"Fashion's Piracy Paradox":

The Faculty Blog (U. Chicago Law School) runs a group blog session on my colleague Kal Raustiala's and Chris Sprigman's paper The Piracy Paradox: Innovation and Intellectual Property in Fashion Design. Lots of interesting posts from top scholars; much worth reading if you're interested in intellectual property.

Here's Prof. Sprigman's summary of the paper:

The Piracy Paradox is about the challenge that the fashion industry presents to the orthodox theories of IP. Advocates for strong IP rights argue that absent such rights copyists will free-ride on the efforts of creators and stifle innovation. Yet fashion presents a significant empirical anomaly: the industry produces a huge variety of creative goods without strong IP protection in one of its biggest markets (the United States), and without apparent utilization of nominally strong IP rights in another large market (the countries of the European Union). Copying and derivative re-working are rampant in both the U.S. and E.U., as the orthodox account would predict. Yet innovation and investment remain vibrant.

Why, when other major content industries have obtained increasingly powerful IP protections for their products, does fashion design remain mostly unprotected --and economically successful? The fashion industry is a puzzle for orthodox IP theory.

Our paper explores this puzzle.

Sebastian Holsclaw (mail):
I would tend to believe that answer to the 'paradox' is found in the footnote to the first few pages. The IP content of an individual fashion item is low compared to the IP content of a song, or movie or pharmaceutical product. This suggests that the industry can survive without protection of that content.
11.21.2006 3:35pm
On my long list of "if I ever get the time, I'd like to look into..." is the question of how magicians protect their tricks. It is considered bad form in the magic world to use a trick someone has invented in the not-too-distant past, and there are informal ways to deal with trick stealers, even though there is no legal protection.
11.21.2006 3:47pm
BoBo (mail):
"Why, when other major content industries have obtained increasingly powerful IP protections for their products, does fashion design remain mostly unprotected --and economically successful?"

Perhaps the conceit of fashion snobs and those with super-bloated wallets who "just have to have" the real thing? You can't copy selfish, stupid pride.
11.21.2006 4:27pm
DNL (mail):
The reason is that, but for the counterfeits, there'd be no fashion industry. BoBo is close to the mark, but misses slightly.

Put yourself in the shoes (so to speak) of a Prada purchaser. In 2004, you buy a pair of $500 shoes which will last basically forever, because you own so many shoes and a shoemaker (or other leathersmith) can mend them for pennies on the dollar. By owning an expensive, luxury item, you enter a small group of people -- the fashion elite.

In 2005, the next year's model comes out. Your incentive to purchase it is simply to become even more elite, which will be enough for some, but not all.

However, something else happens in 2005. The bag you purchased in 2004 has been replicated by dozens of others, replacing the "Prada" name with something else. Now, others can buy a version of your bag for $15. Your bag's value as a symbol of your entry into fashion's elite (and a reflection on your good taste and social circle) has crumbled.

So, what do you do? You buy the 2005 bag after all -- to the delight of the company whose intellectual property was left unprotected.
11.21.2006 4:49pm
Ron Mexico:
I think what it generally comes down is that the "copies" of the designer goods are usually inferior. Though Target may make a decent looking copy of the original, it will almost always be with inferior quality materials and an inferior quality construction. The two sellers likely don't have a large amount of overlapping consumers, so the original designer is probably not losing a ton of sales to Target. I also think that designer knock-offs tend to solidify the reach of the design and perhaps make the original even more popular.

And I tend to disagree with "BoBo" that fashion snobs and those with super-bloated wallets are the only people who want quality, well-designed products. Some people simply like nice things. This isn't "selfish, stupid pride" any more than staying at a nice hotel vs. the motel 6 (both have beds, don't they?) or owning a nice car vs. something old that still runs (they both get you where you need to go, don't they?).

The fashion world is interesting in IP---it's not like other media where direct copies can be made. Instead, the copy is a mere approximation of the original: good enough for some, but not for others. Thus it is actually beneficial to our economy by creating a larger market of more consumers.
11.21.2006 5:07pm
Trademark law is IP law. The fashion world uses trademark law plenty. I guess the only argument is that there is "creative content" in the styling of garments that is not being protected, but that's just assuming the conclusion. A far more likely outcome is that there is no protection because it is not that creative.
11.21.2006 5:39pm
John (mail):
Oh, come on. Is this so hard? It's the designer's name that sells, and that piece of IP is protected fanatically. To suggest it's the dress is like saying the chemistry of the ink on the pages is what sells the next Grisham novel.

The fashion industry is viciously protective of the only IP that matters--brand identity. The rest is worthless.
11.21.2006 5:42pm
jallgor (mail):
I would argue that unlike music or art all the fashion industry need is trademark protection. This has something to do with both DNL's and Ron Mexico's arguments. Most people don't really know if something is made well or is made from good material so they trust the trademark when picking an item (which is often misleading since some very expensive brands produce junk but I digress). Similarly, the brand can carry with it prestige that causes people to buy. Are Prada shoes really worth 300 times more that the identical looking $40 pair from Payless on quality alone?
Whether the motivation is quality control or prestige, protection of trademark gets the job done for the manufacturer. The designs don't need protecting because people are either not discerning enough to know if a knock off is decent quality or too snooty to care.
11.21.2006 5:47pm
Chris Bell (mail):
Thanks for the post, this was very interesting. Especially that fashion in the EU has a regulatory defense that they don't use...

As the push to "beat the cycle" increases, we would also expect to see designers over investing in new designs. Since only the "new" is worth money, designers may be over-creating. The designers are constantly pregnant, but put their children up for adoption at three months.

We also expect to see more trademarks on clothing itself since those can't be copied as blatantly. I, for one, am tired of feeling like a walking billboard.

The authors don't know what to expect if IP law were actually utilized in fashion, but I would suggest that less emphasis would be placed on newness and more on other features. Right now, who cares if your chic new outfit isn't washable and falls apart after you wear it five times? You can only wear it five times before it goes out of fashion anyway. I think you would see more emphasis on interchangability, durability, ease of use, etc. (All of which would be good things from a consumer's point of view.)

I like their note that sports plays are creations that aren't protected.

"Copyright infringement, #42 on the defense. Five yard penalty from the spot of the foul."
11.21.2006 6:05pm
NickM (mail) (www):
Copyrights weren't originally considered to apply to graphic design works, and designers copied each others' designs freely. When copyright protection became available, copying had become so deeply ingrained into the design business that there wasn't really much that would be copyrightable, and the culture of copying has continued.

As others have said on this thread, trademark protection is available, strongly used, and definitely IP.

11.21.2006 6:43pm
Bob R (mail):
(How old are the authors, if I can ask?) IP only became a huge issue in industries where and when it became possible to make perfect copies of products at trivial cost. Not true in fashion/apparel as Ron Mexico points out. Other reasons may contribute, but my guess is that is the biggest. Knockoffs require significant effort. No one worried about pirated movies when you had to make 35mm film prints.
11.21.2006 7:15pm
Knockoffs require significant effort. No one worried about pirated movies when you had to make 35mm film prints.

I see your point, but wasn't piracy of books, sheet music, etc. a problem even in the labor-intensive days of manual presses and hand-set type?
11.21.2006 10:37pm
Randy R. (mail):
Not really. What happened is that composers such as Chopin or Mozart sold thier works to a publisher for one set fee. The publisher then could print as many or as few copies as he choosed to, but no matter how much was sold, neither composer got any more money.

I know of no pirated copies of Chopins' works, or the works of any other composers. How about novels, such Fielding, or Sand, or Dostoevsky? I don't ever recall anyone professor of mine saying -- be careful about buying your Proust from a reputable book dealer, or else you may have a pirated copy with mistakes in it.
11.22.2006 1:44am
Randy R. (mail):
And as for whether IP protected the knock-offs; Were there really so many imitators of Chopin's waltzes that he was forced to buy up copies and say these pieces were not composed by him? Beware of minuets and mazurkas claiming to be created by Mozart or Beethovan?

It's sorta fun to think of this, though....
("Buy the sheet music of Mr. Luddy von Beets O'van! So good, you won't be able to tell the difference!)
11.22.2006 1:47am
Well, in Shakespeare's day, there were so many unauthorized (and inaccurate) printings of his plays that after Shakespeare's death, his friends published the famous First Folio to provide a definitive text.

I did like the Beethoven joke--and after all, Mozart's Requiem was commissioned by an amateur hoping to pass off the work as his own!
11.22.2006 9:39am
Houston Lawyer:
As I remember the law from my IP class decades ago, you can't get any type of IP protection for the "art" part of an otherwise functional object, trademarks excluded. Imagine the car industry if you didn't have Mercedes knock-offs. Almost every functional item has some asthetic value. Any attempt to give IP protection to these asthetic elements would stifle innovation.
11.22.2006 10:35am
I think accepting some combination of these premises may resolve the paradox:

1) The fashion industry recognizes that marketing is a much stronger determinant of the success of its content than the quality or originality of the IP content. Thus the major concern for fashion is counterfeiting of labels, not look-alikes.

2) "In fashion, one day you are in and the next day you are out." With rapid product cycles, fashion does not have to try and maintain long-term value for its IP on a piecemeal basis, rather the reputation of the label is what is important.

3) The fashion industry is greatly stratified by price and there are sufficient market niches that companies are not reduced to fighting over IP scraps. Other industries attempt wring value from a specific piece of IP for decades.
11.22.2006 10:42am
The comments of BoBo and DNL reminds me of something I read once, but I can't remember the author. Basically, it said that the fashion industry was just one long running joke on rich people.
11.22.2006 10:46am
Bob R (mail):
...but wasn't piracy of books, sheet music, etc. a problem even in the labor-intensive days of manual presses and hand-set type?

Sure, if it wasn't a problem there wouldn't have been laws against it. But it wasn't the huge threat that it is to digital industries today. Those of us of a certain age who have seen the transition from analog to digital have seen a huge change in ideas about and attitudes toward IP. I'm not a lawyer, but I would guess that interest in law school IP classes is very different today than it was in 1975. (Is that correct?) I'd guess that attitudes toward IP in the fashion industry aren't all that different from attitudes in the music industry in 1970. (BTW, that was the reason for my question about the authors' ages. I did not mean any disrespect. I was just curious about their perspective.)
11.22.2006 12:37pm
Eugene W. (www):
The fashion industry has it right. Copyright and IP law should focus on the line between trademark and specific content infringement. The value of a Stephen King novel is his name, his "trademark." Derivative Stephen King novels sans the Stephen King name hardly command the same market valuation. So short of outright plagiarism, Stephen King is going to be less concerned about writers "borrowing" his ideas and plots and style than stealing his good name.

A recent Reason article illustrates a real-world application of this approach in the publishing world, in the billion-dollar Japanese manga industry:
The underground sale of fan-made comics (known as dojinshi), often highly derivative of the commercial product, occurs on a massive scale in Japan, with some comics markets attracting 150,000 visitors per day. Rarely taking legal action, the commercial producers sponsor such events, using them to publicize their releases, recruit new talent, and monitor shifts in audience tastes.
A similar strategy was followed in the U.S., with Japanese copyright holders rarely if ever pursuing copyright infringement against websites that scanned, translated and freely posted Japanese manga for English speakers (known as "scanlations"). As a result, 80 percent of the top 100 best-selling graphic novels (meaning: legit sales) in the U.S. are now Japanese manga.
11.22.2006 1:49pm
markm (mail):
What John 11.21.2006 5:42pm said. It's not the designs that sell at such outrageous prices, it's the labels.

Also, if they couldn't copy pieces of each other's designs, there would be very few new designs - and rich women couldn't spend a fortune vying to wear the latest style first. Everyone would lose (except for whoever was footing the bill for replacing wardrobes several times a year.)
11.22.2006 3:03pm