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“Purse parties” are the newest trend in the counterfeit fashion trade,
an industry that is running rampant worldwide. Fashion isn’t the only type of
brand susceptible to copycats. Pharmaceuticals, beverages, toys, furniture,
software, electronics -- you name a brand niche and it has most likely fallen
victim to counterfeiting. The International Chamber of Commerce estimates that
the counterfeiting industry comprises five to seven percent of global trade and
is worth roughly US$ 450 to 500 billion.
Knock-offs of luxury fashion brand accessories, like purses, make up just a
fraction of the counterfeit trade industry but they are among the most prominent
offenses. Louis Vuitton, Gucci, Kate Spade, Christian Dior and Burberry are just
some of the big-name (and big-price) brands that are relentlessly knocked off.
The replicated accessories go beyond just purses to include wallets, sunglasses,
scarves and more.
There’s a lot of profit in counterfeiting. Knock-offs in the US are priced
one-sixth to one-eighth of the retail value of an authentic product. When a
simple wool Burberry scarf retails for US$ 200, a Christian Dior belt can bring
in US$ 400 and big-brand purses, like Louis Vuitton, can sell for over US$ 1000,
it’s easy to see how merchants can make ten times their manufacturing costs for
mass-produced counterfeit goods.
It seems silly to get worked up over fashion fakes when there are knock-offs
that can cause physical harm, even death, when dealing in fake pharmaceuticals
or counterfeit automotive parts. Why even worry about the superficial world of
the knock-off fashion industry? Is there any real harm in letting someone a
little short of cash get the Louis purse they’ve always dreamed about?
According to Ellen Goldstein, chairperson of the accessories design department
at the Fashion Institute of Technology in New York City, fakes do harm the real
brand. “It hurts the worth of the brand terribly; it cheapens the brand,” she
says.
Goldstein goes on to explain, “People assume that this is a form of flattery,
but the brands don’t. It’s stealing and it cuts back on authentic brands’ sales
considerably.”
Tim Trainer, president of the International AntiCounterfeiting Coalition in
Washington DC dismisses the theory that knock-off brands offer a type of free
advertising and promotion for legitimate brands. “Counterfeiters trade off the
backs of legitimate brands. They let the real brands pay for the marketing,
advertising, develop the designs, and then they profit off of it.”
There’s no question that ripping off a fashion design is a crime, but busts like
the one in Florida are rare. If the consequences of knock-offs are so severe for
the real brands, why isn’t more being done to crackdown on this growing problem?
In fact, if anything counterfeiting appears to be more prevalent than ever.
One used to have to shop big cities to find knock-offs. Now purse parties are
replacing Tupperware parties, the web is saturated with sites dealing in fakes,
store-fronts in strip malls advertise “imposter goods,” and most county fairs
have booths loaded with knock-off goods. The brands being knocked off are, in
most cases, multi-million dollar brands so the question remains why aren’t they
doing more to protect their products?
“Brands do fight to protect themselves, but it’s a very long and arduous
process,” says Goldstein. “Coach went through it and won, but it was a very long
process.”
A process that in the end, just might not be worth it. Even if these brands have
the money to spend in legal fees, it is a strenuous, drawn out course of action.
Instead brands like Kate Spade and Louis Vuitton tend to take matters into their
own hands first by hiring private investigators to find where knock-offs of
their brands are being sold. Convincing authorities to step-in is tough; they’re
off fighting “real” crimes. So a typical next step is to have the brand’s lawyer
send a threatening letter in hopes that it will scare merchants into shutting
down shop or canceling their next purse party. Sometimes the threat is enough,
sometimes it’s ignored or merchants just lie low for a while. After this, it’s a
matter of trying to convince authorities to step in.
Then there’s the chance -- a good chance -- that authentic brands may not win
over knock-offs in court. There are intricate details that go into brand
protection and fashion design. Unlike other products, copyright protection is
denied to fashion designs under the US Copyright Act. Trademarks are available
to designs, but it’s a fine line between an actual counterfeit and a “creative
interpretation.”
For instance, it’s still possible to find knock-offs of Coach’s popular demi bag
despite the company’s fight; the fakes replace the trademarked Cs, adorning the
small canvas bags, with Gs. The same goes for Burberry; although the company
makes its stance about the trademarked plaid quite clear in communication
materials, replicas of Burberry purses and scarves using variations of the
colors are popular knock-off items. Even when legitimate brands win, punishment
is usually only as harsh as a slap on the wrist.
On top of all this, while brands are putting forth all of this effort and money,
the designs they are fighting to protect are already out of style, replaced by
new ones.
What’s worse is that as the industry advances, so does the technology used to
make the imitations. Goldstein speculates that counterfeiters attain authentic
looks by purchasing the real purse, wallet or scarf and copy it detail for
detail. “There are knock-offs now where you cannot tell the difference between
the fake and the real,” she says.
Those mirror-image replicas mean more sales, even to consumers with
distinguishing tastes. Anyone is up for saving money.
If there is a bright side to this whole dilemma, it’s that law enforcement is
starting to become more involved in cracking down on the knock-off industry.
That’s because counterfeiting fashion brands has a more serious consequence than
just stealing legitimate brands’ designs.
“Consumers pay street prices for knock-offs and think they are just pulling one
over on legitimate brands…. Narcotics, prostitution, weapons; [the money they
spend] could be going to all those things,” explains Trainer.
Trainer says consumers need to step back and think of where the money they spend
on knock-offs could be going. Just as selling knock-offs is a crime, a
connection is drawn between counterfeit goods and funding for other crimes
involving drugs and weapons. Now law enforcement is worried about a link between
counterfeit goods and terrorism, which means since September 11, authorities
have stepped up their pursuit of those knocking off fashion brands.
As Trainer explained, law enforcement is not so much concerned with brand
protection, as it is looking at trade in fake luxury brand names and logos that
can bring in enough money to fund crime (which was the case in the Florida purse
party where law enforcement seized over US$ 40,000 in knock-offs). “There’s
interest from authorities,” says Trainer. “But they are only interested in
finding large quantities [that are funding crime] -- the major distribution
centers. Knock-offs are coming from large, sophisticated distribution centers.”
Pinpointing the centers is only a guess, but many US sold fakes are suspected to
come from Asia, primarily China, Thailand and South Korea.
Although the whole issue may first appear to be a simple yet rampant case of
copycatting, in fact it demonstrates that there is a real need for stricter
protection laws of luxury fashion brands, enforcement of those laws, and harsher
punishments for merchants and makers of counterfeit goods. But as far as
knocking out counterfeiting completely, Trainer says like other crime, it’ll
never be gone and brands need to view counterfeit products just like any other
competition.
Indeed FIT’s Goldstein agrees: “Counterfeiting will always exist. It’s the
subculture of the fashion industry.”
[1-Dec-2003]
Diane O'Brien lives in San Francisco.
2006 | 2005 | 2004 | 2003 | 2002 | 2001
22-Dec-2003 Are We Still Lovin' It? -- A.K. Cabell
What is McDonald’s strategy for getting back to the business of international
success?
15-Dec-2003 Will E-Government Click with Its Constituents? -- Stephen Gardner
Electronic services cannot grow without attracting the public on more than just
functional benefits.
8-Dec-2003 Products that Rise Above Their Corporate Brands -- Edwin Colyer
How important is the corporate brand compared with the product brand? We may
request our Prozac by brand name but do we care who makes it?
24-Nov-2003 Low-Carbs: Are Brands Losing It? -- Dale Buss
Food and beverage brands deal with the latest trend to hit the industry: the
low-carb frenzy. Is it time to throw your entire product line down the trash
disposal over a trend?
17-Nov-2003 Hip Marketing: Targeting a New Audience -- Randall Frost
Medical product brands are skipping trials and heading straight for a jury of
their patients.
10-Nov-2003 Is Bologna Bologna if It's Not from Bologna? -- Michael Standaert
The EU brings trademark law to the table as it cracks down on the generic use of
terms such as Parmesan, Burgundy, Chablis, Bologna, and Feta.
3-Nov-2003 The Fundamentals of Branding -- Vincent Grimaldi
A definitive breakdown of what branding is, why it is, and what it has to do
with you.
27-Oct-2003 Navigating the Economic Upturn -- Dale Buss
Baby steps or giant leaps? As the economy slowly improves what’s the best
strategy for your marketing plan?
20-Oct-2003 Taking Advantage of Women -- Edwin Colyer
Would you like a loyal customer from cradle to grave? Pharmaceutical companies
are missing out on opportunities for a long-term product line for women.
13-Oct-2003 Are French wines screwed? -- Emilie Boyer King
Is France’s reputation enough to sell a brand of wine? Or is this strategy
causing French wines to slip behind in global sales?
6-Oct-2003 Made where? -- Ron Irwin
English roses grown in Kenya, American skis built in China, Italian shoes made
in Romania? Home brands insist offshore production is the only route for
survival.
29-Sep-2003 Turning Over a New Leaf? -- Edwin Colyer
We care about our staff and the environment… right? Are businesses really
improving their records on environmental responsibility? Or is this cynical
marketing at work?
22-Sep-2003 Who Is Securing Your Identity Online? -- Randall Frost
Brands from Amazon.com to IKEA have exposed sensitive customer information on
their websites. Are these events hindering the growth of e-commerce?
15-Sep-2003 Pharmaceuticals Go to the Dogs -- Edwin Colyer
Do consumers want the same drugs as their dog? Some like Pfizer offer animal and
human products all under one brand. Others like Merck and Eli Lilly prefer to
keep man and beast separate.
8-Sep-2003 Can Bosch spark its OEM brand? -- Brad Cook
Could OEMs in the automotive industry apply the Intel Inside approach to their
products?
1-Sep-2003 Are Your Employees the Solution? -- Edwin Colyer
Is branding a waste of your company’s money?
25-Aug-2003 Viral Marketing: It's Infectious! -- Randall Frost
Is your brand contagious? Some brands promote through viral marketing and let
their customers do the talking.
18-Aug-2003 Promoting Brand Allegiance Within -- Edwin Colyer
Can your employees behave on brand? Brand management is nothing without internal
buy-in.
11-Aug-2003 Marketing Beauty Products From the Inside Out -- Dale Buss
Brand owners dig deep to bring skin care to the surface of consumers’ minds.
4-Aug-2003 Me Incorporated: Your Own Magnetic Brand -- Randall Frost
Is there power in a personal brand?
28-Jul-2003 Samsung Shows its Strength -- Robin Rusch
Five years ago Samsung Electronics was a cheap Korean brand; today it’s a
quality name that climbs to number 25 in Interbrand and BusinessWeek’s top
global brands survey.
21-Jul-2003 Taking a Closer Look at Your Customers -- Edwin Colyer
Ethnography breaks the boundaries of conventional branding.
14-Jul-2003 PR Stirs it Up -- John Karolefski
Move over advertising and marketing, the spotlight's on PR.
7-Jul-2003 Will the Wireless World Connect? -- Vivian Manning-Schaffel
Cellular service providers vie hard to ring your bell.
30-Jun-2003 Delivering Global Brands -- Edwin Colyer
Global express distribution operators, like TNT and Exel, are consolidating
supply chains to better service and win contracts with brands like Deutsche
Post, FedEx and UPS.
23-Jun-2003 Battle of Biblical Proportions -- Dale Buss
Zondervan revises the New Testament and faces a challenging marketing effort to
convince readers that it’s still a Good Book.
16-Jun-2003 Can Hip Hop Cash In? -- Abram Sauer
Courvoisier, Burberry and Mercedes have all gotten the hip hop treatment. What
if that placement were planned and paid for?
9-Jun-2003 Pushing Pills to Those Who Pay the Bills -- Edwin Colyer
Since most patients don’t choose their drugs, pharmaceutical brands typically
target physicians, but should these brands be targeting healthcare payors as
well?
2-Jun-2003 Celebrity Endorsements Reach for the Stars -- A.K. Cabell
Can celebrity endorsements knock out the competition?
26-May-2003 Membership Has Its Privileges -- Brad Cook
The epitome of brand loyalty can be seen in a phenomenon called "brand
communities."
19-May-2003 Can Tobacco Brands Extinguish Their Bad Rap? -- Elen Lewis
Do tobacco companies have any hope of shedding their evil image?
12-May-2003 Brands That Go Places -- Patricia Tan
Forget the passports and plane tickets, did you pack the guidebook?!
5-May-2003 Who's Filling Gen-Y's shoes? -- Dr. Pete Markiewicz
Surprising developments among the so-called Gen-Y or Millennial market in the US
could point to future trends worldwide.
28-Apr-2003 All Sweeteners Are Not Equal -- Dale Buss
The substitute sugar wars are not sweet.
21-Apr-2003 Crash Course in Auto Branding -- John Karolefski
Is safety a compelling brand attribute when it comes to car purchase decisions?
14-Apr-2003 Brand Leader -- Edwin Colyer
How closely is the CEO linked with the company's brand?
7-Apr-2003 Happily Ever After? -- Dale Buss
Looking to ally forces in a co-branding relationship? Match-making is a skill
fraught with pitfalls, but done right it can expand market and grow
opportunities.
31-Mar-2003 The Brands We Love to Hate -- David Liss
What can we learn from the brands we just can't stand? WWE, Jerry Springer and
NASCAR aren't as far from Tiffany's or BMW as we may like to believe.
24-Mar-2003 The Side Effects of Going Off Patent -- Edwin Colyer
Can pharmaceuticals retain their brand equity after brands go off patent?
17-Mar-2003 Do Online Ads Boost Brands? -- Fiona Harvey
Combine web advertising with tv and radio, and you've got an effective
brand-building tool.
10-Mar-2003 The EU Marks Its Territory -- Ed Meikle
The European Union now offers trademark protection across its member states for
managing your intellectual property.
3-Mar-2003 Estonia and Belarus: Branding the Old Bloc -- Stephen Gardner and
Mike Standaert
Estonia's exercise in nation branding kick-started tourism and investment. How
does Belarus compare and what can it learn?
24-Feb-2003 Advergaming Scores -- Dale Buss
Brands break through online clutter with games and contests to engage the
consumer.
17-Feb-2003 Life Saving Brands -- Edwin Colyer
Are branded medical devices the next must-have accessory?
10-Feb-2003 Google Ranks First: 2002 Readers' Choice Award Results -- Robin
Rusch
Our readers choose Google.com, Nokia, Target, LG and Corona as global and
regional brands for Brandchannel's 2002 Readers' Choice survey.
3-Feb-2003 Brand USA: Tarnished? -- Patricia Tan
How is it that American brands do so well in Muslim countries, while Brand
America itself is so tarnished?
27-Jan-2003 Big Brand on Campus -- Dale Buss
Smart brands head back to university, where a captive audience awaits them.
20-Jan-2003 Down to the Core: Branding Not-for-Profits -- Patricia Tan
Why should not-for-profits concern themselves with branding?
13-Jan-2003 Is Advertising Effective in Brand Building? -- Robin Rusch
Could it be that advertising is a very expensive waste of time in building a
brand?
6-Jan-2003 Urban Consumers Get Phat -- A.K. Cabell
Can mainstream brands like Motorola tap into urban youth market through
co-branding with brands like Phat Farm?
