The Empire Strikes Back Against Counterfeits

The CFDA, along with other interest groups has been trying to get the Design Piracy Prohibition Act passed in Congress in order to protect the rights of designers:

"August 8, 2007 – On Thursday, August 2 in Washington, D.C. Senators Charles Schumer (D-NY), Kay Bailey Hutchison (R-TX), Dianne Feinstein (D-CA) Orrin Hatch (R-UT), Herb Kohl (D-WI), Lindsey Graham (R-SC), Sheldon Whitehouse (D-RI), Hillary Clinton (D-NY) and Olympia Snowe (R-ME) introduced the Design Piracy Prohibition Act (S1957: The Schumer-Hutchison-Feinstein Bill) in the United States Senate. This bill protects original fashion designs for a period of three years from their registration with the U.S. Copyright Office." -CFDA website


http://www.cfda.com/index.php?option=com_cfda_content&task=news_display_all


This bill was introduced as preventive measure to protect emerging designers from having their creative work poached by counterfeiters as well protecting the right of consumers to better quality goods that are made under fair labor conditions. The ultimate goals of this proposed legislation are to protect designers and to protect intellectual property.


The Copyright Act is currently under review to include protection for fashion designs with this introduction of this bill: “The Design Piracy Prohibition Act, H.R. 5055, introduced by Congressman Bob Goodlatte (R-Va) last year, seeks to amend the Copyright Act to include protection for fashion designs for three years from the time that the designer registers the design and establishes for infringement of a fashion design at the greater of $250,000 or $5 per copy.” Hope Calder-Katz, How Does Design Piracy Prohibition Act Could Deter Copying of High Fashion, 21-MAY CBA Rec. 44, 45 (2007). If the Copyright Act is amended, it will be for a much shorter period of time as given to other creative works because the fashion industry works within specific seasons that are transient. Id. Under the Copyright Act, protection for the creator lasts for the life of the creator plus 70 years after the creator’s death. Id.


Some individuals against the bill claim that this is too much protection. However if you consider the anti-piracy measures in countries such as the U.K. and France, United States legislation to protect the creativity of designers is lagging behind. Many prominent individuals of the fashion industry have commented on the lack of protection afforded to designers in U.S. law: “Patrick Thomas, President & CEO of Hermes, agreed, saying that ‘[i]t is a very strange statement to see that in the U.S. the trademark is protected, but the model, the shape or the design itself can not be protected…Our creative activity in fashion and accessories [is] of the same nature as the professional efforts put into developing movies, music or medicines.’ Id. at 46


The proposed legislation is not even agreed upon by interest groups. There is the CFDA which supports the bill, while the American Apparel and Footwear Association is a little more hesitant in its support of the bill. It would like to protect the interests of its larger members who sometimes are "inspired" by the creative designs of smaller designers who may not have the financial abilities to market their designs on a larger scale. So the AAFA is pushing for a revision to the Act.



However, there are opposing parties who argue that passing such a bill like the Design Piracy Prohibition Act will only serve to protect elite designers and keep prices on couture designs unreasonably high for the average consumer: “However, some scholars hope that the United States will resist the international pressure, arguing that the framework of free copying in this country actually benefits the fashion industry as whole more than the stricter laws of Europe.” Laura C. Marshall, Catwalk Copycats: Why Congress Should Adopt a Modified Version of the Design Piracy Prohibition Act, 14 J. Intell. Prop. L. 305, 309 (2007).



Those opposed to stricter intellectual property protection for fashion design argue that piracy actually induces more creativity and economic growth. They argue that the fashion industry tends to remain stable in a ‘low IP equilibrium’ Id. at 320. Since piracy involves diffusing the designs of elite couture houses to a larger audience that normally would not have access to these designs, it makes the exclusivity factor of the designs obsolete to the elite clientele of the creators of the designs.



Here is a good example of diffusion: The dress on the left is from Versace and retails for $1,685 while the dress on the right is from Bebe and retails for $130.


The interesting thing to note is that most individuals who are likely to purchase the original from Versace would not be easily swayed into purchasing the cheaper Bebe version. There is an argument that the Bebe version appeals to another type of consumer who would never buy the original, yet would purchase an item that has been inspired by a designer. This forces designers to constantly be creative because once the design is commonly found in malls across America, the original purchaser of that Versace dress will no longer want it. They will crave something unique and different. It is not that piracy really eats away at potential revenue losses, but its a creativity drain. It forces designers to have to churn out designs at a faster rate. Where is the harm? Is there are a harm to consumers? Or is this a case of just designers suffering from creative burnout?

Is the whole idea of knock offs really harmful to business? Isn't this what capitalism and fair competition are about? Are the European countries that have adopted stricter measure against design piracy really correct in doing so?