Journal of Business Ethics

, Volume 55, Issue 4, pp 343–352 | Cite as

The Ethics of Counterfeiting in the Fashion Industry: Quality, Credence and Profit Issues

  • Brian Hilton
  • Chong Ju Choi
  • Stephen ChenEmail author


One of the greatest problems facing luxury goods firms in a globalizing market is that of counterfeiting. The purpose of this paper is to analyze the different types of counterfeiting that take place in the␣fashion industry and the ethical issues raised. We argue that the problem partly lies in the industry itself. Copying of designs is endemic and condoned, which raises several ethical dilemmas in passing judgment on the practice of counterfeiting. We analyze the ethical issues in a number of different types of counterfeiting encountered in the fashion industry. We conclude with some observations on the general implications for ethics in intellectual property rights.


fashion business ethics marketing counterfeiting 


Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.


  1. Belhumeur, J. 2000International Law of FashionCanova EditriceTrevise, ItalyGoogle Scholar
  2. Bentham, J. 1948An Introduction to the Principles of Morals and LegislationClarendonOxfordGoogle Scholar
  3. Bonacich, E., Appelbaum, R., Chin, K.-S. 2000Behind the Label: Inequality in the Los Angeles Apparel IndustryUniversity of California PressBerkeley, CAGoogle Scholar
  4. Bowie, N. E. 1999Business Ethics: A Kantian PerspectiveBlackwellOxfordGoogle Scholar
  5. Conner, K. R., Rumelt, R. P. 1991‘Software Piracy: An Analysis of Protection Strategies’Management Science37125140Google Scholar
  6. Darby, M. R., Karni, E. 1973‘Free Competition and the Optimal Amount of Fraud’The Journal of Law and Economics166788Google Scholar
  7. Department of Labor Bureau of International Labor Affairs: 2001, Findings on the Worst Forms of Child Labor. Google Scholar
  8. Ekelund, R. B., Franklin, G., Mixon, F. G., Ressler, W. 1995‘Advertising and Information: An Empirical Study of Search, Experience and Credence Goods’Journal of Economic Studies223344Google Scholar
  9. Emons, W. 1997‘Credence Goods and Fraudulent Experts’The Rand Journal of Economics28107120Google Scholar
  10. European Commission: 2003, ‘Customs: Counterfeiters and Pirates are Increasingly Turning to Mass-produced Goods’, Press release, Brussels, 24 November 2003.Google Scholar
  11. Fassin, Y. 2000‘Innovation and Ethics: Ethical Considerations in the Innovation Business’Journal of Business Ethics27193203Google Scholar
  12. Flowers, E. B. 1998‘The Ethics of Patenting the Human Genome’Journal of Business Ethics1717371745Google Scholar
  13. Hannafey, F. T. 2003‘Entrepreneurship and Ethics: A Literature Review’Journal of Business Ethics4699110Google Scholar
  14. International AntiCounterfeiting Coalition: 2004a, FY2003 Top IPR Commodities Seized (available at Scholar
  15. International AntiCounterfeiting Coalition: 2004b, Facts on Fakes (available at Scholar
  16. Jones, T. M., Ryan, L. V. 1997‘The Link Between Ethical Judgment and Action in Organizations: A Moral Approbation Approach’Organization Science8663680CrossRefGoogle Scholar
  17. Kant, I. 1963Lectures on EthicsHarperNew YorkGoogle Scholar
  18. Kant, I. 1990Foundation of the Metaphysics of Morals, 2nd EditionMacmillanNew YorkTranslated by L. W. BeckGoogle Scholar
  19. Kant, I. 1994Metaphysical Principles of Virtue in Ethical PhilosophyHackett PublishingIndianapolisTranslated by J. W. EllingtonGoogle Scholar
  20. Kelly, E. eds. 2001Justice as Fairness: A RestatementBelknap PressCambridge, MAGoogle Scholar
  21. Mill, J. S.: 1998, in R. Crisp (ed.), Utilitarianism (Oxford University Press, Oxford).Google Scholar
  22. OECD: 1998, The Economic Impact of Counterfeiting.Google Scholar
  23. Rawls, J. 1971A Theory of JusticeHarvard University PressCambridge, MAGoogle Scholar
  24. Resener, M.: 1990, ‘Haute Couture’s Financial Makeover’, Institutional Investor (March), 80--85.Google Scholar
  25. Resnick, D. B. 2003‘A Pluralistic Account of Intellectual Property’Journal of Business Ethics46319335Google Scholar
  26. Ross, A. 1997No Sweat: Fashion, Free Trade, and the Rights of Garment WorkersVerso BooksNew YorkGoogle Scholar
  27. Sagoff, M. 1998‘Patented Genes: An Ethical Appraisal’Issues in Science and Technology143742Google Scholar
  28. Sama, L. M., Shoaf, V. 2002‘Ethics on the Web: Applying Moral Decision Making to the New Media’Journal of Business Ethics3693103Google Scholar
  29. Sims, R. L., Keon, T. L. 1999‘Determinants of Ethical Decision Making: The Relationship of the Perceived Organisational Environment’Journal of Business Ethics19393401part 1Google Scholar
  30. Smithsonian Institution: 1997, Between a Rock and Hard Place: A History of American Sweatshops 1820-Present (available at Scholar
  31. Steidlmeier, P. 1993‘The Moral Legitimacy of Intellectual Property Claims: American Business and Developing Country Perspectives’Journal of Business Ethics12157164Google Scholar
  32. Strasser, M. 1991The Moral Philosophy of John Stuart Mill: Toward Modifications of Contemporary UtilitarianismLongwood AcademicWakefield, NHGoogle Scholar
  33. The Economist: 2003, ‘Imitating Property is Theft’, May 15.Google Scholar
  34. Varley, P. 1998The Sweatshop Quandary: Corporate Responsibility on the Global FrontierInvestor Responsibility Research CenterWashington, DCGoogle Scholar
  35. Wyld, D. C., Jones, C. A. 1997‘The Importance of Context: The Ethical Work Climate Construct and Models of Ethical Decision Making–An Agenda for Research’Journal of Business Ethics16465472Google Scholar

Copyright information

© Kluwer Academic Publishers 2004

Authors and Affiliations

  1. 1.National Graduate School of ManagementAustralian National UniversityCircuit, CanberraAustralia

Personalised recommendations