Finer Bags Case Study

The creation and sale of low-cost counterfeits, replicas and knock-offs of brand-name originals is a common occurrence. Across all markets, counterfeiting and Piracy account for $461 billion (OECD/EUIPO, 2016). Only 25 countries have GDPs greater than that. (Statistics Times, 2017) In the world of fashion accessories, there are many companies that look to benefit from consumers’ desires to own something luxurious while paying not-so-luxurious prices. Such is the case of Finer Bags, a company that sold what they advertised as replica or original designer brand bags. Was Finer Bags breaking the law? Was it unethical? Before attempting to answer those questions, it is best if we consider the differences between the terms counterfeit, replica, knock-off, and copy. While all represent closely copied designs of another product, the main difference
To do so, we need to look at who wins and who loses when Finer Bags sells one of their knock-offs. The individual consumer who purchases on of the replicas wins as they save hundreds or thousands of dollars purchasing a designer handbag they would otherwise not be able to afford. They see an increase in utility based on monetary savings and happiness. For those resellers who may purchase a product, they win from the profit earning potential that depends on how they choose to market the product (as a fake, a quality replica, or pass it off as the real thing). The loser is the original designer who, it can be argued, most likely would not have received a sale anyway as the buyers shopped for fakes because they couldn’t justify or afford buying the original. With a large enough volume of fakes on the market, the designer brand’s value could get diluted. Here the designer has the upper hand as they stay ahead of the counterfeiters since continue to create new models which can only be copied once they are universally available to the