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Authors: Christopher Sprigman Kal Raustiala
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lower price points. As the now-hot design is copied and tweaked, it becomes far more widely purchased and hence even more visible. For a time, the trend grows. Past a certain point, however, the process reverses course. The once-coveted item becomes anathema to the fashion-conscious, and, eventually, to those who are somewhat less style-focused. The early adopters move on, and the process begins again.
The key point is that fast and free copying is fully legal—and the widespread copying that flows from this rule induces more rapid obsolescence of designs. Obsolescence would probably happen anyway, eventually. But the fashion cycle is driven
faster
by widespread and legal copying, because copying more rapidly erodes the positional qualities of fashion goods. The result has profound effects on the apparel industry. Piracy paradoxically benefits designers by inducing more rapid turnover and greater sales—a process we call the “piracy paradox.”
If we drill down a little deeper, we can understand the role of copying in this story in at least two broad ways. First, copying allows the marketing of less expensive versions, pricing-in consumers who otherwise would not be able to afford to purchase the design. A middle-class woman might be able to put a Louis Vuitton handbag on her credit card occasionally, but absent extraordinary measures (or very sticky fingers) it cannot be done regularly. Copying permits the design to spread to lower income consumers, who are far more plentiful than the top income tier of consumers to whom the most exclusive fashion goods are marketed.
Second, copying facilitates variations on an attractive design—what lawyers refer to as “derivative works.” These are garments that use the original design, but tweak it in some new way. Under standard copyright law, the originator has the exclusive right to make or authorize derivative works. The legal rule for fashion is the opposite, and the many variations on a theme this makes possible means that the stores will be full of countless versions of a popular design.
As we mentioned earlier, sometimes only a particular feature of a garment is copied—a certain sleeve or cut—and sometimes the entire garment is copied. And what is copied is not necessarily part of a hot trend. Consider the Foley + Corinna story that opened this chapter. The dress in question was striking and somewhat popular, but it was not the Must-Have-Item of the season. Still, the basic dynamic we describe applies. The Forever 21 version surely sold at levels that Dana Foley and Anna Corinna could only dream of. The Foley + Corinna customers, many of whom trekked to the Lower East Side for their dress, were not wild about seeing that dress in shopping malls across the suburbs and on the backs of thousands of more women. 62 So they decamped for a new design or new trend earlier than they would have absent the copying.
The key point remains the same: existing rules, by permitting this kind of copying, act as a kind of turbocharger to the fashion cycle. And that spurs designers to create anew so as to ride the next wave of trends.
There is, of course, a downside to all this. While induced obsolescence generally helps the industry sell more goods over time, widespread copying can and does harm particular originators in particular cases. Certainly that is the view of Dana Foley and Anna Corinna. But the effect of a system of free and easy copying, across the fashion industry and over time, is beneficial. Because this effect is spread out over many products, it is less noticeable than the losses suffered by individual designers. But in the aggregate, it is much more significant. It creates more demand, and therefore more designs and more sales.
We now have some more precise and targeted data to back this observation up. We recently spent a few months working (with the help of our crack research assistant, Charlie Murry) at the US Bureau of Labor Statistics (BLS) in Washington, DC.
The key point is that fast and free copying is fully legal—and the widespread copying that flows from this rule induces more rapid obsolescence of designs. Obsolescence would probably happen anyway, eventually. But the fashion cycle is driven
faster
by widespread and legal copying, because copying more rapidly erodes the positional qualities of fashion goods. The result has profound effects on the apparel industry. Piracy paradoxically benefits designers by inducing more rapid turnover and greater sales—a process we call the “piracy paradox.”
If we drill down a little deeper, we can understand the role of copying in this story in at least two broad ways. First, copying allows the marketing of less expensive versions, pricing-in consumers who otherwise would not be able to afford to purchase the design. A middle-class woman might be able to put a Louis Vuitton handbag on her credit card occasionally, but absent extraordinary measures (or very sticky fingers) it cannot be done regularly. Copying permits the design to spread to lower income consumers, who are far more plentiful than the top income tier of consumers to whom the most exclusive fashion goods are marketed.
Second, copying facilitates variations on an attractive design—what lawyers refer to as “derivative works.” These are garments that use the original design, but tweak it in some new way. Under standard copyright law, the originator has the exclusive right to make or authorize derivative works. The legal rule for fashion is the opposite, and the many variations on a theme this makes possible means that the stores will be full of countless versions of a popular design.
As we mentioned earlier, sometimes only a particular feature of a garment is copied—a certain sleeve or cut—and sometimes the entire garment is copied. And what is copied is not necessarily part of a hot trend. Consider the Foley + Corinna story that opened this chapter. The dress in question was striking and somewhat popular, but it was not the Must-Have-Item of the season. Still, the basic dynamic we describe applies. The Forever 21 version surely sold at levels that Dana Foley and Anna Corinna could only dream of. The Foley + Corinna customers, many of whom trekked to the Lower East Side for their dress, were not wild about seeing that dress in shopping malls across the suburbs and on the backs of thousands of more women. 62 So they decamped for a new design or new trend earlier than they would have absent the copying.
The key point remains the same: existing rules, by permitting this kind of copying, act as a kind of turbocharger to the fashion cycle. And that spurs designers to create anew so as to ride the next wave of trends.
There is, of course, a downside to all this. While induced obsolescence generally helps the industry sell more goods over time, widespread copying can and does harm particular originators in particular cases. Certainly that is the view of Dana Foley and Anna Corinna. But the effect of a system of free and easy copying, across the fashion industry and over time, is beneficial. Because this effect is spread out over many products, it is less noticeable than the losses suffered by individual designers. But in the aggregate, it is much more significant. It creates more demand, and therefore more designs and more sales.
We now have some more precise and targeted data to back this observation up. We recently spent a few months working (with the help of our crack research assistant, Charlie Murry) at the US Bureau of Labor Statistics (BLS) in Washington, DC.
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