University of Virginia Legal Working Paper Series
University of Virginia John M. Olin Program in Law and Economics Working Paper Series
The Piracy Paradox: Innovation and Intellectual Property in Fashion Design
Abstract
The orthodox justification for intellectual property rights is utilitarian. Advocates for broad and readily enforceable intellectual property (IP) protections note that scientific and technological innovations, as well as music, books, films, and other literary and artistic works, are often difficult to create but easy to copy. Absent IP rights, they argue, copyists will free-ride on the efforts of creators, discouraging future investments in new inventions and literary and artistic works. In a world without IP rights, the orthodox justification predicts that copying will stifle innovation.
The orthodox justification for IP rights is logically straightforward, intuitively appealing, and, not surprisingly, well reflected in American law. Yet few seem to have noticed a significant empirical anomaly: the global fashion industry produces a huge variety of creative goods in markets larger than those for movies, books, music, and most scientific innovations, yet does so without strong IP protection. Copying in this industry is rampant, as the orthodox account would predict. Yet competition, innovation, and investment remain vibrant. Few legal commentators have considered the status of fashion design in IP law. Those who have done so have almost uniformly criticized the current legal regime for failing to protect apparel designs. But the fashion industry itself is surprisingly quiescent on the subject of copying. Fashion firms take steps to protect the value of their trademarked brands, but appear to accept appropriation of their original designs as a fact of life. Design copying is widely accepted, occasionally complained about, but just as often celebrated as “homage” rather than attacked as “piracy”. This diffidence about copying stands in striking contrast to the heated condemnation of piracy and associated legislative and litigation campaigns in the film, music, software and publishing industries. Why are the norms about copying in the fashion industry seemingly so different? And why, when other major content industries have obtained (and made use of) increasingly powerful IP protections for their products, does fashion design remain mostly unprotected? That the fashion industry produces high levels of innovation, and attracts the investment necessary to continue in this vein, 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 actually promotes innovation. 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 investment in innovation? Does the piracy paradox occur only in the fashion industry, or are stable low-IP equilibria imaginable in other content industries as well?
Subject Area
Intellectual Property Law, Law and Economics
Recommended Citation
Kal Raustiala and Chris Sprigman,
"The Piracy Paradox: Innovation and Intellectual Property in Fashion Design"
(February 2006).
University of Virginia Legal Working Paper Series.
University of Virginia John M. Olin Program in Law and Economics Working Paper Series.
Working Paper 29.
http://law.bepress.com/uvalwps/olin/art29
No readers' reactions have been posted for this article. To submit one, copy the URL for this article (http://law.bepress.com/uvalwps/olin/art29) and click here.