Why Knockoffs are Legal; Should they remain so?
One of the biggest fashion trends of Fall/Winter 2021 were the Prada, military-inspired, Monolith boots, costing a whopping £1,050. However, after a quick online search, similar style boots from websites like Clarosa or Ego Official can be found at prices ranging from £24 to £50. The only difference between them is the absence of the famous Prada logo. It might seem bizarre how some brands can sell the same styles as designer products without getting into trouble, but there is a very simple explanation; there is a massive difference between a counterfeit and a knockoff. This article will analyse the differences between these two types of products and explain why selling knockoffs is legal, while the sale of counterfeits is a crime.
Counterfeit vs Knockoffs
So what is the difference between counterfeits and knockoffs?
A counterfeit is essentially any product that is identical to another product and, as a result, it infringes the trademark of that other product. For example, a Gucci bag sold by a street vendor for a ridiculously lower price than the original one, is most likely a counterfeit because it has an identical design and logo to the original Gucci design. Counterfeits are illegal because they mislead consumers as to the origins of the products by pretending to originate from a particular brand.
A knockoff, on the other hand, is simply a product that resembles another brand’s product, without infringing upon its trademark. For example, reputable high street stores may sell designs similar to luxury designer products, for a much lower price than the designer ones. In essence, if an expensive designer product is not affordable, it is highly likely that there are plenty of knockoffs online and in high street stores which have essentially the same design and features as the expensive product - and those are all legal!
IP in the fashion industry
In the fashion industry, both counterfeits and knockoffs generate continuous legal battles regarding Intellectual Property (IP) rights. IP law protects a multitude of things, including songs, movies, art, logos, and inventions; but fashion designs are excluded from the scope of IP law.
IP law in the fashion industry mainly protects the symbols and logos on the products. This can be done through the use of trademarks that indicate the source or manufacturer of a product. For example, both the Gucci and Louis Vuitton logos are protected under trademark law and, therefore, any counterfeits using these logos would be illegal. However, the design of a bag, a shoe, or any other type of clothing, cannot be protected under trademark law, as this is not the purpose of trademarks. You can find more on the purpose of trademarks and on how they work by following this link.
Another form of IP that could grant protection to creators, such as fashion designers, are patents. These can be offered to useful and novel inventions and they grant their holder a 20-year monopoly on the manufacture, use, or sale of the patented invention. However, this form of protection would not work in the fashion industry. Whilst it is easy to see how a new and innovative clothe-manufacturing machine can qualify as a patentable invention, it is highly unlikely that a clothing item itself would be able to qualify as such. Even if it could, the practical realities of the lengthy patent-application process mean that by the time a patent is granted for a fashion design, the product will most likely already be out of fashion.
The last major type of IP are copyrights, and fashion designers regularly rely on them to argue that knockoffs should be illegal. Copyright law offers protection to original literary, dramatic, musical, and artistic works. It is designed to protect artists and it grants the creator of a copyrighted work the exclusive right to make economic use of it, including the right to copy that work. Since knockoffs reproduce the features of other items, bringing fashion designs within the ambit of copyright would render knockoffs illegal. Despite the attempts of fashion designers to persuade the courts that they should be considered artists for the purposes of IP law and that their designs should be afforded protection as copyrighted material, this has not been achieved yet and fashion designs remain unprotected under IP law.
Oddly enough, fashion designers do get copyright protection over their fabric designs but no such protection is offered to cover the shape of a dress or a bag. This is supposedly justified by the fact that granting IP law protection to shapes of fashion products would not produce any benefit for society, as it would not incentivise creativity or promote economic development.
Impact on the Fashion Industry
The purpose of IP law is to give protection to certain objects, products and designs to incentivise their development, enhance creativity, and ensure that society, as a whole, benefits economically. Such protection is not afforded based on what people desire. If fashion designs were to be given IP law protection, this would have a detrimental impact on consumer choice and on the competitiveness of the fashion industry. Knockoffs would become illegal, but this would drive a lot of high street shops and online retailers out of business, as many of them copy features from the prevalent fashion trends when creating their own products. The value of the global fashion industry is estimated to be around $2tn (£1.4tn) as of 2020, with the personal luxury goods market only accounting for around $270 billion (£194bn). This means that the vast majority of the global fashion industry’s value is generated by fast-fashion brands.
Crucially, consumers would be left with a lot less choice, as they would only be able to buy fashionable products from expensive, high-end fashion designers. Most consumers cannot afford to buy the original products and the fashion industry would suffer if it alienated the majority of the population by insisting that only the original fashion items should be sold. Therefore, the desire of fashion designers to gain protection from IP law cannot outweigh the benefits of keeping knockoffs legal, as consumer choice and the welfare of the whole of the fashion industry are more important than the wishes of the elite fashion designers.
The fashion industry is huge, and it has a global reach. Knockoffs might cause problems for fashion designers, yet the size of the market means that their products are still being bought regardless of their price and of the availability of cheaper options. Buying designer products is an elusive prospect for the majority of consumers and removing knockoffs from the shop windows would leave them with reduced choices and remove their ability to keep up with fashion trends. While it is understandable why designers want to protect their creations, could we really imagine the fashion industry without knockoffs?