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PROTECTING BRAND INTELLECTUAL PROPERTY
The Legalities of Pre-Loved Designer Fashion
The fashion industry, a juggernaut of the global economy, has seen an emerging trend that combines sustainable practices with high-end style: the market for vintage and second-hand designer fashion. As this market continues to grow, it’s important to understand the intricate legalities involved in buying and selling pre-owned designer clothing.
Second-hand luxury re-sale is on the rise and so are concerns regarding authenticity, modification, and market control. The stakes are now higher than ever: according to Vogue, “ in 2019, resale grew 25 times faster than retail — and what is now a $28 billion second-hand-apparel market will more than double to an astonishing $64 billion by 2024.”
RE-SELLING IS LEGAL
There are many reasons why people resell their products in the UK. For some people, they no longer need them, many want to allow others to be able to enjoy their pre-loved luxuries, some of us want to keep quality items in the loop and circular; helping to achieve global sustainability aims.
We also have many retail businesses like our's who buy, sell, hire, authenticate and source pre-loved products. Whatever your reason, understanding the laws that govern reselling products in the UK is important to stay compliant.
For this reason we summarise the relevant laws on reselling products, helping others fully understand the intricate legalities involved in buying and selling pre-owned designer clothing, whilst remaining on the right side of the law.
RELEVANT LAWS
Copyright and Trademark Laws: The Foundation of Authentic Resale
Intellectual property rights, specifically copyright and trademark laws, serve as the foundation for the legal operation of the second-hand designer fashion market. Copyright law protects original designs while trademark law safeguards brand logos and names. In this sphere, it’s crucial to ensure that items sold are authentic and don’t infringe upon the designer’s intellectual property rights.
Selling a counterfeit dress that mirrors a famous designer’s work could lead to a lawsuit for copyright infringement. Similarly, using a designer’s logo without permission may result in a trademark infringement suit. Sellers, like us, must conduct thorough due diligence to authenticate the items they sell and ensure they abide by the law.
Key Points:
We are able to sell, display, and offer goods under original trademark pursuant to the first sale doctrine. However, the first sale doctrine does not protect a someone who makes or sells a reproduction of a copyrighted work. Similarly, the first sale doctrine does not apply to an item that is materially different than the one sold by the trademark holder. As we only re-sell authentic items we fully support and uphold copyright and trademark laws.
We are particularly passionate about luxury children wear, quality, care and authenticity. We value our global community of circular fashion lovers visiting our online store every day and therefore quality control is essential and central to every single stage of our work. You can rest assured with our 8 Step Quality & Assurance Process. This ensures that only the highest quality & 100% authentic collections are stocked.
The 2015 Consumer Rights
The 2015 Consumer Rights Act is an important law on reselling products in the UK that covers the sale and supply of goods, digital content and services in the country. This law provides and protects consumer rights as they purchase products and services. For example, the 2015 Consumer Rights Act permits a customer to request for repair, replacement or return of a item purchased. (we offer a 14 day returns policy). Whether it is a new product or a used one, the Consumer Rights Act protects the interest of our customers.
Key Points: All our product descriptions are accurate and we have a clear refund and return policy for all our products.
Marketing and Advertising Laws
Another set of laws we consider when re-selling online are the marketing and advertising laws. These laws are in place to restrict vendors who might attempt to exaggerate the benefits or quality of their products. Typically, marketing and advertising laws protect customers from false or misleading adverts.
We are very cautious of our marketing language and advertising claims made about our products. From the product descriptions to photos, videos and promotional content, every claim is within reasonable facts.
Additional considerations under the marketing and advertising laws are for us the vendor to clarify our product prices and delivery charges whenever applicable. We state the terms and conditions of every promotional strategy such as discount sales so that customers can know exactly what to expect.
Key Points: We give all our customers a view of the RRP (the recommended retail price) as well as our price, and the potential saving. We grade all our products and ensure the descriptions are a accurate reflection on the actual item.
Online Sales Regulations
All business vendors reselling products online in the UK must take note of important online sales regulations like the 2013 Consumer Contracts Regulations. These laws cover vital e-commerce transaction details like distance selling and the 2002 Electronic Commerce Regulations.
The 2013 Consumer Contracts Regulations, apply to any business contract between the seller and consumer that is concluded electronically online or over the phone. The regulation further protects stated consumer rights during online purchases and grants them the right to cancel orders or ask for a refund within 14 days if the provided goods are not as described.
The 2002 Electronic Commerce Regulations also apply to businesses selling goods and services online. The regulation makes provisions for common issues associated with website design, payment methods and delivery charges.
Key Points: As a business vendor, we ensure that our official website or social media page complies with all these online sales regulations. We have clearly stated terms and conditions and a documented privacy policy that complies with the 2018 Data Protection Act and GDPR.
The Data Protection Act 2018 & GDPR
The Data Protection Act 2018 is the UK's implementation of the General Data Protection Regulation (GDPR). Everyone responsible for using personal data has to follow strict rules called 'data protection principles'. They must make sure the information is: used fairly, lawfully and transparently.
These laws protect personal data when reselling products in the UK. Certain business processes might require the vendor to collect and store the personal data of customers such as their name, address and email address. The Data Protection Act ensures there is a valid reason for every piece of data relating to a customer that is collected. This includes personal details such as name and address, plus more obscure information like website visits. Data collected must only be for valid reasons and these reasons must be shared with customers at the point their data is collected.
Key Points:
We allow customers to see how we process and share their data. All Data protection & GDPR information is available on within our website terms and managed viu our privacy policy.
Tax Laws on Reselling Products
The tax laws on reselling products in the UK regulate how your profits are taxed. Reselling is considered a business activity and therefore earnings made will fall under taxable income.
Learn how the tax laws on resold products work and the registration process to start filing returns:
Income Tax is payable on the profits made by individuals who resell products in the UK and Corporation Tax is payable on the profits of companies that resell products.
Individual business vendors are required to register for self-assessment with the HMRC to file their tax returns annually if they make over £1000 profits.
Company resellers will have to register for Corporation tax with the HMRC to file their company tax returns annually.
Whether you resell products as an individual vendor or corporate company, you must pay VAT on every product sold. VAT is defined as a tax on the sales of goods and services in the UK.
Registration with the HMRC is very important and you should contact them if you have questions about the process or think you might have missed important payment deadlines.
Additional information about the tax laws on reselling products in the UK is available on the HMRC website.
We operate the website and marketplace www.designerkidsclub.com. We Designer Kids Club Ltd, are registered in the United Kingdom under company number 15507491. Our registered office and main trading address is Apt 212 Metropolitan Apartments, 20 Lee Street, Leicester, LE1 3RF.
The Challenges of Buying/Selling Pre-Loved Designer Fashion:An Uphill Battle
The second-hand designer fashion market has its own challenges. With so many platforms such as vinted, poshmark, ebay, facebook groups etc it is very difficult for consumers and businesses to protect brand IP and ensure only authentic items are brought & sold.
We can broadly categorize some of the challenges into four groups:
Challenge 1: Assessing the Condition and Quality of the Product
Tip 1: Customers should carefully and thoroughly examine the item. Pay close attention to delicate areas and inspect the garments or accessories for signs of compromised quality, especially enclosures, zip, padlocks, pockets etc.
Tip 2: Only purchase from reputable and trusted sellers. Businesses will usually have a quality and assurance process.
Challenge 2: Identifying and Avoiding Counterfeit Products
Tip 3: It’s important to research the brand’s authentication guidelines and study the specific features, logos, patterns, and materials commonly used in authentic items.
There are many free online guides to help you through the process, we particularly like Legitgrails, who have an entire library of free guides.
Businesses usually authenticate their own items via a third party provider such as Entrupty.
Tip 4: Purchase from well-established vintage stores, consignment shops, or online platforms that have robust authentication processes and positive reviews. Avoid buying from suspicious or unknown sellers. Look for any inconsistencies in craftsmanship, materials, or packaging.
Challenge 3: Hygiene Concerns
Tip 5: Upon receiving the item, consider washing or dry-cleaning it according to the manufacturer’s instructions as mentioned on the product. If no such instructions are mentioned, one can seek professional cleaning services to ensure hygiene, or contact the seller/businesses for more care instructions.
Challenge 4: Warranties and Returns
Tip 6: Before buying, review the seller’s policies regarding warranties, returns, and exchanges. Don’t hesitate to clarify any doubts or concerns you may have.
Ask About Guarantees: Inquire about any guarantees offered by the seller regarding the authenticity and condition of the item.
A BALANCING ACT-
The fashion industry has seen its fair share of legal disputes related to copyright and trademark infringements in the resale market.
- In 2019, Chanel sued The RealReal for selling counterfeit Chanel bags.
- The Rolex Watch USA, Inc. v. Meece case 1998 is the most instructive case regarding the second hand luxury goods market and what level of “materially different” constitutes trademark infringement.
- Tiffany (NJ) Inc. v. eBay Inc. 2010 was the first case to apply the concept of contributory trademark infringement to an online marketplace. In this case, Tiffany & Co. ("Tiffany"), a seller of branded jewelry, among other items, sued eBay, an online marketplace that connected various buyers and sellers, for trademark infringement and other claims in relation to eBay's advertising and listing practices.
Consumers who care about bargains and sustainability are fueling other re-sale platforms like Poshmark, Vestaire Collective, and many others. Brands, and consumers, still need to grapple with modified luxury second hand goods and counterfeits.
By silently chipping away at ways an individual can sell their luxury goods, luxury brands are protecting the market for their new goods while also making it difficult for former customers to tap into the equity of their luxury investments.
Previous precedent, specifically regarding control over product, may result in a stop to innovation in the second-hand luxury goods market. Companies that take possession of goods in an effort to provide authentication must be correct regarding its assessments one hundred percent of the time to escape potential liability. Or, a company may switch to a business model in which it does not take possession of goods, even if that theoretically means that more inauthentic items end up being sold to consumers.
Disincentivizing control over goods results in platforms adopting a hands-off approach regarding sales. While companies like The RealReal should not make absolutist guarantees regarding authenticity, improvement in preventing counterfeit items from entering the stream of commerce should be encouraged.
Until luxury brands and secondhand re-sellers agree to co-exist, by finding a balance luxury second-hand goods are stuck being sold in a manner that rewards a certain lack of oversight.
" TOGETHER WE ARE STRONGER, LET'S UNITE TO BRING ABOUT POSITIVE CHANGE"
Innovation and Adaptation in the Second-hand Fashion Industry: Shaping the Future of Fashion
Companies like Thredup and Poshmark have revolutionized the sector, providing an easy and convenient platform for people to buy and sell pre-owned designer fashion. Thredup, with over 10 million members, has raised over $100 million in funding, demonstrating the viability of this business model. Poshmark, with its 60 million users, has facilitated over $10 billion in sales, again validating the strong demand for second-hand designer fashion.
Both Thredup and Poshmark have thrived by providing seamless customer experiences and by spreading awareness of the environmental and social advantages of buying vintage and second-hand clothing.
Future Trends for the Resale Market for Vintage and Second-hand Designer Fashion: Moving Towards a Sustainable Future
As the demand for sustainable and ethical fashion continues to grow, the vintage and second-hand designer fashion market is expected to flourish. Developments in technology may help address current challenges, such as verifying the authenticity of items by using blockchain technology.
THE FUTURE: OUR FINAL THOUGHTS
The second-hand designer fashion market presents a fascinating blend of opportunities, challenges, and responsibilities. While navigating the complex legalities of copyright and trademark laws is essential, so is the capacity to adapt and innovate in the face of challenges. The potential economic, environmental, and social benefits make this sector an exciting frontier in fashion.
Second-hand luxury re-sale is on the rise and it will only continue to grow. In 2019, the resale grew 25 times faster than retail — and what is now a $28 billion second-hand-apparel market will more than double to an astonishing $64 billion by 2024.”
Luxury brands and secondhand re-sellers must agree to co-exist. We refuse to be limited and restricted, hindering our ability to educate, challenge, disrupt and re-invent the current fashion landscape.
We will fight on to bring about much needed change for the betterment of our planet and our people.
Our mission is to promote sustainability and conscious consumption through circular fashion principles with the buying, selling and hiring of luxury, designer preloved children's clothing. We are committed to extending the lifespan of garments, reducing waste, and minimizing the environmental footprint of the fashion industry.
Through our online platform, we strive to empower and educate individuals to make mindful choices by offering them a high-quality preloved clothing option as an alternative to buying new. Allowing them to appreciate and embrace the beauty of circular fashion - a harmonious dance between luxury fashion, environmental responsibility and the celebration of personal style.
We believe that by adopting a circular economy for luxury childrenswear, everyone can have access to the clothes they need, when they need them, whilst capturing the full value of clothing during and after use.
We hope that in the future circular fashion will no longer be just a movement; it will be a way of life, and that our journey will leave a small but indelible mark on the fashion landscape, inspiring change one t- shirt at a time.
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