Knockoff designers defend the 'right to look fabulous'

For now, a bipartisan group of Senators are proceeding in the opposite direction with the Design Piracy Prohibition Act. According to the Council of Fashion Designers, "Design Piracy describes the increasingly prevalent practice of enterprises that seek to profit from the invention of others by producing copies of original designs under a different label. These duplicate versions then have the potential to flood the market and devalue the original by their ubiquity, poor quality, or speed at which they reach the consumer. Technological advances to the means of textile and garment production, as well as increases in the number of distribution channels and the availability of cheap labor in emerging economies have created serious challenges to the growth of fashion design in America. The Design Piracy Prohibition Act grew from these concerns, and was initiated with two main objectives: to protect both the established and the up-and-coming designers whose development, growth and success helps to support the $350 billion U.S. fashion industry; and to preserve intellectual property."

The passage and enforcement of the act could be a major boon to high-fashion brands that are vulnerable to knockoffs -- especially if the industry's estimates about its prevalence are accurate. Investors interested in companies like Coach (NYSE: COH). Lower-end stores like Wet Seal (NASDAQ: WTSLA) could be hurt.

The important question is how much sales these knockoffs steal from top designers, and how much of it is just additional -- Would someone who was going to buy a $300 pair of jeans buy a $30 pair of look-alikes? Is someone who buys a $30 pair of look-alikes really part of the top designers market?

This will have an impact on how the top designers have to gain from their crusade against counterfeiters but, from an ethical perspective, they appear to be right on. You cannot legally copy a book, movie, or CD and sell it, and you shouldn't be able to do the same with fashion.