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Winners of The Knockoff Economy Photo Contest

We are excited to the announce the winner of The Knockoff Economy contest for best photo of a knockoff. In fact, we are excited to announce that we have two winners (we had a lot of great entries, but these two jumped out). And, since they kind of go together in an odd way, we decided to award them both the prize. Winners receive a signed copy of The Knockoff Economy plus a copy of the new album Just Tell Me That You Want Me, featuring covers (i.e., legal knockoffs) of Fleetwood Mac songs by artists like Karen Elson, Lykke Li, and The New Pornographers.

Our congratulations to Donna Ivanisevic for the Louis Vuitton condom (originally created and sold, ever so briefly, for World AIDS Day) and to Terry Stedman (disclosure: a former student of Kal’s) for the Louis Vuitton Virgin Mary: Read More »





The Authors of The Knockoff Economy Answer Your Questions

We want to thank everyone for their questions — it’s great to see people responding to, critiquing and, in some cases, tweaking, the ideas we set out in The Knockoff Economy. We are fascinated by the complex relationship between copying and creativity — and we’re thankful that many of you are as well.  So, to the Q&A . . .

Q. The issue that concerns my industry most is internet sales of prescription skin products such as retin-A and hydroquinone. Some might be counterfeit, but many are probably diverted products. The manufacturer sells them to a physician, the unscrupulous physician sells them on the internet at a deep discount, the patient may be hurt by expired or dangerous medications or may not use them correctly even if they are real. This hurts legitimate physicians by drawing business away from them, but also hurts a manufacturer’s reputation. (Apparently, people who have qualms about buying Viagra online don’t think twice before buying skin medications from those same sources.)

Do you plan to do any research in this area? Will you be looking at diversion in addition to counterfeits? Read More »





The Knockoff Economy Is Out! Bring Your Questions for Kal Raustiala and Chris Sprigman

The Knockoff Economy: How Imitation Sparks Innovationis out! The book explores the relationship between copying and creativity. Copying has a well-known destructive side—which is why we have intellectual property rights—but it also has a much less appreciated productive side. We explain how some creative industries not only survive in the face of copying, but thrive due to copying.  These industries offer an important set of lessons about intellectual property law and highlight the often complex balance between innovation and imitation. While many of the cases we explore are unusual—such as fashion and fonts—we close the book with a broader examination of the main themes and lessons and a brief look at the music business, which is perhaps the poster child for the (often exaggerated) perils of copying.

The Knockoff Economy grew out of an earlier paper of ours on innovation in the fashion industry. We realized there were many creative fields that fell outside the scope of intellectual property law in one way or another, and just as importantly, these fields turned out to be really fun to explore. Writing the book allowed us to dig into things like football and fonts, and to do so in a way that, we hope, opens up a broader debate on the law and economics of innovation. Read More »





Why Knockoffs Can Help Build a Strong Brand

Here is an excerpt from The Knockoff Economy: How Imitation Sparks Innovation, which has just been published by Oxford University Press. Next week, we’ll be taking questions from Freakonomics readers in a Q&A. We’ll also run a contest for the wackiest photo of a knockoff item.

THE KNOCKOFF ECONOMY
CONCLUSION

The traditional justification for trademark law, which protects brands, has little to do with innovation. Instead, trademark law’s justification is that brands help consumers identify the source of products, and thereby buy the item they want–and not an imitation. And yet brands—like Apple, or J. Crew–play an important and often unappreciated creativity-inducing role in several of the industries we explore in The Knockoff Economy.

Put in economic terms, trademarks reduce the search costs associated with consumption. If you’ve had a positive experience with basketball shoes from Adidas, then marking them with the trademark-protected three-stripes helps ensure that you can quickly find their shoes the next time you are shopping. And of course it also lets everyone else know which shoes you prefer.  Read More »





Excerpt from The Knockoff Economy: Tweakonomics

Here is an excerpt from The Knockoff Economy: How Imitation Sparks Innovation, which has just been published by Oxford University Press. Over the next few weeks, we’ll be running 2 excerpts from the book here on the blog and taking questions from Freakonomics readers in a Q&A. We’ll also run a contest for the wackiest photo of a knockoff item. 

In The Knockoff Economy we examine the relationship between copying and creativity. Most people who study this area look at industries such as music or publishing, where intellectual property (IP) protections are central. We do something different: we explore innovative industries—such as fashion, food, fonts, and finance–in which IP is either unavailable or not effective. In these industries copying is common, yet we find that innovation thrives. In a world in which technology is making copying ever easier, we think these industries have a lot to teach us. And one of the key lessons is that copying is not just a destructive force; it can also be productive. Harnessing the productive side of copying—the ability to refine, improve, and update existing innovations—is at the heart of this excerpt.

THE KNOCKOFF ECONOMY
CHAPTER 4

Rules against copying don’t just cover outright imitation. They also address variations: works that use that some portion of another creative work but add in new stuff, and in the process transform the original work. Think of Shepard Fairey’s famous Hope poster of Barack Obama, which took an existing photograph and reworked it into an iconic image:  Read More »





The Legality of “Dumb Starbucks”

By now, pretty much everyone has heard about how Comedy Central star Nathan Fielder opened his personal version of a Starbucks in an L.A. strip mall. Fielder’s “Dumb Starbucks” looked just like a real Starbucks – same logos, colors, store layouts, and similar products and menu. With the exception that everything was preceded by the word “dumb”, including the “Dumb Blonde Roast” coffee and the “Dumb Norah Jones” CDs on sale by the register.  Also, the coffee was free.

Fielder kept his involvement under wraps at first. But by Monday he revealed his ownership, and by Tuesday the L.A. County Board of Health had shut him down for operating without a license. And yet, while Dumb Starbucks lived, it created a sensation, with lines snaking down the street and Fielder invited onto Jimmy Kimmel to talk about his adventure.

Starbucks itself was not amused. “We are aware of this store, and it is not affiliated with Starbucks. We are evaluating next steps, and while we appreciate the humor, they cannot use our name, which is a protected trademark.” Starbucks spokeswoman Laurel Harper said in a statement. When pressed on whether Starbucks intends to take legal action, she replied, “That may happen. We’re not sure at this point.” Read More »





When a Fake Banksy Is a Real Banksy

Many news outlets this week carried the story that Banksy, the celebrated British street artist, had set up an innocuous-looking booth near Central Park that offered original signed works for $60 each—despite their value being much closer to $60,000 apiece.  Even with this astounding discount, only a handful were sold—as the video in the post, from Banksy’s website, shows.

What’s interesting to us is what this says about art and the role of copies. While copying is a huge concern in many art forms—especially music and film—in fine art, it is comparatively insignificant. In China, there are whole villages full of artisans devoted to copying the great masters of Western art, and certainly fakes and frauds are well known in the West as well. Yet there is not a thriving black market in Banksy knockoffs—or, for that matter, in the work of other major contemporary artists.  Why is that? Read More »





FREAK-est Links

1. Movie tickets cost as much as $48; “Star Wars” creator George Lucas predicts that ticket prices are only going up. (HT: SM Fishman)

2. Name wars: Borghese Inc. fights the Borghese family for the right to market with the royal name.

3. Does dim lighting enhance creativity?

4. An interactive data map (in French) of Paris Metro lines crossed with socioeconomic and political indicators. Read More »