“Fashion is art and you are the canvas”  -Yves Saint Laurent

Believe it or not my first love isn’t Law, it’s fashion. I have always admired how luxury fashion displays a designer’s creativity and passions, leaving the wearer and the admirer empowered. Although the fashion industry is whimsical and fantastical, it is also just that - an industry. In every business environment legal issues are inevitable, with the fashion industry facing the issue of intellectual property infringement through counterfeiting. The counterfeit industry is rapidly expanding, causing designers and consumers alike to lose faith in the luxury industry. However, global developments in Intellectual Property legislation and designers taking steps to protect their Intellectual Property can prevent the counterfeit market from overshadowing the inspiring originality of the luxury fashion industry. 

Most fashion lovers would agree with Saint Laurent when he said that designers are artists. Just as the art world is threatened by counterfeiting, so too is the luxury fashion economy. Whilst the luxury fashion industry is famously exclusive, the increased proliferation of online shopping and the inescapable effects of globalisation encourage consumers to desire a taste of luxury without the price tag by purchasing counterfeits. 

The main culprit providing these knock-offs is China. China’s manufacturing sector is notorious for producing counterfeits of globally renowned designers creation, aided and abetted by the lack of intellectual property legislation. However, in recent years, China has been working towards remedying the lack of Intellectual Property protection. In 2014, the Shanghai Intellectual Property Court (China’s first specialised intellectual property court) was established to strengthen the handling of intellectual property disputes. China’s newly amended Trademark Law of 2014 also represents a major step by China to tackle the counterfeit industry. However, the gradual move from physical markets to Internet platforms has promoted the expansion of the counterfeit industry, making it harder to regulate. Therefore, steps should be taken to safeguard ideas and creations from falling victim to the counterfeit industry. Most designers and brands take the first step to register their names and logos as trademarks but ignore the right to trademark specific elements of designs. This is where the counterfeit industry comes in; manufacturers can copy popular designs and distribute these knock-offs at an attractively reduced price. 

The recommended retail price of luxury goods is justified by the craftsmanship and high-quality materials used to transform a designer’s vision into product. However, with the popularisation of street style blogs and the use of social media as a tool to share an insight into luxury worlds and luxury closets, more and more consumers desire a luxury image. The counterfeit industry is a $600 billion dollar industry, with revenues growing and production becoming more sophisticated each year. The growth of the counterfeit industry threatens the luxury fashion industry, infringing intellectual property rights by diluting designers’ visions and customers’ trust in the luxury fashion industry. 

According to a UN report, 70% of these fakes come from China. The dominance of the Chinese market can be attributed to the legislation- or lack thereof- in place as well as the manufacturing system, both of which indirectly encourage the knock-off industry.  In her book Deluxe: How Luxury Lost its Luster, Dana Thomas describes how China hasn’t historically monitored intellectual property and only since the economic reforms of 1978 has the government embraced the notion of Intellectual Property  ownership. This makes it difficult for brands to assert their intellectual property rights in the face of convincing and desirable counterfeit goods made in China. Unlike the US or the UK, China doesn’t have a federal government so each province regulates itself financially and monitors its own manufacturing sector. As a result Chinese factories have ‘clan-like’ provincial procurement practices and will often hand designers’ precious intellectual property ideas to ‘friend’ factories near their own or within the same province. This manufacturing system undermines the luxury element of fashion, as design elements can get diluted and ideas dispersed. 

However, there are multiple preventive and disciplinary measures in place to counter the counterfeit industry and protect the luxury fashion business.  As courts have become the main medium to challenge copyright infringement, companies can use litigation to serve as a warning for other violators. Court proceedings can result in damages and even obtaining ‘well-known trademark status’ for trademark protection. It is important to use preventive measures when setting up your brand to avoid the time, effort and costs that are involved with litigation over an intellectual property dispute. 

Asal Reyhanian as co-author.

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