To copy or not to copy, that is the question: the game theory approach to protecting fashion designs.

• Author: Wong, Tedmond

INTRODUCTION I. INTELLECTUAL PROPERTY PROTECTION FOR FASHION DESIGNS A. Current Protections for Fashion Designs 1. Trademark 2. Patent 3. Copyright B. Congressional Efforts to Extend Copyright Protection to Fashion Designs C. Foreign Approaches to Copying in the Fashion Industry 1. France 2. United Kingdom 3. European Union II. COPYING WITHIN THE FASHION INDUSTRY A. The Current Trend of Duplication in the United States B. Academic Debate on the Duplication of Fashion Designs 1. Low Intellectual Property Protection 2. High Intellectual Property Protection 3. Intermediate Intellectual Property Protection III. How GAME THEORY INFORMS INTELLECTUAL PROPERTY PROTECTION IV. THE GAME THEORY MODEL A. Scenario 1: No Legal Protection B. Scenario 2: Uncertain Legal Protection (The Current State of the Law) C. Scenario 3: Innovative Design Protection and Piracy Prevention Act V. POLICY INSIGHTS FROM THE GAME THEORY MODEL A. Maximizing Social Welfare and Fostering Innovation B. Alternatives to the IDPPPA 1. Private Enforcement Through an Industry Guild 2. Reputation CONCLUSION INTRODUCTION

Fashion designers in the United States, unlike those in many foreign jurisdictions, enjoy only limited intellectual property protection for their creative endeavors. The American patent, copyright, and trademark systems each present obstacles to obtaining protection for fashion designs. Copyright and trademark law protect certain elements of fashion designs, such as unique fabrics and logos, but the protections do not extend to the general shape and appearance of a fashion design. Moreover, copyright and trademark law do not grant protection to products and features that serve a utilitarian purpose. On the other hand, patent law presents difficult statutory barriers; a design must be novel and nonobvious, and can only gain protection after a lengthy litigation process. The result is a gap in intellectual property protection that leaves fashion designers vulnerable to a stitch-by-stitch, seam-by-seam replication of the designs they labor to create.

While the duplication of fashion designs is not a new phenomenon, the practice has recently received increased attention due to high-profile lawsuits by famous designers including Anna Sui and Diane yon Furstenberg against low-end, mass retailers such as Forever 21. The defendants in these cases are known as "fast-fashion" firms for their ability to replicate original designs at alarming speed, on a large scale, and at low cost. (1) Many fashion designers disapprove, claiming that fast-fashion firms' capabilities of quickly copying original designs and bringing those copies to market deprive original designers of profits and stifle design firm creativity. The fashion industry, represented by the industry group Council of Fashion Designers of America (CFDA), has sought Congress's assistance to rectify the longstanding dearth of intellectual property protection for fashion designs. (2) The Senate introduced a proposal to amend the copyright statute known as the Innovative Design Protection and Piracy Prevention Act (IDPPPA) last session, (3) and the House of Representatives recently introduced the same proposal. (4)

In this Comment, I address the normative question of the optimal scope of intellectual property protection for fashion designs through game theory's unique perspective of law and economics. I do so by developing a game theoretic model that evaluates the impact of greater legal protection on the incentives of fashion designers to bring lawsuits to protect their designs and of fast-fashion firms to make replicas of these designs. Analyzing the incentives at play will allow me to predict whether the IDPPPA in its current form will deter fast-fashion firms from replicating designs, encourage innovation, and maximize welfare in the fashion industry.

Part I of this Comment offers a detailed overview of the current state of intellectual property protection for fashion designs in the United States and compares U.S. protection with the legal regimes of foreign jurisdictions. Part II discusses the recent developments in the fashion industry that have triggered an outcry against copying and summarizes the scholarly views on the normative question of which legal regime, if any, should exist for the protection of fashion designs. Part III provides background on the law and economics approach to intellectual property protection and explains the relevance of game theory, a law and economics tool, to the analysis of copying fashion designs. Part IV lays out the assumptions and the structure of a game theoretic model and applies this model to different legal regimes aimed at protecting fashion designs. Finally, Part V examines the findings of the game theory analysis in Part IV, evaluates the efficacy of the Innovative Design Protection and Piracy Prevention Act as a policy choice, and introduces possible alternatives.

1. INTELLECTUAL PROPERTY PROTECTION FOR FASHION DESIGNS

   1. Current Protections for Fashion Designs

      American law offers what has been described as a "patchwork of protection" for fashion designs. (5) That is, American intellectual property laws provide neither a specific nor a comprehensive scheme of protection for fashion designs. Instead, fashion designers must seek protection from the existing institutions of trademark, patent, and copyright law for relief from copying. However, each of these sources of law presents obstacles to a plaintiff fashion designer.

      1. Trademark

         Trademark law protects "any word, name, symbol, or device, or any combination thereof ... used by a person ... to identify and distinguish his or her goods...." (6) Trademark can thus protect certain elements of a fashion design, such as a designer's logo. However, trademark protection does not extend to the entire fashion design. For a fashion designer to gain protection for the entire design, he may have to turn to trade dress, an extension of trademark that the United States Code does not explicitly define. The Supreme Court has recognized trade dress:

         The breadth of the definition of marks registrable under [section] 2 [of the Lanham Act] ... has been held to embrace not just word marks ... and symbol marks ... but also "trade dress"--a category that originally included only the packaging, or "dressing," of a product, but in recent years has been expanded by many Courts of Appeals to encompass the design of a product. (7) With this broader definition of trademark, fashion designers can try to register their designs as trade dress, but they will have to demonstrate distinctiveness, which is an "explicit prerequisite for registration of trade dress." (8) Designers may establish distinctiveness of a trademark or a trade dress in one of two ways: a mark can either be inherently distinctive, or it can gain secondary meaning. (9) A trademark or trade dress is inherently distinctive if its "intrinsic nature serves to identify a particular source." (10) A mark gains secondary meaning when "in the minds of the public, [its] primary significance ... is to identify the source of the product rather than the product itself." (11)

         In practice, "[t]he more easily visible the logo is," the more protection there will be afforded for a design. (12) While an exact copy of a handbag design with prominent identifiers--such as a Louis Vuitton bag--presents a case for trademark infringement, a uniquely tailored item of clothing without such identifiers does not. A fashion designer therefore would have to protect an item without logos and identifiers by trying to protect the entire design through trade dress. This is a tall task, as it is not easy to prove inherent distinctiveness and secondary meaning, especially for a fashion designer with limited resources. More importantly, the functionality doctrine poses an enormous hurdle in that it denies trademark protection to any "useful product feature." (13) The shape and form of an article of clothing are generally considered essential to use or purpose and thus fall outside the scope of trademark protection. (14) The fear is that if a trademark protects useful elements of a product, "a monopoly over such features could be obtained without regard to whether they qualify as patents and could be extended forever (because trademarks may be renewed in perpetuity). (15) Given these obstacles, most fashion designers are unlikely to receive significant protection from trademark.

      2. Patent

         Utility and design patents theoretically are available to fashion designs as a form of intellectual property protection. A utility patent can be obtained by "[w]hoever invents or discovers any new and useful process, machine, manufacture, or composition of matter, or any new and useful improvement thereof." (16) In addition to this subject matter requirement, an invention must be truly novel (17) and nonobvious (18) to qualify for patent protection. The nonobviousness requirement presents a roadblock to fashion designers because an eligible design must be so original that another fashion designer, or someone similarly engaged in the fashion industry, would not have thought of it. (19) Given the relatively standard shape and form of articles of clothing and the industry practice to "quote, comment upon, and refer to prior work," designers cannot easily, if at all, show nonobviousness. (20) A fashion designer may also consider applying for a design patent, which is provided to "[w] hoever invents any new, original and ornamental design for an article of manufacture." (21) While this language seems sufficiently broad to encompass fashion designs, the novelty and nonobviousness requirements still apply. (22)

         Even if a fashion designer can meet the statutory requirements, the patent system presents a further obstacle to protecting fashion designs: timing. The patent system takes too long to grant protection. (23) In 2010, the average time for an initial determination of patentability was 25.7 months--an...