Last week, Kal Raustiala and Chris Sprigman took us behind the scenes of fashion copycatting, and explained why the practice is actually good for the fashion industry. This week, they explore historical and current efforts to protect fashion from copycatters. Kal Raustiala, a Professor at UCLA Law School and the UCLA International Institute, and?Chris Sprigman, a Professor at UVA Law School, are?counterfeiting and intellectual property experts.
Is the Design Piracy Prohibition Act A Good Idea?
By Kal Raustiala and Chris Sprigman
In our last post, we discussed the phenomenon of “red carpet copycats”: those firms that quickly issue copies of the often-striking-and strikingly expensive-dresses worn by the stars at the Oscars. Many apparel firms are very open about this practice, lauding it as a way to provide “bling on a budget.” And, as we explained, this practice is legal under American copyright law, which has never protected fashion in the way that other creative endeavors, such as music or film, are protected.
We also argued that the reason copying is permitted is in part that, in the fashion world, copying has hidden benefits. Styles, as we all know, rise and fall in a ceaseless cycle of trends. That is the nature of fashion. As copies of trendy or noteworthy garments are freely made, fashion-forward consumers recognize that it’s time to jump to the new new thing. The fashion cycle turns even faster.
The interesting effect of copying is to generate more demand for new designs, since the old designs-the ones that have been copied-are no longer special. The overall result is greater sales of apparel. We call this surprising effect the “piracy paradox.”
We think the piracy paradox explains why fashion has remained immune from the steady march toward ever stronger intellectual property rights. From boat hulls to buildings to books, copyright law has been dramatically expanded and strengthened by Congress over the last 50 years. That fashion remains an outlier reflects the unusual incentives of the industry.
Nonetheless, not everyone agrees that copying is beneficial. Indeed, if you are the designer being copied, you may feel otherwise, since you bear many of the costs of copying (such as foregone sales), while others reap the majority of the benefits. For that reason, there have been occasional calls to amend American copyright law to protect fashion designs. To date, none of these efforts have succeeded. But a closer look at them can give us further insight into the economics of fashion.
The first notable effort was actually a private arrangement in the 1930s called the “Fashion Originators’ Guild.” The Guild registered American designers and compelled retailers-some 12,000 across the nation were members-not to sell copies. If a retailer did sell a copy, they were issued a “red card,” and other manufacturers were supposed to boycott them.
The Fashion Originators’ Guild operated for several years before it began to face internal conflict. The major turning point was a lawsuit by Wm Filene’s Sons, Co., the precursor of Filene’s Basement. The Filene’s suit charged the Guild with violating the antitrust laws. While the Guild successfully defended itself, the notoriety created by the Filene’s lawsuit ultimately provoked action by the Federal Government. Ultimately, the Guild was struck down by the Supreme Court in 1941.
In the wake of the Supreme Court’s decision, the former head of the Guild, Maurice Rentner, lobbied Congress to provide copyright protection, stating that a failure to do so would put the fashion business in mortal danger. Many in the industry were opposed to protection, however. Leon Bendel Schmulen, of the Henri Bendel department store, told the New York Times in 1947 that copying was “no danger to the business” and a “natural consequence of fashion.”
In the nearly seven decades since the fall of the Guild, we learned that Bendel was right. We have lived in a Golden Age for American fashion, which grew enormously in sales and influence following the Guild’s demise.
Nonetheless, Rentner’s efforts were revived in 2006, when Congressman Bob Goodlatte introduced the Design Piracy Prohibition Act (DPPA). Updating Rentner’s prediction of catastrophic job losses (Rentner predicted 500,000 lost), Goodlatte’s colleague, Rep. Bill Delahunt, declared that 750,000 jobs were at stake due to design piracy. The DPPA would change this, they argue, by creating an unusual three year copyright in fashion designs.
While the DPPA died in committee in 2006, it was updated and recently reintroduced. (Disclosure: one of us (Sprigman) testified against the bill in the 2006 hearings.)
Is the DPPA a good idea? From our perspective, the bill is both unnecessary and unwise.
The DPPA is unnecessary because for 70 years the American fashion industry has thrived in a world of free and easy copying. To be sure, some designers are unhappy with the status quo and support the DPPA. Proponents point to the speed with which red carpet copycats like Faviana replicate dresses, as well as the great success of repeat copyists like Forever 21, to argue that protection is essential. But while individual cases of harm certainly exist, intellectual property law is meant to be designed with the big picture in mind. Without clear evidence of systematic harm, the case for the DPPA is very weak.
The DPPA is also unwise. Extend copyright to the fashion industry, and designers are going to start fighting over who started a trend.? Ligitation of this sort is great for lawyers-and those firms who can afford good lawyers-but not great for small designers or start-ups, who can be easily cowed or crushed by a lawsuit. And in a field where many believe there is nothing new under the sun, creating monopolies in fashion designs is bound to lead to a lot of lawsuits.
There’s one last point to make here.? Consumers benefit enormously from the fashion industry’s freedom to copy.? Because of copying, the latest styles are not restricted to the wealthy – indeed, copying has played a major role in democratizing fashion.
The bottom line is that there is no shortage of innovation in the U.S. fashion industry.? Right now, in studios in New York and Los Angeles, uncounted thousands of designers are busy churning out new designs.? And they are also busy copying and “interpreting” one another.? And that’s good.