Trademark Industry Insights - Material World: IPR in the Textiles Trade
What can the World of Trademarks tell us about the Fabric industry? A multitude of intellectual property rights apply to the design and production of fabrics - the development of new threads or weaves may qualify for patent protection, the artwork or designs might be covered under copyright and different aspects of both of these can be protected by a registered trademark.
Copyright protects the artistry involved in the designs and the purpose of a trademark is to identify the source of a particular fabric. Trademark registrations are classified according to the Nice Classification system - a somewhat arbitrary grouping of goods and services. Textiles (the focus of this paper) sit across Class 24 while many of the secondary products created from the fabrics will sit across other classes. Examination of the international trademark registration databases can show you some of the growth and challenges in the industry.
And there’s more! The analysis of trademark information in any industry provides one of the most reliable business intelligence tools available - illustrating emerging markets and trends as well as those in decline and give you a snapshot of not only the movers and shakers in your industry today….but also indicate what tomorrow might bring.
LIVE TRADEMARKS BY JURISDICTION - NICE CLASS 24
The fabric industry is a global market that has seen huge growth over the past half a century, Euler Hermes (global trade insurance company) values the industry at $439.1 Billion (USD). 2016 was considered a challenging year even though prices largely remained stable, international trade which accounts for a third of total output lost $40bn worth of business. 2017 didn’t get off to a good start either with the Office of National Statistics reporting the first quarterly decline in retail sales since 2013. KPMG suggests that a late easter, increased input costs, petrol pump prices and rising inflation all contributed to this downturn.
For those well versed in the tumultuous history and economics of fabrics and textiles, they are unlikely to be put off by the latest economic reports. Historically textiles have seen and overcome numerous seismic shifts (country recessions, crop damage and lack of product), and still continued to experience growth which can be seen in trademark data. A fact that illustrates the importance of intellectual property and the role it plays in the textile industry.
TRADEMARKS REGISTERED BY YEAR (1980 - 2016) - NICE CLASS 24
When filtering on marks that have NICE Class 24 designated and tracking these applications you can near enough determine when new production techniques became ubiquitous across the industry (1980’s onwards) with a “hockey-stick” rise in trademark applications. While this did in the short term, have a detrimental impact on employment rates, the industry saw explosive innovation and a tremendous increase in wealth generation.
The question is with a 3.2% drop in trademark applications in 2016, double that of 2008 (-1.5%) can we be bold enough to state that the fabric industry is facing its next “challenge”? How can we expect the industry to respond?
The textile industry has experienced earth shattering change which can be pin-pointed to the early 19th century. Most famously with the Luddite protest movement whereby skilled handloom weavers rebelled against the industrialization and mechanization of the fabrication process. Now, factories are a modern metropolis of computer automation producing advanced technical materials that increasingly have numerous applications from increasing the performance of athletes, supporting health and rehabilitation, conserving energy, reducing pollution and the list goes on.
"Textiles are also showing up in road construction and environmental applications, ... there is much activity today that extends far beyond clothing and home furnishings."
Jonathan A. Stevens, CEO, American Textile History Museum in Lowell, MA
Noticeably there is a fast rise of trademark applications that stems from the 1960s which was when new production centres began rapidly springing up in Asia. This trend didn’t stay in the sixties, developing countries continued to produce a greater share of textiles throughout the 1970’s increasing 300% to account for more than 21% of the world’s supply by 1980.
This steady increase year-on-year continued right on up to 2008 which then saw a -1.5% and subsequently a -8.8% drop in trademark applications in those years.
TRADEMARK APPLICATIONS (2007 - 2010) - NICE CLASS 24
This fall in the number of trademark applications could be linked to the increase in cotton prices in the late 2000s and was due to problems with the crop at that time. This demand for cotton from the market was the same (if not higher) and meant that the cotton that was available was sold quickly. The mismatch in supply and demand affected the price of consumer products containing cotton and impacted sales due to the rise in cost.
The creation of textiles and their distribution globally has changed massively, with the number of production centres decreasing across Europe and North America, and developing countries mainly across Asia experiencing fast growth. As far back as 1990, Germany was the largest exporter of textiles producing 12 percent of world exports in value.
When looking at the geographical spread of trademarks that contain Nice class 24 it is no surprise to see China at the top. The world leader in textiles has achieved a 30% growth in trademark applications in this market since 2011, its success came from focusing on domestic markets and technical textiles - it has sustained and seen an uptick in growth.
RATIO OF TRADEMARKS SELECTED BY PTO WITH NICE CLASS 24
China’s biggest advantage is that it is able to export its fabric at such a low cost comparatively to Brazil who are much lower down the list. This is due to three main factors;
- Low Wages - Chinese textile workers are some of the lowest paid in the industry
- Investment - China puts a significant amount of money and time into scientific textile research and development. Placing it at the forefront of developing the latest technical textiles & new synthetic fibres.
- Large Silk/Cotton Producer - Which means this base product is available domestically and they can sell this commodity to countries who are not able to grow their own as steadily.
China is expected to see increased competition from countries such as Brazil, Vietnam, India, and Japan. These countries create more similar types of fabrics to China than most Western countries, however as long as China can create more and at a cheaper cost than any other country it will maintain its number one position.
Market Challenges - Textiles & Trademarks
The manufacturers of textiles for use in the home face a number of challenges, not least of which is the wide variety of potential end consumers and their sophistication and attention level to the source of the goods. A mill producing upholstery fabric may find themselves with several types of consumer.
In the first instance, their fabric may be purchased by a large scale manufacturer of furniture who will likely be familiar with the work of different mills and their related patent, copyright or trademark protections. Equally, the bulk of the material may be purchased by fabric retailers and sold on to the general public.
The international crafting world is huge and growing all the time. Many of these crafters will use fabrics for their projects that they have purchased and this can present a number of potential infringement headaches!
Copyright is often the first issue and in many cases, use of fabrics in the US will be covered by the Doctrine of First Sale which provides that legitimately purchased items protected by copyright may indeed be sold on. Trademark registrations however, are governed by the Lanham Act and are designed to clearly identify the source of the goods. Where the fabric features trademarked logos or design elements, confusion arises as to what exactly crafters are permitted to do with such fabric and how they can present such items for sale to prevent their handmade products from being confused with those produced by the trademark owner.
Threads of Tomorrow (Trends)
Fabrics are most commonly associated with being used in the household including linen, pillows, curtains etc. however when used within an industrial environment are referred to as technical textiles where the primary requirement is more about function and performance. It is this area that is seeing considerable innovation globally with large investment, and is tipped to see huge growth.
DNA Clothing - Counterfeiting is a serious problem for the textile industry, manufacturers are investigating ways in which they can combine certain chemicals that will halt the black market in fake goods with the additional benefit of assuring buyers of a product's authenticity and provenance.
Nanotechnology - Still in its infancy the textile industry is applying nanoscience to fabric that have water-repellent, self-cleaning, and fire-repellent properties. Additionally the industry is developing methods which use less energy in the process of textile design, fabrication, and manufacturing.
"At the same time, there has been spectacular development of innovative textile materials for a wide range of high-value items."
David Brookstein, Executive Dean, Philadelphia University & a Fellow of ASME
Production Advancements - Technology is enabling the production of more lightweight and durable materials and with the use of 3D printers fabrics are being printed. In addition it is creating new composite materials which has the potential to bring improvements to medical implants and other technical textiles.
Smart Clothing - Smartphones are everywhere so it is no surprise that the textile industry is looking for ways to interact with this technology. Chips can be placed within textiles which can send information to individuals phones, conceptually you could track clothing items or measure vital signs.
Other trends that are being researched and developed are color-adaptive fabrics, non-woven fabrics and textile environmental sustainability.
Commodity prices are forecasted to rise in the US and China, and as witnessed in the late 2000s if that increase is passed onto the customer this will impact sales and erode margins.
TRADEMARK APPLICATIONS (2014 - 2016) - NICE CLASS 24
Regardless, exports are expected to climb by +3.5% not barring any major international trade interruptions, however with the US pulling out of the ‘Trans-Pacific Partnership’ agreement it now may be too late. It is likely expected regional trade agreements will be put in place which could see tariffs and regulations increase, a serious factor considered to be slowing the growth of the textile industry.
The textile industry is vast, one of the largest in the world employing millions of people globally and is currently undergoing a fundamental change. The industry originally focused on the end product, now it is combining science and technology creating innovations in the world of fabrics. Countries are choosing their own direction but many are investing in new machines and technology to gain a larger share of this market - especially with the expectation that technical textiles offers more resilience to market fluctuations.