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LAW À LA MODE Issue 27 - November 2018 Word from the industry’s mouth Enforcement of IP rights through Ukrainian customs register E-commerce in Poland The development of artificial intelligence in the fashion industry Reinventing retail E-commerce in Brazil The rising star of the social media influencer The California Consumer Privacy Act: More than an encore of the EU GDPR Requirements for the labelling of pure textile products Blockchain and fashion UK: Compliance with the national minimum wage Influencers watch out: Digital communication in Italy Will 3D body scanning change the future of online shopping? Fashion retailers: Data protection Retail Sector Group Contents EDITORIAL 03 WORD FROM THE INDUSTRY’S MOUTH 04 ENFORCEMENT OF IP RIGHTS THROUGH UKRAINIAN CUSTOMS REGISTER: COMMON MISTAKES AND LIFE HACKS 06 E-COMMERCE IN POLAND: A TRUE WINNER OF THE SUNDAY TRADING BAN? 07 THE DEVELOPMENT OF ARTIFICIAL INTELLIGENCE IN THE FASHION INDUSTRY: AN OPPORTUNITY OR A THREAT? 08 REINVENTING RETAIL: THREE CONTRACTUAL LEVERS TO DELIVER TECHNOLOGY-LED TRANSFORMATION 10 E-COMMERCE IN BRAZIL: PRACTICAL SPECIFICITIES FOR COMPLYING WITH THE BRAZILIAN ONLINE MARKET 12 THE RISING STAR OF THE SOCIAL MEDIA INFLUENCER 13 THE CALIFORNIA CONSUMER PRIVACY ACT: MORE THAN AN ENCORE TO THE EU GDPR 14 REQUIREMENTS FOR THE LABELING OF PURE TEXTILE PRODUCTS 15 BLOCKCHAIN AND FASHION: IMPLICATIONS FOR SUPPLY CHAIN MANAGEMENT, ETHICAL SOURCING AND ANTI-COUNTERFEITING 16 UK: COMPLIANCE WITH THE NATIONAL MINIMUM WAGE 18 INFLUENCERS WATCH OUT: A NEW ERA OF DIGITAL COMMUNICATION IN ITALY 19 WILL 3D BODY SCANNING CHANGE THE FUTURE OF ONLINE SHOPPING? 20 FASHION RETAILERS: DATA PROTECTION AS A TOOL TO ENSURE CONFIDENCE AND INCREASE COMPETITIVENESS 22 02 | Law à la Mode US Editorial EDITORIAL TEAM The US editorial team is delighted to bring you Tamar Duvdevani (NY) the 27th edition of Law à la Mode, the quarterly legal magazine produced by DLA Piper’s Retail Melissa Reinckens (San Sector Group for clients and contacts of the firm Diego) worldwide. Airina Rodrigues (NY) It is late fall in New York City, and the rainbow of leaves scattering the ground in Central Park David Kramer (DC) is complimented by the deep tones of autumn Michael Geller (Chicago) fashion. But, here and nearly everywhere else in the world, winter is coming. Perhaps not literally, Marc Miller (NY) but when it comes to regulatory changes and James Stewart (DC) challenges to e-commerce, no jurisdiction is safe from the frosty winds of change. As reported Megan Michaels (NY) in this edition of Law à la Mode, from Brazil to France to sunny California, regulations keyed to consumer protection are changing the landscape of online retail, and our team breaks down what brand owners need to know to stay up to date in their policies. We also tackle developments in Eastern Europe, with pieces on IP protection in Ukraine and the rise of e-commerce in Poland, where the internet provides a solution to the Sunday trading ban. We explore the rise of AI in the fashion industry, the integral marketing role of the social media influencer, and other noteworthy developments in retail in the UK, Germany, Italy and Belgium. We round out this issue with an explanation of blockchain technology, and a fabulous Word from the industry’s mouth interview with SoulCycle’s Senior Director of Legal Affairs, Melissa Schoffer Farber. We hope you enjoy this edition of Law à la Mode. If you have any questions or feedback, please get in touch with DLA Piper’s Retail Sector Group at: [email protected]. www.dlapiper.com | 03 WORD FROM THE INDUSTRY’S MOUTH By Tamar Duvdevani (NY), Airina Rodrigues (NY) and Michael Geller (Chicago) Interview with Melissa Schoffer Farber, SoulCycle’s Senior Director of Legal Affairs To describe New York-based SoulCycle as a company offering indoor cycling classes is a serious understatement. While SoulCycle does tout 90 locations in the US and Canada, with a growing international presence, the business has morphed from an indoor cycling company into a powerhouse lifestyle brand. The brand focuses on redefining health and happiness through unique mind-body- soul experiences. A hefty portion of SoulCycle’s business is its retail offerings, and its loyal following avidly deck themselves in its stylish apparel. We sat down with Melissa Schoffer Farber, SoulCycle’s Senior Director of Legal Affairs, to learn more about the brand. 1. Melissa, can you tell us about SoulCycle? SoulCycle has taken the fitness world by storm. What started as an indoor cycling class has grown into so much more! At its core, SoulCycle provides riders (this is how we refer to SoulCycle clients) with a candlelit sanctuary where they can emerge feeling better, stronger and inspired. Founded on the belief that fitness could be fun, while also offering the best in hospitality, SoulCycle has fostered an amazing community of loyal fans. Since 2006, SoulCycle has continuously grown and expanded its reach, evolving into a lifestyle brand. In terms of retail, SoulCycle was at the forefront of the athleisure market when it opened the first studio 12 years ago. From day one, fashion has been an integral part of the brand, selling apparel inside the studios before expanding into e-commerce in 2010. Currently, SoulCycle produces at least 12 retail collections each year. 04 | Law à la Mode 2. Can you tell us about your role at the company and areas of focus? I joined SoulCycle as their first in-house attorney in 2013. I’ve watched the company grow from 11 studios to 90! My role like the company itself has certainly evolved over the years. But, I now spend the majority of my time focused on protecting and developing the brand. This means working closely with the business teams on matters of intellectual property, advertising/marketing, and retail, among others. 3. You can’t walk down the streets of New York City without seeing people decked out in SoulCycle apparel. How did SoulCycle make the transition from an indoor cycling fitness company to a lifestyle brand? I think this happened organically as riders fell in love with the brand. They were excited to wear clothing bearing the SoulCycle name and logos, and were eager to find ways to incorporate the energy of SoulCycle into their lives, inside and outside the studios. 4. We see that SoulCycle has collaborated with apparel and accessory designers as well as other brands. Can you tell us about a collaboration that you have worked on? I’d love to! One of the first collaborations I worked on with SoulCycle, was with Shopbop, in 2014. It was a big moment for the brand as it was a retail offering outside the studios. It was exciting to work together as a collaborative team to bring this opportunity to life, and looking back, I see how that teamwork and camaraderie set the stage for future work – creating a strong and cohesive relationship between Legal and Retail, important for any company. 5. What is the most exciting part of working at SoulCycle? That energy I spoke about earlier which comes out of those magical studios – inspiring you to be the best version of yourself. I’m fortunate to work somewhere where I can disappear into that candlelit sanctuary (during a work-day!) and I do not take it for granted. It’s exciting to work for a company that is focused on making people feel their best, physically and emotionally, on and off the bike! www.dlapiper.com | 05 ENFORCEMENT OF IP RIGHTS THROUGH UKRAINIAN CUSTOMS REGISTER: COMMON MISTAKES AND LIFE HACKS By Natalia Pakhomovska and Ivan Shatov (Kiev) Due to its geographic location, with access to the Black 2. Enter your trademark into the Customs Sea and proximity to the EU and Russia, Ukraine often Register for all categories of registered goods serves as an entry point in the supply chain of counterfeit When recording a trademark with the Customs Register, product. Fake products are frequently imported into brand owners must list the types of goods imported under Ukraine and re-sold in other jurisdictions. The Customs the trademark by providing Combined Nomenclature Register Of Intellectual Property Objects (Customs (CN) codes. Rights holders, however, often indicate some, Register) was introduced in Ukraine in 2001 as a means to but not all, CN codes. If counterfeit goods identify a CN protect brand owners from counterfeiting. While a dearth code not covered in the Customs Register for a trademark, of trademarks have been recorded to date, the Customs the customs clearance process will not be suspended. Register appears to be an effective tool for curbing the Thus, brand owners should include all relevant CN codes flow of counterfeits. Indeed, in 2018 alone, Ukrainian when recording the trademark in the Customs register. customs stopped imports 4,200 times due to suspected infringements. 3. Improving customs protection via extending Some pointers for rights holders importing their goods trademark registration into Ukraine are summarized below. Counterfeiters in Ukraine often present goods for customs clearance by indicating the incorrect CN codes. 1. Registering your trademarks with the For instance, when importing t-shirts, infringers may Customs Register indicate CN codes for fabric, or for the boxes/packaging Though customs officials have the ex officio right to of the goods. To further increase the chances of detecting suspend the customs clearance process for goods counterfeits, brand owners should record not only goods suspected of IP infringement, in practice they rarely do so. themselves, but also production and packaging materials. In most cases, the customs clearance process is stopped where a trademark is registered with the Customs Register or where officials have contact information for the rights holder’s representative.