Fashion is a form of communication, and exclusivity sells. Sophisticated luxury brands have many time-tested legal avenues available to leverage their trademarks, from celebrity partnerships to limited-edition products and tightly controlled distribution channels.
But sometimes exclusivity and tightly controlled distribution can make consumers feel that it’s unfair to them, and expose fashion companies to liability. In Cavalleri v. Hermès International, two California residents accused Hermès of violating US antitrust law by requiring customers buy other company products before they purchase a Birkin bag—a status symbol costing up to tens of thousands of dollars.
Plaintiffs Tina Cavalleri and Mark Glinoga alleged that they and other members of a proposed class were harmed by Hermès’ alleged violations of the Sherman Antitrust Act and the California Cartwright Act, the state’s law prohibiting anticompetitive activity.
Regardless of the outcome in the case, Hermès, and perhaps the fashion industry, might have to contend with how similar accusations affect the public’s interpretation of brand storytelling.
The desire for an exclusive experience transcends generations: In Ancient Rome, only the nobility could afford to wear purple, which was produced using sea snails and therefore labor-intensive and expensive. By using its trademark to sell exclusivity, Hermès has artfully capitalized on this aspirational feeling.
“The unique desirability, incredible demand and low supply of Birkin handbags gives Defendants incredible market power,” the plaintiffs allege, adding that “most consumers will never be shown a Birkin handbag at Hermès retail store. Typically, only those consumers who are deemed worthy of purchasing a Birkin handbag will be shown a Birkin handbag (in a private room).”
Exclusivity matters. The tighter the control by licensor over licensee in clauses pertaining to distribution, communication and marketing, the stronger the trademark. Many luxury brands have established licensing agreements with fragrance and cosmetics companies; consider Gucci and Coty, for example. Hermès has taken this one step further by creating all fragrances in-house, relying only on third-party manufacturers.
Whatever the courts decide in Cavalleri, Hermès has long relied on the best-known strategies in marketing exclusivity.
A story of specialness starts with the product itself—how it was made, and who made it, and why it’s unlike other items available on the market. Hermès champions its products as high-quality, made in France by hand, and sometimes by the same individual from start to finish.
Flip through any high-end print magazine, and you’ll find women in silk dresses striding through the desert in high heels or idling around the Gulf of Naples in lavish prints. Far from a whim, this strategy is a calculated statement about the brand’s intended positioning. Hermès excels at capturing this aspirational escapism in its campaign imagery.
The very existence of the Birkin bag is a testament to Hermès’ understanding of the power of celebrity—this crafts a sense of exclusivity, though the company keeps a low online profile and doesn’t hire any official ambassadors.
Reportedly, a former Hermès executive launched the Birkin bag after sitting next to actor and singer Jane Birkin on a flight. The company’s other celebrity bag, the Kelly, is named for actress Grace Kelly, Princess of Monaco.
Distribution is another key piece of the exclusivity puzzle, as the environment where a product is sold conveys as much to consumers about the brand as the product itself.
Hermès, for one, doesn’t sell its handbags even in high-end department stores—and this unusually tight control over distribution contributes to its status and brand image. The prevalence of department store shop-in-shops—designated, brand-controlled spaces—is further evidence of image management.
Most luxury fashion brands have celebrity public relations departments whose job is to identify the right people to be seen in certain clothes, and to ensure those individuals are seen and photographed in branded attire —at the Oscars, the Grammys, or out on the town. It’s not illegal to send expensive gifts to attractive people and hope they will use them in public.
In this realm, the major concern is to make sure any actual quid pro quo is divulged. For example, if a brand asks a celebrity to promote a product online, any social media post must disclose the underlying commercial relationship clearly and conspicuously.
The Federal Trade Commission’s Guides Concerning the Use of Endorsements and Testimonials in Advertising, updated in 2023, address many advertising pitfalls and are a key legal tool for any company that uses celebrities or influencers in marketing. One recent update specified that for online disclosures to be clear and conspicuous, they must be “unavoidable,” and not, for instance, buried in the text description of a TikTok video.
As companies seek to increase their exclusivity, they can rely on an established array of branding strategies. But before exploring gatekeeping measures such as those described in Cavalleri, they should remember to seek the advice of antitrust counsel.
The case is Cavalleri v. Hermes, N.D. Cal., No. 24-cv-01707, complaint filed 3/19/24.
This article does not necessarily reflect the opinion of Bloomberg Industry Group, Inc., the publisher of Bloomberg Law and Bloomberg Tax, or its owners.
Author Information
Karen Artz Ash is intellectual property partner at Katten and co-chair of trademark, copyright, and privacy.
Cynthia Martens is intellectual property attorney at Katten with focus on trademark and copyright in fashion and beauty.
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