Satchels v Zatchels: how not to have a relationship with your manufacturer

Recent press reports have highlighted the Satchels v Zatchels spat.

Cambridge Satchel Company is suing its former manufacturer. It’s not the first brandowner to find itself in this situation.

The Cambridge Satchel Company is claiming breach of contract, infringement of designs, and unfair trading off its reputation against Zatchels, which is a subsidiary of Leicester Remedials & Sewing.  Zatchels in response has denied the claims and stated that it is owed money by the Cambridge Satchel Company.

This dispute is a textbook example of why the relationship between brandowner and manufacturer is of utmost importance.  Brandowners place extensive trust in manufacturers. However, it is not usual to discover that below quality products that have reached the market are cast offs which came out of the back door of the manufacturer’s factory.  Equally, manufacturers have been known to take the brandowner’s design, tweak it, and then offer it to a competitor. 

Moving manufacturers is an expensive process both in terms of potential delays to the supply of products, management time in building a relationship, and ensuring that the new manufacturer ”gets” the brand. 

There is no cure all! But given that prevention is better than cure:

• make sure you have a written contract with your manufacturer which provides that it will not use your intellectual property and/or sell products which are confusingly or colourably similar to your products. Generally speaking, it is easier to prove breach of contract rather than infringement, as it is not necessary to show that your designs are valid, which is the usual defence to a claim of infringement.

   

• Police the contract. For example, visit the factory on a regular basis during the relationship.  Get to know who you are dealing with and, how they work. Be upfront about what you want from them. And let them know when they are not delivering.  
• As your business grows so will their’s.  If your production is a substantial percentage or all of their business then the ramifications of you moving to someone else will be severe.  Marrying a supplier very closely to your business is a practical way of ensuring that your continued success is not only at the heart of your future business but their future business.