If Fashion Copyright Harms So Many, Why Is Congress Pushing For It?

from the regulatory-capture dept

With the latest version of the totally unnecessary and ridiculously dangerous fashion copyright bill likely to become law, despite a near total lack of justification for it, combined with significant evidence of the harm it will do, it might make you ask how the hell does a law like this get passed, and why does someone like Senator Chuck Schumer come up with something quite this badly thought out? Thankfully, law professors Kal Raustiala and Chris Sprigman -- who have been pointing out the problems with Schumer's weird infatuation over fashion copyright for years -- have a basic explanation for how such bad laws get passed. Basically, it's a form of regulatory capture. A very small group of players are likely to benefit at the expense of the overall market and consumers -- but that small group are a lot more focused on the issue than everyone hurt by it:

When a large group favors a policy change, it is expensive to organize that group to seek it. And often each member of a very large group will experience only small individual benefits from the policy -- so no member has the incentive to invest in change. Apathy reigns. Conversely, a small group can usually organize cheaply. And because the group is small, each individual member is likely to realize a much larger benefit from the sought-after change. As a result, the small group is properly motivated. In short, the committed minority can often beat the disorganized majority.

They then note that this is quite common in copyright law:

That scenario explains how a lot of law is made, and intellectual property law is no exception. The problem is most acute with copyright. Producers of copyrighted works -- film studios, record labels, commercial publishing companies -- are few in number and stand to gain significantly from more powerful protections (and therefore have ample incentive to spend money seeking policy change). The result is that Congress hears, loudly and often, from those who favor stronger protection. Congress does not hear nearly as often from those who take the opposite view. Who is that? Well, just about every consumer who has to pay more for a book or a song because stronger property rights prevent competition from low-cost copyists that would otherwise exist. We all pay a little hidden tax every time copyright law expands.

It's even worse than that, actually. In many cases, there are plenty of us willing to speak up about the harm caused by greater protectionism, and the vast amounts of actual evidence and research showing how these policies are inherently going to do more harm than good -- but very few people in Congress listen. Why? Because the industry has done a rather impressive targeted PR job of branding anyone who actually presents evidence and facts about the harm done by copyright law as simply supporting "piracy," which then gets lumped in with all sorts of other awful things. It's really a shame.

Raustiala and Sprigman also point out that this is actually a repeat action. A small group of fashion designers colluded to stop competition during the 1930s, and that only ended when the Supreme Court broke it up for antitrust reasons -- leading those involved to insist that the industry would surely fail without the ability to collude against competition. Of course, the opposite happened. But the new bill effectively brings back the antitrust activity of a few fashion designers -- but this time with Congressional approval. What a sad state of affairs.

Filed Under: chuck schumer, copyright, fashion industry

The Many Ways In Which Fashion Copyrights Will Harm The Fashion Industry

from the stop-it-before-it's-too-late dept

Earlier this year, we pointed to a video presentation by Johanna Blakley about why the fashion industry has thrived without copyright. The argument certainly wasn't new -- as we've been discussing (for nearly a decade) that industry as a model of an industry that innovates creatively without copyright. However, it certainly was timely, as the fashion industry (with a campaign led by someone who has been caught copying others' designs) has been able to get a new bill for fashion copyrights introduced, and the buzz in DC is that this time it might actually pass.

So what does Blakley have to say about the new bill? Well, she's put together a wonderfully written, if depressing, look at why this law simply is not needed, and how it will almost certainly harm the industry and many fashion designers:

It's worrisome to think about the frivolous litigation that such legislation could introduce (that's not exactly what our over-taxed court system needs right now) as well as the ethical problems associated with conferring an arbitrary right of ownership to any Joe Blow who decides to lay claim to a certain combination of design features which used to belong to the public domain.

Right now, designers pore over vintage magazines and patterns and visit museum archives in order to find inspiration for the next season's look, cherry picking design elements that feel fresh and in line with the current zeitgeist. It's a refreshingly open process unhindered by legal consultations. Those archives could become battlefields where litigants try to find evidence to support their assertion that a design is or is not unique. The geeky librarian in me is worried that some powerful people may attempt to limit access to particularly rich collections of design history and some unscrupulous types may destroy or hide rare materials that prove that their new design isn't as unique as they claim.

The scope of items that the bill intends to protect is larger than you probably think. It's not just ornate red carpet gowns: it also includes coats, gloves, shoes, hats, purses, wallets, duffel bags, suitcases, tote bags, belts, eyeglass frames and underwear. I can only imagine the lengths to which some companies with deep pockets will go to lay claim to an exclusive right to an iconic popular design.

The sad thing is that just about everyone will suffer (well, except for lawyers). Consumers will pay higher prices (someone has to pay those legal fees) and they won't have the same access to the plethora of knock-offs that allow them to participate in global fashion trends without paying aristocratic prices. Designers who can't afford legal counsel will worry about being accused of copying and they probably won't be able to sue if someone copies them because, well, litigation is expensive.

The real travesty in all of this is how there is a total lack of evidence that this new copyright is needed. No one has shown a single shred of evidence to support this. It's the same point that we've made over and over again when it comes to copyright law. If you are going to demand government granted monopoly protections, shouldn't there be a relatively high burden to prove the need for one? Instead, we seem to be going in the other direction. Those seeking such protections demand them, claim they're necessary, and argue that it's somehow "unfair" if they don't have such protections. Blakley points out how unnecessary this new copyright is, quite nicely:

But just because copying is legal doesn't mean it's acceptable. In order to succeed, designers have to develop a signature style -- a look that everyone will instantly recognize as theirs. Designers who have reputations as innovators don't want to be accused of copying, so they have a strong incentive to come up with something new every season that's unique to them and their signature style.

There are several reasons why the fast fashion giants like H&M, Zara, Forever 21 and Topshop haven't destroyed the business of high-end designers. One obvious reason is that the customer who shops for the $19.99 version of a Chanel skirt is quite simply not the same customer who buys clothing in a Chanel boutique. That's one reason that so many A-list designers -- including Karl Lagerfeld and Vera Wang -- have decided to knock themselves off and create lines for lower-end retailers like Target and Kohl's. Far from cannibalizing their own product sales, these designers realized that they could expand their clientele and their brand by marketing a variety of products at vastly different price-points.

Over and over again, the courts have decided not to give extra protection to the designers who have complained about fast fashion knock-offs because designers have not been able to demonstrate that it has hurt their business.

In fact, the fast fashion industry has actually strengthened the fashion industry overall since it has accelerated the market for global fashion. The big bonus for high-end designers is that their influential designs become influential even faster than before. And because trends are established so quickly, fashionistas who buy the products that top designers sell have an incentive to move on to the next new thing when the masses have settled on the trendy knock-off. By the time the next season comes around, designers must compete all over again for customers hungry for the new designs that best capture the zeitgeist.

Those are just two snippets from an excellent, if disappointing, take on this new law that is nothing less than monopoly rent seeking by a few powerful interests in the fashion industry. It's no surprise that the fashion giants are seeking such protectionist policies. The real shame should be in Senator Chuck Schumer for falling for this over and over again (oh look, fashion industry giants happen to be in his state...), as well as those who co-sponsored the bill: Senators Orrin Hatch, Lindsey Graham, Sheldon Whitehouse, Kirsten Gillibrand, Olympia Snowe, Barbara Boxer, Dianne Feinstein, Ben Cardin, Herb Kohl and Kay Bailey Hutchison. If these are your senators, let them know how much you disapprove of such blatant protectionism that will harm everyone.

Filed Under: copyright, fashion, fashion industry, johanna blakley

Newsweek Explains Why Fashion Designers Don't Need Copyright

from the good-to-see dept

For many years, we've been troubled by the effort by some fashion designers to add a totally unnecessary copyright to fashion design. We had noted that the fashion industry was actually a great example of a creative industry that was thriving without copyrights. It's quite innovative and has a ton of competition, which is what we'd like to see -- so it never made sense that some politicians keep introducing a bill to extend copyright protection to fashion designers. This year, Sen. Chuck Schumer is back again with another attempt at extending copyright to fashion, and he's been able to sign up a large number of co-sponsors. In the past, similar proposals haven't gone far, but there's a feeling that there may be some momentum behind it this year.

Thankfully, some in the mainstream press are calling foul. Over at Newsweek, Ezra Klein has a fantastic column questioning the need for this bill and highlighting just how ridiculous it is. My favorite part is the following:

But perhaps the strongest argument is that America's apparel industry doesn't seem broken--so why try and fix it? "America is the world fashion leader," said Steven Kolb, director of the Council of Fashion Designers of America, the lead trade group in support of the Schumer bill, "and yet it is basically the only industrialized country that does not provide protection for fashion design."

Run that by me one more time? We're the world leader in fashion, so we should change our policy to mimic our lagging competitors?

Klein quotes Jamie Boyle, pointing out that:

"Intellectual property is legalized monopoly," says James Boyle, a professor at Duke Law School. "And like any monopoly, its tendency is to raise prices and diminish availability. We should have a high burden of proof for whether it's necessary."

Indeed. The supporters of this bill don't seem to realize that copyright is supposed to be about "promoting the progress," not about "protecting an industry." The comments from Steven Kolb show that fashion designers want this not to promote the progress, but because they feel blatantly entitled to extra protectionism. Yet, as Boyle points out, this can seriously harm the public. There should be a high burden of proof to show that any such expansion of copyright law is necessary, and the evidence (as even Kolb implicitly admits) is totally lacking.

Filed Under: chuck schumer, copyright, fashion industry

It's Back: Totally Unnecessary And Damaging Fashion Copyright Bill Reintroduced

from the you-can't-be-serious dept

We've discussed over and over and over again how the fashion industry absolutely thrives without copyright protection. In fact, much of the research shows that it thrives because of the lack of copyright. The lack of copyright in fashion does a few useful things: (1) it actually helps disseminate concepts faster, creating important trends that drive the industry forward (2) it helps create important customer segmentation in the market, which actually increases the value of top designers (3) it drives fashion designers to be more innovative and to keep innovating. And all of it works. The fashion industry is highly dynamic, rapidly innovating and highly competitive. So it seems absolutely contrary to basic common sense to introduce a copyright law aimed at adding copyright to fashion.

So, of course, fashion designers and politicians keep doing it. Pretty much every year Chuck Schumer trots out just such a bill, and this year is no different. Reader Steve Phillips points us to the announcement of the bill being introduced and ReallyEvilCanine points us to a celebratory post by a professor who was involved in drafting the bill. This time around the bill has Senators Boxer, Feinstein, Hatch, Graham & Hutchison as co-sponsors, so there's quite a bit of firepower, as they seek to build up protectionist policies that may benefit a few top designers, but will significantly harm up-and-comers. Just as we've seen throughout history, intellectual property protections lag innovation, rather than cause it. That's because the top players in the space use those laws to reduce, not enhance, competition. This is no exception.

Of course, Schumer's been unable to shove through this disaster-in-waiting the past few times he's tried, so hopefully it goes nowhere again, but if you want to see regulatory capture in action, here you go. In the meantime, if this should actually go through, we eagerly await the first major supporter of the bill getting caught copying someone else's design.

Filed Under: chuck schumer, copyright, fashion industry

Fashion Designers Hope That Michelle Obama Gets Them Copyright On Clothing Design

from the comes-from-all-directions... dept

While there are plenty of legitimate worries that the Obama administration is way too influenced by copyright maximalists, who knew that the battle for ridiculous new copyright laws would start involving the First Lady as well? For years, the fashion industry has been a shining example of an industry where innovation and competition thrives, despite no ability to copyright designs and widespread copying of those designs. However, what's resulted is a more dynamic and more creative marketplace that has actually increased output and helped enlarge the market. In fact, repeated studies have shown that it's this lack of intellectual property protection that has made the industry so successful, and that implementing restrictions would actually harm the industry. That's because the rampant copying has done many good things:

• It helps permeate new designs into the market much faster.
• It creates a defacto market segmentation between "originals" and copies, which actually has increased the value of having an original brand name design.
• It encourages more innovation because designers know that they need to keep coming out with new works to stay on top, rather than relying on their old designs.

And it's working. The fashion market is highly competitive, very robust, and very, very creative. So it makes no sense at all that anyone should want to add new IP into that market. The purpose of copyright is to encourage new content creation, and anyone would be hard pressed to say that the fashion industry isn't quite good at constantly churning out tons of new designs. And yet... as with so many case studies about intellectual property, those who are on top often want increased IP protection, not to encourage the creation of new content, but to stamp out competitors and be able to slow down innovation and rest on their laurels.

In other words, the leaders in highly competitive markets often implicitly recognize that IP protection does exactly the opposite of its intended purpose: and they want that. It helps lock them into a leadership position by easing competition, and slowing down the pace at which they need to innovate. So, it should be no surprise that over the years, some top fashion designers have pushed hard for Congress to create a new copyright for fashion designs, despite the total lack of evidence of any need (and, in fact, lots of evidence to the contrary). NY Senator Chuck Schumer has been a big supporter of such a damaging idea, but it hasn't gone anywhere to date.

Yet, now we find out that many top designers, who have designed dresses for the First Lady, Michelle Obama, are hoping to enlist her help in supporting such legislation. They're apparently excited that Michelle Obama is known for her fashion sense, and are playing off of that to get more attention. Unfortunately, in the article linked here, the Washington Post's fashion columnist simply parrots the designers' false claims about how such copying "harms" the industry, despite the evidence saying exactly the opposite. I guess it's too much to ask the Post's fashion columnist to actually understand or research the issue, but it's unfortunate that these false ideas are being reported as fact, and that the First Lady may get dragged into a battle that would ultimately harm fashion design by establishing protectionism where none is needed.

Filed Under: competition, copyright, fashion design, fashion industry, innovation, michelle obama

Giorgio Armani Realizes That Fashion Copying Isn't A Bad Thing

from the good-for-him dept

For many, many years, we've pointed to the fashion industry as a great example of a creative industry that thrives despite widespread "piracy" and greatly reduced intellectual property rights. Contrary to what copyright maximalists claim will happen in the absence of such copyrights, the fashion industry is highly competitive, highly innovative and highly creative. Also, contrary to the maximalists' claims, it hasn't "devalued" the creators at all. In fact, it's only helped to increase the value of original works by the best designers. The copycats have actually pumped up their value, rather than decreased it.

Research has shown that it's because of this lack of IP that the industry has been able to thrive. That's because it does a few things: the copycats help spread the word about the designs, getting them spread to a much wider audience than the high end fashion designers would alone. On top of that, it increases the value of authentic works by those top designers, since the reputation increases the overall value. Finally, the rapid copying pushes designers to keep innovating and keep bringing out new things, so that they're always seen on the cutting edge -- ahead of the copiers.

Despite all of this, some in the industry have been pushing for special new copyrights for fashion, and have even found some politicians willing to support the idea -- despite clear evidence that it's not needed (the highly competitive, highly innovative industry that exists) and research suggesting such a right would significantly harm the industry.

That's why it's interesting to see this Time magazine interview with Giorgio Armani (sent in by an anonymous reader), which relies on questions submitted by Time readers. Two of the questions deal with issues concerning "copying" of designs -- and Armani seems to recognize quite clearly the value of copying, and laughs off the idea of suing anyone for copying a design. The only downside he sees is when his designs are counterfeited with the Giorgio Armani label -- which is something we agree with. That's what trademark is supposed to protect: consumer confusion over someone pretending to be a brand that they are not. Otherwise, he seems quite happy to recognize the benefits of copying in the industry:

Does the Armani brand suffer a lot of damage because of counterfeit products? David Remenyik, BUDAPEST

Personally, I think counterfeit products are good because their existence shows that we create something people want to copy. Professionally, it causes big problems because it creates products with your name on them that are not controlled by you.

You recently accused Dolce & Gabbana of copying one of your designs. Do you plan to pursue this claim in court? Alice Goodman, SYDNEY

No. This happened at the end of a small press conference. One of my colleagues brought me a photo of this pair of pants. I said, very nonchalantly, "Look--great designers like Dolce & Gabbana copy us!" I was joking, it was not serious, but naturally the press picked up on it and splashed it all over the headlines.

Hopefully, other designers will start to recognize that this view makes sense. Having someone copy your work is a good thing, and let's hope this recognition begins spreading to other industries as well.

Filed Under: copying, copyright, fashion industry, giorgio armani
Companies: armani

Fashion Designers Turning To Patents To Protect Their Designs (And Kill The Industry)

from the how-short-sighted-can-you-be dept

Five years ago we pointed out that the entertainment industry could take a wonderful lesson from the fashion industry. After all, here was a highly competitive, extremely profitable, exceptionally innovative creative industry -- and it was doing all that without copyright protection. It seemed to show quite the opposite of what many in the entertainment industry predicted would happen without copyrights. Unfortunately, though, the lessons seemed to go in the other direction. The fashion industry got jealous of the entertainment industry's ability to crack down on innovation with copyrights and pushed Congress to introduce new legislation that would add a copyright for fashion design. Recently such laws have been getting a big push from politicians who are pandering to the fashion industry. Of course, studies have shown that the very reason the industry has thrived was because the lack of IP protection. In fact, one bit of research showed that adding IP protections to fashion could kill the industry.

While that may sound counterintuitive at first, it's not once you understand the market a little bit more. Fashion is a trend industry. You need a trend to make something popular and the only real way to get a trend is when designers are copying each other. Without that ability trends don't show up, and the demand for the latest "trend" dries up. On top of that, having copycat designs on the lower end actually act as a "signal" that a high-end designer is on to something. It helps prop up the price of those name-brand designs, while making similar copycat designs more affordable to a lower end of the market that would never buy the high end designers. It's both a way of establishing a larger market and doing price discrimination.

However, it appears that fashion designers still don't want to understand the economics of intellectual property and why it may hurt them. Since the bill for copyrights on fashion designs is still making its way through Congress, designers have taken it upon themselves to start using design patents instead and enforcing those rights aggressively (thanks to Gary for sending the story in). Considering that the recording industry's aggressive enforcement of copyrights has contributed to a massive slide in revenue for that industry, you would think that the fashion industry would think twice before following it down that path.

Filed Under: copyright, fashion industry, patents

If The Fashion Industry Doesn't Get Special Copyrights, The Terrorists Will Win

from the who-else-can-we-help? dept

Having seen the Senate create a special patent exemption for banks, it should come as no surprise that plenty of other industries are looking for special intellectual property treatment as well. Take, for example, the fashion industry. Years back, we noted that the fashion industry was a near perfect example of a creative industry that thrived despite no copyright protection on clothing designs. It showed what a myth it was that creation and innovation would stop in the absence of copyright law. In fact, studies began to show that it was that exact lack of copyright that drove the industry to be so innovative. That was for two reasons. First, designers had to constantly be innovating. An old design is an old design and they couldn't rest on their laurels, but had to keep creating newer and better designs. Second, by allowing knockoffs to hit the market, it actually helped promote the designer versions, and make those legitimate versions even more valuable.

Given all that, it's pretty difficult to understand why Congress decided to introduce new legislation specifically extending copyright to the fashion industry. Research suggested that such a copyright would effectively kill the fashion industry. It's about as backwards a law as you can get. The purpose of copyright is to create an incentive for new and innovative content -- and here's an industry where a ton of new and innovative content is created all the time without it. To any right thinking person, it should be clear that no copyright is needed. And, yet, Congress moves forward with the effort.

As the bill is being discussed, Congress has apparently held a hearing entitled: "Are Special Provisions Needed to Protect Unique Industries?" The answer should be a pretty clear "no," but instead, people were treated to an explanation of how a lack of copyright in the fashion industry would mean that the terrorists, organized criminals and child pornographers would win:

"Most people think that buying an imitation handbag or wallet is harmless, a victimless crime. But the counterfeiting rackets are run by crime syndicates that also deal in narcotics, weapons, child prostitution, human trafficking and terrorism. Ronald K. Noble, the secretary general of Interpol, told the House of Representatives Committee on International Relations that profits from the sale of counterfeit goods have gone to groups associated with Hezbollah, the Shiite terrorist group, paramilitary organizations in Northern Ireland and FARC, the Revolutionary Armed Forces of Colombia."

Note, of course, that where the proceeds of such sales go has no bearing, whatsoever, on the the issue of copyright. But don't think that won't stop the fashion industry from setting this up as an emotional issue. And, of course, it's not just the fashion industry. The report also notes that the automobile makers showed up at the hearing as well, claiming that they need special copyright protections on car part designs. Who else wants to step up and ask for special protections?

Filed Under: congress, copyright, fashion industry

EU Looks To Destroy Fashion Innovation; Begins Enforcing Fashion Copyrights

from the a-big-step-backwards dept

We've spent plenty of time discussing how innovation thrives in the fashion industry, despite a lack of intellectual property covering designs -- as well as rampant copying. In fact, recent studies have shown that the reason the industry is thriving is because of the lack of intellectual property protection -- leading to a much more dynamic and competitive environment, leading to a more rapid pace of innovation. However, despite all that innovation going on in the industry, some in the US have been looking to add new intellectual property laws that cover fashion designs. This makes no sense. The purpose of intellectual property laws is to encourage innovation and creation. If the industry is already thriving, there is no sensible rationale for then adding in those laws -- unless it's an attempt to slow down innovation and allow the current leaders some monopoly on the legacy business they've already developed. In other words, it's corporate welfare for the leaders in the space, designed to squeeze out any innovations.

We may start to see just how pointless a move this was, as over in Europe they decided to grant some IP protections to fashion designs a few years ago. Those new regulations had not been enforced... until now. eoinmonty writes in to let us know that a UK designer has won a lawsuit against a retailer for selling clothing that was similar in design to that of a well known designer, Karen Miller. Now, some will argue that this kind of ruling doesn't hurt innovation because the one getting sued was merely copying. But that's assuming that the story only goes one-deep. As the research on the fashion industry has shown, when knockoff clothing is made, it simply encourages the brand name designers to continue to design something newer and better, pushing the industry forward. If Karen Miller doesn't have to worry about competition, then she can rest on her laurels and has less incentive to continue to design yet another new line of clothes, slowing down the pace of innovation in the fashion industry.

Filed Under: copyright, eu, fashion industry, karen miller, uk

Copyright Is About Incentives, Not Protection

from the net-benefits dept

Whenever we discuss the issue of copyrights and bring up the fact that copyright is not a welfare system to protect creators, people get upset with us. There seems to be this false assumption that copyrights (and patents) are designed for the sake of protecting the creator of content. That's not true and it's never been true. From the very earliest debates about the concept of intellectual property in the US, it has always been about creating incentives for innovation -- or, as the Constitution so eloquently puts it: "to promote the progress of science and useful arts." In thinking over the various debates over copyright, it seems to come down to this particular issue over and over again. Those who are focused on the original purpose of copyrights recognize the problems with the copyright system and are interested in fixing them. Those who believe that the purpose of copyrights is to "protect" don't have a problem with the way things are, or with the idea of strengthening copyrights, even if they weaken the actual market and are a net negative on society.

This is quite clearly indicated in a great article by Julian Sanchez arguing against extending copyright protections to the fashion industry (found via Tim Lee). The question of extending copyrights to the fashion industry has been discussed at length before, but a few key points in Sanchez's piece highlight this split in thinking about the issue. He notes, as many others have, that the industry is constantly innovating and is quite healthy -- which is why the idea that new "incentives" are needed seems laughable. However, if you view things from the position that copyright is about protecting, then it's a different story. Sanchez notes that while individual designers may be harmed, it's only helped the overall industry. From that standpoint, if you believe in protectionism, then you say these new laws are needed to "protect" those who are harmed -- ignoring the greater harm caused to the rest of the industry.

The history of economics is littered with examples of why protectionism is rarely, if ever, a reasonable policy. It tends to backfire badly, in part because it takes away many of the incentives for competition and innovation. In protecting one area, you are inevitably harming another. Indeed, studies have shown that innovation in the fashion industry is often because of the rampant copying, rather than in spite of it. That's the way you want markets to work -- where competition drives innovation by forcing companies to keep innovating to leapfrog each other. Sanchez quotes legal scholar Kal Raustiala to make the point: "When a successful restaurant opens up on a street that's never had a restaurant before, there's a way in which the second business is parasitic on the first. But in the United States, we call that capitalism and competition."

Filed Under: copyright, fashion industry, incentives, protections