Now, your first instinct may be to condemn Restoration Hardware as a copycat. You may worry that if Restoration Hardware can get away with copying Emeco’s original design, that’s bound to discourage others from coming up with new furniture designs in the future.
But that first instinct can mislead. In our book, The Knockoff Economy, we look at industries like fashion, cuisine, financial innovations, fonts, databases, and open-source software in which there are lots of copying and knockoffs (often perfectly legal) but also lots of creativity. In all these industries, copying and creativity coexist. In fact, copying often leads to more creativity, not less.
Consider the fashion industry. Anyone who has spent time in a Forever 21 store knows that fashion is full of knockoffs. And all this copying is completely legal because copyright law doesn't cover apparel design. Yet far from killing creativity and destroying the market, the industry is prospering.
How is that possible? Because of something we all know instinctively about fashion. People typically buy new clothes not because they need them, but because they want to keep up with the latest style. Without copyright restrictions, fashion designers are free to rework a design and jump on board what they hope will be a money-making style. The result is the industry’s most sacred concept: the trend. Copying creates trends, and trends are what sell fashion. Every season we see designers “take inspiration” from others. Trends catch on, become overexposed, and die. Then new designs take their place.
This cycle is familiar. But what is rarely recognized is that the cycle is accelerated by the freedom to copy.
So copying is a central, and beneficial, element of the fashion cycle. But that’s not the only way in which copying sparks creativity. Copying can also serve as advertising. When a popular fashion design is imitated, more people see it and experience it, which helps to create buzz and allure. Copies can also serve as trial versions of the original. A 2009 Harvard Business School study found that many women who buy knockoff handbags soon move up to the real thing. Copies act as a kind of gateway drug to the more expensive genuine article.
Which brings us back to the Navy chair. What are the effects of cheaper knockoffs on Emeco’s $455 original?
We don’t know for sure how many buyers of Restoration Hardware’s $129 version would have bought the Emeco original if the cheaper knockoff didn’t exist. But we suspect the answer is not many. Emeco’s chair is handmade in the United States using high-grade recycled aluminum and a painstaking 77-step manufacturing process. The much cheaper Restoration Hardware knockoff is made in China and is of palpably lower quality. It may well be that, just as with knockoff handbags, the main effect of the Restoration Hardware knockoff chair is to signal to the Emeco chair’s real audience—the fortunate few wealthy enough to spend $3,000 for a set of 6 dining chairs—that the design remains relevant and desirable. Along the way, the Restoration Hardware version—appearing in malls and mailboxes everywhere—will educate a much wider swath of furniture buyers about the real thing. If that’s true, then the Emeco chair isn’t going to be hurt by knockoffs. Indeed, Emeco might well prosper.
More broadly, why should only the wealthy be entitled to have good design in their houses? No one really needs a chair in his dining room built to withstand a torpedo hit. Perhaps if Emeco was concerned about knockoffs it could have made a less expensive version before Restoration Hardware did. In any event, calling Restoration Hardware’s version of the Navy chair a knockoff doesn’t really do it justice. There is another, much more attractive word that fits at least as well: competition.