Thesis Statement

The sale of counterfeit designer goods is believed to be a global issue that funds organized crime, terrorist groups, and costs the United States billions of dollars in tax revenues and lost jobs. Studying consumer motivation to purchase counterfeit goods is one move toward understanding what changes can be made to resolve the problem.

Six Professional Journal Articles on Counterfeit Merchandise

Works Cited

Hilton, Brian, Chong Ju Choi, and Stephen Chen. "The Ethics of Counterfeiting in the Fashion Industry: Quality, Credence and Profit Issues." Journal of Business Ethics 55.4 (2004): 343-52. Web.

Karpova, Elena, and Hyejeong Kim. "Consumer Attitudes Toward Fashion Counterfeits: Application of the Theory of Planned Behavior." Clothing and Textiles Research Journal 28.2 (2010): 79-94. Sage Journals. Web.

Marcketti, Sara B., and Mack C. Shelley. "Consumer Concern, Knowledge and Attitude towards Counterfeit Apparel Products." International Journal of Consumer Studies 33.3 (2009): 327-37. Web.

Norum, Pamela S., and Angela Cuno. "Analysis of the Demand for Counterfeit Goods." Journal of Fashion Marketing and Management 15.1 (2011): 27-40. Print.

Perez, María Eugenia, Raquel Castaño, and Claudia Quintanilla. "Constructing Identity through the Consumption of Counterfeit Luxury Goods." Qualitative Market Research: An International Journal 13.3 (2010): 219-35. Print.

Wall, D. S., and J. Large. "Jailhouse Frocks: Locating the Public Interest in Policing Counterfeit Luxury Fashion Goods." British Journal of Criminology 50.6 (2010): 1094-116. Web.

Four Professional Journal Articles About Counterfeiting

Hilton, Brian, Chong Ju Choi, and Stephen Chen. "The Ethics of Counterfeiting in the Fashion Industry: Quality, Credence and Profit Issues." Journal of Business Ethics 55.4 (2004): 343-52. Web.

The paper studies the counterfeiting issue from within the industry and whether copying takes place from designer to designer, making it difficult to prosecute outsiders.

Marcketti, Sara B., and Mack C. Shelley. "Consumer Concern, Knowledge and Attitude towards Counterfeit Apparel Products." International Journal of Consumer Studies 33.3 (2009): 327-37. Web.

This article discusses a study of 244 undergraduate fashion and apparel students regarding purchasing counterfeit and non-counterfeit merchandise, after learning more about the issues.

Norum, Pamela S., and Angela Cuno. "Analysis of the Demand for Counterfeit Goods." Journal of Fashion Marketing and Management 15.1 (2011): 27-40. Web.

The paper addresses the demand side of the counterfeit industry, studying what can be done to deter consumer desire.

Wall, D. S., and J. Large. "Jailhouse Frocks: Locating the Public Interest in Policing Counterfeit Luxury Fashion Goods." British Journal of Criminology 50.6 (2010): 1094-116. Web.

This article serves to define retail counterfeiting; identify various types; and discuss in what ways consumers drive the issue; and what direct and indirect impact counterfeiting has on society.

Analysis of Popular Audience Needs

The most striking aspect of what many consumers had to say regarding fashion knock-offs was their defensiveness of the right to purchase the goods. It came across as almost an intentional ignorance. They seem to permit themselves not to understand the consequences that their actions have on the designers of the original items and the fashion industry as a whole. I expect that what they would want, if anything, is affirmation that their purchasing habits are legitimate. What appears to be necessary is an education in the impact that fashion piracy has on designers, the industry, and the economy. There are many details to that argument, and since defensiveness is often difficult to breakthrough, it would be important to be concise in relaying the facts. One way to try to get a point across would be in a bulleted list format with brief statements of the issues. Interestingly, since the consumers’ own arguments were emotional appeals, it could be helpful to include emotion in arguing the other side.

A Genre Analysis on the Topic of Fashion Counterfeiting

When I determined fashion counterfeiting to be my “hot topic” that term was in reference to the interest displayed by my peers in the class poll. The reality is, it is a “hot topic” among fashion industry leaders and consumers, as the subject makes some people really ‘hot under the collar’. (Pun intended.) The heat comes from both sides of the argument, as designers feel robbed of their designs, which are a result of their significant investments in time, talent, and money. On the other hand, some consumers see a disconnect between the designs and the physical knockoffs. Those consumers feel they have the right to own designer goods even if they cannot afford the luxury versions produced by the real author. We will take a look at the professional perspective by reviewing the 2009 proposal by three United States Congressmen of legislation called the Design Piracy Prohibition Act, and the 2011 hearing before the Congressional Subcommittee on Intellectual Property, Competition, and the Internet, of House Bill 2511, the Innovative Design Protection and Piracy Prevention Act (ID3PA). Then we will examine the claims by the consumers via reports from the New York Times and Internet blogs.

The Professional Point of View -

In the first professional appeal Congressmen Bill Delahunt (MA), Bob Goodlatte (VA), and Jerrold Nadler (NY) begin with the point that a driving force for the economic recovery of the US is the creativity and success of its businesses. This opening statement is hardly one that can be argued with, as it has been one of the cornerstones of the nation. In order to aide in that process we need to protect our innovators with laws that provide legal protection of intellectual property. There are trademark laws in the US that provide protection for brand names and logos. Congressman Nadler pleads the case specifically for his own district pointing out that the fashion industry in New York not only produces billions in monetary revenue, but also creates hundreds of thousands of jobs, and brings in a wealth of tourist and cultural dollars to this international fashion capital. Something that may not be thought of by many people is wide range of job sectors that are involved. Steven Kolb, the Executive Director of the Council of Fashion Designers of America is quoted as saying, “…with today’s technological capabilities, [pirates] can make a copy on the other side of the world and make it available in our country before America’s designers can sign a deal and make the garment here.” American designer Thakoon Panichgui points out that his costs of doing business include money for research, pattern makers and runway shows, while pirates copy his work and are able to sell a knockoff of his design free of any of those inherent costs.

The second source of professional perspective comes from the Judiciary Subcommittee meeting held in July 2011. The appeal for the passing of the ID3PA is one hundred and forty-six pages of informative testimonies on the issue of pirating fashion design. Just one of the testimonies comes from a young designer named Lazaro Hernandez. Mr. Hernandez is one of the co-founding partners of the high-end design firm Proenza Schouler. According to his testimony, the US and China are the only two developed countries in the world that do not have laws to protect the intellectual property of fashion designers. As such, the US has become a safe place for pirates to steal and sell designers’ work. He goes on to say that his company creates four collections a year, which cost them about $3.8 million each. A typical runway show costs them about $320,000. Advances in technology have escalated pirating since with digital imaging their designs can be photographed on the runway, sent to China, copied, and for sale on the Internet within a matter of a days of one of those shows. Meanwhile, it takes the true designers months to take the orders, produces the goods, and have them in the stores.

In both of the professional documents referenced the point is made that there can be successful partnerships between high-end designers and discount retailers, which could be the solution for the average consumer to obtain true, but affordable designs. Target is a good example of a large corporation that has partnered with several designers in creating lines that allow designers to retain ownership of their designs and at the same time protect the consumer from poorly made, pirated copies.

In evaluation of these professional perspectives, each deals with the facts of the issues. They are true ethos (ethical) appeals, excluding any emotion. Even at a point in his testimony when Mr. Hernandez refers to the repeated knock-off of a satchel that is iconic to their brand, he makes no reference to what must be a very frustrating circumstance, but instead uses the example to make his point about America being such a safe haven for pirates. For the reader these organized, factual presentations lend to the credibility of and even the sympathy toward the struggles that designers must constantly face over this issue. As both were presented to governing bodies it would be critical that they be presented in these factual formats.

The Consumer’s Point of View –

In the New York Times interview with Ms Cabrina Whitman, a frequent buyer of knockoff goods, the reader immediately becomes aware of the emotion she has connected to this issue. Her responses about her rights as a shopper, her non-support of “child labor” and “supporting terrorists” were protests derived from her own thoughts on the matter as there were not references to those issues anywhere else in the reporter’s story. That would tend to make me think that she had some feelings of guilt about making the purchases, but evidently not enough to stop her. This article was as a result of a legislation being proposed by a New York City Councilwoman, Margaret Chin, which would me fines and potentially jail time for shoppers caught purchasing counterfeit merchandise. Ms Chin, who is councilwoman for the Chinatown area said that she would like to see the area known for things like museums and restaurants rather than fake merchandise. She proceeded to ask what happened to the idea that people should live within their means and if they really want something they should save up their money and buy the real thing. In contrast, another shopper interviewed for the story pointed out that if the legislation is intended to protect the jobs of people in the legitimate industry, the number of people selling the knockoffs, who would lose their means of income, might offset it. The final two comments in the article were that if the economy is down, why stop people of spending money, and that as long a person knows what they are buying isn’t authentic, then they should be able to buy it.

A second coverage of the consumer’s point of view was drawn from a yahoo.com blog asking, “What’s wrong with carrying a fake handbag?” Though the forum contained a few hints toward the ethical idea that maybe it’s not right to copy somebody else’s idea, not one of the twenty-one postings made the conclusion that there was anything wrong with buying a knockoff. For the most part the point was made that if that’s what you want, you should have it. Defensiveness seemed to be the overwhelming sentiment.

In contrast to the professional presentations, the consumer’s statements were almost completely pathos (emotional) appeals. There seemed to be a lack of knowledge or even awareness of the perspective of the designer or any ownership of intellectual property. I know that there have been a few anti-fake campaigns over time, but the conclusion of the limited research done for this paper would be that the public needs to be educated much more about the issue.

How Professionals View this Hot Topic

Though not a professional journal, the first place I decided to check for a response to this topic was the website for the Council of Fashion Designers of America, or CFDA. When using the site’s search field for the word “knockoffs” I was taken to a news release dated April 30, 2009, titled Delahunt, Goodlatte and Nadler Reintroduce Legislation to Combat Design Piracy. The three names in that title refer to United States Congressmen from Massachusetts, Virginia, and New York. The brief article on the legislation they were proposing at the time contained points that are key to the issue –

· most industrialized nations have legal protection for fashion designs, while US laws provide trademark protection on brand names and logos, but not on the clothing itself

· it is estimated that the counterfeit merchandise business has cost America 750,000 jobs

· the fashion industry in New York is a major sector of the national economy, producing $350 billion dollars in revenue, hundreds of thousands of jobs, and should be protected from opportunists who avoid the costs intrinsic to creating a garment

· according to US Customs and Border Protection counterfeit merchandise costs American companies $200 to $250 billion in sales

The Design Piracy Prohibition Act was not passed, but has since evolved into the Innovative Design Protection and Piracy Prevention Act (IDPPPA) presented to the House Subcommittee on Intellectual Property, Competition, and the Internet, in July 2011. My research led me to a testimony before that committee by Harvard Professor of Law, Jeannie Suk. Ms Suk provides several excellent points. The first of those is that although all forms of creative work draw references from prior or even existing sources, there is a difference between borrowing from ideas and blatant replication of someone else’s work.

It is here that I should point out that there are two types of counterfeiting or piracy that go on in fashion. One is the issue of the replicators who sell fake designer goods that gives the appearance of being genuine, the other is the matter of the duplicators who steal the designs down to the smallest details, and then put their own label on them. An example of the latter is the American chain store Forever 21. As of the postings I could find, the company has been sued more than 50 times, many of those suits by well-known American designers, but because of the current US laws, or lack thereof, cases either could not be won or were settled. Substantiating the fact that US laws do not offer American designers the same protection as those in other countries is the fact that although Forever 21 has more than 500 stores in this country, they have none outside the US. This is because of the laws in other countries, and is in contrast to their Europe-based competitors, H&M and Zara. Those companies borrow ideas from designers and produce clothing that is influenced by them, but do not directly copy them, as does Forever 21.

Ms Suk reassures the committee that the IDPPPA is not intended to focus on those whose products are inspired by fashion designers. This legislation is intended to prevent the sale of exact knockoffs.

The proposed legislation would also encourage partnerships between high-end designers and discounters like Target and H&M, as it would be incentive for the consumer to purchase sought-after designer labels from those stores. So, even though there would be lost selection for the consumer via one avenue, it could be increased via another.

My final source for the professional perspective on this matter was an entry titled Counterfeiting as corporate externality: intellectual property crime and global security, by Simon Mackenzie. This article took an entirely different approach to the subject, stating that:

· designers are the cause of the problems through hyper branding and marketing;

· designers expect to create an extreme desire for their items and then think they should be able to control that desire;

· designers choose to outsource to countries where there is less control over unauthorized use of their designs, in order to reduce production costs and increase profits, which must indicate that they lose less to counterfeiting than they gain from outsourcing to these countries;

· and lastly, there are other issues involved in the outsourcing such as environmental concerns, health and safety concerns for the workers, and the known involvement of organized crime in making and distributing the fake goods, all of which are issues designers choose to look past.

While there are some interesting and probably valid points to Mr. Mackenzie’s ideas, for me they fail to address what I see as the core issue, which is theft. Whatever failures or shortcomings designers may have in the operation of their businesses, the idea that one person can put all of their talents and efforts into creating something that other people are willing to pay for, and then a third party feels they have the right the steal that work and sell it as their own is just wrong. But, it will be interesting to see whether American designers are ever able to successfully impact, stop, or even inhibit such a huge industry.

Works Cited

Mackenzie, Simon. “Counterfeiting as Corporate Externality: Intellectual Property Crime and Global Insecurity. “Crime Law and Social Change 54.1 (2010): 21-38. Web. 02 Feb. 2012. http://www.springerlink.com.proxy.libraries.uc.edu/content/m2116h407293u33h/

United States. Cong. Senate. Subcommittee on Intellectual Property, Competition, and the Internet. Innovative Design Protection and Piracy Prevention Act. Hearing. 15 July 2011. 112th Cong., 1^st sess. Washington: Government Printing Office, 2011. http://judiciary.house.gov/hearings/printers/112th/112-46_67397.PDF

A Popular Opinion Regarding Counterfeit Merchandise

I have to admit that the more I look into this topic the more frustrated I get with consumers. I don’t understand people like Mrs. Whitman, a frequent buyer in New York City’s Chinatown, and who was quoted in a New York Times article (http://www.nytimes.com/2011/04/27/nyregion/bill-aims-to-make-buying-fake-goods-a-crime-in-new-york.html?_r=1&scp=1&sq=knockoffs&st=cse) as saying, “I don’t believe in child labor and I don’t believe in supporting terrorists, but if I want to buy a knockoff, that’s my business.” Isn’t that a case of sticking one’s head in the sand just to get what you want? Can a consumer make a statement like that and then do they convince themselves that they aren’t doing just that?

A second common thought seems to be rooted in resentment toward designer brands costing as much as they do. What I don’t understand is why a person would want to give the impression that they are carrying a handbag created by a company that they resent so much. (e.g., “Best answer” on http://uk.answers.yahoo.com/question/index?qid=20091228082237AA8biUO)

Finally, though my focus when beginning to research this topic was in the area of fashion, I have been surprised by the variety of industries plagued by this problem. I suppose I could have guessed electronics, as we all know that pirated music and videos are released continuously. What I didn’t realize is that items as small as cigarettes and as large as cars come in “knockoff” varieties. (http://en.wikipedia.org/wiki/Counterfeit_consumer_goods) And, the most frightening one of all is that pharmaceuticals are counterfeited. The Wikipedia article noted says that an estimated 100,000 people a year die from counterfeit medicines.

I doubt that Mrs. Whitman from Chinatown would feel the same about counterfeit drugs as she does about counterfeit handbags. And how can we say that the designer of a drug has more rights of ownership than the designer of a handbag. Granted it’s an extreme comparison, but is one situation truly any less dishonest?