Q. Since name-brand items are so expensive, many enterprising individuals market look-alikes. Is it ethical to sell or to buy these knockoff products?
A. In order to answer this question properly, we have to make clear that there is a crucial difference between two kinds of “look-alike” products:
1. Counterfeits. These are designed to fool the buyer into thinking that the product is a genuine name-brand item.
2. Copy-cats. Everyone knows that this product is not the original name brand, but the similarity in design informs the customer that this copy is designed to function or appear like the original.
It is certainly unethical to sell or buy counterfeit items. Besides being illegal, this practice falls afoul of several prohibitions in Jewish law.
First of all, selling counterfeits constitutes fraud towards the customer known is Jewish law as “geneivat da’at.” The Talmud tells us that it is forbidden to sell someone a lower quality item if the purchaser would assume that it is the higher quality type. This is forbidden even if for this particular purchaser the difference is completely immaterial, and even if he or she will never find out. For example, it would be forbidden to sell synthetic vitamins as if they were natural, even if a careful chemical analysis reveals that there is no difference.
Second of all, this kind of practice constitutes unfair competition towards the original manufacturer. The name brand invests large sums in associating its name or trademark with quality and desirability; it is unethical for the competitor to take a free ride on this investment. Furthermore, if the knock-off is of inferior quality then this will reflect unfairly on the name-brand manufacturer.
Buying these items is also improper, since it encourages fraud and is part and parcel of the debasement of the brand name. Scripture tells us that “One who splits with the thief hates his soul” (Proverbs 29:24), and this practice is in some ways similar.
However, there is no ethical obstacle to selling copy-cat items. The fact that a major brand of a cola soft drink uses brown food dye and a red label shouldn’t stop me from making a brown-colored cola drink with a red label. As long as it is clear to all that my soft drink is not the name brand, there’s nothing wrong with using some secondary characteristics to help the customer know what kind of product I’m trying to compete with.
Indeed, the “Jewish Ethicist” name and logo were chosen to hint at a superficial resemblance to the New York Times Magazine “Ethicist,” to inform new readers that this feature adopts a format similar to that of the NYT Magazine column. This is proper because the differences are as important as the similarities: this column provides answers from a traditional Jewish approach as hinted by the name Jewish Ethicist and by the benevolent, grandfatherly rabbinical figure smiling from the logo.
(There is also an intermediate category of “status-seeker” items: the buyer knows that the item is a knock-off, but he or she wants to make a display of using a high-status name brand item. Perhaps we will devote a further column to this intriguing case.)
SOURCES: Shulchan Arukh Choshen Mishpat 228; Rambam Mishneh Torah Geneiva 5:1; Rabbi Aaron Levine, Case Studies in Jewish Business Ethics page 331.