Friday, November 05, 2010

The Truth about Counterfeiting

Why counterfeiting is a good thing for the fashion industry

Background on copyright laws and the fashion industry

Copyright protection allows the original creator the right to control the reproduction of artistic work. The purpose and intent of the law is to encourage new ideas and to promote the development of certain activities. The consumer’s interest is also an important aspect of copyright protection and is taken into account when considering the right to public access of such works.

The fashion industry is known to be one of the most counterfeited markets. The International Chamber of Commerce estimates that counterfeited goods are worth over $350 billion worldwide. Many times, the ownership, sales as well as the manufacturing processes of counterfeited goods are conducted across numerous countries. From a legal standpoint, there is no clear protection that is uniform across countries. Certain countries allow for protection of the functionality of artistic work but not the design or style. Other countries have little or no copyright protection. Thus, the inconsistencies among countries in regards to copyright protection make it difficult for designers to seek legal remedies against counterfeiters.

How designers benefit from counterfeiting

The fashion industry operates on the premise of change. It is in a constant state of movement, with new designs created each season and consumers replacing old items as they become less fashionable for new ones. The success of the fashion industry depends on this movement through the fashion cycle. It is the ongoing rise, peak and fall in popularity of specific styles that makes this movement possible.

In order for goods to move through the fashion cycle, they have to move through each phase by way of increasing and decreasing supply and demand. The initial phase of the fashion cycle starts with exclusive designs, this is where the new “looks” are first introduced to the public. As the popularity or demand of the design become more prevalent, supply increases and these designs are duplicated by other designers. At the peak of popularity, where demand is the highest, the design becomes more widely available to the mass market. At the end of the fashion cycle, designs are copied and are available inexpensively at budget stores or lower end chains and discount stores. New designs are introduced for the next season and the cycle starts over again.

Without copying, the fashion industry is unable to move through the fashion cycle. It facilitates the constant demand that is sought after by consumers and helps fuel the industry to come up with new designs and ideas. In fact, the current lack of copyright protection actually helps to spur investment and foster new ideas rather than impede them. It essentially helps to promote the success of the industry.

It can be further argued that counterfeiting promotes the popularity of the designers. If designs are not copied, then they cannot be available to the mass market, and without this, designers would not gain the brand recognition they desire, which in turn helps them profit from future designs.

One of the key claims made by designers is the losses they suffer at the hands of counterfeiters. However, looking at it from a consumer perspective, it could be said that customers who purchase counterfeit merchandise would never be the ones who buy the real thing. These consumers represent a different target market and therefore the actual losses suffered by designers are minimal.

In fact, most people that purchase counterfeit merchandise do so because they like the designs and cannot afford to purchase the real thing. The people who purchase counterfeit merchandise are promoting the brand rather than devaluing it, thereby creating awareness which translates into earning power for the designers. Additionally, customers may end up purchasing from these designers in the future once they are able afford it. Thus, counterfeiting actually helps create future potential customers for the designers.

As for the working conditions and abuse of workers by companies that counterfeit designs, it is true that there are instances where manufactures take advantage of workers. However, if counterfeiting laws prohibit the manufacturing of such merchandise, then in many of these less developed countries where most of these jobs are situated, massive economic hardship would result by the elimination of these jobs. Thus, it can be said that the industry helps create jobs for workers to earn a living that they may not have available otherwise.

It is true that designers should have a moral right to enjoy the benefits of their creativity and should have legal protections in place to take action if necessary to protect their reputation against unscrupulous counterfeiters. However, if designers want to seek legal action, the costs may outweigh the benefits.

Designers may end up spending a lot of time pursuing legal action that may end up costing more in legal fees than gaining compensation for the supposed losses suffered as a result of counterfeiting. Further, proof of original ownership must be established in order to bring a claim against a person or company who copies without permission. Since many designs are rooted in taking inspiration from various outlets and possibly other designers, especially since fashion seems to repeat itself every decade or so, who is to say what constitutes originality. Establishing copyright infringement may prove to be a difficult task with little or no benefit.

Overall, there is validity to both sides of the argument; however, if one looks at it from the perspective of the welfare of society as a whole, then, the costs associated with counterfeiting appears to be far less than the benefits derived from it.

Debbie Meraram

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