Crefovi was a speaker at 2013 Cosmetic compliance summit in

The new European Union EU(‟”) cosmetics regulation entered into force on 11 July 2013. Many, in the cosmetics industry, are still confused over the exact wording of the regulation, which nonetheless implies tightening safety controls and information on cosmetic products. This topic was debated during the 2013 Cosmetic compliance summit, in London, on 15 October 2013. The Cosmetic compliance summit was ’s first two day event dedicated entirely to the EU cosmetic regulation and its implications. This summit gave brand owners, cosmetic designers and formulators, as well as cosmetics manufacturing companies, a chance to network, share best practices, discuss obstacles and overcome some of the biggest challenges the cosmetics industry faces today.

Key industry professionals met in London at the Cosmetic compliance summit to discuss the surrounding issues, on 15 and 16 October 2013.

Annabelle Gauberti, founding and managing partner of Crefovi, an expert on the law of luxury goods, spoke on Wednesday 16 October 2013, at the Cosmetic compliance summit, about the legal aspects of the EU Cosmetic products regulation and about how to become legally compliant with this EU regulation.

You can watch her presentation here:

While there is ample information in the industry surrounding the cosmetic products regulation, from a manufacturer and safety perspective, there is less available discussing the legal implications this regulation throws up. Hear from a leading legal professional on the key areas you need to be focusing on from a legal point of view, in this webcast recorded during the 2013 Cosmetic compliance summit in London, on 15 October 2013.

Please contact us if you have any questions about the implications, as well as pros and cons, of the new Cosmetic products regulation.

Crefovi regularly updates its social media channels, such as Linkedin, Twitter, Instagram, YouTube and Facebook. Check our latest news there!

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Send v Topshop & passing off: a love/hate relationship

Jeff Randall interviewed Crefovi’s founding and managing partner, Annabelle Gauberti, during his live show on Sky News, on 31 July 2013, the day on which the court judgment Rihanna v Topshop was made public. As Jeff’s interview was really short and snappy, Annabelle didn’t get a chance to say what she thought was important about this court decision, as far as the protection of celebrities’ personality rights is concerned. So here is her additional information on this matter. Rihanna v Topshop lawsuit from Annabelle Gauberti.

Here are the three questions that I was asked to prepare answers to, before the interview:

1. What was the problem in the Rihanna v Topshop matter?

2. Is image copyright an issue that many celebrities have to deal with?

3. What implications will the case have for retailers and designers?

1. What was the problem in the Rihanna v Topshop matter?

Topshop, a well-known retailer, started selling, in March 2012, a t-shirt with an image of Rihanna, the worldwide famous pop star, on it. The image was a photograph taken by an independent photographer. Topshop had a license to use the copyright on the image from the photographer, but no license granted by Rihanna.

Rihanna contended that the sale of such a t-shirt, without her permission, infringed her rights. Topshop did not agree.

Rihanna, as well as her companies Roraj Trade LLC and Combermere Entertainment Properties LLC filed a lawsuit on 30 March 2012 with the chancery division, a part of the high court of justice which deals with intellectual property claims, against , parent company of Topshop, and Topshop/ Limited.

After four days of hearing, on 17, 18, 19 and 23 July 2013, judge Mr Justice Birss ruled on 31 July 2013.

The judge ruled that the mere sale, by a trader, of a t-shirt bearing an image of a famous person is not, without more, an act of passing off.

However, the sale of this image, of this person (i.e. Rihanna) on the garment, by this shop, in these circumstances, is a different matter.

Mr Justice Birss ruled that Topshop’s sale of this Rihanna t- shirt without her approval was an act of passing off. He ruled for the claimants.

2. How did the judge reach the decision to sentence Topshop for passing off?

From the outset, judge Mr Justice Birss stated that the case was not relating to so-called ‟image rights”.

He confirmed the case law, which firmly applies in England and Wales, that there is no free standing general right by a famous person to control the reproduction of their image, or ‟image rights”.

In addition, according to the judge, there was no issue, here, about law of privacy or breach of Rihanna’s privacy.

Further to these preliminary comments, Mr Justice Birss explained that the case was concerned with the civil liability generated by the tort of passing off.

Passing off is an intellectual property right under English law.

To understand passing off, we need to define what ‟goodwill” is: goodwill is a form of property constituting the market perception of the value and quality of a business and its products.

This goodwill can be protected against interference or damage by passing off.

Passing off is therefore a civil liability tort that may be used in preventing a trader from making misrepresentations which damage the goodwill of another trader.

There are three conditions for passing off to be established, as the judge set out, in his court judgment:

some evidence that Rihanna has goodwill and a reputation amongst the relevant members of the public;

Topshop’s conduct complained of must be shown to make a misrepresentation, i.e. is likely to lead the public to believe that the t-shirts had been authorised by Rihanna and therefore deceiving those members of the public into buying the product, and

some evidence that the misrepresentation caused some damage to Rihanna’s goodwill.

Now, let’s apply those conditions to the facts, as Mr Justice Birss did, in his decision of 31 July 2013. 2.a. Goodwill

There is no doubt that Rihanna has a world-famous reputation. Through her companies, she runs a very large merchandising and endorsement operation.

For example, she has, or used to have, endorsement agreements with the likes of Nike, Gillette and Clinique. Her vast merchandising business is managed by Live Nation, which paid a hefty sum for the right to put Rihanna’s image on t-shirts.

In addition, Rihanna is very fashion conscious and oriented, having done collaborations with Gucci in 2008, Armani in 2011 and 2012, which produced two capsule collections. In 2012, she entered into an agreement with River Island, to design clothes.

Rihanna has ample goodwill to succeed in a passing off action.

2.b. Misrepresentation

Demonstrating that Topshop had done some misrepresentation was the (slightly more) difficult aspect of this lawsuit.

It is true that the fashion garment on which Rihanna’s image appeared did not set out the words ‟Rihanna” or her logo ‟R”.

However, the judge found that Topshop’s actions gave the impression that the t-shirt, and the use of Rihanna’s image on it, was authorised.

The photograph on which the image is based was taken during the video shoot of ‟We found love” for Rihanna’s 2011 ‟Talk that talk” album.

Rihanna’s fans will recognise, or think they recognise, this particular image of Rihanna, in a particular context, which is her ‟Talk that talk” album. For those fans, the idea that the image is authorised will be part of what motivates them to buy the product.

Many will buy the product because they think she approved of it. Other will wish to buy the t-shirt because of the ‟value of the perceived authorisation itself”. In both cases, they will be deceived.

Therefore, Mr Justice Birss ruled that a misrepresentation was being made by Topshop.

2.c. Damage

Such misrepresentation creates a false belief that the t-shirt has been authorised by Rihanna herself.

That will be obviously damaging to the claimants’ goodwill because of the sales lost to Rihanna’s merchandising business and because of the loss of control over her reputation in the fashion sphere.

Interestingly, the written and oral press have been blabbing about Rihanna suing Topshop for USD5 million, which is untrue.

I understand that neither the court papers, nor the court judgment, make any reference to a particular figure, at which Rihanna and her advisers would have valued her financial prejudice deriving from Topshop’s misrepresentations.

Now that passing off has been confirmed by the judge, the next step for him is to assess the damages that Topshop will have to pay to Rihanna and her companies. The way such financial compensation is usually computed is by assessing the equivalent to what the celebrity in question would likely have received from the endorsement, had it been legitimate.

Furthermore, since I wrote the present article, shortly after being interviewed on 31 July 2013, I understand that the high court of justice in London ordered Topshop to pay the singer’s legal costs of almost GBP1 million, with an interim payment of GBP200,000 to be made within 14 days from the date of the second judgment of 26 September 2013.

In addition, Mr Justice Birss (him again!), in his second judgment, granted Rihanna an injunction to prevent any future similar wrong use of her image, imposing a permanent ban on Topshop selling these infringing t-shirts.

3. Is image copyright an issue that many celebrities have to deal with?

This was the second question I was asked to prepare an answer to, before being interviewed by Jeff Randall on Sky News on the Rihanna v Topshop matter.

Image copyright is the intellectual property right that a photographer would have, on his pictures.

For example, the independent photographer, who shot that picture during the making of Rihanna’s video, owned such image copyright and assigned it by entering into a licensing agreement with Topshop (i.e. he got some royalties, probably a percentage on the total sales of the t-shirts by Topshop, in exchange for such temporary transfer of copyright).

Image copyright is not the intellectual property right at stake, ‟vis-à-vis” Rihanna and her companies.

What many (if not all) celebrities have to deal with is the protection of their personality rights, also known as rights of publicity or image rights. These are the rights of an individual to control the commercial use of his name, image, likeness, etc.

In common law jurisdictions, such as England and Wales, the typical route to protect those image rights is the tort of passing off.

Indeed, there is no codified regime of image or personality rights in England and Wales, such as article 9 of the Civil code in , for example.

In England and Wales, there is therefore a need to rely on a variety of statutory and case law.

The groundbreaking case, in relation to passing off and celebrities, is the Eddie Irvine vs Talksport case from 2002. Passing off was extended then, in order to allow famous people, with sufficient goodwill, to protect their names and images, if an unauthorised exploitation of these was done in a way that suggested the celebrity had endorsed a product.

4. What implications will the case Rihanna v Topshop have for retailers and designers?

It is not the first time that celebrities and brands clash about differing views revolving around the use of image rights in a commercial context.

In 2003, Catherine Zeta-Jones took legal action against French skincare company Caudalie, for running an ad campaign saying that the actress was seen buying its products, which Ms Zeta- Jones refuted. The lawsuit was filed in Los Angeles in September 2003 and I understand that the parties reached an off-court settlement some time after.

Another interesting story, involving Topshop again, was its embroilment in a copying row, after up-and-coming graphic designer Kate Moross started a Twitter campaign in October 2012. Ms Moross revealed that Topman (the men’s brand of Topshop) sweaters were bearing a tribal print which, she claims, in places, is identical to a design she created and sold via her website in February 2011.

The key finding for retailers and brands, here, is that they rarely win, in these lawsuits in which they are defendants. If, by extraordinary, some brand owners and retailers were to win an intellectual property infringement case, they would still loose because of the high costs of litigation associated with the lawsuit and because of the reputational damage that they will invariably suffer from.

Retailers and designers must run by their in-house or external legal teams, any “creative” project which is borderline, involving a ‟homage” to, or ‟quasi-endorsement” by, another artist, creative person or brand. Those legal checks and clearance processes need being done before any product is launched in the market, of course.

I think that the next high-profile legal battle, in the fashion sector, will revolve around the very subtle and ironic use of logos and names, of super luxurious brands such as Hermes, Cartier and Chanel, by savvy graphic designers who monetize their inventive derision by putting it on (expensive!) hooded sweaters.

To conclude about the repercussions of the Rihanna v Topshop case on the music industry, I think that musical artists, especially those who have signed endorsement and merchandising deals with brands, need to emulate Rihanna, by adopting a systematic approach against non-authorised brands using the artist’s image and personality rights.

Represented by an apt and reactive lawyer, who needs to first check all the facts and that the legal requirements for violation of image rights have been met, musical artists should not hesitate to send a cease-and-desist letter to the infringing brand. In this letter, musical artists and their legal representatives could refer to passing off (if the infringement is happening in England and Wales) or other types of legal arguments (if the infringement is happening in other jurisdictions), which are customarily used in cases of violation of image and personality rights.

The quicker a musical artist and his lawyer react to the infringement, by sending such a cease-and-desist letter, the higher probability of success in court, should the infringing brand refuse to quickly discontinue the sale of the infringing products and/or to provide some damages to the musical artist, whose image and reputation have been tarnished by that brand’s actions.

Read article here

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Send Business breakfast on fashion finance law on Tuesday 30 July 2013

We had a great time, on Tuesday 30 July 2013, during the business breakfast during which we presented our proprietary research on fashion finance.

During our presentation on fashion finance law, the audience was really paying attention and asking incisive questions on the tools and tips to get funding!

Please find below our video and slides of the seminar, as well as some information on the content of this cutting-edge presentation on fashion financing.

You will need initial funding to create your first, second or even third collection and set up your fashion business. While family & friends, grants and loans can be a source of financing, don’t underestimate the value of intellectual property (‟IP”) in the context of obtaining funding for your fashion business.

This video was created with the efficient and proactive contribution of the London Film Academy. Thank you LFA!

During this B@B, we covered:

tools and tips to get funding;

the different financing sources available to you;

your business plan – key considerations;

attracting third party financial investment – and the important role of IP;

key clauses in partnerships or equity finance agreements, and

next steps after you secured funding.

The speaker is Annabelle Gauberti, founding and managing partner of London fashion law firm Crefovi, an expert in fashion finance law.

She has more than 10 years of experience practising the law of luxury and fashion law, both in the UK and France. Annabelle advises fashion houses, financiers, security providers, on various aspects of fashion finance law.

Her clients base includes fashion houses, designers & models, artists, film production companies.

She is steeped in finance & corporate law, and has been involved in many matters, either contentious or non- contentious, relating to intellectual property, trademark litigation, selective distribution, franchising, tax & internet law.

Annabelle has more than ten years of experience practising fashion law, also known in France as “droit du luxe” (law of luxury goods) and she has written numerous publications about it.

Crefovi regularly updates its social media channels, such as Linkedin, Twitter, Instagram, YouTube and Facebook. Check our latest news there!

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Art and luxury: how the art market became a luxury goods business – revisited

London law firm for creative industries Crefovi publishes its latest proprietary research in the art and luxury issue of INFO Magazine, in relation to the interactions between the art and luxury sectors. I came across an interesting piece, on Phaidon’s website, recently, entitled ‟How the art market became a luxury goods business”. This blog post describes the reactions to, and contains an interview about, artist Andrea Fraser’s essay entitled ‟L’1 pour cent c’est moi”, freely available to download from the Whitney Museum’s website as part of its 2012 Biennial.

In her essay, the California-based artist and professor at UCLA stresses her concerns that today, art is not only an asset class for the financial elite, but has also become a financial instrument. She also states that, the greater the discrepancy between the rich and the poor, the higher prices in the art market rise. According to Ms Fraser, while there is a direct link – quantified in recent economic research [1] – between the art market boom and economic inequality that has reached levels not seen since the ‘20s in the US and the ‘40s in Britain, it is not just the art market that has expanded from this unprecedented concentration of wealth but museums, art prizes, residences, art schools, art magazines have multiplied in the past decade. She expresses her uneasiness at working in the art field, which has benefited from, and, as an artist, having personally benefited so directed from, the anti-union, anti-tax, anti-regulation, anti-public sector politics that have made this concentration of wealth possible. Andrea Fraser concludes her essay by saying that a‟ broad- based shift in art discourse can help bring about a long overdue splitting off of the market-dominated sub-field of galleries, auction-houses and art fairs. Let this sub-field become the luxury goods business it already basically is, with what circulates there having as little to do with art as yachts, jets and watches. European museums have the potential to be the birthplace of a new art field that could emerge from this split, where new forms of autonomy can develop”.

It is not the first time that an artist has expressed concern, resentment and even cynicism at having to play the game of capitalism and conform to harsh business realities.

Sarah Thornton, in her book ‟Seven days in the art world” [2], cheekily describes her conversation with Marc Jacobs, artistic director of Louis Vuitton Malletier, to whom she says that she heard that artist Takashi Murakami referred to his Louis Vuitton work [3] as ‟my urinal”. After taking an audible puff on his cigarette, Marc Jacobs, who deeply understands the art world – he collects, attends the auctions, visits the Venice biennale -, replied coolly ‟I’m a big fan of Marcel Duchamp and his ready-mades. Changing the context of an object is, in and of itself, art. It sounds like a put-down, but it’s not”. As Ms Thornton notes, ‟given that Duchamp’s ‟urinal” is one of the most influential works of the twentieth century, one might argue that Murakami is in fact glorifying his LV affiliations”. However, one can only wonder how this play on words might be interpreted, coming from an artist.

To further expand on this point, it is worth noting that some street artists have a radical take on the luxury goods business, trying to differentiate themselves as much as possible from this industrial sector. For example, French street artist Zevs made many works of art parodying logos of famous luxury brands, such as Chanel, Louis Vuitton and Ralph Lauren, criticizing the role these brands play in society. Since these street art works may damage and dilute the image of luxury houses, Louis Vuitton and Ralph Lauren, among others, have put in place some robust anti-copying and anti- counterfeiting teams, who do not hesitate to threaten litigation if artists do not stop using their protected trademarks in artworks [4]. The paradox is that, the more street art boldly criticises and parodies the luxury goods business and consumerism, the more expensive it becomes on art markets, fetching ever increasing prices at auctions, just like any other luxury good!

It is true that there is a correlation between the fine arts and luxury goods sectors, as buyers of the former are often buyers of the latter. To give clues about their status and wealth, high net worth individuals (‟HNWIs”) tend, in general, to surround themselves with luxury goods and art works. With a rising trend of HNWIs becoming more numerous, especially in emerging economies such as China, Brazil and India, the demand for luxury goods and art works is bound to increase. ‟In Asia, and the Middle-East, the purchase of artworks has acquired enormous cultural, economic and lifestyle importance. The decade’s new millionaires, hopping from art fairs to auction sales the world over, have transformed the auction market into an increasingly high-end market” [5]. As one of the most important economic features of the art market is that it is essentially supply-driven (i.e. there is a limited amount of high-quality fine arts pieces available on this market), increased demand cannot necessarily increase supply, and instead elevates prices of art works [6]. As a result, only either the 1 percent (or, most likely, 0.1 percent), mentioned by artist Andrea Fraser in her essay, or corporate art collectors, can afford buying works of fine arts.

Indeed, companies play an essential role in the current art world, as corporate collectors, patrons, charity-event organisers, supporters of art exhibitions and collaborators with artists. Luxury houses, in particular, are very attracted to the art world and, despite the ‟disdain” shown by certain artists towards commercial endeavours and the luxury goods sector in general, actively get involved on artistic projects. At the forefront of this movement, Louis Vuitton has even recently published a book, entitled Louis‟ Vuitton: Art, Fashion and Architecture”, to publicise its many collaborations with artists. From theLouis Vuitton Foundation, expected to open in 2014 at the zoological gardens in Neuilly, in the outskirts of Paris, to the many fashion collaborations with artists Takashi Murakami, Olafur Eliasson, Richard Prince and, more recently, Yayoi Kusama and Daniel Buren, Louis Vuitton is the all-time winner of art accolades, even having set up an access and arts education programme for disadvantaged children in partnership with five London museums [7].

Other important corporate collectors are François Pinault, the founder of luxury goods conglomerate Kering (ex PPR), who has created a contemporary art foundation at the Palazzo Grazzi and La Punta della Dogana in Venice and who is the owner of the world’s largest auction house Christie’s; and jewellery house Cartier and its highly originalcontemporary art foundation. In the words of luxury marketing specialists M Chevalier and G Mazzavolo [8], an‟ art collaboration will attract the attention of the press and the public, invigorating the brand’s creativity, giving the brand a renewed pertinence since it will become associated to celebrities of the contemporary art world, giving it the proof of aesthetic sensibility of the brand”.

It all makes sense from a business standpoint anyway, since, according to luxury strategists JN Kapferer and V Bastien, ‟luxury is the artist’s means of financial subsistence. Working for the luxury industry allows an artist to live decently while pursuing his or her artistic work” [9]. In addition, corporate collectors and patrons can benefit from substantial tax advantages when putting money in fine arts: both the US and France grant hefty tax relief to companies that buy works of art to constitute corporate art collections. Another Gallic example is the tax cuts granted to French companies that make donations to public bodies, which main activity is to organise contemporary art fairs for the public [10].

In the United Kingdom, the government has recognised the importance of providing reductions in corporate tax, capital gain tax and income tax, in exchange for donations of qualifying gifts of pre-eminent property to be held for the benefit of the public or nation. A new scheme entitled ‟gifts of pre-eminent objects and works of art to the nation” was introduced in April 2012, in order to boost philanthropy by living individuals and corporations, all of whom are tax residents in Great Britain.

To conclude, I agree that the art market has become a luxury goods business, controlled by the economics rules of supply and demand. If some artists are unhappy with this state of affairs, I think that it is down to them to control the “demand” chain for their art works. If they do not want to sell their art pieces above a certain price and/or to certain types of buyers, they should make it clear when dealing with art gallery owners and other distributors of their work. Artists could even directly approach the types of buyers they want to sell or donate their work to, such as museums, art foundations or non-profit organisations, obtaining written warranties, covenants and undertakings from these ‟selected” buyers that they will not put the art works in the secondary market (in particular, at auctions). As the demand side for contemporary art works is ever increasing, inflated by the cohorts of HNWIs who seek highly visible labels and for whom buying from an internationally renowned gallery is similar to buying from Louis Vuitton, Prada or Chanel, artists need to have a well-thought business plan, in which they lay out their plans to reach financial success as well as recognition from the art world, while holding true to their ethical beliefs.

[1] ‟Art and Money” by William N. Goetzmann, Luc Renneboog and Christophe Spaenjers, 28 April 2010.

[2] ‟Seven days in the art world”, Sarah Thornton, Granta, 2008.

[3] One of Takashi Murakami’s most visible commissions has been for the accessories giant Louis Vuitton Malletier. In 2000, Marc Jacob asked Murakami to reenvision ‟monogram canvas”, the company’s century-old signature pattern in which the beige and brown initials LV float in a field of four-petal flower and diamond shapes. Three Murakami designs were put into production, and one of them, ‟multicolor”, which used thirty-three candy colors on white and black backgrounds, was so successful that it became a standard line.

[4] ‟Art attacks: Perspectives on the use of fashion logos”, Fashion Law Institute at Fordham Law School, 8 February 2012.

[5] ‟Contemporary Art Market 2010/2011”, The Artprice annual report.

[6] ‟Fine art and high finance”, edited by Clare McAndrew, Bloomberg Press, 2010.

[7] ‟Corporate art collections”, Charlotte Appleyward and James Salzmann, Lund Humphries, 2012.

[8] ‟Management et marketing du luxe”, Michel Chevalier and Gerald Mazzavolo, Dunod, 2011.

[9] ‟The luxury strategy”, J N Kapferer and V Bastien, Kogan Page, 2012.

[10] ‟Art tax law: a double-hedged sword”, Annabelle Gauberti, 2013.

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Send Crefovi presents ‟Law & luxury” course at business school HEC

Annabelle Gauberti, founding and managing partner of London law firm in the law of luxury goods Crefovi, presented a ‟Law & luxury” course to the MBA and Master students of French business school HEC, who are enrolled in the Luxury Certificate.

On 7 June 2013,Annabelle Gauberti, founding and managing partner fo Crefovi, presented to the master and MBA students of HEC Luxury Certificate the specificities of luxury law, in her ‟Law & luxury” course.

The ‟Law & luxury” course, presented during HEC Luxury Certificate, was filmed: watch the videohere !

This emerging legal discipline covers legal issues relating to intellectual property, financings and private equity transactions, licensing and distribution agreements, as well as the fight against counterfeiting and the opportunities represented by e-commerce.

Annabelle is an expert in luxury and fashion law, which she started practising back in 2003. In May 2004, she curated the publication, and co-wrote, the Law of luxury goods supplement (‟Droit du luxe”).

Within the scope of her practice at London fashion law firm Crefovi, she regularly advises luxury houses, brands, fashion companies, creative designers, retailers, contractors of luxury houses, models on their business and legal issues.

Her clients are based in the United Kingdom, France, the rest of Europe, the Middle East, and Asia.

Annabelle Gauberti, founding partner of Crefovi, will tweet her impressions and pictures on @crefovi, so please stay in tune with Crefovi on Twitter.

Crefovi regularly updates its social media channels, such as Linkedin, Twitter, Instagram, YouTube and Facebook. Check our latest news there!

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