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The Luxury Economy and Intellectual PropertyCritical Reflections$
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Haochen Sun, Barton Beebe, and Madhavi Sunder

Print publication date: 2015

Print ISBN-13: 9780199335701

Published to Oxford Scholarship Online: October 2015

DOI: 10.1093/acprof:oso/9780199335701.001.0001

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PRINTED FROM OXFORD SCHOLARSHIP ONLINE (oxford.universitypressscholarship.com). (c) Copyright Oxford University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in OSO for personal use. date: 28 October 2021

Let Them Eat Fake Cake

Let Them Eat Fake Cake

The Rational Weakness of China’s Anti-counterfeiting Policy

(p.263) 13 Let Them Eat Fake Cake
The Luxury Economy and Intellectual Property

Kal Raustiala

Christopher Sprigman

Oxford University Press

This chapter examines the following questions: How did China become the world's leader in luxury goods sales—a category that relies heavily on intellectual property (IP) rights for its market value—while at the same time achieving unchallenged global dominance in “IP theft”? How can authentic luxury products, with their often-stratospheric prices, have such astonishing market success in China when knockoff versions are so easily produced and so widely available? It begins by describing China's approach to IP and its thriving luxury goods market. It then examines China's equally robust knockoff economy, and explores how copying and counterfeiting occur in China. Finally, it speculates on how to reconcile the success of both legitimate branded luxury goods and counterfeits in China. The chapter argues that much of the harm assumed to flow from counterfeits is difficult to demonstrate empirically in the luxury goods sector, and there are good theoretical reasons to doubt its magnitude. Indeed, the conventional wisdom about the harm caused by counterfeits is more a matter of inference than evidence. And there is some evidence, including evidence from China itself, that counterfeits can strengthen brands as well as undercut them.

Keywords:   China, counterfeit goods, luxury goods, intellectual property rights, intellectual property theft

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