This article is authored by Mokksha D Shah, a third year B.B.A. LL.B. (Hon’s) student at the Gujarat National Law University, Gandhinagar.

Introduction

 The fashion industry often encounters the terms “counterfeit” and “knockoff,” which are suitably different when used in a legal sense. A counterfeit is a fake which closely resembles a product made without authorization with the intent of deceiving the consumer. Contrary to this, a knockoff is an imitation of an original product but there are noticeable differences and no infringement of the trademarks is involved, although they might still look similar.

Knockoffs are in a legal grey area. While they may skirt besides trademark violations, one cannot ignore the fact that copyrights deal with all of these creative works like fabric patterns and some embroidery. Sometimes a designer’s unique print or pattern could be considered an infringement under copyright, regardless of the absence of a brand name or logo.

It seeks to strike a delicate balance between the protection of designers and encouragement for innovation vocations. Christian Louboutin S.A. v. Yves Saint Laurent America, Inc. (2012) is a landmark case that actually involved the question of whether or not the red sole of Louboutin had acquired the protection of trademark. The court ruled that the red sole of Louboutin had attained secondary meaning and was entitled to trademark protection, but was only limited to its contrast with the rest of the shoe. In this case, an all-red shoe by YSL did not by contrast infringe upon that trademark.

These cases highlight the complex nature of intellectual property law in fashion, wherein the blurry line between inspiration, imitation, and infringement still continues to evolve. In the wake of innovations by brands, the courts will have to determine how to best uphold protections of intellectual property while fostering fairness in competition in the industry.

Understanding knockoff Goods

A knockoff, is a product that imitates the design of an original but isn’t meant to be an exact replica[i]. It does have noticeable differences and only copies elements of the design that aren’t legally protected. Unlike counterfeits, knockoffs don’t use logos or branding that could easily be mistaken for the real thing[ii]. While both counterfeits and knockoffs mimic the look of the original, a knockoff doesn’t try to deceive buyers into thinking they’re purchasing the genuine product.

Differences Between Trademark, Patent, and Copyright Laws in Cases of Knockoffs, there are inherent differences that provide grounds for analyzing the legality of knockoff products.  Trademark Law protects brand names, logos, and symbols that distinguish products. If knockoffs steer clear of using a certain brand name or logo and do not mislead the consumer, there may be no infringement of trademarks.  Patent Law covers inventions and functional designs. A knockoff that copies a patent product’s design, technology, or process could be infringing simply being it lacks the name of its original brand.  Copyright Law protects creative works that include original patterns, prints, and artistic designs. Even without a trademark problem, artfully mimicking the original artistic details of an object may raise copyright issues for knockoffs. For example, a bag from a luxury line features a unique pattern, wherein it was made in such a way that it does not infringe trademark laws, yet there stands the risk of facing a copyright suit if the design is original. Should the structure of the bag hold a patent, then it also stands the risk of incurring patent infringement.   

The Benefits of Knockoffs to the Fashion Industry

Knockoffs play a significant role in shaping fashion trends. They don’t always copy entire garments—sometimes, only specific elements like necklines, sleeves, or patterns are replicated[iii]. Since these design details aren’t legally protected, copying them ensures that no single designer monopolizes common fashion motifs[iv]. While some knockoffs appear immediately after the original, others resurface years later as past trends make a comeback.[v]

Fashion has always been cyclical, with styles from previous decades returning in updated forms. Bell-bottoms, puff sleeves, and jumpsuits are examples of revived trends. Even the famous designers like tom ford and Marc Jacobs have drawn inspiration for their previous designs and past creativities, where the industry revolves around the continuous exchange of ideas, ensuring that fashion remain fresh and exciting.[vi]

The main role which is been played by is social media where factories and local designers get easy access to imitate run way shows and make it fast fashion within the matter of days, with affordable prices, brand like Steve Madden have reached the success by offering affordable version of designer’s footwear with maintaining its own identity[vii].

Knockoffs help democratize fashion, making trends available to a wider audience. Rather than stifling creativity, they fuel innovation by pushing designers to continually reinvent their work, keeping the industry dynamic and ever-evolving.

What is a Counterfeit?

Counterfeit produces are unauthorized imitation of branded products that copies the original to deceive consumers[viii]. The desire for luxury goods has existed since ages, with people seeking cheaper imitations to project higher social status.[ix]

To combat counterfeiting, elite designers constantly release new collections to outpace counterfeiters. However, many consumers do not believe counterfeits are illegal or unethical, they have normalised[x], due to its affordability and accessibility which made a major role under the impression of people to buy it[xi]. Some people mistakenly believe counterfeit are genuine products, whereas on the other hand intentionally knowing it, still people believe to buy it, due to maintain the social status[xii]. This weakens consumer confidence in authentic brands, ultimately harming their reputation and exclusivity.

The Dangers of Counterfeit Goods

Counterfeit goods pose serious economic and security risks. In 2021 alone, U.S. Customs and Border Protection seized $3.3 billion worth of fake products, with fashion items making up 83% of the confiscated goods[xiii].

Apart from financial damage, counterfeiting is linked to organized crime, terrorism, and labour exploitation. Illicit profits from counterfeit sales have been traced to terrorist activities, including the 1993 World Trade Centre bombing and the 2004 Madrid train attacks[xiv]. Additionally, counterfeit manufacturing is often associated with human trafficking and child labour, particularly in China, which produces over 70% of counterfeit luxury apparel[xv]. Many workers are trafficked and forced into sweatshops to complete these products under inhumane conditions.[xvi]

The Debate Around Counterfeit Fashion

Some argue that counterfeit fashion provides free publicity for luxury brands and makes high fashion more accessible[xvii]. However, this perpetuates an elitist view that luxury is only for the wealthy, pushing those who cannot afford it to seek fakes big brands like channel, Versace and Moschino have proven that luxury, affordability and exclusivity can be indicted as same time through collaboration with retailers like H&M[xviii], with sufficient range of audience, However, counterfeit goods exploit both business as well as consumers, they dilute brand value, loyalty, fund illicit activities and exploit workers.

Ethical Foundations of Intellectual Property

Intellectual property (IP) issues can be examined through four key ethical frameworks: utilitarianism, distributive justice, moral rights, and ethical relativism.

Utilitarianism, maximizing the good of society: Utilitarianism, the one influenced by statements of Bentham and Mill, defends choices in Favor of maximizing the good for the society. For IP matters, it points to arguments supporting the view that the protection of the rights of the creators boosts innovation and ensures reward for the labour that had been expended. Without any protection to strengthen the parastatal, the inventors would be discouraged from investing energy into the development of new ideas, divergent modes, or the production of works of culture, art, and literature. For the very same reason, patents were initially birthed to encourage innovation and economic growth by means of limitation of competition.

Distributive Justice: It is the moral force that revolves around the fair distribution of benefits and burdens. The fundamental essence of this approach is that creators should justly receive rewards for the final product of their efforts because their efforts and resources should dictate the level of compensation, they receive in order to fairly reward those who put forward the most effort or resources. Therefore, this principle supports IP protection because it ensures that sufficient rewards are provided for its work while being fair in its practical application.

Moral Rights: have been interpreted to imply that all original works belong in some regard to the creator. In this view, authors and artists assume control over how their works are manipulated. The whole moral rights description attends to the respect for the creator’s intent and dignity even in preference to those laws supporting the good of society.

Ethical Relativism: Contextual Morality Ethical relativism says that all moral decisions should be value-based, formed from cultural context and societal norms. In IP, that means accepting varying viewpoints about copying and innovation across cultures and beyond different industries. Here, some parts of the world prioritize strict enforcement of IP laws, while others might value communal knowledge-sharing over these laws or have ethical standards that differ widely from those attributed to IP laws.

Balancing ethical perspectives, various ethical approaches have highlighted the complexity within IP law. While utilitarianism Favors strong protection of innovative activities, distributive justice Favors fairness, moral rights stress the dignity of creators, and ethical relativism allows for cultural differences. The effects must be balanced to achieve an environment that encourages creativity, fairness, and much attention to other people’s perspectives of IP law.

Conclusion

It is of utmost importance to know the difference between knockoffs and counterfeits in fashion law. Knockoffs create affordable and competitive products whereas counterfeits even sneak in brand-weakening industrial practices and exploit labor and finances tied with illicit activities. Some of the major debates regarding IP protection involve balancing creator rights with innovation and accessibility. Small designers face much bigger challenges than luxury brand counterparts, beset with exorbitant litigation costs, further compliance with sustainability issues, and now limited access to market with the exploitation by fast fashion for designs. Under-ethical production works already strain up the smaller brands. Stronger measures for fighting counterfeiting must be paired with fair and inclusive IP laws in order to protect the spirit of creativity and uphold the ethics governing an industry. Policies where support can back the smaller brands to create a balance are appreciated.

 

Endnotes:

[i] Ibid.

[ii] Willey (n 13) 7.

[iii] The Ultimate Guide to Different Types of Necklines’ The Shift (18 May 2018) https://rtrshift.com/types-of-necklines/ [https://perma.cc/J9KJ-77ZP].

[iv] Raustiala & Sprigman (n 4) 37.

[v] Ibid 38.

[vi] Cathy Horyn, Is Copying Really a Part of the Creative Process? N.Y. TIMES (Apr. 9, 2002), https://www.nytimes.com/2002/04/09/nyregion/is-copying-really-a-part-of-the-creativeprocess.html [https://perma.cc/LRH6-BF8H].

[vii] Tariro Mzezewa, An ‘It’ Bag Faces its Imitators, N.Y. TIMES (Mar. 21, 2018), https://www.nytimes.com/2018/03/21/fashion/steve-madden-cult-gaia-handbag-lawsuit.html [https://perma.cc/V7H5-KXH4].

[viii] Ibid.

[ix] ‘Counterfeiting: Imitating Property is Theft’ The Economist (15 May 2003) http://www.economist.com/node/1780818 [https://perma.cc/9DRV-WEZX].

[x] Tripoli, supra note 77, at 885.

[xi] See Mary Lambkin & Yvonne Tyndall, Brand Counterfeiting: A Marketing Problem that Won’t Go Away, 20 IR. MKTG. REV. 35, 40 (2009).

[xii] See infra notes 201-208 and accompanying text; How Fighting Fake Goods Tackles Terrorism, ICAEW (Jan. 10, 2022), https://www.icaew.com/insights/viewpoints-on-the-news/2022 /jan-2022/how-fighting-fake-goods-tackles-terrorism [https://perma.cc/VW2P-RKS2].

[xiii] ‘The Truth Behind Counterfeits’ US Customs & Border Protection (16 May 2023) https://www.cbp.gov/trade/fakegoodsrealdangers [https://perma.cc/S57W-STAV].

[xiv] Felice (n 174) 223.

[xv] Dana Thomas, Deluxe: How Luxury Lost Its Luster (Penguin Group 2007) 287–88.

[xvi] Thomas (n 198) 278, 285.

[xvii] Ibid.

[xviii] See Lynn Yaeger, Chanel, H&M, Macy’s, Diet Coke: What Should Karl Lagerfeld Design Next? VOGUE (Aug. 4, 2011), http://www.vogue.com/vogue-daily/article/chanel-hm-macys-dietcoke-whatshould-karl-lagerfeld-design-next/#1 [https://perma.cc/L9S8-JLAQ].