Kate Spade and the Dangers of Personal Name Branding
A designer’s use of their personal name as their company name is not a new concept. Designers are attracted to pinning their name to their products and accomplishments. However, when a designer’s personal name becomes the embodiment of a successful brand, designers are likely to lose control of that name. Kate Spade is the most resent designer that has lost the rights to use her name.
Kate Spade created her handbag company over 14 years ago, using her birth name as the name of her company, “Kate Spade.”[1] As the company grew, her name quickly became the brand’s most valuable asset, as it identified the company’s intellectual property rights and goodwill (the established reputation of a business regarded as a quantifiable asset).
In 2007, Kate Spade, the company, was sold to Liz Claiborne for $125 million.[2] One of the main points of negotiation in this sale was the acquisition of the name “Kate Spade.” Kate, had previously agreed that Kate Spade the company owned all of the intellectual property rights to the Kate Spade name.[3] When Kate Spade the company was sold to Liz Claiborne, Kate’s name went with it.[4] As a result, Kate was forced to surrender all commercial use of her birth name, and only use her name to identify herself personally.[5] If Kate used her name beyond a personal setting she would likely cause confusion among consumers and infringe on Liz Claiborne’s newly acquired trademark rights.[6]
Earlier this year, Kate Spade was reported to have legally changed her name to Kate Valentine so that she could continue to design and use her personal name to promote her new brand.[7] She is rumored to launch a new footwear and handbag label.[8]
Although Kate legally changed her name, this is not required. Designers always retain their birth right to their personal name in a personal context. http://www.nolo.com/legal-encyclopedia/using-surname-family-name-trademark.html [https://perma.cc/BG7Q-F3LQ].[/mfn] Therefore, a designer who falls victim to losing their name, may continue to use that name in personal identification, so long as they do not use that name in a commercial context that identifies their brand or their trademark,[9] Most designers in this situation keep their birth name for personal use, and use a fake name to design and sell.[10]
It is also possible for a designer to sell their company, while still keeping the commercial rights to their name. Donna Karen is one such example. When forming her company, Donna Karen Intl., Donna Karen created a sister company called Gabrielle Studio, after her daughter, and owned by her immediate family.[11] Gabrielle Studio owned all of the rights to Donna Karen’s famous trademarks, and licensed those trademarks to Donna Karen Intl.[12] When Donna Karen Intl. was sold, Donna Karen retained the rights to her name.[13] She then licensed her name to the new Donna Karen Intl.[14] Admittedly, Donna Karen Intl. probably sold for much less than it could have if trademark ownership was included in the sale; however, by doing this Donna Karen was able to keep the rights to her name and ensure that she remained a vital entity to the new Donna Karen Intl.[15]
Footnotes
