To Copy or Not to Copy, That is the Question
https://scholarship.law.upenn.edu/cgi/viewcontent.cgi?article=1055&context=penn_law_review
Unlike most creative industries in the United States, fashion designers face a huge battle each season when releasing their newest lines. While copyright claims are quickly created in the music, literature, or art industries, fashion designers struggle to protect their intellectual property. Fashion designers are often left vulnerable to have their exact designs recreated and stolen with very little legal interference. Inexpensive recreations by “fast-fashion copiers” of luxury fashion items are regularly created, but often, they also increase the popularity and demand of the original luxury item. To ensure the protection of fashion designers, we must analyze the consequences of fashion intellectual property protection.
This issue can be considering using the game theory model of the prisoner’s dilemma. We can let the players of this game be the Designers and the Copiers where the Copiers may either choose to make an “Exact Copy” of the original design or “Redesign” the original work. Conversely, the Designers decide to either “Enforce” by taking legal action against the Copiers or “Not Enforce” and allow the Copiers to continue without any consequences. In this scenario, we must also assume that the Copier will profit much more if they choose to make exact copies than to redesign and that there are costs associated with enforcing and creating lawsuits for the Designers. Unfortunately, in the example scenario when law enforcement was not present, the Nash Equilibrium existed where it was equally profitable for Copiers to exact copy and for Designers to not enforce. Since Copiers easily can free-ride off of the profits of the Designers, this de-incentivizes innovation.
In a situation like this, it is easy to apply the principles of Nash Equilibrium to determine how to proceed for both Copiers and Designers. This article considers various payoff/risks associated with the various Copier and Designer strategies with various levels of legislation protecting Designers. Using Nash Equilibrium to assess the risk and reward for both Designers and Copiers helps us understand the actions that are necessary to take and the consequences that Copiers need to face.