NCPA - National Center for Policy Analysis


April 6, 2007

Not every industry necessarily benefits from strong intellectual property protection.  In some cases, it appears that lack of protection can lead to a more vibrant and dynamic industry, says Hal R. Varian is a professor of business, economics and information management at the University of California, Berkeley.

Take the fashion industry for example.  According to Kal Raustiala of the University of California, Los Angeles, and Chris Sprigman of the University of Virginia.  The industry can survive without intellectual property protection because of two interacting factors that they refer to as "induced obsolescence" and "anchoring":

  • Induced obsolescence means that clothes become unfashionable before they wear out; when styles become too commonplace, it's time for something new -- which the fashion industry is happy to provide.
  • Anchoring is where the copying actually comes in; if, for example, all the designers are showing baby doll dresses in the spring of 2006, then there's a good chance that is what everybody will be wearing by the summer of 2006.

Raustiala and Sprigman argue that the lack of intellectual property protection actually promotes the functioning of the industry.  If the extension of copyright to fashion prevented clothes manufacturers from copying each other, the industry would be ceding a major role to the lawyers and become much less creative.  We'd see the same thing year after year.

Intellectual property protection may be very important to the development of products and ideas in many arenas, says Varian, but for at least some, including the fashion industry, they seem to be getting along well enough alone.

Source: Hal R. Varian, "Why That Hoodie Your Son Wears Isn't Trademarked," New York Times, April 5, 2007.

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