fashion design how can the fashion industry protect its designs?

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Fashion design How can the fashion industry protect its designs? Slide 2 Nuria Basi Mor President, Armand Basi Fabio Angelini ECTA Law Committee Susan Scafidi Professor and Academic Director, Fashion Law Institute at Fordham Chair: Verena von Bomhard Partner, Hogan Lovells Slide 3 Fabio Angelini De Simone & Partners Fashion and Design rights How an empirical/economic approach may change the way the law sees them Slide 4 "Fashion is a form of ugliness so intolerable that we have to alter it every six months." Oscar Wilde Slide 5 Two scenarios 1) Someone says: I have a registered /unregistered design right and some else is copying me. OR Someone saying that is accusing me of copying. 2) Someone says: I do not have a registered/unregistered design right and someone else is copying me. OR Someone saying that is accusing me of copying. Please note I do not mention copyright, but one may add even that, if applicable! Slide 6 The real problem: is it (copying, recycling or taking inspiration) bad? Lets face it: however you want to call it, it is a common phenomenon, widely accepted. Large retailers survive by doing it. Who can deny that fashion is a trend and there is very little new under the sun. Most importantly does anyone have empirical evidence that it is bad? Slide 7 Actually it might not be that bad: cf. The Piracy Paradox: Innovation and IP in Fashion Design (Kal Raustiala and Christopher Sprigman, Virginia Law Review (Vol. 92:1687) 2006 Slide 8 The starting point is in the concept of low-IP equilibrium: the three core forms of IP law copyright, trademark, and patent provide only very limited protection for fashion designs, and yet this low level of legal protection is politically stable. The lack of design protection in fashion is not especially harmful to fashion innovators, and hence they are not incentivized to change it this low-IP system may paradoxically serve the industrys interests better than a high-IP system. Beware, the above conclusion is empirically proven valid for both the US market and for the EU market which differs for the kind of protection which is afforded to designs. Slide 9 Anecdotal economic assessment of its impact on the industry as a whole It helps those who spend less and thus performs an economic and social function. Stricter IP protection might create monopolistic positions, thus slowing the fashion cycles leading to less innovation and higher prices due the lack of demand for new trends. Licensing costs resulting from stricter IP protection may increase prices and decrease innovation. Compares to other industries (music/film), there is a less negative impact from the low IP-equilibrium. Two reasons: Induced obsolescence and Anchoring. Slide 10 A.Induced Obsolescence Positional Goods Fashion is not only tied to our personal taste. Fashion is now more than ever a status-conferring good: Most forms of apparel above the commodity category function as what economists call positional goods...These are goods whose value is closely tied to the perception that they are valued by others. These goods are positional goods defined by economists as bought because of what they say about the person who buys them. They are a way for a person to establish or signal their status relative to people who do not own them: fast cars clothes from trendy designers. Basically, the concept works in reverse to the famous quote Slide 11 Slide 12 Or, if you want a more serious quote: Art produces ugly things which frequently become more beautiful with time. Fashion, on the other hand, produces beautiful things which always become ugly with time. Jean Cocteau Slide 13 Anchoring If the fashion industry successfully wants to maintain a cycle of induced obsolescence by introducing new styles each season, it must somehow ensure that consumers understand when the styles have changed. This happens in many ways, but it helps. The fashion industry itself does not always really know what will become fashionable and a new trend. Basically, when the market becomes suddenly saturated by it, one latest fashion becomes a trend. Therefore it helps to anchor the new season to a limited number of design themes, which are more or less freely workable by all firms in the industry within the low-IP equilibrium. Slide 14 A regime of low IP protection, by permitting extensive and free inspiration, enables emerging trends to develop and diffuse rapidly, and, as a result of the positionality of fashion, to die rapidly. Induced obsolescence and anchoring are thus intertwined in a process conducive to quick design turnover. This turnover contributes to, though it does not by itself create, a market in which consumers purchases are at a level well beyond that necessary simply to clothe themselves. Together, induced obsolescence and anchoring help explain why the fashion industrys low-IP regime has been politically stable. Slide 15 The Seventies are back!!!! Great. But, in my view, there is a missing factor. Fashion is cyclical, and fashion itself recognizes that most of the time the inspiration is drawn by looking back at past fashion. Slide 16 The missing factor is the dj-vu. Perhaps because I have been around for longer than I care to admit, I find myself thinking time and again that todays fashion is oh-so-similar to what we used to wear when I was younger. Here is a clue: the greatest consumers of fashion are the youngest. Because they do not, cannot remember. So, who is the greatest designer? Perhaps the one who notices first when its time to look back to the past? Slide 17 How does all of this fit from a legal perspective? In my view, it should guide Courts in correctly interpreting existing laws as well as IP owners in correctly deciding their strategies. Since Ive been on both sides (sometimes I was a plaintiffs lawyer, some other times a defendants lawyer), Im really wary of militant (i.e. one-sided) IP law practice. Do you want an example? Lets play a game: WHO IS THE COPIER? Slide 18 Yves Saint Laurent or Chewy Vuiton Slide 19 Wrong. Ask Louboutin Slide 20 Even those who pride themselves in being the leaders, not the followers, sometimes are on the wrong side of the equation. In practice, the paradox of fashion means that we ought to use IP rights, that is design rights, wisely, so as not to suffocate the cycle of innovation and still guarantee adequate ROI for those who create. Therefore, designers should choose among the different instruments that current laws provide keeping in mind what is the end result Slide 21 Registered designs should never be used for fledgling, seasonal fashion. Use them for fashion items that might last longer, such as handbags or perhaps shoes. Beware though: since there is nothing new under the sun, a skilful lawyer will often be able to find something in the past which may deny the individual character. Conversely, the Court should decline to expand the scope of protection of a design and treat with suspicion any attempt to do so. Slide 22 Rely instead on unregistered design rights to protect seasonal fashion against real knock-offs, but beware that anchoring needs the existence of inspired fashion if no-one follows you, no trend will ever be established. Youre going to be a freak. Conversely, Courts should narrowly interpret what copying means, and should not treat as interchangeable the concept of no different overall appearance with that of copying. Meaning that those who take inspiration and are followers should be left free to do so for the system to function. Slide 23 In conclusion, it is my view that the interaction of IP rights (i.e. designs) and fashion is an uneasy one, which nonetheless has found its balance and it seems to work! Nonetheless, there is a problem for a restricted number of fashion designers, who thrive by the allure and profit so long as they are capable to restrict access to their product to extremely few customers. However, the nature and the cost of these products is often such that it is not even possible to talk about competition. There is no competition between an original and most times unique dress by a celebrated designer in super exclusive boutiques and the inspired dress sold at large department stores. Perhaps a balance can be struck, maybe with the adoption of low cost brands and /or with other models of distribution, but the question remains: if it aint broken, why fix it? Slide 24 Re-Fashioning Intellectual Property Susan Scafidi Professor and Academic Director, Fashion Law Institute at Fordham Slide 25 Susan Scafidi Professor and Academic Director, Fashion Law Institute at Fordham No authorization for distribution to attendees Slide 26 Questions


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