When the Brand Wears the Celebrity: Intellectual Property Disputes in Celebrity Fashion Use and Collaboration Agreements

Abstract

The fashion industry’s advancement led to the amplification of the roles of celebrities in the branding, and their subsequent involvement in the creative process as well. The liaison between the fashion industry and the celebrity world has paved way for questions of law with regards to the contracts that are drafted between them and the persistent issues due to the ownership of Intellectual Property (IP) of the designs. Thus, this paper, highlights the various issues that stems from the legal complexities of the contracts between them and the doctrinal deficiency of the existing IP frameworks in application to the collaboration agreements. Through a critical examination of case studies, like the Yeezy-Adidas and the Rhode trademark conflict, the paper attempts to emphasize on the structural inadequacies of the legalities of the overlap of the two worlds.

Keywords: Fashion Line, Collaborative Agreements, Intellectual Property, Branding, Joint-ownership, PR Loan, Endorsement

Introduction

The fashion industry has always operated at the intersection of commerce and culture, yet it is only in recent decades that the relationship between fashion brands and celebrities has crystallized into a distinct commercial arrangement. What began as simple product marketing has evolved into a web of contractual obligations, co-owned intellectual property, and shared commercial identities. Celebrities now occupy a structural role in the fashion industry that extends well beyond the traditional endorser. They have become co-creators and equity partners whose cultural identity is the primary source of commercial value in a fashion line. This shift has generated a new class of legal dispute that existing frameworks are fundamentally incapable of resolving. This is due to the fact that, despite these developments, the law has been conspicuously slow to recognize this transformation.

This paper examines three primary categories of the celebrity–fashion relationship and identifies a consistent pattern that emerges, i.e., the legal frameworks designed for any mundane commercial arrangement is being applied to relationships of significantly greater complexity and uses case studies to arrive at the conclusion. The central argument focuses on the existing contractual frameworks failing to anticipate the breakdown of rights between the brand and the celebrity, and that the doctrinal tools provided by IP law apply a logic that does not produce a coherent result to protect the celebrity and the brand.

Conceptual Framework

The world of fashion has a plethora of designers who start their own line of clothing, makeup or luxury goods. The fashion industry is essentially a hierarchical system; wherein different levels of the industry catered to the composition of different groups of people. A very negligible niche of consumers is for whom couture and luxury goods were intended for. Despite that, the industry experienced it’s shift towards higher demand for luxury goods with the unexpected involvement of celebrities and social media influencers in the marketing process. While the fame that these celebrities brought to the commercial realm was initially limited only to the scope of an endorsement that they had with a fashion line, their participation in the fashion industry grew in various other ways.

The celebrities were considered to be the face of a particular designer, albeit being disguised as a commercial transaction. However, the relationship between a fashion line and a celebrity cannot be reduced to a mere transaction as there are multiple aspects that must be annexed to make it a legitimate agreement. The most common paradigms of the transactions between these parties include:

• A celebrity endorsement agreement, wherein the designer can hire celebrities and social media influencers to be the face of their brand, in accordance with taking marketing initiatives.[1]
• A Public Relations Loan (PR loan) is a form of transaction where designers provide their apparels to celebrity stylists for a vocational event, for the purpose of displaying their designs to the masses.[2]
• A Co-creation agreement, the rarest of all, is the one in which the celebrity takes the initiative to unite efforts so as to come up with a new line of fashion or luxury goods.

The default that is experienced by all these agreements is primarily due to the lack of a clear framework to govern these agreements. Due to this, either of the parties end up being exploited and facing the short end of the stick when it comes to the execution of these agreements. Further, the predominant reason for drafting an agreement is to protect themselves in the case of any legal consequences being conjured up. Additionally, with respect to the co-creation and collaborative agreement, a common issue that emerges is due to the IP rights and the ownership of such rights. Thus, it is essential that their rights are protected under the legal frameworks for Trademarks, and Patent (if applicable) of their respective jurisdictions. For instance, in India, Section 24 of the Trademarks Act, 1999 defines the joint ownership of a trademark.[3]

Legal Analysis

Agreements of endorsement and branding

Celebrity endorsements of products of any kind have been an age-old practice for the company to gain some sort of traction to increase consumer demand of their products. Various studies done by many economists have proven that the use of celebrities for marketing have positive impacts on the consumers by way of increasing attention of the consumers and the credibility of the product in itself.[4] The same studies have, however, shown that there are conditions that are associated with the effect of the celebrity endorsement, like the gender of the celebrity endorser and their relevance to the product they are endorsing.[5] This gap was rectified in the early 1900s, when they began associating the product with the kind of advertisements that they aimed to achieve and subsequently identifying the ideal celebrity who could be the face of such a product. The most common form of using celebrities for advertising a product came through “testimonial advertising”, wherein manufacturers of female beauty products aimed at profiting from marketing them to be “the same as any other woman”.[6] This was expanded from the mere usage of actresses for beauty products to using them for all kinds of women clothing apparels and fashion lines through endorsement advertising and PR loans.

While the companies benefited from these marketing strategies, the celebrities were stuck being the means to the end, where they were unable to make executive business decisions for their own growth in the fashion industry. Each attempt made by the celebrity resulted in a tighter and more seamless endorsement agreement, thereby depriving them of their autonomy.[7] As times changed, the detriment faced by the celebrities moved to the companies being overshadowed by the fame that they bring along.[8] The branding is done to make it seem like the celebrities, themselves, were the creators of the products they were marketing. A common example of this would be Beyoncé’s campaign with Tiffany & Co. for their jewellery.  Thus, this requires the agreement of endorsement between a celebrity and the fashion company they seek to endorse.

A contract made for the purpose of an endorsement advertisement or a PR loan must be reduce the prospect of leaving behind grey areas, where one party can take advantage over the other. Thus, these agreements must clearly and unambiguously outline the requirements expected from the other with respect to the fashion or luxury good used. A few ways to achieve a coherent and beneficial endorsement agreement would be:

• The duration of the endorsement and the royalties that would be paid to the celebrity or influencer responsible.
• The clear indication that the celebrity ought not to use any other products from a rival company to avoid confusion in the minds of the consumers. This aspiration can be derived from tech companies, where they particularly require the endorsing celebrity to use only their product in public and refrain from any other companies. A significant example in the field would be, Sabrina Carpenter using Samsung phones for the duration of their endorsement agreement, during which she was forced to refuse touching Apple phones in public.
• To make sure an indemnity clause is included to protect the celebrity from being held accountable for the shortcomings of the brand, albeit being an endorser. In India, the Advertising Standards Council of India (ASCI) has been established to ensure the applicability of due diligence in the product to be endorsed.[9]

With respect to a PR loan, which does not incur in the financial loss of the brand providing their designs and apparels to celebrities, it is pertinent that a legal contract be drawn up instead of relying on the credence of the celebrity stylist.[10] Further, damage of the provided couture is a very common distress faced by the brands, thus, formulating an appropriate indemnity clause to bear the responsibility of the damage is also important.[11]

Collaborative efforts for fashion lines

A new approach taken by celebrities in the recent years to establish their own fashion brands so as to avoid the burden that accompanies endorsing another brand. However, the means to establish their own brands is currently limited to collaborating with another well-established designer. The most known examples of this would include Rihanna’s creative collaboration with Moët Hennessy Louis Vuitton (LVMH) to create her clothing line “Fenty Maison” and Kanye West’s creative collaboration with Adidas to create his shoe brand “Yeezy’s”. LVMH’s collaboration with Rihanna to make the Maison was the first time that they had opted for a celebrity to create a fashion line with them, instead of merely endorsement.[12] This was explained to be a direct consequence of using celebrities as a way of enhancing the brand, rather than diluting it, which was proven when the Yeezy brand gave a turnover of nearly $1.5 Billion in annual sales in 2022.

In spite of the significant increase in the demand and the sales of the products in the brand, a significant issue that is brought to light in such collaborative agreements is due to the breakdown of the IP rights of the designs. This agreement generally includes the aftermath of a commercial relationship between the parties, wherein the parties will each be responsible for different processes in the making of the brand and would have a joint ownership of the trademark of the brand and the products designed. This method brought forth a new abundance of consumers for the name of the celebrity that can be found attached to the brand of clothing or cosmetics. Especially when the collaboration is made with a previously well-known and affordable manufacturer, i.e., in the case of Rihanna and Kanye West, LVMH and Adidas were already industry leading designers and manufacturers of clothing lines and had accustomed patrons that catered to them. In most cases, the accepted form of trademark is the joint ownership of it which has been legalized by the World Intellectual Property Organization (WIPO) and subsequently many countries, including India under Section 24 of the Trades Mark Act, 1999.

The only issue that stemmed from such collaborations was with respect to the split of the IP rights in the case of a termination of the contract. Although such a termination is not commonly done, the possibility is still feasible. A primary case study that can be used to understand the termination of such a contract is the conflict between Adidas and Kanye West. In 2022, Adidas made the executive decision to terminate its collaborative agreement with Kanye West due to racist comments made by the latter. This led to the raising of questions about the split of the IP rights of the Yeezy’s shoe line as West held the trademarks of only the brand, while Adidas had complete rights over the designs and the colour combinations of the shoes of all the shoes in the line.[13] However, due to the lack of access to the original agreement between the parties, it is interpreted that the parties had included a defined split of rights under the pretence of a ‘morals’ clause.[14] This clause has enabled the Yeezy brand, i.e., Kanye West, to earn money as royalties well after the termination of the initial contract.

Case Law Discussion

In the situation of a brand being a subsidiary to another established brand, albeit remaining as an individual legal entity, the IP dispute issues a different angle than ordinary. In this particular scenario, Hailey Beiber’s skincare brand, Rhode, was acquired by e.l.f. Beauty, thereby becoming a subsidiary to the latter. However, right before the acquisition was made, Rhode had settled a trademark dispute that was filed by Rhode-NYC, LLC, a clothing store based off of New York, in the Federal Court in New York. This was prompted by the use of the clothing store’s trademarked name by the skincare brand. In accordance with the fair usage of trademarks and 15 U.S.C. § 1125[15], it is allowed to be used for non-commercial purposes, to avoid confusion in the consumers. In this case, the skincare brand was found to be in direct violation of the norm and used the trademark for commercial purposes. As the skincare brand had settled their dispute, the acquisition of the brand by e.l.f. Beauty was effortless. This is due to the fact that any Merger and Acquisition (M&A) requires the conduct of due diligence of the trademarks before committing to them as such.[16] If the trademarks dispute had persisted, the acquisition of the Rhode brand could not have been made possible by e.l.f. Beauty, leaving the former short of millions of dollars of revenue. From this case, it can be understood that IP plays a very important role in the fashion industry, including, but not limited to the rights of the designs and the relevance of their company with respect to M&A.

Another significant case that has the capability of highlighting the issues faced by celebrities who have endorsement contracts with famous fashion brands is the case of Raymond Weil SA v. Theron[17]. In this case, the luxury watch brand had contracted with Charlize Theron, a well-known actress, in which the brand actively paid $3 Million to the actress to use her image as a marketing strategy. This contract mandated Theron to never use watches of any other luxury rival brand. The use of Montblanc’s jewellery in public led to the invocation of the cure period, during which the issues was resolved. Subsequently, Theron wore a Dior watch in public which led to a dispute between the parties which was taken to court. The court held the ‘Dior’ situation to be a blatant violation of the contract and held the defendant to be liable for the breach. On the other hand, the ‘Montblanc’ situation was considered to be rectified during the prescribed cure period. This case underlines the major fault in any endorsement contract that is drafted between a fashion industry and a celebrity. This fault derives from the brand’s need to have the upper hand in the industry in comparison to the other rival brands. Because of this need, the brands conjure up clauses in the contract that is proven to be detrimental to the celebrity. The involved celebrity endorser is often found facing disputes of such nature unequivocally, even if they attempt to remedy the wrong done. Thus, the importance of ensuring a contract that protects the celebrity endorser’s rights, while at the same time having the ability to market the brand appropriately is to be noted.

Findings

The primary issue that is faced by celebrities who wish to enter the fashion industry is the fact that they are very often found to be drawing the shorter straw when dealing with the industry. When their fame that they bring is used for the advantage of the fashion brands, the use is often followed by exploitation of the celebrities. This, primarily, is derived from the fact that there are deficiencies in the framework and the expected structure of the contracts drafted. At the same time, the brand faces hardships due to the co-creation, collaborative agreements. In these agreements, the celebrity seems to be benefitted due to the concentration of their fame and the commercial value they add to the project as a whole.

From this, it can be understood that the most fundamental gap lies in the absence of any IP doctrine that is designed specifically for co-creation. IP law, through the work-for-hire rule and the “Mastermind” test, allocates ownership to the party that executes a design rather than the party whose involvement offers mere commercial value. The integration of the IP law, however, results in benefits going more towards the fashion brand than the celebrity. On the other hand, IP law creates the conditions for an IP stalemate in co-branded licensing arrangements that separate the ownership of the trademark from the holder of the design patent registration. Taking India into consideration, Section 24 of the Trademarks Act allows for the joint trademark ownership but is silent on how that joint ownership is divided when the contract is terminated by the parties.

Judicially, courts have begun to apply the mandatory requirement of the plaintiff to demonstrate actual commercial harm rather than merely proven breach, through the case of Raymond Weil SA v. Theron, where no monetary damages had in fact been suffered. It has also proven that established fashion houses benefit from registration of the IP rights and from vaguely drafted exclusivity clauses in endorsement agreements. Alternatively, smaller established brands, as the Rhode dispute proves, are inadequately protected against displacement by a stronger market power. Celebrity co-creators, despite being the primary source of commercial value in many collaboration arrangements, receive the least protection that the law affords.

Conclusion

The fashion industry has always been an industry of transformation and yet the law governing it has not kept pace. As the relationship between celebrity and fashion brand has evolved from mere endorsement for marketing to genuine co-creation, the legal frameworks purporting to govern that relationship have remained anchored to a reality that no longer reflects the commercial view of the current age.

The cases examined in this paper have revealed that it is not a series of contractual failures, but rather a disparity between the commercial value that celebrity co-creators bring and the legal protection they are given. The party that supplies the meaning, the market demand, and the identity of a collaboration always seem to end up with less IP protection than the party that supplies the manufacturing facilities. That outcome is a policy choice that is made by the legal and the commercial realm, and this paper argues against the choice made. Until a reform is brought about to rectify this gap, the law will continue to govern the fashion industry’s most commercially significant relationships with frameworks that were never designed for them.

Bibliography

1. Craig L Garthwaite, Demand Spillovers, Combative Advertising, and Celebrity Endorsements, 6 American Economic Journal: Applied Economics (2014).
2. Krishna Priya Pallavi, ‘Everything is borrowed’: Diet Sabya explains how celebs turn up in luxe new outfits for events each time, Hindustan Times, (July 15, 2024).
3. Laure Ambroise & Noël Albert, Celebrity Endorsement, 35 Recherche et Applications en Marketing (English Edition) (2020).
4. Marlis Schweitzer, “The Mad Search for Beauty”: Actresses’ Testimonials, the Cosmetics Industry, and the “Democratization of Beauty”, 4 The Journal of the Gilded Age and Progressive Era (2005).
5. Anya Behera, Product Endorsement by Celebrities and Implementation of Endorsement Laws in India, 6 International Journal of Law Management and Humanities (2023).
6. Gianna Orioli, Fashion on Loan: The Legal Framework Behind Celebrity Looks, Brooklyn Sports & Entertainment Law Blog (May 28, 2025)
7. Pamela N Danziger, What The LVMH-Rihanna Partnership Means For The Luxury Market, Forbes (May 11, 2019)
8. Isaiah Poritz et al., Adidas might be cutting ties to Kanye West, but the company could still be paying him millions of royalties into 2023, Fortune (Oct. 26, 2022)
9. Heather Bowen, Trademark Due Diligence In M&A Transactions, American Intellectual Property Law Association
10. Raymond Weil SA v. Theron
11. Trademarks Act, 1999
12. Trademark Law

[1] Craig L Garthwaite, Demand Spillovers, Combative Advertising, and Celebrity Endorsements, 6 American Economic Journal: Applied Economics (2014).

[2] Krishna Priya Pallavi, ‘Everything is borrowed’: Diet Sabya explains how celebs turn up in luxe new outfits for events each time, Hindustan Times, (July 15, 2024).

[3] The trade marks act § 24 (1999).

[4] Laure Ambroise & Noël Albert, Celebrity Endorsement, 35 Recherche et Applications en Marketing (English Edition) (2020).

[5] Ibid

[6] Marlis Schweitzer, “The Mad Search for Beauty”: Actresses’ Testimonials, the Cosmetics Industry, and the “Democratization of Beauty”, 4 The Journal of the Gilded Age and Progressive Era (2005).

[7] Ibid

[8] Anya Behera, Product Endorsement by Celebrities and Implementation of Endorsement Laws in India, 6 International Journal of Law Management and Humanities (2023).

[9] Supra note 8.

[10] Gianna Orioli, Fashion on Loan: The Legal Framework Behind Celebrity Looks, Brooklyn Sports & Entertainment Law Blog (May 28, 2025), https://sports-entertainment.brooklaw.edu/media/fashion-on-loan-the-legal-framework-behind-celebrity-looks/.

[11] Ibid

[12] Pamela N Danziger, What The LVMH-Rihanna Partnership Means For The Luxury Market, Forbes (May 11, 2019), https://www.forbes.com/sites/pamdanziger/2019/05/11/what-the-lvmh-rihanna-partnership-means-for-the-luxury-market/.

[13] Isaiah Poritz et al., Adidas might be cutting ties to Kanye West, but the company could still be paying him millions of royalties into 2023, Fortune (Oct. 26, 2022), https://fortune.com/2022/10/26/how-much-does-adidas-owe-kanye-west-ye-yeezy-royalty-payments/.

[14] Ibid

[15] U. S. trademark law

[16] Heather Bowen, Trademark Due Diligence In M&A Transactions, American Intellectual Property Law Association https://www.aipla.org/list/innovate-articles/trademark-due-diligence-in-m-a-transactions.

[17] 585 F.Supp.2d 473