The piracy paradox: innovation and intellectual property in fashion design
| Autor | Kal Raustiala - Christopher Sprigman |
| Cargo | Professor, UCLA Law School and UCLA International Institute - Associate Professor, University of Virginia School of Law |
| Páginas | 339-409 |
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THE PIRACY PARADOX: INNOVATION AND INTELLECTUAL PROPERTY...
CONTRAFÁCTICO
The Piracy Paradox: innovation and intellectual
property in fashion design* / *
KAL RAUSTIALA Y CHRISTOPHER SPRIGMAN**
Anuario Andino de Derechos Intelectuales.
Año III - N.º 3. Lima, 2007
It is surprising that in this tremendous field [of fashion], ranking conservatively
among the first five in the United States, such unregulated and primitive conditions
obtain that unreserved pilfering is tolerated and openly permitted.
Sumario: Introducción. I. The fashion industry. A. Fashion Industry Basics. B. Copying in the
Fashion Industry. 1. Copy Control via Cartelization: The Fashion Originators’ Guild. 2.
Unrestrained Copying Following the Fall of the Guilds. a. Fashion’s Low-IP Equilibrium.
b. Some Examples of Fashion Design Copying. II. The piracy paradox. A. Induced
Obsolescence. B. Anchoring. C. Summary: The Paradoxical Effects of Low Protection. D.
The European Union and the United States—Different. Legal Rules, Similar Industry
Conduct. E. Alternative Explanations for the Fashion Industry’s Low-IP Equilibrium. 1.
Copyright Doctrine as a Barrier. 2. Political Barriers. 3. First-Mover Advantage. III.
Paradox or paradigm? Innovation and copyright’s negative space. A. Creative Cuisine. B.
Other Elements in Copyright’s Negative Space. Conclusion.
* Este artículo se publicó en el ............................. ............................................... .......
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** Professor, UCLA Law School and UCLA International Institute and Associate Professor, Univer-
sity of Virginia School of Law, respectively. The authors wish to thank Michael Abramowicz,
Kerry Abrams, Jonathan Barnett, Michal Barzuza, Lillian BeVier, Laura Bradford, Nuno Carval-
ho, Julie Cohen, Terry Fisher, Brett Frischmann, Brandon Garrett, Joseph Gratz, Larry Helfer,
Paul Hoffert, Ed Kitch, Mark Lemley, Larry Lessig, Michael Madison, Paul Mahoney, Neil
Netanel, David Nimmer, Dotan Oliar, Frank Pasquale, Glen Robinson, Rebecca Tushnet, Rip
Verkerke, Eric Von Hippel, and participants at presentations at Columbia Law School, the MIT
Innovation Lab, the Center for Internet and Society at Stanford Law School, and at a Berkman
Center “cybercamp” hosted by Pam Samuelson for their helpful comments on earlier drafts. The
authors also wish to thank Annette Kur for her substantial assistance with E.U. materials, and
Michelle Morris, Charnan Jessica Cooke, Christen Raymond, Kristen Riemenschneider, Tyler
Slay and Wade Kackstetter for expert research assistance. A skeletal version of some of the
arguments in this paper appeared in Kal Raustiala, Fashion Victims, The New Republic Online,
March 15, 2005. Any errors are, of course, entirely the authors’ own.
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ANUARIO ANDINO DE DERECHOS I NTELECTUALES
CONTRAFÁCTICO
The leaders of this gigantic segment of our commercial life . . . have completely
ignored a situation that is eating away at the very roots of its existence. Style and
creation constitute the life blood of this multi-billion dollar business. Without
them, the industry would fade into obscurity. Yet, for some unknown reason, style
piracy is treated more indulgently than much lesser offenses involving deprivation
of one’s rights and property.
— Samuel Winston, Inc. v. Charles James Services, Inc., 159 N.Y.S.2d 716, 718
(N.Y. Sup. Ct. 1956).
INTRODUCTION
The standard justification for intellectual property rights is utilitarian. Advocates
for strong intellectual property (“IP”) protections note that scientific and technological
innovations, as well as music, books, and other literary and artistic works, are often
difficult to create but easy to copy. Absent IP rights, they argue, copyists will free-ride on
the efforts of creators, discouraging future investments in new inventions and creations.
In short, copying stifles innovation.
This argument about the effects of copying is logically straightforward, intuitively
appealing, and well reflected in American law. Yet, few seem to have noticed a signifi-
cant empirical anomaly: the existence of a global industry that produces a huge variety
of creative goods in markets larger than those for movies, books, music, and most scien-
tific innovations1, and does so without strong IP protection. Copying is rampant, as the
standard account would predict. Competition, innovation, and investment, however,
remain vibrant.
That industry is fashion. Like the music, film, video game, and book publishing
industries, the fashion industry profits by repeatedly originating creative content. But
1. According to the 2002 Economic Census, the U.S. book publishing industry reported revenues
of $27 billion. U.S. Census Bureau, 2003 Service Annual Survey, Information Sector Services,
Table 3.0.1 2003), http://www.census.gov/svsd/www/sas51.html. Annual revenues for 2001 for
the U.S. motion picture industry are estimated at approximately $56 billion. Id. Annual revenues
for 2004 for the recording industry are estimated at approximately $12 billion. See Recording
Industry Association of America, 2004 Yearend Market Report on U.S. Recorded Music Ship-
ments (2004), http://www.riaa.com/news/newsletter/pdf/2004yearEndStats.pdf. The U.S. ap-
parel industry reported gross revenues for 2004 exceeding $173 billion. See Press Release, NPD
Fashionworld, The NPD Group Reports U.S. Retail Apparel Sales Up After Three Years of
Decline (Feb. 23 2005), http://www.npd.com/dynamic/releases/press_050223.html. Globally,
the fashion industry is said to produce revenues of about $784 billion. See Safia A. Nurbhai,
Style Piracy Revisited, 10 J.L. & Pol’y 489, 489 (2002). It may well be, as some commentators
on this Article have suggested to us, that the “IP content” of the film or music industry’s products
is higher than the “IP content” of fashion items. We are unsure how to measure this in any
reliable way. Even if this suggestion is accurate, these numbers illustrate that by whatever metric
may be used, fashion is a very large economic sector when compared to the more traditional foci
of IP scholarship. Thus, even if fashion’s per-item IP content is much lower, the aggregate value
of this content across the industry is still quite high.
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THE PIRACY PARADOX: INNOVATION AND INTELLECTUAL PROPERTY...
CONTRAFÁCTICO
unlike these industries, the fashion industry’s principal creative element—its apparel
designs—is outside the domain of IP law. And as a brief tour through any fashion maga-
zine or department store will demonstrate, while trademarks are well protected against
piracy, design copying is ubiquitous. Nonetheless, the industry develops a tremendous
variety of clothing and accessory designs at a rapid pace.
This is a puzzling outcome. The standard theory of IP rights predicts that extensive
copying will destroy the incentive for new innovation. Yet, fashion firms continue to inno-
vate at a rapid clip, precisely the opposite behavior of that predicted by the standard theory.
Despite this anomaly, few legal commentators have considered fashion design in
the context of IP.2 Those who have done so have almost uniformly criticized the current
legal regime for failing to protect apparel designs. For example, one article argues that
“[s]ociety must protect the great talent of fashion designing. Courts need to adequately
safeguard innovation and creativity in the fashion business.”3 Another describes fashion
2. Jessica Litman has noted in passing fashion’s unusual disconnection with copyright. See Jessica
Litman, The Exclusive Right to Read, 13 Cardozo Arts & Ent. L.J. 29, 44–45 (1994). Litman’s
formulation of the fashion industry’s challenge to IP orthodoxy is worth considering in full:
Imagine for a moment that some upstart revolutionary proposed that we eliminate all
intellectual property protection for fashion design. No longer could a designer secure
federal copyright protection for the cut of a dress or the sleeve of a blouse. Unscrupulous
mass-marketers could run off thousands of knock-off copies of any designer’s evening
ensemble, and flood the marketplace with cheap imitations of haute couture. In the short
run, perhaps, clothing prices would come down as legitimate designers tried to meet the
prices of their free-riding competitors. In the long run, though, as we know all too well, the
diminution in the incentives for designing new fashions would take its toll. Designers
would still wish to design, at least initially, but clothing manufacturers with no exclusive
rights to rely on would be reluctant to make the investment involved in manufacturing
those designs and distributing them to the public. The dynamic American fashion industry
would wither, and its most talented designers would forsake clothing design for some more
remunerative calling like litigation. And all of us would be forced either to wear last year’s
garments year in and year out, or to import our clothing from abroad.
Id. at 44–45. Consideration of fashion and IP is rising. See Jonathan M. Barnett, Shopping for
Gucci on Canal Street: Reflections on Status Consumption, Intellectual Property, and the Incen-
tive Thesis, 91 Va. L. Rev. 1381 (2005); Kal Raustiala, Fashion Victims, The New Republic
Online (Mar. 15, 2005), http://www.tnr.com/doc.mhtml?i=w050314&s=raustiala031505. Re-
cently, Susan Scafidi has created a blog addressing issues of fashion and IP. See Counterfeit
Chic, http://www.counterfeitchic.com (last visited Aug. 26, 2006).
3. Karina K. Terakura, Comment, Insufficiency of Trade Dress Protection: Lack of Guidance for
Trade Dress Infringement Litigation in the Fashion Design Industry, 22 U. Haw. L. Rev. 569,
619 (2000). For articles arguing for expanded protection for fashion designs, see, e.g., Saman-
tha L. Hetherington, Fashion Runways Are No Longer the Public Domain: Applying the Com-
mon Law Right of Publicity to Haute Couture Fashion Design, 24 Hastings Comm. & Ent. L.J.
43, 71 (2001); S. Priya Bharathi, Comment, There Is More Than One Way to Skin a Copycat:
The Emergence of Trade Dress to Combat Design Piracy of Fashion Works, 27 Tex. Tech L.
Rev. 1667, 1669–72 (1996); Leslie J. Hagin, Note, A Comparative Analysis of Copyright Laws
Applied to Fashion Works: Renewing the Proposal for Folding Fashion Works into the United
States Copyright Regime, 26 Tex. Int’l L.J. 341, 364–66 (1991); Jennifer Mencken, A Design
for the Copyright of Fashion, 1997 B.C. Intell. Prop. & Tech. F. 121201, ¶14 (Dec. 12, 1997),
http://www.bc.edu/iptf.
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