Fashion Industry is an international multi-billion pound business whose economic and social significance is incontrovertible around the world. Ranging from premium design houses to individually owned boutiques, this structurally diverse industry is incessantly generating and commercially exploiting creativity and innovation. Tremendous value of intellectual capital is used for creation and marketing of products in the fashion world, be it haute couture or ready-to-wear. The key sources of competitive advantage in contemporaneous business environment are innovations and original creative expressions. For continuous reaping of fruits through this competitive advantage, it is crucial for business managers to identify such valuable intangible assets, determine their business relevance, and secure the right kind of IP protection for them. Global Fashion Industry is growing by leaps and bounds, however, its growth is marred by fashion design piracy which is ubiquitous in all spheres of fashion, be it clothings, footwear or jewellery. It denies the creators their rightful profits that should ooze out from their hardwork and creativity. A product of human creativity and intellect, fashion designs are apposite for IP protection, however, consensus on this issue is eluding. The reason for denying strong IP protection to fashion industry is the fear of creation of monopolies which could hamper further growth and creativity. However, this view forgets that on the other side this attitude results in robbery of the intellectual efforts of the design houses and designers. There is a constant tractor pull between the need for protection of fashion designs under IPR regime on one hand and the piracy paradox view on the other. As per the pioneering work of Kal Raustiala and Christopher Jon Sprigman, fashion houses invest huge capital in development of new and creative designs and also their protection under intellectual property law, but at the same time they accept the rampant unauthorized appropriation of their designs as an inescapable fact of the industry. According to the authors, this acceptance of piracy is due to the reason that copying of fashion designs is actually good for the growth and promotion of fashion industry and this is what they called the "Piracy Paradox". The authors argue that fashion industry flourishes in a low IP equilibrium i.e. the state of low IP protection because piracy of fashion designs is the motivating force behind fashion innovations and strong IP protection will prove disastrous for the ecosystem of fashion industry's creativity. The basis of this theory is that the absence of IPR protection push designers to innovate new designs as every design created by them falls into public domain and can be copied, ultimately leading to growth of fashion industry. The design houses come up with new collection every season because the designs of the previous collections get copied. Hence, the authors claim that fashion design piracy has never been a threat to the growth of fashion industry and in fact, growth, promotion and creativity in fashion industry depend upon piracy.
Piracy paradox is a frail argument, trying to establish a canard that designers and design houses accept piracy as a usual practice of the industry. In fact, the revenue and profits of premium fashion houses depend heavily on their IP protection. Celebrated fashion houses have been able to make it big in the industry because of the strenuous efforts they have put in protection of their intellectual property. Fierce battles such as between H&M and Forever 21 for Beach Please Bag, YSL and Ralph Lauren for Women Tuxedo and Christian Louboutin and YSL for Red Soles are some of the examples of aggressive IP enforcements. Apart from the fact that premium houses are extremely vigilant in respect of battling piracy, the class of small, nascent and emerging designers is worse affected by piracy. The major flaw with piracy paradox theory is that it is based on 'trickle-down effect' of fashion change which assumes that copying of fashion design occurs from highest to lower layer. This assumption of piracy paradox theory is flawed as copying of fashion designs takes place in all layers of fashion. It is not only the small designers who copy designs of celebrated designers, due attention to inverse copying at vertical levels and horizontal piracy has been omitted in the piracy paradox view. While the aforementioned IP combats between premium design houses mark the existence of horizontal piracy, copying of the designs of handloom works such as Banarasi Sarees by colossal manufacturers and producing them en masse is a doleful example of piracy by upper layer of the fashion industry. Such small designers and weavers lack enough capital and resources to protect their intellectual property as rigorously as big fashion houses and are also weakly placed in terms of bearing economic loss. A premium fashion house can still bear loss without any severe harm to its business, but for a small designer even a small economic loss can prove to be fatal for its business and money circulation. A small weaver or designer will not be motivated or encouraged to innovate by piracy of designs but will rather be discouraged. Creativity of such designers will be curbed which will hinder the thriving of fashion industry as promised by the Piracy Paradox argument. Au fond, the Piracy Paradox argument fails to deliver what it promises and thus cannot be sustained in the interest of design houses and designers, more specifically, the emerging and indigenous sector of designers and fashion workers.
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