Fashion Law – New US/EU Legislation And Retailers: Customer Data And Trademarks

NEW YORK — The fourth annual Fashion Law Seminar, organised by the Federal Bar Association Intellectual Property Section, presented on new legislation in the United States and European Union, and its potential impact on domestic and transnational retailers.

The Fashion Law Seminar took place on 10 February.

With the prospect of the North American Free Trade Agreement (NAFTA) being renegotiated, Anthony V. Lupo of Arent Fox LLP in New York reported that some clients are looking into alternatives for sourcing supply in Latin America. Panama and Costa Rica are both attractive options, Lupo said. But a presentation by Maricruz Villanea Villegas, partner at Ideas, Trademarks and Patents in San Jose, Costa Rica, highlighted the difficulties retailers face in registering trademarks in these locations.

Most countries in Latin America, including Panama and Costa Rica, allow parallel imports for trademarked goods. Under this system, a trademarked item could be imported by a local franchise of the trademark owner, as well as another private seller.  This means that a local franchise of a brand could face competition from another seller, who could potentially be selling the same items as the brand owner for a different price.

Villanea Villegas cited the competition of parallel imports as one factor in the closure of a Gap retail store in Panama City in 2016. Licence agreements that could offer protection to trademark owners are rarely registered within the country.

According to Lupo, new legislation in the EU, meanwhile, will have an impact on transnational retailers, especially as companies rely more upon data both within wearable technology and as a tool for omni-channel marketing. This data allows retailers to track a customer’s purchases, browsing history on store websites, and even how long a customer spends in a certain section of a store.

Effective in May 2018, the EU General Data Protection Regulation, and specifically the EU-US privacy shield within it, requires that US based companies comply with stricter EU regulations to ensure customer privacy when receiving overseas data. The law could have an expensive financial implication for transnational companies which collect and store curated data on their customers, with violations potentially fined up to 4 percent of their global annual turnover.

Kenya N. Wiley, founder and CEO of the Fashion Innovative Alliance in Washington, DC, discussed the impact of new legislation in the United States in her presentation.

New wearable technologies, like smart clothing and fitness trackers, amass large amounts of data, she said. These devices are often referred to as a part of the “Internet of Things”, an interconnected network of devices beyond traditional computers.

Both existing and new software will be critical to Internet of Things items, as is their ability to digitally speak to one another, potentially raising issues in both patentability criteria and ownership, she said.

The Developing Innovation and Growing the Internet of Things (DIGIT) Act was passed in the US Senate Committee on Commerce, Science and Transportation in 2016, but not the full Senate, and was reintroduced and approved by the committee in January [corrected]. It would form a working group to establish interagency coordination to help advance the Internet of Things, to discuss this and other concerns within wearable technology, including data encryption and security. Wiley explained that the bill will create a blueprint for how public policy will move forward on these technologies.

Kim Treanor is an intern at Intellectual Property Watch, and is a student in the graduate program of International Affairs at the New School in New York, where she studies development, trade and public health.

 

Image Credits: Olivera Medenica