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What are counterfeit brands, and why have they become a global problem? We examine some famous forgery cases to provide a classical example of counterfeit goods and explain their impact on legitimate businesses.
Brands that achieve a great level of success for their companies often become assets coveted by buyers, sellers, and rival companies alike. Sometimes, a less honest company will try to take advantage and use a famous brand or trademark as its own.
For instance, you may have heard of 'knock-off' clothing. This is clothing that has had a famous brand's label or a replica label sewn into it. The purpose of this forgery is to sell the garment for a much higher price. Other names commonly used to describe this illegal practice include brand piracy and counterfeiting. Understanding how these famous forgery cases worked can help you protect your brand against similar malicious practices.
Five Famous Brand Forgery Cases
1. Gucci and Yves Saint Laurent Counterfeit Products Online
In a classic example of a counterfeit case, luxury fashion houses Gucci and Yves Saint Laurent were famously involved in a lawsuit with a Chinese online shopping group. The suit alleged that the Alibaba Group Holding Ltd violated trademark and racketeering laws. Specifically, it was claimed that the shopping group made it possible for fake products bearing the highly sought-after labels to be sold on their sites.
2. Bottega Veneta Lawsuit
In Manhattan, a district court held the Bank of China in contempt after it would not turn over account information. The information sought was about Chinese companies that had been accused of selling counterfeit items in the United States. The brands making the claims included Kering, Inc., Bottega Veneta, and others. While the bank was not accused of wrongdoing, the contempt was held because the court felt the bank was hindering a proper investigation into the case.
3. Make-up and Beauty Counterfeits
This sort of brand forgery can be especially dangerous for consumers. Sub-par cosmetics will not have the same ingredients and safety testing that real brands employ. There was a ring of counterfeit makeup and other beauty product forgeries in Grand Prairie, Texas. Over eight months, more than US$40,000 worth of these supplies were discovered, along with US$15,000 in cash. The sellers would bring their counterfeit items to a large local flea market and present them as genuine, along with the markup of a genuine item.
4. Louis Vuitton and Eight Other Brands Forged
Counterfeit brands, including Gucci, Chanel, and Louis Vuitton, were found for sale by a woman named Xu Ting. The lawsuit, in 2008, concluded with an order to pay Chanel Inc. US$6.9 million in damages. In 2009, another court in Florida ordered the shutdown of seven websites that she was using to sell forgeries of Marc Jacobs, Celine, and more. In 2010, another suit was filed by Gucci, Balenciaga, Bottega Veneta, and Yves Saint Laurent. It was alleged to be a family business, with her husband, brother, mother, and six other people implicated in selling more than US$2 million worth of counterfeit handbags and wallets through online shops.
5. Federal Racketeering
A pair of linked online merchants became the defendants against a company named Wimo Labs. The lawyers alleged these defendants knew, assisted, encouraged, and profited from ongoing sales of counterfeit items online. It is alleged that this major company, worth US$18 billion, helped a US$1.7 trillion worldwide counterfeiting ring, threatening consumer health and safety. Damages were also sought in relation to the brands' reputations and income. If settled, manufacturers stood to recover three times their damages.
How to Avoid Becoming a Counterfeit Brand
Counterfeiting is a worldwide criminal enterprise. As these famous forgery cases show, when thieves engage in this activity, everyone suffers. That's why it's so vital to keep track of where and how your brand and trademark are used, and monitor for unauthorized use online. This ensures a solid reputation and fair competition in the marketplace.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
