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May 21 2011

New NYC Bill Proposal: Buy a “Knock-Off” Go to “Lock-Up”!

NYC Councilwoman Margaret Chin has a bad idea for a new law:  Folks who buy a fake designer handbag or shoes would face a misdemeanor charge (a criminal charge punishable by $1,000 fine and up to one year  in jail, per item). That’s buy a fake bag, not sell a fake bag. While it may sound like a common sense proposal – after all it is a trademark violation to ripoff to a designer, punishing the purchaser does not make sense economically. Nor will it help the very designers it is allegedly meant to protect. Councilwoman Chin states that counterfeit goods “rob the City of nearly $1 billion in tax revenue.” This statistic was also touted by Mayor Bloomberg who supports the bill’s passage. But the folks who buy the knock offs won’t go into a real Coach or Burberry store and then buy the real one if knockoffs are somehow magically eliminated by this proposal. They will just go without the fake. Tax revenue increase = zero. All the sales tax generated by the restaurants, drug stores, coffeehouses, etc that knock off buyers frequent while shopping in Chinatown – gone as well.

Now I am not condoning trademark infringement. Considering that part of my practice involves helping newer designers set up their businesses properly to best protect their ideas, designs and other intellectual property, I know what it means to have your idea stolen by someone else. But these are not small designers who are getting ripped off by the bigger fashion houses. These are multinational corporations that are having their brands spread through the masses in ways that would not normally occur. Do you think that Coach and others like it would be as popular if only those who could afford the real bags bought them? No, the fakes are advertising the brand and are making them objects of desire for those that can afford the real goods.

Also, fashion has always won in the end from one designer being inspired by what s on the runway or on Fifth Avenue and then making a different version of it for ready-to-wear and even mass market sales. Copying and fashion have gone hand in hand for centuries, that’s how trends are created. I don’t think we should try and stifle that creativity by criminalizing the purchase of knock offs.

There is another twist to this law that has not been written about or considered. Do we really want our cops getting involved in policing this issue? Are we going to spend the money training them in spotting fake handbags? If buying a knock off is a crime, can a police officer observing someone in what appears to be a knock off, have the right to go up to that person and have them prove that its a legitimate Kate Spade model? Wouldn’t the law give them the right to inquire of the person since they have reasonable cause that the a crime was committed?

The proposed law raises more problems than it solves and will likely have a much more negative economic impact than a positive one. I would be interested in hearing from my friends and clients in the design community as to whether they feel arresting the wannabe fashionista is the right way to address this issue.

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