Tailor made: Levi Strauss & Co's IP strategy

In 1873, California gold miners faced a problem. While the pants they wore for work were made of a strong, durable denim, well-suited to the rigours of underground toil, the seams that held their pockets together were not.

Levi Strauss, a German immigrant with a dry goods business, and Jacob Davis, a Nevada tailor, thought they had the solution. US patent No. 139121 was one of the earliest US clothing patents; it covered copper rivets for strengthening the pockets of miners’ pants, thus creating the world’s first blue jeans. The rest, as they say, is history.

Tom Onda, chief IP counsel at the modernday Levi Strauss & Co., says the company’s IP portfolio looks very different now to how it looked in 1873. “We do have a small patent portfolio of manufacturing-related patents as well as some patents related to designs,” he says.

“[But] these days, the IP portfolio consists primarily of trademarks. We own more than 5,000 trademark applications and registrations worldwide, so that’s our primary form of intellectual property protection.”

Onda oversees a core global IP team of 12 people, with an additional 12 to 15 people acting as brand protection co-ordinators around the world. Together with his team, Onda is responsible for all registration issues, clearance issues, infringement matters and anti-counterfeiting.

Levi Strauss & Co. employees are acutely aware of their brand’s history and status, and are keen to ensure it continues. “The Levi’s jean is an icon, it’s the authentic blue jean,” Onda says.

That of, course, creates problems. “Unfortunately, there are people who want to take advantage of that rich history and goodwill of our brands. They try to copy features of the brand to ride on that goodwill, reputation and quality. We also face counterfeiting, where they not only try to mimic our trademarks, but copy them wholly and try to pass off their goods as Levi’s,” Onda says.

“As part of our company’s brand protection programme, we work to preserve and protect the value of those historic trademarks, which are some of the oldest in the apparel industry. If we allow others to infringe our trademarks, our consumers’ trust for our products eventually could erode, so that’s obviously a concern for us.”

There are two main categories of infringement the company faces, says Onda. “There’s the egregious counterfeiting category, when someone will copy the name, the stitching design, the tab, and really try and pass it off as a Levi’s jean, and then there’s the general infringement category, where they copy certain features, but not necessarily our brand name.

"They copy it and try to sell it under their own brand—so not counterfeiting per se, but infringement of our other trademark rights. Those trademarks would be for, say, the design that featured on the waistband on our jeans, the pocket tab on the jeans, the stitching design, the 501 mark. They copy those elements but they may not copy the jeans themselves.”

Counterfeiting provides a particular challenge, primarily because of the speed at which virtually identical copies of Levi’s products can get into the global marketplace. While Onda acknowledges that it is impossible to deal with all instances of counterfeiting all of the time, Levi Strauss & Co. has a robust and proactive strategy for targeting infringers.

“Counterfeiting provides a particular challenge, primarily because of the speed at which virtually identical copies of Levi's products can get into the global marketplace.”

“We have a long-established brand protection programme within the company and we use several methods,” Onda says. “We have our own brand protection co-ordinators who employ investigation methods, but often our employees will bring infringements or counterfeits to our attention.

"We subscribe to an international watch service. We receive notice of third parties attempting to register infringing trademarks. In the US, we review the US Patent and Trademark Office Official Gazette on a weekly basis to see if any other third parties are trying to infringe our marks.”

But merely looking for infringement and dealing with it as and when it occurs may not be enough. The company works closely with trademark offices and law enforcement agencies to ensure that the brand is as well protected as possible.

“We are very proactive,” Onda continues. “We register our trademarks with agencies worldwide. We also train customs officials to identify counterfeit products and to seize them before they get into the marketplace. We have a very comprehensive training programme. We record our trademark registrations with customs, so we act proactively to nip the infringements in the bud.

"Most customs officials are quite open and receptive to receiving training. Most of them will actually hold sessions that they organise. They invite brand owners to come in and train them to identify fake products. We’ll also sometimes work with other brand owners in a coalition to organise meetings with customs officials. The response has been good. They’re very receptive and they’re a great partner in trying to stop counterfeiting.”

While Levi Strauss & Co. is not shy when it comes to taking firm action against infringers, it pays to vary the approach depending on the specifics of the problem. Onda says:

“When an infringement or counterfeit is brought to our attention, generally a decision is made to pursue it. I usually make that decision. The process involves sending a cease and desist letter to the third party. If it’s an egregious or repeat infringement, we may opt to immediately file suit, but we always try to reach an amicable solution.

"Most of our cases are settled out of court. If we do need to file suit, the case goes through the general process. Even in those cases though, there are very few cases that proceed to trial. We’re generally able to settle most cases before that point.”

And just as different types of offence might meet with different responses, so much may depend on where an infringement occurs. “If the infringement is global, or appears in several markets worldwide, one strategy is to pursue the matter in our strongest jurisdiction,” Onda says.

“In other situations, when it’s a local problem, we deal with it on a case-by-case basis. And of course we consider all the factors involved, including the strength of our rights in the country and the strength of the enforcement in the country, before we decide how to pursue it.”

With such a large portfolio to manage, it doesn’t make sense for the company to deal with everything in-house. When the time comes to litigate, or even to send a cease and desist letter, Levi Strauss & Co. will turn to its global IP partner for counsel. Townsend Townsend and Crew is a California-based law firm that co-ordinates Levi Strauss & Co.’s efforts with local counsel worldwide.

“Having one firm as a global partner has really worked to our advantage,” Onda says. “They are able to take an overview, to see the lay of the land, and provide us with very strategic advice.”

However, in common with any company that sells non-perishable consumer goods, Levi Strauss & Co. is faced with the challenge of policing its IP in a world where rigid geographical boundaries are increasingly irrelevant. The Internet provides very particular challenges to big brands, and not just because there are the added problems of dealing with search-term keywords and domain name management.

“Infringements on the Internet are a different beast from bricks and mortar infringement

Onda says: “Infringements on the Internet are a different beast from bricks and mortar infringement in that they can appear on the Internet one day and disappear then next...The strategy is a bit different, but generally, once we identify the source behind the infringement or counterfeit product, it’s pursued very much as we would a bricks and mortar retailer. The more difficult task is finding out the source on the Internet.”

Many of these strategies are not unique to Levi Strauss & Co. Any company that is serious about protecting its IP should have similar systems in place. But what really sets the company apart, Onda says, is the experience and reputation that comes with being one of the first kids on the block.

“The company has a long history of having successfully pursued hundreds and hundreds of infringements worldwide,” he says. “Our past history speaks for itself. Our efforts have been recognised by brand enforcement agencies in the apparel field around the world.

"We’re founding members of the International AntiCounterfeiting Coalition, and we’ve been considered a pioneer in the whole area of trademark protection. Even third parties or our competitors will come to us for guidance in protecting their intellectual property, so I think all that speaks to the success of our efforts.”

Some have suggested that the recent strength of Levi Strauss & Co.’s enforcement efforts has as much to do with falling sales and market share as it does with any particularly innovative approach. Perhaps there is a correlation between difficult business environments and enforcement activity.

Onda responds emphatically to the suggestion: “Our enforcement efforts have remained consistent across business environments good and bad. If there has been a change, it’s because there are just more denim brands out there than there were in the past, so in relation to that, our enforcement activity may increase. But as a brand owner, we have a responsibility to our customers, shareholders and lenders to protect the value of our trademarks.”

When Levi Strauss filed that first patent 137 years ago, he surely had a similar sentiment in mind. As Onda puts it: “Anyone can make a pair of jeans, but only we can make an authentic pair of Levi’s jeans.”