La Diega (2019)
|La Diega (2019)|
|Title:||Can the law fix the problems of fashion? An empirical study on social norms and power imbalance in the fashion industry|
|Author(s):||Guido Noto La Diega|
|Citation:||La Diega, G.N. (2019) Can the law fix the problems of fashion? An empirical study on social norms and power imbalance in the fashion industry. Journal of Intellectual Property Law & Practice, 14(1), pp18-24|
|Key Related Studies:|
|About the Data|
|Data Description:||Participants were identified through snowball sampling, resulting in eighteen total interviews with 8 members from the creative side of fashion, and 10 from the legal side.|
|Data Type:||Primary data|
|Secondary Data Sources:|
|Data Collection Methods:|
|Data Analysis Methods:|
|Cross Country Study?:||No|
|Government or policy study?:||No|
|Time Period(s) of Collection:|
“• The fashion industry is affected by an imbalance of power that goes beyond the outsourcing of part of the manufacture to developing countries. Said imbalance characterizes the whole supply chain and hinders freedom of expression, freedom to conduct business and, hence, creativity and innovation. In order to understand fashion, IP lawyers and lawmakers need to take into account that the law is not the main device for regulating the relevant relationships. Indeed, fashion is a closed community, a family where complaining is rather frowned upon and where contracts do not reflect the actual relationships between the parties.
• In order to rebalance power, this article explores the possibility of treating good faith and inequality of bargaining power as unifying principles of contract law. However, in light of the evidence collected during a number of in-depth interviews with fashion stakeholders, it seems clear that social norms are the main source of regulation of relationships and, therefore, intervening at the level of the contracts may not be helpful. Competition law, in turn, may be of more help in rebalancing power; however, cases such as Coty v Parfümerie Akzente do not augur well. Moreover, competition law is useful when the relationship is over, but it is in all the stakeholders’ interest to keep the relationship alive while fixing its imbalance. This study confirms recent findings that social norms do not just have a positive impact on fields with low IP-equilibrium and sheds light on the broader consequences of the reliance on social norms and on its relationship to power imbalance.
• This work makes a twofold recommendation. First, IP lawyers should engage more with the unfamiliar field of social norms. Second, advocates of a reform of IP aimed at transforming the industry into an IP-intensive one should be mindful that the effort may prove useless, in light of the role of social norms, especially if power is not distributed.”
Main Results of the Study
The fashion industry operates as a tightly knit, closed “family” community which largely regulates itself through social norms as opposed to hard law. However, in this context these social norms may have very negative effects due to imbalances in power between parties (namely luxury brands vs retailers/buyers). The study labels this phenomenon the “dark side” of social norms regulation.
Contracts in the fashion industry tend to either be fair but never applied, or unfair but never complained about. This is due to widespread and significant power imbalances, which causes retailers and buyers to fear challenging distribution practices due to being viewed as socially unacceptable; else-wise, fears of exclusion are also evident, as retailers and buyers are reliant on ongoing relationships with luxury brands. Instead, the study suggests that the factual relationship in this instance is more important than the legal or contractual one; namely, one of economic dependence.
Policy Implications as Stated By Author
The study suggests that competition law may be a viable route to challenge the problematic practices identified. However, participants indicated that this ex-post tool is less effective than a means of keeping ongoing relationships alive.
Policymakers may also consider that reform in IP intensive industries may have limited effect where social norms dominate, and inequality in bargaining positions and power distributions limits freedom of expression and freedom to conduct business.