What's in my name? Benefits and pitfalls for fashion designers of using their own name as a brand

In a recent trade mark decision in Belgium, the Brussels Court of Appeal had to consider the rights of a fashion designer and the extent to which the holder of a right to a name – being her or his own name – can prohibit the use of a registered European Union trade mark.

For companies and individuals active in the fashion or cosmetic industries as well as IP rights holders, the decision underlines some of the major legal principles guiding their relationship and how designers can lose, or win, their battle to use their own names in business when leaving a company or selling it.

Background

Odile Jacobs (a pseudonym being the combination of her first name and her husband’s surname) set up a fashion brand in 2016. Inspired by her Congolese origins, she created colourful clothing, including wax print dresses, rich of both African tradition and Belgian design.

In order to develop a successful business, and meet customer demand, she and her husband founded a company named ‘Odile Jacobs’. In 2019, the company registered a European Union trade mark for ODILE JACOBS covering clothing and associated retail/design services in classes 25, 35 and 42.

In 2021, after her divorce with Mr Jacobs, the designer decided to launch a new clothing collection and filed a Benelux trade mark application for the same mark, ODILE JACOBS in relation to clothing in class 25.

The two founders of the company ‘Odile Jacobs’, and former spouses, started a legal battle before the Belgian courts and Benelux Office. Mr Jacobs, remaining Director of the company ‘Odile Jacobs’, relied upon the EUTM registration to consider that use of the name ODILE JACOBS by the designer was infringing said trade mark. She claimed to hold unregistered prior rights in the same name, being the use of the pseudonym Odile Jacobs to identify herself as designer. As a counterclaim, she filed an application for an injunction seeking to restrain the company from using ODILE JACOBS.

Prohibiting the use of EU trade marks

In accordance with Article 60 of the European Union trade mark regulation (EUTMR), an EU trade mark shall be declared invalid on application to the Office, or on the basis of a counterclaim in infringement proceedings, where the use of such trade mark may be prohibited pursuant to another earlier right under the Union legislation or national law governing its protection, and notably a right to a name.

The protection afforded to these earlier rights must allow their proprietors to bring proceedings under the civil, administrative or criminal law of a Member State or under provisions of Union law for the purpose of prohibiting the use of a later EU trade mark to the extent that the use of a national trade mark may be prohibited under the law of that Member State or under Union law (Article 137 EUTMR).

In the circumstances of the Odile Jacobs case, the Brussels Court of Appeal found that the designer was authorised to keep using the name ‘Odile Jacobs’, a prior right that she never transferred to the company.

Interestingly, the Court also concluded that the company had to stop using the same name, according to the principle and conditions set out in Article 137 EUTMR.

Some thoughts from other fashion disputes

The Odile Jacobs case shows how designers can benefit from using their own name as a brand name and legitimately enforce this category of IP Right. It seems that Odile Jacobs made the right decision of not transferring her rights in relation to the use of her brand name. Previous disputes show that some designers may not have been so wise and simply lost the right to trade under their own name. 

In the early 80’, Karen Millen founded her clothing business under the name Karen Millen Fashions Limited. More than 20 years later, she decided to sell her share in the business to an Icelandic consortium through a Share Purchase Agreement (‘SPA’). The terms of the SPA notably prevented Karen Millen from using 1) any intellectual property rights owned by her previous business or 2) the name KAREN MILLEN or any other confusingly similar name “in any connection with any business which is similar to or competes with” the sold business, anywhere in the world.

Several years later, Karen Millen wanted to use her own name in connection with a new homeware range notably in the United States and China. Legal disputes started in these countries, and Karen Millen issued proceedings in the United Kingdom where she applied for negative declarations from the High Court that would enable her to use her name, including:

1. that she could apply for and use various trade marks without breaching the SPA;
2. that she could carry out a homeware business in the US under the name Karen Millen without breaching the SPA; and
3. that using the name Karen on its own would not be confusingly similar to Karen Millen, even for clothing.

The High Court rejected Karen Millen’s application on the grounds that according to UK case law, negative declarations can only be granted where the underlying issue is clearly defined. In this case, the negative declarations were not clear and specific enough. In any event, the Judge considered that most of the acts falling within the negative declarations were in breach of the terms of the SPA. This meant that regardless of the negative declarations, Karen Millen could not use her name without breaching the SPA. 

The importance of contractual terms when selling fashion-related business

It is very much common practice for fashion designers to launch their clothing collection and name their business using their own name. The goodwill will be building up in this name and value will be attached to this brand name.

For designers who have made substantive investments in promoting the brand being their own name, the value attached to the brand name and the possible restrictions for a future use in a similar business should play an important role when selling their business. Buyers purchasing a business want to make sure they are buying all of the goodwill built up in the brand. Restrictions will necessarily be included in Share Purchase Agreements.

Under this scenario, it may be difficult or impossible to claim the right to use the designer’s own name before the Courts.