Third time a charm? The Innovative Design Protection Act in the face of The Knockoff Economy.

On Friday November 1, 2012, the American University, Washington College of Law Program on Information Justice and Intellectual Property (PIJIP) hosted the Inaugural Peter Jaszi Distinguished Lecture on Intellectual Property, featuring Christopher Sprigman, Professor at the University of Virginia Law School and co-author of the book The Knockoff Economy: How Imitation Sparks Innovation.

In a recent clip discussing The Knockoff Economy, Professor Sprigman mentioned that the intent of the book was to try to give a “reality check” to the widely accepted justification and theory for intellectual property rights. Namely, the theory that creativity and innovation depend on property rights to protect it. If creativity isn’t protected, copying will “drain away” the resources of creators and they will never be able to recuperate their investment costs, and as a result they will stop creating. Professor Sprigman agrees that the theory is relevant, albeit on an abstract level and with important limitations as there are some very successful industries such as fashion, food, and open-source software that do little to support this theory.

The dynamics of the fashion industry have been of particular interest for Professor Sprigman and co-author of The Knockoff Economy Kal Raustiala, a Professor at UCLA School of Law. The two authors have previously published several articles concerning the ongoing debate concerning the expansion of intellectual property rights for fashion design including, The Piracy Paradox: Innovation and Intellectual Property in Fashion Design as well as The Piracy Paradox Revisited.

The authors wanted to understand how the fashion industry thrives despite the low intellectual property afforded to it. Professor Sprigman notes that although fashion designers are “free to copy, to take inspiration from their rivals’ designs”, the industry is highly innovative and extremely profitable. The authors identified several advantages of copying in the fashion industry, including trends which act to fuel innovation and new designs: “copying helps spread the trend, and then it helps kill it”, as well as anchoring, which helps to reduce transaction costs by signalling the latest styles to consumers.

The Inaugural Distinguished Lecture featuring Professor Sprigman on The Knockoff Economy follows the latest of three attempts to expand intellectual property rights by proposing a Bill to amend the US Copyright Act to include protection for fashion design. The improved Innovative Design Protection Act (IDPA, 2012) S. 3523, successor to the Design Piracy Prohibition Act (DPPA, 2009) and most recently the Innovative Design Protection and Piracy Prevention Act (IDPPPA, 2010), was introduced on September 10, 2012 and successfully passed through the Senate Judiciary Committee only ten days later. It is now queued on the Senate’s legislative calendar.
Prior coverage of the IDPPPA can be found here.

2012 has endured a flurry of fashion related cases including the high profile Christian Louboutin v Yves Saint Laurent America Holding Inc case decided by the US Second Circuit Appeal Court in September which granted Louboutin trademark victory for the red soles shoes (except for in the case of monochromatic shoes). Interestingly, Louboutin fought and lost a similar lawsuit in the French Cour de Cassasion in 2011 to retail giant Zara. Canadian based lululemon athletica inc also launched a lawsuit against Calvin Klein Inc late this summer concerning the alleged design patent infringement of their Astro yoga pant waistband design.

In Canada, fashion design protection is fragmented between copyright and industrial design law, as is protection for most useful articles. In the second edition of Intellectual Property Law: Copyright, Patents, Trade-Marks, David Vaver, Professor of Law at York University, Osgoode Hall Law School observes that clothing has not qualified under the category of work of artistic craftsmanship (Vaver, 84), and gives a useful example of the shortcomings of copyright law for clothing design under the “useful article” provision in section 64 of the Copyright Act :

“The Copyright Act removes full copyright protection from some of the “applied” artwork, applied as a design to a finished “useful article” … if more than fifty copies are made. This means that a Chanel “original” may be fully protected by copyright, as may any other original dress design, until the fifty-first dress is made anywhere with the copyright owner’s consent. Then anybody can copy the dress (a useful article) without infringing any copyright in it or any preliminary sketches and patterns”. (Vaver, 86)

Alternatively, designers may decide to register their designs under the Industrial Design Act which would grant ten years of protection upon mandatory registration, although it might be cost prohibitive to many small and medium designers given the rapid cycle of the fashion industry. As well, it is a limited form of protection, at least compared to other intellectual property rights in Canada. There has been a renewed interest in industrial design protection given the recent Federal Court case Bodum USA, Inc. and PI Design AG v. Trudeau Corporation (1889) Inc. Details of the case can be found here.

In Whither Industrial Design, authors Margaret Ann Wilkinson, Faculty Scholar and Director of the Area of Concentration in Intellectual Property, Information and Technology Law at the University of Western and Amy Muhlstein warn about the difficulties of relying solely on industrial design protection, stating that:

“The narrow definition of design in the legislation, together with the difficulties in interpreting the definition of design and related terms; in establishing criteria for originality; in coping with the subjective element in establishing infringement and in applying legislation from an earlier age to modern designs, all indicate that industrial designs are neither protected comprehensively, nor with any great certainty of enforcement under the current Industrial Design Act.” (Wilkinson & Muhlstein, 23)

The legislative policy concerning the relationship between copyright and industrial design has also been found to be rather inconsistent if not arbitrary. (Vaver, 89) Professor Vaver finds that “The attempt to draw a bright line between fine art and industrial design is unfortunately undermined by the list of bric-a-brac that is specifically allowed to retain full copyright protection” i.e. trademark and textile designs, labels and character merchandising to name a few. (Vaver, 89)

Similarly, in her chapter When Intellectual Property Rights Converge: Tracing the Contours and Mapping the Fault Lines ‘Case by Case’ and ‘Law by Law’ in An Emerging Intellectual Property Paradigm: Perspectives from Canada, Myra Tawfik, Associate Professor at the Faculty of Law at the University of Windsor writes:

“It would seem then that in spite of Parliament’s best efforts, the segregation of industrial design and copyright has not been entirely successful – and indeed, will not likely be fully achieved unless and until a systematic review of Canadian industrial design law is undertaken that includes a full analysis of its interface with copyright law.” (Tawfik, 273)

Despite the fact that Canada has not followed the queue for stronger fashion design protection, the debate for IP expansion is certainly still relevant, as is discussion about Industrial Design Act reform and its relationship with copyright law. It will nonetheless be interesting to see whether any noticeable changes in the fashion industry will occur stateside, including creativity, trend behavior and all of the other positive attributes of low intellectual property industries Professors Sprigman and Raustiala have identified in The Knock-off Economy, should the IDPA successfully pass this time around.

Courtney Doagoo is a doctoral student at the University of Ottawa, Faculty of Law.