The fashion industry is one of the most polluting industries in the world and is responsible for approximately 10% of global greenhouse gas emissions. There are many factors that contribute to this problem, including pollution from textile factories, depletion of water resources and waste from goods.
Young consumers are increasingly prioritizing sustainability efforts in their purchasing decisions. In fact, 74% of millennials and 62% of Gen Z are willing to pay more for durable goods. Consumer demand has caused a noticeable and welcome shift towards sustainability in the fashion and apparel industry. This underscores that sustainable fashion and transparency regarding these efforts will be increasingly important in the years to come.
To that end, below are some ecocentric trends and intellectual property (IP) related issues that fashion brands should consider to advance their sustainability goals while maintaining brand equity.
Recommerce—Increasing sustainability while maintaining brand integrity
Consumers are reducing waste by buying sustainable and increasingly used goods. The resale or “resale” market contributes to the circular economy by reducing clothing waste and extending clothing life cycles. The second-hand market is forecast to reach $77 billion by 2025, and clothing resale is expected to account for 27% of consumers’ wardrobes by 2023. Even the luxury sector – a former resale skeptic – has warmed to resale .
That said, the many environmental and economic advantages of resale may come with a trade-off—namely, uncertainty about product authenticity. The threat of counterfeits presents challenges for both retailers and brands. While the first sale doctrine limits trademark owners from controlling the resale of authentic, unaltered trademarked products, failure to control against counterfeiting can result in the dilution or loss of the trademark owner’s rights. Counterfeits also pose significant risks to resellers in the form of violations and even shareholder lawsuits.
Brands can increase sustainability metrics and resolve infringement risk by partnering with re-marketing vendors. For example, brands like Gucci, Burberry and Stella McCartney have partnered with popular retailer RealReal for years. By partnering with re-trade vendors, brands can participate in the validation process, which allows them to prevent brand dilution while still reaping the benefits of participating in the circular economy. Of course, the cache and credibility of brand partnerships certainly enhances the seller’s reputation as well.
Brands are also increasingly creating their own resale programs. For example, Patagonia, Eileen Fisher, lululemon, and Levi’s allow consumers to sell, trade, and/or buy gently used clothing. This approach similarly fulfills consumer demand for fully authenticated second-hand products. Brands may also consider strengthening their trademark files to cover stable or circular market offerings. For example, Nike and Madewell have filed to register some of their brands in conjunction with promoting public interest and awareness about environmentally sustainable practices.
Blockchain Technology-Fighting Counterfeit and Communicating Sustainability Metrics
A blockchain is a digital ledger used to record transactions and track assets. Once information is added to the ledger, the information effectively cannot be removed or modified, which ensures transparency and reliability. This makes blockchain a particularly strong tool for both anti-counterfeiting and substantiating sustainability claims.
For example, non-fungible tokens (NFTs) – blockchain-based assets of some kind – are more often used to represent digital goods and have revolutionized the fashion industry by digitizing physical goods and potentially reducing the need for physical resources. distribution and production. Indeed, brands are increasingly applying to protect their core brands in relation to NFT goods.
However, NFTs can also be linked to real-world products so that they can be used to combat the ever-increasing sale of counterfeit goods that has been fueled by the rise of second-hand fashion. Specifically, NFTs can be used as digital “passports,” which include blockchain-based ledgers that verify the provenance of associated physical products that aid in authentication efforts. Key players in this space include Arianee, which is creating “NFT digital passports for luxury goods” that will digitize service history and repairs, and LVMH’s Aura Blockchain Consortium, which issues digital certificates of authenticity that also detail provenance and durability of products. Digital passports are typically associated with smart tags using radio frequency identification (RFID), quick response (QR) codes or near field communication (NFC), which are attached to the connected physical products.
Digital passport NFTs are a potential win for brands. Their authentication technology will help consumers avoid unwittingly buying counterfeits, which reduces brand dilution and increases consumer confidence. Further, their ability to communicate and verify information about a product’s production and provenance helps verify a brand’s sustainability claims—which, again, promotes consumer trust and loyalty.
Sustainability Trademarks—Transparently convey ecological commitments
Trademarks identify the origin of goods, but they also convey brand values—the emotions, missions, and goals that a brand stands for. Thus, trademarks are particularly effective for communicating sustainability.
Luxury brands have increasingly adopted trademarks to communicate the sustainable nature of their products. For example, Prada’s Re-Nylon™ bag line is made with recycled nylon. Louis Vuitton also adopted an Upcycling Signal Logo – which is a combination of the LV logo and the recycling symbol – for products that are either recycled or contain at least 50% recycled and bio-sourced materials. Similarly, Valentino recently introduced a sustainable version of his signature Rockstud sneakers, which are branded with an eco-centric version of his V logo.
Trademarks communicate a company’s values and signify its reputation. However, to avoid backlash and reputational damage, brands must be transparent and not overstate their ecological commitments. For example, each of the above brand owners is transparent about their sustainability practices, fiber source and/or ecological footprint. Fashion and retail brands can enjoy similar success by combining their branding efforts with achievable goals and transparent messaging.
deal
There is consumer demand for environmentally friendly goods, and fashion brands have certainly reoriented to meet this demand through enhanced reselling and messaging about their ecological commitments. That said, brands should be careful to consider the various pitfalls that can arise in this space.
Intellectual property advice can help brands navigate these issues – including negotiating contractual agreements with re-trade partners and selecting, clearing and protecting trademarks that truly reflect sustainability practices and ecological policies.
The authors would like to acknowledge the contributions of summer associate Michelle Zaurov to this update.
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