If you like your legal analysis interlarded with pictures of Ugg boots and Gypsy BoHo skirts, then you'll have fun with a forthcoming article in the Virginia Law Review, "The Piracy Paradox: Innovation and Intellectual Property in Fashion Design." But if you're an intellectual property geek looking for evidence suggesting that the recent trend toward strengthening IP protection at all times in every situation may be wrongheaded, then the 94-page (but extremely readable) article by law school professors Kal Raustiala (UCLA) and Christopher Sprigman (University of Virginia) is riveting reading. (Thanks to the Consumer Project on Technology for the link.)
Here's the paradox:
Like the music, film, video game, and book publishing industries, the fashion industry profits by repeatedly originating creative content. But 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 magazine 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 innovate at a rapid clip, precisely the opposite behavior of that predicted by the standard theory.
Raustiala and Sprigman offer a wide-ranging tour of the fashion industry in the U.S. and Europe and its relationship to IP law, but the most provocative point they make is this: The speedy copying of new designs contributes to the rapid turnover of the fashion cycle, which in turn boosts the profitability of the entire sector. The hot new elite thing becomes passé so fast that the cognoscenti must perforce move on to something even swankier, asap.
More fashion goods are consumed in a low-IP world than would be consumed in a world of high-IP protection precisely because copying rapidly reduces the status premium conveyed by new apparel and accessory designs, leading status-seekers to renew the hunt for the next new thing.
In other words, there's greater innovation because of weaker IP. So what does this mean for other industries, such as music, or semiconductors? Has the world been headed in the wrong direction? Would there be more listening choices to thrill to with less copyright protection?
Not necessarily, say the authors. Each industry is different, and thrives (or doesn't thrive) because of a different constellation of factors. What makes sense for boots might not be right for microprocessors. But understanding that very point is the critical issue. Advocates of increased intellectual property protection tend to rely on some combination of a fundamentalist appeal to morality (copyright infringement is theft!) or an economically utilitarian mandate (copyright protection equals innovation). But if the goal is a thriving industry that benefits both consumers and producers, then the example of the fashion industry proves that neither argument always holds. And the challenge then becomes finding the right balance in each specific situation.