When the business review site Yelp added badges and royalty titles to its check-in features earlier this month, it seemed clear that it was doing so in response to those very features made popular by the location-based network Foursquare.

Of course, imitation is the sincerest form of flattery, right?

And in some cases, imitation might be a good business strategy as well: take something your competitor is doing and do the same thing, but (hopefully) better.

But when it comes to proprietary product features, imitation isn’t necessarily flattering. It’s cause for litigation.

But is copying necessarily a bad thing?

While copying is often dismissed as a sign of a lack of imagination, some studies have shown that imitation actually leads to better innovation.

Along those lines, in a recent TED talk, Johanna Blakely describes the ways in which one of the industries most lauded for its creativity and innovation – the fashion industry – actually offers very little, if any, IP protection to designers. While fashion designers can apply for trademarks, they cannot copyright or patent their apparel. Blakely says that the courts have decided on multiple occasion that apparel is “too utilitarian” for copyright protection.

Blakely’s presentation – and the IP model of the fashion industry – makes a strong case for fewer rather than more restrictions on sharing and copying. Countering the argument that without ownership, there is no incentive to innovate, Blakely says that the fashion industry fosters an open “ecology of creativity.” In fact, Blakely points to several of the benefits the fashion industry reaps from copying, including the rapid dissemination of fashion trends worldwide and the acceleration in creative innovation.

Pointing to statistics that show that gross sales from industries with low IP protection far outstrips the sales from sectors with high protection, Blakely argues that the fashion industry’s relationship to copyright and patenting might be a model for other industries.

Granted, not all imitation violates copyright or patent law. But even when it doesn’t violate the law, it often violates our sensibilities.

What do you think? Should startups be worried about imitation? Or is imitation an important part of innovation?

Photo credits: Flickr user Domain Barnyard