Toky-No Laundry! (A Creative Legal Edit: Fashion long-er read) [Amended to reflect appeal]

I can only apologise that I’ve been lax about the Fashion edition of the Creative Legal Edit. I’ve been struggling with whether to continue with it because there are so many fashion law blogs out there and the circulation list for this is much smaller than my music edition, but I decided that there is space in the market for a fashion/retail law blog through a UK/EU-centric lens.

Let’s kick things off with a fascinating long read about the tort of passing off (but it eventually boils down to contract law), which is something I love trying to explain to non-lawyers. Let me know how I did in the comments.

Toky-No Laundry!

The Superdry v Tokyo Laundry dispute was a long running dispute between everybody’s favourite nonsensical cultural appropriator of sorts, Superdry (seriously, ask a Japanese speaker what those t-shirts say) and Tokyo Laundry, a clothing brand ‘inspired’ by the former, but who quaintly adopted Chinese text on their clothing instead. The judgement took place back in November 2015, but was published this week for our enjoyment.

Copyright 101 is that there is no copyright in an idea. However, English intellectual property law does include the tort of passing off. The basic principle of passing off is that “a man is not to sell his own goods under the pretence that they are the goods of another man.” It’s a complex claim to prove and technical, often relying on consumer surveys and data to prove that consumers were “confused” by the goods. Superdry brought an action for passing off against Tokyo Laundry’s parent company SRG Apparel. This was because Tokyo Laundry used something described as a similar “get up” to Superdry. Superdry’s argument was that the “get up” had become so associated with them, they therefore had protection from anyone else using the same. The only information that we have about the claim (cobbled together from the judgement) is that the “get up” included a combination of “Japanese Elements” (which are explained as Japanese place names and Japanese characters), “Vintage Americana imagery” and a “swoosh”. Examples below:

Superdry hoodie
Tokyo Laundry hoodie

If you look at these images, you can see that nothing is actually the same/copied, so there is no copyright infringement. There is no “same overall impression” so there is no design right infringement. Tokyo Laundry have never used “Superdry” or another registered trade mark, so there is no trade mark infringement. But there are elements that are similar, and Superdry is arguing at a passing glance, a customer could be confused into thinking that the Tokyo Laundry hoodie was actually produced by Superdry. This was similar reasoning used in the Rihanna v Topshop decision.

This matter settled before it could get to court, as many of these disputes often do. When this happens, the parties negotiate and sign a settlement agreement, agreeing the terms on which they will no longer pursue this action through the courts. This is what the judgement above refers to. Tokyo Laundry and Superdry agreed to a series of statements, one of which was that Tokyo Laundry could continue to produce clothing, but only if it did not use the “Japanese elements”. Tokyo continued to produce clothing, which Superdry argued breached their agreement. Tokyo Laundry attempted to argue that the clothing was not in breach, because it only featured one of the three ”get up” elements mentioned above — the Japanese elements. Tokyo Laundry’s lawyers tried to point to the original claim which referred to the three “get up” elements, noting that the Tokyo Laundry clothing did not feature a combination of the “get up” elements mentioned in the original claim, but only one.

Without the existence of the settlement agreement, Superdry have no rights to stop anyone from producing clothing featuring “Japanese elements”. In fact, they have no right per se to stop someone from using a combination of these, because it never got to the point where the courts determined if there had been any “passing off” and whether Superdry was entitled to protection over such a combination. However, because Tokyo Laundry had agreed by settlement agreement not to use only the Japanese elements, the courts held that Tokyo Laundry had breached their contract with Superdry. It is important to note that this was not intellectual property infringement, but a contractual claim. The courts said that when negotiating a settlement agreement, parties have free reign to negotiate the clauses as they wish, so if after the date, the clauses seem to be in competition with common sense or what had previously been claimed, well... you’re stuck. You should have thought about that before hand.

This is an interesting case for those who may be on the wrong side of an IP infringement settlement agreement, as when agreed, it is binding. If Tokyo Laundry felt strongly enough that their designs did not constitute an infringement and wanted to continue using the design elements, they needed to hold firm during negotiation, and not let Superdry narrow the scope of their rights, which ultimately weakened Tokyo Laundry’s position. Of course, the big driver behind these settlements is money, and one can imagine that Superdry had the funds for a robust and lengthy negotiation, whereas a smaller outfit like Tokyo Laundry may have a financial interest in bringing the negotiations to a close quickly. Sadly, that backfired as they ended up in court regardless.

EDIT 4 March 2016:

I’ve just been informed that SRG Apparel have appealed the decision above and the appeal hearing will likely take place in 2017. Lord Justice Patten gave permission to appeal saying that the appeal had a real prospect of success. It is not obvious from the judgement at first instance, but the articles of clothing in question did not feature designs similar to the example photographs above. What is in question is Tokyo Laundry’s branding tabs (for lack of a better word) the small, 2cm x 2cm tabs you often see on sleeves or the bottom of jackets, or neck labels etc which featured Japanese elements alongside the Tokyo Laundry trade mark.

This is interesting point because it goes to the root of “confusion” which was the whole basis of the original claim that was settled (from which the settlement agreement arose). Can a 2cm x 2cm tab on the bottom of an article of clothing cause a consumer to be confused? Sometimes, yes. Levi’s have their famous red tab registered as a trade mark and will enforce their rights in this heavily. But can Superdry argue the same? It’s doubtful. Regardless, this will be an interesting appeal which will come down to a strict reading of the contract. If the appeal judge decides that Tokyo Laundry can use the Japanese elements without breaching the settlement agreement, Superdry will have a hard time in arguing they have any rights over the use of Japanese elements on clothing. Watch this space.