The Knockoff Economy: How Imitation Sparks Innovation [Hardcover]

Kal Raustiala (Author), Christopher Sprigman (Author)

Book Description

Publication Date: September 17, 2012

From the shopping mall to the corner bistro, knockoffs are everywhere in today's marketplace. Conventional wisdom holds that copying kills creativity, and that laws that protect against copies are essential to innovation--and economic success. But are copyrights and patents always necessary? In The Knockoff Economy, Kal Raustiala and Christopher Sprigman provocatively argue that creativity can not only survive in the face of copying, but can thrive.

The Knockoff Economy approaches the question of incentives and innovation in a wholly new way--by exploring creative fields where copying is generally legal, such as fashion, food, and even professional football. By uncovering these important but rarely studied industries, Raustiala and Sprigman reveal a nuanced and fascinating relationship between imitation and innovation. In some creative fields, copying is kept in check through informal industry norms enforced by private sanctions. In others, the freedom to copy actually promotes creativity. High fashion gave rise to the very term "knockoff," yet the freedom to imitate great designs only makes the fashion cycle run faster--and forces the fashion industry to be even more creative.

Raustiala and Sprigman carry their analysis from food to font design to football plays to finance, examining how and why each of these vibrant industries remains innovative even when imitation is common. There is an important thread that ties all these instances together--successful creative industries can evolve to the point where they become inoculated against--and even profit from--a world of free and easy copying. And there are important lessons here for copyright-focused industries, like music and film, that have struggled as digital technologies have made copying increasingly widespread and difficult to stop.

Raustiala and Sprigman's arguments have been making headlines in The New Yorker, the New York Times, the Financial Times, the Boston Globe, Le Monde, and at the Freakonomics blog, where they are regular contributors. By looking where few had looked before--at markets that fall outside normal IP law--The Knockoff Economy opens up fascinating creative worlds. And it demonstrates that not only is a great deal of innovation possible without intellectual property, but that intellectual property's absence is sometimes better for innovation.

Editorial Reviews

Review

"Raustiala and Sprigman have some good news: copying and creativity can co-exist. Using extensive industry case studies of fashion, fonts, jokes, recipes, and other sectors, they remind us that a coherent intellectual property policy inherently involves trading off protection and imitation. Let us hope that policymakers get the message and restore balance to our intellectual property system."

-Hal Varian, Chief Economist, Google

"Policymakers still-astonishingly-have a mistake at the core of their understanding of how innovation happens. This beautifully written and brilliant book by two of America's most creative thinkers corrects that mistake, and launches an incredibly important project to understand just how much law creativity requires."

-Lawrence Lessig, author of Remix and The Future of Ideas

"Kal Raustiala and Christopher Sprigman have written a fascinating look at the surprising relationship between creating and copying. It's amazing to see the parallels across industries as diverse as cuisine, comedy and football."

-David Chang, Chef/Owner of Momofuku

"The Knockoff Economy is the most entertaining portent of doom I've read in a long time."

-Patton Oswalt, stand-up comedian and actor

"This book shines a powerful searchlight onto some neglected aspects of the intellectual property field, in the process revealing some fascinating insights that require us to rethink past assumptions about the incentives to create."

-David Nimmer, author of Nimmer on Copyright

About the Author

Kal Raustiala is Professor of Law at UCLA and the author of Does the Constitution Follow the Flag?

Christopher Sprigman is the Class of 1963 Research Professor at the University of Virginia School of Law.

Product Details

• Hardcover: 280 pages
• Publisher: Oxford University Press, USA (September 17, 2012)
• Language: English
• ISBN-10: 0195399781
• ISBN-13: 978-0195399783
• Product Dimensions: 6.4 x 0.9 x 9.3 inches
• Shipping Weight: 1.1 pounds (View shipping rates and policies)
• Average Customer Review: 4.2 out of 5 stars  See all reviews (48 customer reviews)
• Amazon Best Sellers Rank: #116,192 in Books (See Top 100 in Books)
  • #47 in Books > Law > Intellectual Property

Most Helpful Customer Reviews

11 of 11 people found the following review helpful

5.0 out of 5 stars A compelling and fresh look at the idea of innovation and IP protection August 19, 2012

By Mark P. McDonald TOP 1000 REVIEWERVINE™ VOICE

Format:Hardcover|Amazon Vine™ Review (What's this?)

This book explores the validity of the belief that innovation and growth only happen when there are strong protections against copying or duplication. The authors, both lawyers, make a compelling argument that IP protections like copyright, patents, etc. do not themselves create an environment of innovation.

Creating `monopoly' rights is not a requirement for vibrant innovation, growth and creativity.

Rather than argue against IP protection, the authors provide examples of industries with low IP protections and a degree of copying that still have high levels of growth and innovation. In showing the positive, the authors provide a compelling and thoughtful view on the connection between protection and innovation.

Raustiala and Sprigman discuss innovation and growth in industries as diverse as fashion, football; stand up comedy, medicine, cuisine, fonts and high finance. The analysis and discussion of each of these industries is first rate providing a balanced, evolutionary and focused approach. I learned much about these industries simply by reading the relevant chapters. I also gained a fresh perspective on the role and type of innovation that works best for most industries based on continuous tweaking rather than bold invention.

This is a top rated book because of the summation and implications provided in the concluding chapter. Like any good TV attorney, the authors save the best for last. I recommend reading this book in the following order.

1. The introduction, then
2. The conclusion and the epilogue, then
3. The first chapter and the rest of the book.

Reading the conclusion second seems a bit disconcerting at times, but it brings a deeper appreciation to the arguments made in the middle chapters.

Share this book widely across the executive suite. I highly recommend it to those in Product Development, Corporate Strategy, CIO, CMO, CEO, CFO and the Chief Corporate Council. Too often we all get set in our ways of thinking, translate everything into dollars and cents, and ignore the possibility of alternative ways of competing. This book combats all of these tendencies, providing a fresh look at an important fundamental issue: innovation and IP.

The Knockoff Economy provides powerful arguments that require rethinking the view of intellectual property and creating deep disruption by changing industry terms. It is chocked full of useful concepts like the 'fashion cycle' the role of social and behavioral norms, six observations about innovation, IP and copying, etc.

Be warned this is not a business book in the traditional sense. The authors are not selling a five-step program, a framework or a solution. Rather they point out the limitations of an existing and deeply held belief that innovation requires protection against copying. This is an argument that leads you to create your own conclusions, but in light of digitalization, innovation and the pace of change, we all need new thinking in this area.

9 of 11 people found the following review helpful

5.0 out of 5 stars Challenges our preconceived notions about IP rights in a 'low-IP' economy July 2, 2012

By Malvin VINE™ VOICE

Format:Hardcover|Amazon Vine™ Review (What's this?)

"The Knockoff Economy" by Kal Raustiala and Christopher Sprigman presents an original, interdisciplinary study of the relationship between innovation and imitation. The author's brilliant deconstruction of various creative industries succeeds in challenging our preconceived notions about the role of intellectual property (IP) rights in today's increasingly "low-IP" economy. Thoroughly researched and accessibly written, this outstanding book is certain to be widely read and discussed.

The author's core argument is that creativity can do more than survive in a knockoff environment; it can thrive. The authors discuss three low-IP industries to shed light on the subject. We learn that in the fashion world, the skills of top designers become even more in-demand as knockoffs accelerate the cycle of innovation. The authors explain how the culinary arts embraces an informal system of professional courtesy and attribution which serves to enhance the prestige of the industry's most creative top chefs. And in the stand-up comedy world, we see how the industry can quickly close ranks on renegade comedians who dare to steal original materials from others.

At first glance, these case studies might seem to be purely situational. However, the authors show us how the key concepts gleaned from these studies can be applied to virtually any other industry. Among the many insights gained along the way, it becomes evident to us that a multi-layered strategy might be the most effective way to keep creativity and imitation in a harmonious relationship; as opposed to the single brute-force instrument of the lawsuit (which in the case of music file sharing, ultimately proved to be ineffective).

In the Epilogue, the authors engage in an intriguing thought experiment where the lessons learned are powerfully applied to the music industry. The authors believe that music can prosper as a low-IP industry by fundamentally redefining its relationship with fans. It is suggested that this can be achieved in part through increasing consumer choice; which in turn might be made possible by embracing new technologies. To be sure, some of these ideas have been suggested elsewhere but what is different here is the author's tight integration of their theory with workable solutions. Indeed, with more artists empowered to create and connect with the fans who most appreciate their work, the authors envision a bright future for the industry.

I highly recommend this thoughtful, timely and influential book to everyone.

3 of 3 people found the following review helpful

4.0 out of 5 stars Creative innovation and intellectual property law August 25, 2012

By Margaret Picky TOP 500 REVIEWER

Format:Hardcover|Amazon Vine™ Review (What's this?)

"The Knockoff Economy" is about innovation at the intersection of creative work, originality, imitation, and intellectual property law with some consideration given to financial aspects. It was interesting to be reading this book when the billion dollar verdict in the Apple v. Samsung case was announced.

Major fields discussed are fashion, cuisine, comedy, magic, football, fonts, financial products such as mutual funds, and the music industry. Subjects explored include trends and life-cycles, enforcement through social norms, goods vs. experiences, open source development, first-mover advantage, and brands and counterfeits.

The authors propose that innovation can flourish regardless of intellectual property laws. Some important factors are sometimes overlooked in certain situations, such as the financial influences of the shift from domestic garment production to imports or changes in market size for music. Throughout there is discussion of the history of intellectual property laws and its quirks such as why some things are given protection and others aren't. Certain areas that would have contributed greatly to their argument, such as unique sharing of U.S. automobile technology intellectual property, are omitted entirely.

Although "The Knockoff Economy" isn't intended as a textbook but more of a popular economics book and sometimes seems like disconnected magazine articles held together as a book by a topical outline and a conclusion, I did learn a lot and enjoyed the many fascinating anecdotes. On the other hand, the tacked-on discussion of the music industry doesn't contain any major insights not already expressed elsewhere.

One particular thing that I found interesting was the brief discussion of how knockoffs can act as an advertisement for authentic goods and how a good percentage of consumers of counterfeit merchandise may later purchase the genuine brand. I also did not know that reason Advil has such a large share of the ibuprofen market is that Pfizer had a two year period of market exclusivity that ended decades ago. Some of the material is even humorous, such as the part about those Ugg boots or the D-list magician who made a television show revealing secrets and was ostracized by other magicians.