Designing a Downfall

On August 5, Senator Charles Schumer (D-NY) introduced Senate Bill S.3728, which would amend U.S. copyright law to allow limited, three-year protection for new and original fashion designs. The legislation would prohibit “deliberate copies” that are “substantially identical to protected designs.” The bill is clearly a corporate handout that will result in great windfalls to the large designers – if they can build fashion trends without mass quantities and ready availability of their styles – and will squeeze the “middle class” of United States clothing manufacturers into financial ruin.

The proposed Innovative Design Protection and Piracy Prevention Act will give designers essentially a 3-year monopoly on their styles. Contrary to the purported benefit to these major designers, the proposed law would serve only to diminish the market for their clothes and hurt the US economy because the clothes won't become widespread so as to start a major fashion trend without people having access to the lower-priced versions. With the lower priced versions of the particular styles out there, more people will wear them, more people will see them and more people will want (and be willing to pay the markup for) the original, simply because they must have the prestige of that particular label. The only possible solution to this problem is that the market will then be flooded with knockoffs manufactured in other countries, such as China, where the enforcement of the IDPPPA will be more difficult. The collateral result will be that lower-priced makers in this country will entirely miss any opportunity to capitalize on the newest trends for fear of mass financial liability under this new law.

Understanding the negative impact of a shortage of the new styles and the unavailability of those styles to the mass market (i.e. those who will not spend designer prices for designer styles), the major designers will further capitalize. After all, who is at liberty to import overseas-manufactured knockoffs? The only people who can do it without running into piracy law problems...the major designers themselves.

The IDPPPA is a corporate-friendly proposal, which squeezes out legitimate domestic competition and benefits only two parties: big name designers and overseas manufacturing outfits. Chichi Designer will put out a new dress. For a time it will hit the runways, create a buzz in the high-end fashion sector and will adorn the racks at high-end retailers such as Neimann Marcus. After a short time, the designer will have tapped its initial market and will need to continue the spread of its trend to a wider market. In order to do so, Chichi Designer itself will commission cheaper versions to be made in China or elsewhere and attach a no-name label to it. This “knockoff” will now be suitably priced to fill the racks at more moderately priced retail outlets such as Kohl’s and TJ Maxx. The large designer double dips. China makes money. And every smaller clothing maker in America goes out of business.

This proposed law embraces the “world economy” in a wholly nonsensical way. More US money...straight overseas in exchange for re-imported goods that will be paid for from domestic pockets. The attack on the sustainability of the US middle class and mid-sized US domestic businesses gains an additional arrow in the quiver. And this time the supplier of the poison economic pill is the US itself by enactment of a shortsighted law.