DAKS GC: Style counsel
23 April 2012
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Geoff Chan, general counsel at the DAKS Simpson clothing group, combines guarding the company’s British heritage with acting as a ’cultural ambassador’
Working in-house at British fashion house DAKS Simpson has its perks. The company’s senior staff, including general counsel Geoff Chan, are regularly invited to attend social events such as banquets hosted by the royal family or the London and Milan fashion weeks.
However, to keep up the century-old brand’s reputation and market standing, Chan needs to get his teeth into many legal and business matters behind the glamorous scenes. Indeed, after the London Fashion Week catwalk shows, Chan was at the forefront of discussions and contract negotiations with potential buyers.
As the DAKS brand holds three Royal Warrants – awarded to regular suppliers of goods and services to the royal family – the company’s representatives will generally attend the banquet hosted for members of the Royal Warrant Holders Association. The warrants are prized highly, but strict regulations govern granting and renewal. Therefore, part of Chan’s responsibility is to ensure his company is compliant with the quality standards and other criteria.
In the case of warrants granted by the Prince of Wales, additional environmental and ethical criteria need to be met, so internal auditing is high on Chan’s priority list.
“Many of our business partners and trademark licensees are based overseas, such as in the Far East and Europe,” says Chan. “Ensuring everyone is in line with the requirements of environmentally and socially responsible practice presents particular challenges.”
But no challenges are too great to overcome, given Chan’s combined passion for the practice of law and for fashion and creative pursuits.
“I was studying a part-time course at the London College of Fashion as a hobby when I was a lawyer at Hammonds,” he recalls. “Everyone instinctively recommended me for this role when it became available.”
In January 2010 he joined DAKS as its first full-time in-house legal counsel from Hammonds (now Squire Sanders), where he worked in the commercial IP department. The firm is a longstanding external counsel.
“It’s a privilege to practise law in an industry I love and it’s made my legal career ever more exciting and rewarding,” he adds.
DAKS’ clothing is exported to 30 countries and has an established and expanding presence in the Far East. The bulk of its retail sales are made in this region, with Japan, Korea and Greater China being the top markets.
Along with exporting DAKS’ UK ranges, DAKS has been made and sold under licence in the Far East and elsewhere. As a result, licensing, management and protection of the group’s trademark portfolio are major areas of focus for Chan. In the former area, Chan works alongside the business executive team driving the negotiating and drafting of all licensing agreements with the group’s major business partners.
The group owns more than 1,200 trademarks worldwide, including its most important, DAKS House. Chan works closely with a full-time in-house trademark agent on trademark registration and management.
“The history of DAKS Simpson began in 1894, so some of our trademarks were registered in ex-colonial countries a century ago, such as
Bophuthatswana,” says Chan. “The scope of our trademark registration work is far-reaching.”
In parts of Asia, counterfeiting is a big problem for the luxury goods industry, particularly in China and Korea. Instead of trying to take action against every counterfeiting activity, Chan takes a balanced approach.
“Although illegal activity is not tolerated, it’s impossible to eliminate counterfeit goods completely,” he says. “In most cases, initiating legal proceedings is not the best strategy based on rational calculations of cost and benefit.”
But he does instruct external law firms to watch out for and report any counterfeiting and trademark infringements, and will take appropriate action based on an analysis of each situation.
In important markets, Chan relies on external law firms for filing, renewing and protecting the group’s valuable brands and IP rights. For example, he uses King & Wood Mallesons for China work, Wilkinson & Grist in Hong Kong, Lee International in Korea, Squire Sanders in Europe and Hogan Lovells for several other jurisdictions. In Japan, the group has a full-time local legal manager overseeing legal affairs.
DAKS prides itself on its British heritage, but even its most loyal customers may not know the group is owned by a Japanese parent – Sankyo Seiko – which acquired it in 1991. The foreign shareholding structure means five of the group’s six-member board of directors are of Japanese nationality. Four of the Japanese directors are based in Japan, but travel regularly to London to oversee the business and attend board meetings. As general counsel, Chan reports to the board.
Chan not only needs to stay on top of his advisory duties, but also take on the role of what he terms “cultural ambassador”.
“The most interesting, and at the same time most challenging, aspect of the job is bridging cultural differences in the business world between Japan and the UK,” he points out.
Communication is an area where differences are easily seen. Chan explains that in the UK a manager will thank you for being straight-forward, while giving legal advice
to Japanese management requires an artful mix of euphemism and politeness.
“Although the business environment in the UK is international there’s room for improvement in cross-cultural understanding and awareness in multinational companies,” says Chan.
Position: Group general counsel
Company: DAKS Simpson Group
Industry: Luxury goods and fashion
Reporting to: Board of directors
Company turnover:Not disclosed
Legal capability: Three
Total legal spend (annual):£500,000
Main external law firms: Hogan Lovells, King & Wood Mallesons, Lee International, Squire Sanders, Wilkinson & Grist
Shamini Rajah, senior legal counsel, Richemont International
The digital media revolution has drastically and rapidly altered the landscape of the consumer goods industry. The luxury sector has not been immune and the status quo in the industry has been challenged in parallel with the behaviour of consumers.
Technological advances have chipped away at cultural divides and made dramatic inroads into connecting consumers worldwide, while economic development globally, led by emerging markets, has skyrocketed.
These phenomena have created challenges and opportunities for our Maisons and our legal team is always keeping up with global issues and compliance. Protection of the brand – the prevention of counterfeiting and licensing issues – is an integral part of our work.
Life is never dull in the luxury retail world. One day you are dealing with a photo-shoot for the forthcoming season’s campaign and the next you’re providing a framework for brand managers to reconnect with their customers on different media platforms.
As such, we are constantly keeping up with developments, including the shift from traditional and towards new media, as well as the impact of, and opportunities presented by, social media.
Daniel Raymond, general counsel, River Island
We provide original and fresh fashion, faithful to our brand ethos. Most of our products are designed in-house, but it is also desirable to source a proportion from external suppliers to provide diversity. This can lead to an increased risk of third-party IP infringement, as we are largely reliant on the integrity and legal awareness of our suppliers. For example, while community design rights provide effective regimes for protection, their principles are not always understood by suppliers, particularly outside the EU.
To address this potential risk we have implemented an extensive in-house training programme, part of which guides our buyers in how to source products safely from external suppliers. This includes ensuring buyers question suppliers on the history of products and prints to gain confidence in their originality.
We also try to help suppliers with their understanding of relevant areas of IP, but we further protect ourselves by obtaining suitable warranties and indemnities.
While it is difficult to eliminate inherent IP risk when buying from suppliers, a combination of training and contractual safeguards can reduce this risk significantly.