The Copycat Economy

LONDON, United Kingdom — Copying is as old as the fashion industry itself. As early as 1903, Charles Frederick Worth began sewing labels bearing his signature into his clothes as a means of authenticating his designs. Coco Chanel considered knockoffs so inevitable that she described them as "the ransom of success." (This position didn't prevent her from allying with her rival, Madame Vionnet, in 1930 to sue Suzanne Laneil, a copyist caught with 48 sketches of their designs.)

Today, knockoffs are more rife than ever before. Fast fashion companies like Zara and H&M have built multi-billion-dollar businesses reproducing the latest catwalk creations for a fraction of their original price. And copying exists among luxury brands too — in the past few years, companies including Saint Laurent have faced lawsuits from other fashion houses.

Is this copycat economy damaging designers? Or does it keep the wheels of the industry turning?

The Cost of Copycats

“Brand loyalty is down…and the taboo of mixing high fashion and high street is largely gone,” says Julie Zerbo, editor-in-chief of The Fashion Law, a blog that covers legal and business news in the fashion industry. In today’s market, she says, “Customers will be tempted towards the lower-cost items, especially if it is a trendy piece that they just want to wear for a season or two.”

The fact that near-identical copies of luxury fashion designs are available on the high street dilutes luxury labels’ brand equity and makes their products less desirable, says Elaine Maguire O’Connor, a fashion law lecturer. “If the luxury customer has seen that design in Primark or H&M, then they’re less likely to pay all that money.”

Jewellery designer Pamela Love agrees. In 2012, Chanel withdrew a series of geode crystal cuffs after public outcry over how closely they resembled Love’s bracelets. “Being copied by fast fashion designers really waters everything down. It makes our ideas less special, which ultimately hurts our business and our authenticity,” she says.

The exact cost of being copied — for example, loss of sales due to knockoffs — is "notoriously difficult to quantify", says Susan Scafidi, founder and director of the Fashion Law Institute at Fordham Law School. However, she is convinced, "It really impacts the bottom line." Certainly, the difference in sales between original designers and their imitators can be dramatic. When Narciso Rodriguez designed Carolyn Bessette Kennedy's wedding gown in 1996, he sold 45 more of the same dress. By comparison, one copyist sold 80,000.

For emerging designers, copycats can be even more costly. Not only do young designers lack the reputation and loyal customer base that drive sales at large brands, but, “often customers don’t even know that they’re buying copies, because they have never seen the emerging designers whose work has been stolen,” says Scafidi.

Young designers also tend to rely on a few staple products for sales, which makes knockoffs even more damaging. "As a young designer, you become well known for a silhouette," says Edgardo Osorio, founder of shoe brand Aquazzura. These classic styles, which can be carried through several seasons, "are the way the designer makes money, because they don't go on sale. When they start copying my classic styles, it's a problem."

Emerging brands also have a limited ability to fight back. Design patents, which protect the ornamental design of a functional item, are by far the most effective defence against copycats — in the past few years, brands including Céline, Jimmy Choo and Balenciaga have invested in them. But filing a patent can cost upwards of several thousand dollars and in the US the average processing time for a patent is more than 24 months.

Even if emerging designers do have a legal claim, going up in court against a retail giant is often financially unviable. Jewellery designer Eva Fehren’s best-selling ‘X’ ring (which has been worn by the likes of Kristen Stewart and Jessica Alba) has been widely knocked off. Fehren initially enjoyed some success taking a legal route against several copyists, but has since dropped this strategy. “To be spending such a big portion of our budget on legal fees when we should have been growing our brand was very difficult,” she says.

Introducing Regulations

Some believe that existing laws are failing the fashion industry and should be improved.

In most countries (including the US and the UK) fashion doesn’t enjoy the same protection afforded to creative media like art, literature or film, because clothes, shoes and bags are categorised as “functional items,” which are exempt from copyright laws. Instead, copyright law only covers the separable creative elements of a product, such as a print pattern.

Other intellectual property protections do cover fashion, but few are effective. Trademark law protects items where a commercial logo is visibly displayed — while this makes it a vital anti-copying tool for logo-ed products such as handbags, it's less useful for ready-to-wear. The same is true of trade dress, which covers products with a design that is so identifiable, it has become a kind of trademark. "The Birkin bag is protected by this. It's so iconic, when people see [it], they automatically know that it comes from Hermès," says Zerbo, but adds, "It's hard for an individual piece of clothing to achieve a level of distinctiveness that someone will see it and be like, 'Oh, that dress is Altuzarra.'"

Some countries have introduced additional legislation to better protect the fashion industry. In the EU, design protection is supplemented by the Creative Designs Directive and the European Designs Directive, which protect new designs for three or five years,

However, a lack of harmonisation between the laws in different countries makes it difficult for brands to protect their designs across markets. In the US, which has no supplementary regulations, protection for fashion is "terrible," says Maguire O'Connor.

The Piracy Paradox

Some opponents of greater regulation argue that copycats benefit fashion. According to Christopher Sprigman, professor of law at New York University and co-author of 'The Knockoff Economy,' copying is "the engine driving the fashion industry." He calls this concept the "Piracy Paradox."

Unlike in industries like technology, in fashion, there isn’t a constant stream of product innovation that renders old items obsolete. Fashion consumers buy clothes out of desire, not necessity: they buy a garment one season, but are unsatisfied with it by the next, so purchase something new.

When a new design first appears on the catwalk, its high price means that only elite customers can afford it. These customers are the early adopters and trendsetters. When the design is copied, it signals to the market that this is going to be a trend, and even more copies are produced.

These copies find their way into fast-fashion retailers, and mass consumers start to buy into the trend. But as the design trickles down the market, it lose its allure for the luxury consumers who kick-started the trend in the first place and who value luxury fashion for its exclusivity and distinctiveness. These customers start looking for something new — and the cycle begins again.

Copycats help create trends, and then help destroy them, paving the way for new ones to take their place, argues Sprigman: “Without copying, the fashion industry would be smaller, weaker and less powerful.”

A Broken System, a Shifting Balance

The idea that copies keep trend cycles turning was first proposed by the American economist Paul Nystrom in 1928 in ‘The Economics of Fashion.’ However, nearly 90 years later, technology has evolved, and both the speed of production and information have increased dramatically. “[Sprigman and co-author Raustiala’s] argument is just a resurrection of an old argument about the fashion cycle, but they’re making it at a time when the cycle is broken,” says Scafidi.

During Coco Chanel’s lifetime, copyists had to sneak into the shows and sketch new designs from memory, before sending them to far-off factories to be made into garments. Today, anybody can access images of the latest designs seconds after they’ve been sent down the runway. And because of high fashion’s seasonal calendar, in which designers show runway collections months before they go on sale, fast fashion retailers can often get their imitations into stores long before the originals hit the shop floor.

Designers have lost their first-to-market advantage and the balance of the old cycle — where designers and their copycats could co-exist — has shifted, Scafidi argues. “There’s no time for trendsetters to adopt the item and for people to pay the designers for the original work,” she says. “The copyists are winning right now.”

Laws and Locks

“Whenever we deal with theft of intellectual property in the real world, there’s always a combination of law and locks,” explains Scafidi. “There’s a law against going into somebody’s house and stealing something, but you lock the door every night.”

While ideally the law should be "stepping up" to protect designers, says Scafidi, some designers have made themselves harder targets for copycats by using technical fabrics and complicated designs, which are difficult to reproduce at a low price. In recent seasons, British designer Mary Katrantzou has moved away from the vibrant digital prints that launched her career, after imitations spread like wildfire across the fast fashion market. Her latest collections featured custom-made embroidered jacquards and guipure lace: "It's impossible [for mass-market chains] to come close to the quality and the craftsmanship," she told The Wall Street Journal.

(L-R) Aquazurra's Wild Thing sandal vs Ivanka Trump's Hettie sandal | Source: Net-a-Porter/Nordstrom

Designers can also use their dialogue with the consumer as a powerful weapon to protect themselves. “Communicate to the customer that you are the creator and, therefore, able to reap the commercial benefits of your creation,” advises Ceci Joannou, founder of Brand + Commercial, a digital resource and fashion commerce consultancy for small brands. Eva Fehren incorporated the story of her ‘X ring’ copycats into her marketing. “It’s become part of our plan of attack,” she says.

In many ways, the Internet has worked to the advantage of fashion pirates — but it has also provided designers with a platform to fight back.

Many designers have used social media to publically call out knockoffs, with some success. Chanel recently withdrew a range of Fair Isle-patterned sweaters after the designer Mati Ventrillon complained in a Facebook post that the luxury brand had visited to her factory and then plagiarised her designs.

Last week, Aquazzura’s Osario called out the designer Ivanka Trump on Instagram for producing a $145 imitation his ‘Wild Thing’ fringed suede sandals (Aquazzura’s retail for $785). “You just have to go public because that’s the only way that hopefully somebody will pay attention and something will happen,” he says. “Because going through lawyers doesn’t work.”

Customers — the ones keeping the copycats in business — have a responsibility too, adds Scafidi. “Consumers need to understand that there is a harm that they do when they choose the cheap knockoff… [Fashion companies] need to recover the cost of paying designers to design.”

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Editor's Note: This article was revised on September 6, 2016. A previous version of this article misspelled Narciso Rodriguez.