaining a granted patent can take several years. Fashion evolves and changes quickly and a patent may not proceed to grant until after a trend has passed. The US Patent and Trademark Office offer inventors the option of filing a provisional application for a patent. Its purpose is to provide a lower cost first patent filing (covering the US only) and allows filing without a formal patent claim and other details. Other jurisdictions offer similar regimes. However, even a provisional application takes time to draft correctly and it will be several years after filing a patent application before the patent is granted. The process is also costly and TechCo may only have budget to patent core technologies rather than specific applications of its technology.

Design rights are an alternative form of protection where the product may not have qualified for patent protection or where cost is an issue. For example, a Registered Community Design (“RCD”) offers EU-wide protection of the appearance of the whole or a part of a product, provided it is new with individual character. It is relatively inexpensive to file an RCD and the application process usually takes 48 hours. The relative cheapness of registering further RCDs is also an advantage, as wearable design will change as fashion trends come and go. In the US, a design patent may be a way to protect the look of a wearable product, such as its graphic user interface or its shape. Unregistered design rights automatically arise in some jurisdictions, including the EU, and can protect shape and configuration of a design.

TechCo will not have the negotiating power of a large, established technology company so cannot steer the direction of any collaboration in the same way. Therefore, another consideration is to think early on about its future plans and direction. TechCo may need to accept that its prototype will need to change to fit the brand ethos and customers’ wants. Going into the collaboration the TechCo will need to be aware its product development will be heavily influenced by its partner. This will impact any future designs especially where this is a one-off collaboration. The fashion brand’s input will mean new IP rights may be created. This raises the question of who owns the newly created IP. There are a number of ways to deal with jointly created IP but it is important that the parties are aware this may arise and agree on how to proceed at the early stages of any discussions.

TechCo should also raise exclusivity early on. Will TechCo be permitted to work with third parties outside this collaboration? If the final agreement is too restrictive TechCo may be prevented from developing products in other sectors. It may be that this is acceptable and the key is using early product commercialisation as a spring board for its business but TechCo should look at whether any products it is working on in parallel may need to be shelved.

TechCo is advised to take time and think about how its brand is used in conjunction with the product. Collaboration potentially gives TechCo’s brand a big boost. Co-branding will ensure the technology is associated with TechCo by the public. This is an important consideration if TechCo plans to launch products in its own name in the future although this may be met with some resistance from the collaboration partner. The fashion brand is likely to have extensive branding and trade mark guidelines and will be wary of its image being tarnished.

This Fashion Tech trend looks set to continue. There will be many opportunities available but TechCo should not rush into partnerships which although they may launch its technology onto the market quickly, in the long run may limit TechCo’s future prospects.

A version of this article first appeared in Intellectual Property Magazine (September 2017).