Knock-off Bagging on Counterfeits
Under current Copyright law, it is legal to “knock-off”, or be inspired by, another designer’s products. Proponents of the current state of the law argue that this design piracy actual spurs sales by inducing obsolescence.
Counterfeiting, the practice of passing of imitation goods as the real things, however, is illegal in the United States. According to the International AntiCouterfeiting Coalition, counterfeiting costs U.S. businesses $200 billion to $250 billion annually.
What if they are wrong and the sale of counterfeit products, like the sale of knock-offs, actually increases sales of the authentic product?
A new study “The Real Value of Fakes,” by MIT Professor Renee Richardson Gosline has shown just that. MIT News reports:
Gosline interviewed hundreds of consumers who knowingly bought fake luxury apparel, many at “purse parties” where such goods are sold. Gosline found that within two years, 46 percent of these buyers subsequently purchased the authentic version of the same.
Now that’s more "faux" for your bottom line.
photo credit: ReplicaEstore.com
Hi - I followed your blog here from the Cut blurb about the MIT study. I hear what you're saying but it reminds me of the arguments in the Grokster case. Some folks felt that by allowing illegal downloads, the music industry was actually helped. Dylan and Springsteen might not miss the royalties and they might gain new fans, but smaller indie artists were actually hurt. They need every last sale to stay in the biz.
Dear Erica.
Thank you for your comment. I understand that counterfeits may be hurtful in some industries (especially health products) and I am not denying that they are illegal. The problem is that the costs of counterfeting fashion are unknown. The IAC relies on a report by the OECD which admits that no "rigorous quantitative analysis has been carried out" and fashion counterfeits are only a small percetage of the total. Finally, in fashion, and unlike music, many people buy counterfeits because they cannot afford the orginal product so the orginal trademark holder is not losing a sale. According to Gosline's study, the trademark holder actual gains a sale in almost half the cases. So perhaps, in net sum, fashion counterfeits actually increase sales, helping not hurting the trademark owner.