Barnett, Jonathan, Grolleau, Gilles and Harbi, Sana El. "The Fashion Lottery: Cooperative Innovation in Stochastic Markets." USC CLEO Research Paper No. C08-17; USC Law Legal Studies Paper No. 08-21. http://ssrn.com/abstract=1241005
This article puts an economic spin or an economist's viewpoint on the fashion copyright debate. In other words, it applies economic principles to the fashion industry to show why an incomplete property regime, not complete copyright protection, is the most sensible situation for the fashion industry. To build this argument, the author first explains the concept of "fashion risk," the main economic problem in fashion. Due to demand uncertainty in the fashion industry, it is difficult to forsee if a new design will be successful. So, designers need a system of collective insurance to balance the losses from seasonal product failure and the risk of firm bankruptcy. This collective insurance comes from designers allowing limited imitation which maximizes earnings in the long run. Basically, how this economic idea works is that the designer that produces the "winning" design for that season earns a larger prize, keeping the incentive for innovation alive. However, the incomplete property regime also gives smaller profits to the "losing" designers as a kind of insurance against the "fashion risk." This method is termed the "winner take most" approach. The article then transitions into three different types of imitation: mark perfection, design perfection, and quality perfection. These are then related to three different methods of imitation: horizontal imitation, legitimate vertical imitation (knockoffs), and illegitimate vertical imitation (counterfeits). Basically, horizontal imitation is copying among high end designers while vertical imitation is copying of elite designs by lower end fashion designers in a trickle down effect. As stated previously, the fundamental economic problem for designers is demand uncertainty and the associated risk of bankruptcy. By allowing horizontal imitation and legitimate vertical imitation, this risk is greatly reduced. An obvious way to success for the majority of the market is to wait until the winning design is determined for the season by the consumers and then release imitation products as this eliminates risk and increases success. However, this would kill innovation. So, the best solution is incomplete protection-positive yet constrained imitation. The economics equations show that to maximize final wealth and minimize the variance of final wealth incomplete, not complete, property regimes are required. This can be explained by the idea that at one extreme the winner does not make enough and so incentive is low. At the other extreme, insurance is too low and risk is too high. Both of these cases lead to underinnovation. In short, some imitation supports design innovation while too much or too little undermines it. Therefore, only the very few elite firms can afford the complete copyright protection suggested by bills such as the Design Piracy Prohibition Act.
This article is a very unique way to approach this fashion copyright war. It is an invaluable asset to my argument against enacting fashion design protection laws. This article basically utilizes economical principles to build mathematical equations proving that incomplete copyright protection or rejection of recently proposed copyright laws is more beneficial to society than enacting complete protection for fashion designs. The organization of this paper with alternating pieces of mathematical equations and textual analysis creates an extremely convincing and almost indisputable argument due to the logical thought process this method of presentation creates. This article greatly enhances my argument in that it provides an alternative viewpoint, particularly an economist's angle, which still points towards the same conclusion: fashion copyright laws should not be enacted.
Rangnath, Rashmi. "Design Protection for Fashion Design and Autoparts: A Bad Idea Times Two." Public Knowledge Blog. http://www.publicknowledge.org/node/1399. February 16, 2008.
This blog considers the design protection for fashion designs and autoparts in terms of markets and niches. In terms of fashion design, the author argues that knockoffs do not damage the market for original designs much at all. Obviously there is some effect on the original designer, but the author argues that this effect is negligible due to the different markets that original designs and knockoffs compete within. Customers who can afford to buy runway designs are going to buy these original designs regardless of how many imitation versions are circulating. This is because the people who are willing to pay so much for clothing want to be able to tell others they are wearing an original. For them, only the original can give them the status they desire. On the other hand, people who cannot afford these original designs do not care if their clothing gives them status. In actuality, these customers still would not purchase the original design if the knockoffs were not present in the industry. These consumers are fine with the lower quality imitation once the trend trickles down. For this reason, elite and original fashion designers have no need to lower their prices to compete with knockoffs and imitations. This is because these two versions are marketing and selling to two different groups of people. They are operating within two different markets. Finally, the blog ends with an attack on elite designers who claim pirates end up selling more imitation versions than the designers can even imagine to sell of their original. The author argues here that in the elite market, the designer can sell very few items at a incredibly high price while pirates may sell thousands of products, but at virtually nothing compared to the original's price. Therefore, the elite designers probably come out ahead in terms of profit. The author makes a correlating argument against autopart design protection, which does not apply to the topic of interest.
This blog was chosen as a source for my paper because it has a very unique approach in looking at fashion designs and their imitations. Rather than looking at the logistics of the fashion industry or as someone from within the fashion industry, this blog arrives at this issue from the viewpoint of a consumer. In other words, the blog looks at the various classes of consumers and their different markets in order to suggest that imitation is not really harming anyone to an extent where copyright laws need to be enacted. By looking at the fashion copyright debate from a consumer and market viewpoint, this blog provides incredible support for my thesis by showing that a lack of copyright laws in fashion actually helps the industry thrive in all consumer markets. With design protection, the market for low end customers may very well be knocked out since a majority of consumers do not shop around in both low and high end markets.