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Can your brand afford a collaboration?

Actualizado: 8 mar 2023

Collaborations between brands are in vogue: Gucci and Adidas, Narciso Rodríguez and Zara, Louis Vuitton and Nike, etc. These type of alliance, which result in small capsule collections, are useful and effective marketing actions, but also carry risks. Making your own image available to others to “create synergies” can end up diluting your own brand, commercially and legally. That is why before embarking on these projects it will be necessary to think long and hard: can my brand image afford a collaboration?

The concept behind collaborations is, in most cases, to unite a luxury or prestigious brand with a mass retailer. This model was popularized by H&M at the beginning of the 00's with its already iconic collaborations with Karl Lagerfeld, Versace, Cavalli or Stella McCartney. They allowed the general public to get hold of pieces that they would not normally have access to, and creating a true fan phenomenon.

These collections meet two objectives: first, to attract media attention; and second, to execute a sort of "cross pollination", that is, to attract the consumers of the other brand to their own. This contagion phenomenon is not necessarily happening in the direction one might expect: not only are fast fashion giants looking to partner with luxury, but luxury brands are also now actively seeking the credibility of cult urban brands (for example, Louis Vuitton with the Supreme skater brand).

Collaborations, which can have a very casual and spontaneous appearance, require solid prior legal planning. At the end of the day, it is about two companies making the most valuable thing they have - their IP - available to the other. Here are some points to bear in mind:

1. Keep your secrets safe

Collaborations are governed by specific contracts that go beyond the simple license, since there is a lot of exchange between brands. The first thing to keep in mind is that ideas, production methods, supplier lists, etc. are shared during the conceptualization process, often even before the contract is closed. It is therefore important to sign a prior confidentiality agreement, in addition to the clauses that may later be included in the contract itself on this aspect.

2. Who owns the product?

Generally, there will be co-ownership of the final designs, made with an amalgamation of intellectual property rights of both companies. It is important to determine this in the contractual phase to prevent products and designs them from being re-issued or copied once the relationship has ended. These problems are more common than it seems, and in fact, it seems that this is what has soured the collaboration of Kanye West with Gap and Adidas.

3. Be mindful of competitors

It is advisable, if possible, to include a non-compete clause to avoid alliances with competitors for a period of time. Otherwise, all the recognition and credibility obtained with a collaboration can be shortly after vampirised by an enemy brand, even to the point of causing confusion among consumers.

4. Last but not least - is my brand strong enough?

Seeing two well-known brands together may seem fun, but not always. The case of the recent Gucci and Balenciaga collection is particularly interesting in this regard. As these two brands have similar profiles, seeing them jumbled together seems more the result of a supply chain error than an intentional design. Gucci and Balenciaga themselves (or “Gucciaga” as they have come to be known) seem to play with this idea by talking about how they are “hacking” each other, creating designs in which one's characteristic prints are mixed with the logo of the brand. But what they have achieved, we don't know if intentionally or accidentally, is that these very expensive luxury products look like counterfeits.

Trademark rights exist to prevent consumer confusion and protect brand identity. For this right to exist and be solid, it is necessary not only for the trademark to be registered, but also for it to be used regularly and constantly, so that the consumer is able to recognize and remember it.

Playing in this way with the identity of the brand itself without it being diluted is a risk that only very iconic firms can afford. The indiscriminate profusion of collaborations that we are experiencing can lead not only to consumer weariness, but also to some confusion about who collaborates with whom and which elements are characteristic of a brand and which of others. This is something not every brand can afford to do.

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