IP Considerations For Art-Fashion Collaborations

| Jan 27, 2021 | Firm News

vivek
In the 1930s, Italian fashion designer Elsa Schiaparelli, known for her avant-garde gowns and other couture creations, struck up a fast friendship with surrealist artist Salvador Dali.

By then, Dali had generally well-received solo shows in Paris, London and New York’s Museum of Modern Art and was already on his way to becoming an extraordinary force in the art world globally.

Dali, long interested in fashion, deeply admired Schiaparelli, whose fashion house thrived in the 1930s and 1940s before closing in 1954. In 1937, the two collaborated on the now iconic lobster dress, in which Dali’s lobster drawing was placed onto silk organza fabric.

Some 80 years later, the market for collaborations between contemporary artists and fashion designers is more robust than ever. Andy Warhol, Jean-Michel Baquiat, Tracy Emin and Damien Hirst are a few of the renowned artists who, over the years, have lent their artwork — or something evoking the look and feel of their work — to major fashion houses for use on splashy new lines of designer clothing.

More recently, creative directors such as Kim Jones of Christian Dior Inc. have made it an annual ritual to work with some of today’s leading contemporary artists such as KAWS, Daniel Arsham, Hajime Sorayama and Amoako Boafo.

Whether it’s Dail’s lobster drawing from the mid 1930s or the breathtaking brushstrokes from Boafo’s latest pandemic portraits, there are at least three primary concerns for artists and the attorneys advising them when negotiating a collaboration with a fashion company.

First, artists should make sure they retain and protect their intellectual property within the context of the collaboration. Second, artists need to think creatively and protect their IP comprehensively in a manner that looks beyond traditional copyright protection. And third, artists must beware of serious pitfalls in agreeing to restrictive covenants.

Copyright

Artists generally own the intellectual property in the artwork they make. When a collector, for example, buys a painting by Boafo for a substantial sum of money, he or she is buying the physical painting, but he or she does not own the IP, absent some off-market or unusual agreement.

Why does this matter? Title 17 of the U.S. Code, Section 106, grants copyright holders a bundle of rights that include the exclusive rights to reproduce the work, make derivative works, transfer the work, and control the public display of the work. Artists must ensure that these rights remain with them as they negotiate their deals with fashion companies.

For example, a Boafo painting was used in collaboration with Dior to create a turtlenecked sweater for its summer 2021 men’s line. If Boafo had created this work as a work made for hire under the Copyright Act, Dior — and not the artist — would receive the bundle of exclusive rights set forth in the prior paragraph. Under Section 101 of the Copyright Act, if a work is made for hire, the company for whom the work was prepared is the initial owner of the copyright unless both parties involved have signed a written agreement to the contrary.

That means, for example, that if Dior and Boafo had agreed in their contract that his contribution to the Dior project was a work made for hire, then Dior would be able to do whatever it pleased with the work: place it on a T-shirt, display it on its website forever, or modify the work to make derivative works for any use it deems desirable. There is another shocking possibility: Dior could prevent Boafo from displaying the work or making works that are substantially similar to the image appearing on the sweater.

There is an important practice pointer here. Boafo, like many contemporary artists, has a uniquely specific point of view. As a result, his most recent body of portrait work has a recognizable look and feel. Some subjects are painted more than once.

Practitioners, who can imagine the scenario in which an emerging artist gets the opportunity to work with a major international company, need to be aware of the work-for-hire conundrum. That is, an artist’s agreement with the company that the artist’s work will be a work made for hire under the U.S. Copyright Act means that Dior would receive and could enforce the exclusive bundle of rights — including the right to make derivative works — that all copyright holders receive.

From a practical standpoint, it would be detrimental to Boafo’s body of work, and, quite possibly, to his career, if he were prohibited from making work that is substantially similar to the work appearing on the Dior sweater merely because he conferred rights in one piece to Dior under the Copyright Act.

The concept of ownership in the collaboration context might be easier to understand when viewed through the lens of other creative endeavors. For example, when a fashion company wants to use a Cardi B song in an advertisement, it doesn’t seek to own the composition or publishing rights. The company becomes a licensee for a very specific and narrow purpose — the commercial or other advertisement.

When that same company wants to use a clip from a Wes Anderson film to sell its latest sneakers, it does not structure the deal in a way that confers the copyright ownership in the film onto the company; it takes a narrowly tailored license. Fashion companies need to understand that when collaborating with a visual artist, they cannot expect to own the IP.

Unless the artist’s counsel argues otherwise, fashion companies historically retain all IP in their designs and creations to maximize flexibility and enterprise value. But so do artists. The conflict between these competing interests sets the stage for negotiations between parties to a collaboration deal. For fashion companies, a collaboration is a temporary way to curry interest from consumers.

For artists, however, the repercussions from failing to retain IP rights in writing when agreeing to terms on a collaboration deal are potentially quite severe and can outlive the collaboration itself. Artists should retain their IP and license their work in a thoughtful way that allows the company to meaningfully use the work in conjunction with the collaboration. That license, however, should not be so broad that it jeopardizes the artist’s ability to control and commercially exploit her work in the future.

Trademark

As most IP practitioners know, works of authorship are immediately protected by Section 102 of the Copyright Act upon creation, provided that they are original works fixed to any tangible medium. However, given the increasingly commercial nature of visual artists’ careers, trademark law — an area less explored by attorneys in protecting artwork — should also be considered when developing a comprehensive strategy to protect artists’ work.

Let’s revisit Dali’s lobster for a moment. Dali first used it conceptually in 1936 while making the “Lobster Telephone” sculpture, then an original lobster drawing was eventually used on the lobster dress. The lobster drawing, if made today, would undoubtedly be covered and protected by the Copyright Act. But Dali’s lobster — like the Lacoste alligator or Ralph Lauren Corp.’s polo horse — could also benefit handsomely from the protections afforded to companies under the Lanham Act.

By registering the lobster as a design mark in International Class 25 for clothing, Dali would enjoy the exclusive right to use that lobster on clothing, including the dress but also including other types of garments. Doing so would ensure that third parties don’t use the lobster in a way that confuses consumers into believing that these parties are either Dali or someone lawfully affiliated with Dali.

With this in mind, artists can imagine more contemporary artists like the Los Angeles-based duo Friends With You – known in part for their recognizable cloud characters featured in Macy’s Inc.’s 2018 Thanksgiving Day Parade – obtaining similar trademark protection, in addition to copyright, to commercialize their work on things like hats or clothing. In other words, artists interested in using their work on products to be sold in multiples or large quantities, as opposed to one unique piece of art, might benefit from using trademark law to protect their IP.

Trademark law is a more appropriate vehicle than copyright law to protect images that connect a consumer’s mind to a specific product or service. The Lanham Act defines a trademark as a word, phrase, logo, graphic symbol or other device that identifies the source of a product or service and distinguishes it from competitors. These trademarks generally come in two varieties: (1) a word mark, e.g., “Nike” for apparel, “Tesla” for automobiles and “Microsoft” for software; and (b) design marks, e.g., Target Corp.’s bullseye, McDonald’s Corp.’s golden arches or Chanel’s interlocking “C’s.”

Copyright, on the other hand, protects works of original authorship, like literary works, motion pictures and sculptural works. Many designs can be protected under both laws — e.g., the Nike Inc. swoosh, which is a logo protected by the Lanham Act but also an original piece of graphic or visual art subject to protection under the Copyright Act. Artists creating products with certain logos or graphic images that consumers associate with the artist’s work should explore trademark protection to acquire the rights afforded under Section 1114 of the Lanham Act that permit enjoining confusingly similar uses.

There’s another practical piece that is worth mentioning here. Copyright holders cannot bring suit unless and until they have a copyright registration; the U.S. Supreme Court recently made clear in the 2019 case Fourth Estate Public Benefit Corp. v. Wall- Street.com LLC that the application approach — in which copyright holders could file suit as long as an application was pending — no longer applies in federal court.

Trademark holders, on the other hand, can file suit as long as they are using a mark in commerce. No registration is required. Accordingly, when artists do not have a copyright registration, they can move quickly in filing suit by relying on their unregistered trademark rights.

Restrictive Covenants

Fashion collaboration deals are all about value, and fashion companies know that few things are as valuable as scarcity and exclusivity. That’s why most artist-fashion collaborations include the kinds of restrictive covenants that companies use all the time to ensure that their employees and critical vendors aren’t providing similar value to competitors.

The most common or typical restriction might prohibit the artist from working with a competing company for a period of time. At first blush, this type of restriction might seem reasonable: Would consumers swoon over a 2022 Boafo post-Dior collaboration with Gucci Group NV?

But many artists, especially those that are emerging and at the precipice of financial success and stability, often agree to contractual restrictions without considering whether they are hamstringing future marketing efforts by agreeing to lengthy or overbroad restrictions.

One solution here for practitioners is to demand clarity: specific written limitations on time — which, in the fashion context, should be described in terms of a season, not years, as is the case in the employment and other contexts — and scope, including a written list of companies that the artist is prohibited from working with. Simply agreeing not to work with “other luxury brands” for a period of time is insufficient and ambiguous, and it invites parties to dispute the applicability.

Attorneys advising artists on restrictive provisions in a fashion collaboration deal should be aware of the so-called janitor rule followed by some jurisdictions. This rule basically says that a court will not enforce a noncompete agreement if it restricts the scope of an employee’s future employment without limits, unrelated to the legitimate business interests recognized in that jurisdiction.

In other words, if the clause is drafted so broadly that it would prevent the artist from working as a janitor for a competitor, the court will likely disregard the provision entirely since no company would have a legitimate business interest in ensuring that the artist does not work as a janitor for a competitor. Using the janitor rule as a negotiation point while drafting restrictive covenants forces the parties to clearly articulate what an artist can and cannot do, specifically, with a competitor.

Another less common but potentially important issue relates to confidentiality. Almost every fashion collaboration deal will include boilerplate confidentiality provisions that generally prohibit the artist from using confidential information during or after the conclusion of the agreement. While this might seem routine or benign, fashion companies may become perturbed if they see the artist working with a competitor, even if doing so does not violate any of the other restrictive covenants.

In these instances, the company might — simply to express frustration at the new collaboration with a competitor — try to argue that the artist has confidential Information that it took from the first deal. Before agreeing to a blanket confidentiality provision, attorneys should consider asking the fashion company to clearly identify what information it will actually provide to the artist that is confidential. That way, the universe of what could be subject to a violation is limited.

Conclusion

Creativity will be the most sought-after skill in the next generation, which is one reason why global fashion companies fixated on profit are turning to contemporary artists to boost sales and maintain relevance. Artists interested in collaborating in this manner need to pay attention to their IP, explore robust IP protection, and limit restrictions where possible.

Artists and their counsel should be carefully examining these three areas when structuring the deal as a whole. At first blush, a handsome fee to collaborate with a global fashion company might seem attractive to an emerging or even established artist. But if that fee requires the artist to strip herself of IP rights — and essentially liquidate the IP — or imposes other unreasonable burdens on the artist’s ability to enjoy the benefits of IP ownership in the future, terms like price should be adjusted accordingly.

Dali said, “A true artist is not one who is inspired, but one who inspires others.” If the market for artist collaborations in 2021 is any indication, artists are inspiring companies around the world to work with them on deals that are changing the landscape of industries like fashion, automobiles and even technology.

Artists unable or unwilling to work in this commercial universe may be foregoing career- changing opportunities. And companies focused on traditional deal structures that do not resolve the artist’s concerns risk joining the ranks of the irrelevant. Together, however, the future can be extraordinary.

Vivek Jayaram is the founder at Jayaram Law Inc.

The opinions expressed are those of the author(s) and do not necessarily reflect the views of the firm, its clients or Portfolio Media Inc., or any of its or their respective affiliates. This article is for general information purposes and is not intended to be and should not be taken as legal advice.