Raustiala and Sprigman (2006)
|Raustiala and Sprigman (2006)|
|Title:||The Piracy Paradox: Innovation and Intellectual Property in Fashion Design|
|Author(s):||Kal Raustiala, Sprigman, C. J.|
|Citation:||Raustiala, K. and Sprigman, C.J. (2006) The Piracy Paradox: Innovation and Intellectual Property in Fashion Design. Virginia Law Review, Vol. 92, 1687-1777|
|Key Related Studies:|
|Linked by:||Danna, Martinelli and Nuvolari (2021), La Diega (2019), Poor (2012), Raustiala and Sprigman (2019), Sprigman (2017)|
|About the Data|
|Data Description:||This study comprises of an analysis of IP protection in apparel designs, including an industry overview, and case/statute analysis. Two economic models are proposed to explain the low-IP equilibrium of the industry.|
|Data Type:||Secondary data|
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|Data Analysis Methods:|
|Cross Country Study?:||No|
|Government or policy study?:||No|
|Time Period(s) of Collection:|
The orthodox justification for intellectual property is utilitarian. Advocates for strong IP rights argue that absent such rights copyists will free-ride on the efforts of creators and stifle innovation. This orthodox justification is logically straightforward and well reflected in the law. Yet a significant empirical anomaly exists: the global fashion industry, which produces a huge variety of creative goods without strong IP protection. Copying is rampant as the orthodox account would predict. Yet innovation and investment remain vibrant. Few commentators have considered the status of fashion design in IP law. Those who have almost uniformly criticize the current legal regime for failing to protect apparel designs. But the fashion industry itself is surprisingly quiescent about copying. Firms take steps to protect the value of trademarks, but appear to accept appropriation of designs as a fact of life. This diffidence about copying stands in striking contrast to the heated condemnation of piracy and associated legislative and litigation campaigns in other creative industries.
Why, when other major content industries have obtained increasingly powerful IP protections for their products, does fashion design remain mostly unprotected - and economically successful? The fashion industry is a puzzle for the orthodox justification for IP rights. This paper explores this puzzle. We argue that the fashion industry counter-intuitively operates within a low-IP equilibrium in which copying does not deter innovation and may actually promote it. We call this the piracy paradox. This paper offers a model explaining how the fashion industry's piracy paradox works, and how copying functions as an important element of and perhaps even a necessary predicate to the industry's swift cycle of innovation. In so doing, we aim to shed light on the creative dynamics of the apparel industry. But we also hope to spark further exploration of a fundamental question of IP policy: to what degree are IP rights necessary to induce innovation? Are stable low-IP equilibria imaginable in other industries as well? Part I describes the fashion industry and its dynamics and illustrates the prevalence of copying in the industry. Part II advances an explanation for the piracy paradox that rests on two features: induced obsolescence and anchoring. Both phenomena reflect the status-conferring power of fashion, and both suggest that copying, rather than impeding innovation and investment, promotes them. Part II also considers, and rejects, alternative explanations of the endurance of the low-IP status quo. Part III considers extensions of our arguments to other fields. By examining copyright's negative space - those creative endeavors that copyright does not address - we argue can we can better understand the relationship between copyright and innovation.
Main Results of the Study
Two interrelated models are proposed to explain the lack of IP protection in the fashion industry:• “Induced obsolescence” – The status-symbol (or positional) nature of fashion goods results in a cyclical process of innovation. Lack of IP protection contributes to an accelerated disuse as these goods become more common (and therefore less desirable). Corresponding loss of positional qualities result in motivations for designers to innovate. • “Anchoring” – The fashion industry relies on communicating emerging themes (or styles) which necessarily results in copying to create trends. This ensures that each season’s innovation is defined around a limited number of designs, which both drive and focus consumption.The authors note no substantial doctrinal barriers which prevent IP protection in the fashion industry in either the EU or US. The conclusion is that the above noted models have created an equilibrium which does not incentivise industry members to change the status quo.
Policy Implications as Stated By Author
The positional and status-based nature of fashion may also be present in other creative industries, and ergo similar effects may exist there (e.g. in the music industry). Due to the strong position of creators in these industries, it is possible that objective incentives are not necessary, as constant innovation is still exhibited. Paradoxically, it may be the case that lower levels of protection better serve these industries than higher levels.
Coverage of Study