BOOK REPORT: “THE KNOCKOFF ECONOMY”

The over-arching economic problem that dogs all of American patent and copyright law is one of demarcation—when is the marginal utility of  an incentive provided to one innovator “to promote progress in science and the useful arts” outweighed by the burden it places on the creativity and economic freedom of everyone else and is therefore counterproductive?  In The Knockoff Economy: How Imitation Sparks Innovation (Oxford Univ. Press), Law Professors Kal Raustiala of UCLA and Christopher Sprigman of the University of Virginia attack this problem from a novel angle, examining  fields of creative endeavor that seemingly flourish in the absence of patent or copyright protection and in the face of rampant and easy copying—fields such as couture fashion, haute cuisine, stand-up comedy, high finance, and professional (and big-time college) football.  Their approach, more anecdotal and even dishy than empirically rigorous, results in a study that is timely, enjoyable, original, and informative, though it falls short of forming a rock-solid foundation for the broad generalizations about IP law and its application to other fields that the authors seek to draw.

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RED SHOES DON’T MAKE IT

Here is what I know about Louboutin shoes — the bottoms (what I have now learned are called “outsoles”) are bright red.  Given how far removed I am from the vanguard of women’s shoe fashion, my association of red outsoles with the Louboutin brand ought to be conclusive evidence that red outsoles are one very powerful trademark.  That the red outsoles clearly operated as a symbolic indicator of the source of Louboutin’s goods, however, was not enough for one federal district judge in New York, who last year rejected Louboutin’s attempt to enjoin Yves Saint-Laurent from marketing its own red-outsoled shoes, holding that in the fashion industry color was an inherently “functional” feature, and therefore could not be granted trademark protection.  Now the U.S. Court of Appeals for the Second Circuit has partially reversed that ruling.  According the Court of Appeals opinion released yesterday, the red outsole may indeed be  a valid and enforceable trademark, provided it is limited to shoes, like those pictured, in which the color of the outsole contrasts with the other parts of the shoe.  Because the YSL shoes were monochromatic, the denial of an injunction was affirmed.

An explanation of how the Court arrived at this Solomonic result follows the jump.

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