H&M and patents often live in two completely separate worlds. As of late, however, they have collided. While H&M, the Swedish fast fashion giant, needs no introduction, patents may require a slight refresher. As a form of intellectual property protection, patents protect things that are new and inventive, including processes, machines, articles of manufacture, etc. They work well for engineering and pharmaceutical industries where lots of time and money is invested on research and development. In return for the time and money spent on that development, patent protection provides a monopoly for patent holders for up to 20 years per patented invention.
Patents are all about long term return on investment, and so, they tend to work less well for fast paced industries like fashion (although this may change as wearable fashion goes mainstream). As well as taking a long time to be granted, they are also very expensive not just in terms of filing fees but also in legal fees. This means that they only really make sense in fashion for new manufacturing processes or new fabrics.
Design patents (as they are called in the USA) and registered designs (in Europe) tend to be the more useful form of patent protection for the fashion industry, as these patents protect things like the shape of a product and, in Europe can even cover surface decoration such as a fabric pattern or stitching design (provided it is sufficiently different from previous designs in the market).
With that out of the way, consider Stretchline, a company based in the British Virgin Islands, which owns various patents including one for a method of manufacturing tubular fabric for use in bras. The patent aims to counter one of the classic problems with underwire bras: the underwiring coming loose and damaging the bra often following machine washing. The patent claims to have come up with a clever way of fusing different yarns together so that they can better protect the underwire and consequently reduce the problem.
Stretchline licences this patent to various bra-related businesses that use the tubular fabric method. If any businesses refuse to license the method and use it anyway, Stretchline threatens to sue for patent infringement. In 2009, Stretchline first noticed that some of H&M’s bras infringed its patent. H&M initially refused to take a licence but following mediation with Stretchline in 2011, they settled the issue and H&M agreed to not sell bras, which used this method of manufacture in the future. Peace only lasted about a year until Stretchline learned that H&M was selling infringing bras … again. It is now suing H&M for breach of the settlement agreement.
The case is still rumbling on but this dispute is notable for two reasons:
First – normally if you are accused of patent infringement, you would defend yourself on the basis that (1) you haven’t infringed the patent and (2) the patent is not valid – and you can’t infringe an invalid patent. Because the settlement agreement was stated to be in full and final settlement and included an agreement not to sue, the English High Court and Court of Appeal both found that H&M is contractually barred from challenging the validity of the patent and can only defend on the basis that they have not breached the agreement (i.e. infringed the patent).
Second – there were parallel proceedings in the U.S. but Stretchline was granted its motion to dismiss (with prejudice - meaning that the plaintiff could not bring the exact suit again) so that it could focus on the UK proceedings. Because the case had been ongoing in the U.S. for five years and was only a few months away from trial, the court did not consider that a dismissal without prejudice was appropriate.
The patent expires in April of next year so, whatever the outcome, this will not be an issue for much longer.
ROSIE BURBIDGE is a UK/EU intellectual property lawyer in the Fashion Law Group at London law firm Fox Williams. When she's not litigating IP rights she tweets about fashion and tech (@rosieburbidge).