IP and Hair and Beauty
|L'Academie de Coiffure|
French satirical print from the 18th century
I found rather more materials on IP and hair and beauty industry than I had expected when I started to read the trade literature. Sabrina Tozzi and Rachel Boakes of Baker & McKenzie LLP have contributed IP and the beauty industry: cosmetic concerns? to Issue 50 of IP Pro Life Sciences (12 Aug 2015). Elaine Eggington of IP Pragmatics Ltd, has posted an interesting presentation entitled Innovation in the cosmetics industry to her company's website.
There are also articles about free wifi with its implications for copyright and data protection in a discussion on free wifi in the Legal Lifeline section of the National Hairdressers Federation website.There are links to the PRS for Music and Phonographic Performance Limited websites on the Hair Council links page.
All of this suggests a wider than average interest in, and understanding of, IP in the hair and beauty industry. That is consistent with my experience as a practitioner as I have recently advised a cosmetics supplier on a trade mark issue, drafted licensing and distribution agreements for a perfumier and represented a design consultancy in a dispute over who was entitled to a patent for equipment used in hairdressing.
Such interest in IP is explained by the economic importance of the hair and beauty industry. According to HABIA (the Hair and Beauty Industry Authority) some 245,795 people working for over 35,704 hairdressers, 13,107 beauty salons, 2,967 barbers, 1,512 nail bars and sundry other establishments generated £6.2 billion of revenue in 2012 which is the last year for which statistics are available. Tozzi and Boakes estimated that the beauty industry was worth £17 billion for the UK alone though they seem to have included the cosmetics industry in their figures.
Tozzi and Boakes identified
"myriad issues of relevance to the beauty industry, from parallel imports to commercial transaction considerations, but we have picked three subjects which are particularly topical in the digital age: counterfeits, lookalikes and online advertising."HABIA, however, considered the impact of globalization and technology to be
"muted and limited to use of ICT in the management of bookings, relationships with consumers and global trends in image and fashion.Also, the Authority expected innovation rates
"to be slight, with some innovation in products but with most hairdressing and beauty treatments remaining essentially the same."The difference between HABIA and Tozzi and Boakes can probably be explained by the latter's including the cosmetics industry into their study. Although there is some overlap between cosmetics and other products manufacturers and the salons and other businesses that apply or distribute them it is probably better to consider them separately. The former supply goods and the latter services. It is hairdressers and beauticians who have contact with consumers. They are much more likely to be small and medium enterprises. For that reason this article will concentrate on matters that would concern a salon owner - particularly one starting out in business.
The name by which a business is known is particularly important since reputation is spread by word of mouth. It is much easier to remember the name of a business than its postal address or even the name of its proprietor. Wherever practicable, salon owners should register registering their business names as trade marks for the services and any products that they supply or intend to supply over the next 5 years. Trade mark registration is essential should they ever wish to franchise their business. It is also helpful should their domain name be challenged under the Uniform Domain Name Dispute Resolution Policy or Nominet's Dispute Resolution Service. For more information about trade marks, see the Trade Marks FAQ,
As customers often develop a relationship with stylists it is important to protect the business's goodwill by including a restrictive covenant in each stylist's employment contract. A restrictive covenant is an agreement between an employer and employee that the employee will not work within a specified area, in a particular capacity or for a certain period of time after leaving the employer's business. The purpose of the covenant is to give the departing employee's successor a reasonable opportunity to make him or herself known to the customers who dealt with the departing employee. Very great care should be taken with drawing up the covenant because a restrictive covenant is illegal and thus void unless it is reasonable having regard to the interests of the parties and the public interest. If, for example, a geographical restriction is too wide or the time is too long the covenant will be unreasonable and thus void.
Salon owners are likely to hold customer lists and other sensitive business information on computer. The use of such information by departing employees or others has always been prevented by the law of confidence (see Trade Secrets FAQ). Any information that is arranged in a systematic or methodical way that is individually accessible is now protected from extraction or re-utilization by a new IP right known as database right pursuant to The Copyrights and Rights in Database Regulations 1997.
The rights mentioned above are enforced by proceedings in the civil courts, The courts will grant injunctions (order to do or refrain from doing something on pain of imprisonment or other penalty for disobedience) and award compensation ("damages") for any loss sustained or make the infrnger account for and surrender any moneys or other benefits that he or she has gained from any wrongdoing. Proceedings in England and Wales may be brought in the Chancery Division of the High Court or the County Court either in London or in Birmingham, Bristol, Cardiff, Caernarfon, Leeds, Liverpool, Manchester, Mold, Newcastle upon Tyne or Preston. Claims under £500,000 that can be tried within 2 days can be brought in the Intellectual Property Enterprise Court ("IPEC"). Claims for less than £10,000 can be brought in the small claims track of IPEC.
Salon owners need to be mindful of the IP rights of third parties. The software they use in their businesses is likely to be copyright works. They can only be loaded and run only with the permission of the copyright owner which is usually set out in their end user licences. Similarly, any recorded music they play in their salons must be licensed by the PRS for Music or other collecting society, They must not allow their wifi services to be used for downloading infringing copied of films, sound recordings or other copyright works. They must take care not to use counterfeit cosmetics or other products,
IP litigation is expensive and is not usually covered by most legal insurance policies. Unless other funding is in place it is prudent to obtain cover against for claims against infringers as well as claims by third parties for infringing their IP rights.
Anyone wishing to discuss this article or IP and hair and beauty generally should call me during office hours on +44 (0)20 7404 5252 or send me a message through my contact form.