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In copycats vs. copyright, the knock-off wins

The wedding this weekend of Chelsea Clinton and Marc Mezvinsky is big news in the town of Rhinebeck, the location of the private nuptials.

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By Ezra Klein
Sunday, August 22, 2010

I pride myself on being a man of substance. A wonk. A nerd, even. And like most nerds, I don't have a great eye for fashion. So I ask this question seriously: What did you think of Chelsea Clinton's Vera Wang wedding dress? Want to buy it? What if I can sell it to you really cheap?

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On Aug. 5, Sen. Charles E. Schumer (D-N.Y.) introduced S.3728: The Innovative Design Protection and Piracy Prevention Act. He's got 10 co-sponsors -- including three Republicans -- and a big idea: to extend copyright protections to the fashion industry, where none currently exist. That's right: none. I -- well, not I, but someone who can sew -- can copy Vera Wang's (extremely expensive) dress and sell it to you right now (for much less), and Wang can't do a thing about it.

Allan Schwartz, founder and lead designer of the label ABS, has promised to do exactly that. He'll take the dress, remake it and sell it to the masses for much cheaper. Is he stealing? Or is he popularizing? Schumer's legislation suggests his answer: He wants to make Schwartz's imitation illegal. Only Wang should be able to profit from her designs, at least for the first three years (the length of Schumer's proposed copyright). But what if he's wrong? What if copying is . . . good?

We're used to the logic of copyright. Movies, music and pharmaceuticals all use some form of patent or copyright protection. The idea is simple: If people can't profit from innovation, they won't innovate. So to encourage the development of stuff we want, we give the innovators something very valuable: exclusive access to the profit from their innovations. We're so bought into the logic that we allow companies to patent human genes.

And companies love copyright. They love it so much that they persuaded Congress to pass the Sonny Bono Act, which extended individual copyright protections to the life of the author, plus 70 more years; and corporate copyrights to 120 years from creation, or 95 years from publication, whichever is earlier. That's an absurdly long time, and it belies the original point of patents. Does anyone seriously believe that a 40-year-old with a money-making idea is going to hold back because someone can mimic it 20 years after he dies?

At a certain point, copyrights stop protecting innovation and begin protecting profit. They scare off future inventors who want to take a 60-year-old idea and use it as the foundation to build something new and interesting. That's the difficulty of copyrights, patents and other forms of intellectual protection: Too little, and the first innovation won't happen. Too much, and the second innovation -- the one relying on that first -- won't either.

Which is why we have to be careful when one industry or another demands more copyright protection. "Intellectual property is legalized monopoly," says James Boyle, a professor at Duke Law School. "And like any monopoly, its tendency is to raise prices and diminish availability. We should have a high burden of proof for whether it's necessary."

Drug development probably meets the burden of proof. It costs hundreds of millions of dollars to bring a drug to market. If Pfizer could just copy the drugs Novartis develops, Novartis wouldn't have much reason to develop drugs.

Recipes don't. You can't patent dessert. Just ask Jean-Georges Vongerichten. Years ago, he created a chocolate cake with a molten core of liquid chocolate. The recipe became a sensation. Which meant it appeared on menus all across the country, with no credit to JGV. That's a bummer for its creator, but a boon to all of us who don't live in New York. We get to eat it anyway. And yet, innovation continues apace in the food world. JGV is still a rich man. We can have our cake and eat it, too. (Sorry, sorry.)

So which is fashion? Well, look around. Sure seems like there are a lot of clothing options, and at all price points. The big fashion houses are raking in billions of dollars in profits. What's the problem we're trying to solve?

Well, there's the principle of the thing. Designers don't like being copied. It doesn't seem fair. But there's nothing fair about legal monopolies, either. The question is which benefits consumers more.

Then there's the matter of profit: Schwartz is threatening to take Wang's profits. In theory, that might dissuade Wang from making new dresses. But America has never had copyright protection for dresses, and Wang keeps making -- and profiting -- from them. Meanwhile, Schwartz's copies make versions of Wang's designs available to more consumers. That has value, too.

Fordham University's Susan Scafidi, who helped craft the legislation, says that it's actually small designers that we need to worry about. They get ripped off, and because they don't have the name recognition of a Vera Wang, there's little they can do about it, and so they have to close shop. But how many of them? There's anecdotal evidence of this, but record numbers are signing up for fashion-design school and the American fashion industry has emerged and thrived in the absence of copyright.

And what about the dangers of the new law? Schumer's office has worked to protect against frivolous lawsuits. The language is very narrow, and cynical plaintiffs would have a tough road ahead of them. But the letter of the law does not always govern the effect of the law. Small designers and retailers don't have attorneys on retainer, and if bigger firms take the opportunity to start sending out a lot of intimidating cease-and-desist letters, or opportunists try to patent everything in sight and sue their way to prosperity, we could, at the least, see the legal fees and threats pile up -- and ultimately consumers will pay for that.

Then there's the question of creep. A judge could interpret the law as broader than Congress intends, or a future Congress could expand the law beyond what Schumer intends -- as has happened in other areas of copyright.

If we're going to risk all that, the law needs to carry some serious benefits. And it might have one: innovation.

"We have Allan Schwartz and six other companies making slavish copies of Vera Wang," Scafidi says. "But suppose we have this law in place. The other companies can't copy it exactly, so they go to their designers and create six or seven versions at the affordable price point." In other words, the ability to copy might reduce the need to innovate.

Jennifer Jenkins, an intellectual property expert at Duke, disagrees. "In fashion, copying has benefits," she says. First, knock-offs make designs trendy, and that increases the value of the original, and thus the incentives for designers to innovate.

Second, it makes them affordable, so more people can wear them. Vera Wang and Allan Schwartz aren't selling to the same crowds, and there are a lot more people shopping at discount stores than at designer boutiques (which is why many designers are now licensing their name to retail outlets like Target). And third, it speeds up innovation, as fashion designers have to keep churning out new products to stay ahead of the copycats.

But perhaps the strongest argument is that America's apparel industry isn't broken -- so why try and fix it? "America is the world fashion leader," said Steven Kold, director of the Council of Fashion Designers of America, the lead trade group in support of the Schumer bill, "and yet it is basically the only industrialized country that does not provide protection for fashion design."

Run that by me one more time? We're the world leader in fashion, so we should change our policy regime to mimic our lagging competitors?

Too often, copyrights are used to protect profit. It's no coincidence that the rise of the Internet -- which led to an explosion of low-cost distribution networks, new forms of competition and unexpected types of innovation -- has also led to calls for new and stronger forms of intellectual protection.

Consumers have been told this is all for them. But it isn't. There's a reason we're skeptical of monopolies, and we shouldn't forget that even when they're dressed up as "copyrights."

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