The Core Idea

It is true, as Randy points out in his post, that the core claims of The Piracy Paradox have not been much criticized by the mobblog. Up till now I thought that was because, well, everyone just agreed with our excellent arguments. But clearly I was being overly-optimistic.

One can certainly view induced obsolesence thru the lens of credible commitments. If the IP regime protected fashion designs, a firm could credibly commitment to limited runs at high prices. To some degree this exists in the real world. Living in Hollywood has proven useful for this project. Down the street from me is one of the world's largest high-end denim retailers, American Rag. In it are Japanese jeans that sell for well in excess of $1000. They come in wooden boxes with certificates assuring buyers that they are a limited edition. (Limited editions can be found in the sneaker world, too. Up the street from American Rag is Undefeated, a specialist in rare sneakers that is always mobbed, ironically, by young Japanese tourists). The $1300 Japanese jeans can do this because pocket stitching, the most visible part of a pair of jeans, are often trademarked, and the jeans in question have expensive appliqués of the sort that IP law does protect. In a high-IP world, firms could likewise commit to buyers that none of their clothes will be widely distributed.

But would they would want to? As Randy notes, in the paper we discuss the prewar "Fashion Originators Guild" that operated in the US. The Guild was largely aimed at preventing copying, and it did work well. Of course, the key designs at that time came out of Paris, and the Guild was happy for members to copy those. So the leading edge of design was not affected by the Guild. Nonetheless, the Guild demonstrates that the industry has at times organized to limit copying.

Since the fall of the Guild on antitrust grounds other efforts have transpired to alter IP law, including a current bill, HR 5055, which creates a sui generis right based on the vessel hull statute that derived from the Bonito Boats decision. (We opposed the HR 5055; Chris testified before the House subcommittee to that effect in July). None of these legislative efforts, included HR 5055, have been successful.

Does this fact challenge our core argument? I don’t think so, because we do not claim that the fashion industry has no interest in copyright protection, nor that designers are never harmed by copyists. Rather, we make a careful claim about the political economy of property rights: that to date, despite a groundswell of interest in IP rights within the content industries, and a seemingly endless appetite on the part of Congress for IP expansion, fashion remains unprotected and fashion designers surprisingly diffident about copying. We explain that unusual comparative finding via our twin models of induced obsolescence and anchoring.

Randy notes that copying has become easier since the old Guild days, which leads him to surmise that the industry would want protection even more in the 1960s than the 40s, and more in the 90s than the 80s. That sharpens the puzzle--and I think supports our claim. Why don’t designers fight for the protection so many other creative industries already have? Because they don't face strong incentives to do so. A regime of free appropriation + TM works very well.

HR 5055 is just one in a long line of weak lobbying efforts. Yet it may well be enacted. If it does, I think the likely reason is not that the dynamics of creativity in fashion have dramatically changed. Rather, the rhetoric of IP has changed. The fear of free-riding, as Mark Lemley has ably described, is now everywhere. And with everyone else grabbing more and better IP rights, it becomes increasingly easy for those in the fashion industry who desire IP protection to make the current system look unfair.

Final note: Randy raises the specter of instant copying. I think the problem here is that even if instant copying existed (and, it basically does) the copyist has to know what to copy. Which of the many designs produced in a season will consumers buy? If copyists could intuit that instantly, before the goods hit the shelves, then they could beat the originators to the punch. Or better yet, get hired as a major buyer for Saks. In the real world, it takes some time for designs to show their selling power. Copyists are thus incentivized to wait a bit.