Gucci Awarded 144.2 Million Dollars in Case Against Counterfeit Fake Fashion

Counterfeit Gucci dust bag

Gucci America has been awarded 144.2 million dollars in damages in a case against online fake fashion counterfeiters.

Gucci filed the lawsuit against the counterfeiters in May 2013, alleging the abuse of the Gucci name and trademark to sell counterfeit goods online. Amidst the defeat of the luxury brand house shock defeat Guess Wins Trademark Suit in Italy which was a humiliating defeat at the same time. The luxury house was not about to lose again.

Gucci got out their legal big guns and went to battle pulling no punches successfully showing that the domain names used publicity campaigns very similar to those of the Italian luxury brands, as well as official product images and descriptions to try and coax consumers into purchasing counterfeit goods.

The company’s president and CEO, Patrizio de Marco, stated that “We are extremely pleased that the court clearly understood the dangers to consumers posed by online counterfeiting organisations and has sent a strong message that counterfeiters can expect to receive severe sanctions when caught.”

According to the presiding judge, US District Court Judge William P. Dimitrouleas, the amount in damages awarded includes the additional amount of interest from the date the lawsuit was filed.

Counterfeit Gucci sneakers advertised on website

As well as successfully proving this the U.S. district court for the Southern District of Florida also ordered ”the immediate surrender to Gucci of 155 domain names used in the counterfeiting operation.”

What does this mean now for the counterfeit market coming on the announcement that Taobao Market Teams up with Louis Vuitton to Remove Counterfeit of the massive Chinese online market place Alibaba e-commerce site. And who can forget Taobao.com signed a similar agreement with Gucci themselves a few years back Taobao Teams Up With Gucci and Apple to Remove Counterfeit Products.

This victory shows the major brands are no longer going to sit back and let counterfeits infringe on trademarks and profits.

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Richemont wins victory in TradeKey counterfeit fake fashion law suit

Chloe counterfeit bag, evidence in TradeKey case. Source VentureBeat

RICHEMONT luxury fashion brand owner have won a significant victory in the war against counterfeit fake fashion and defeated Trade Key e-commerce with the help of one man.  Rob Holmes is a private investigator and owner of IPCybercrime from Plano, Texas, and he blew the lid on one of the world’s biggest counterfeit goods sales sites with a year-long undercover operation. In doing so, he may have helped give brands a new legal tool in their attempt to stamp out billions of dollars in sales lost to counterfeiting each year.

In an interview with VentureBeat, Holmes said his work helped unearth evidence that the Pakistani e-commerce vendor TradeKey helped enable wholesale trading of thousands of counterfeit goods over the Internet by setting up a “virtual swap meet” where vendors could sell fake goods with impunity. A federal judge ruled on Oct. 8 that TradeKey had violated copyright law and contributed to the counterfeiting of goods made by companies, including Holmes’ client, Richemont, the owner of six luxury fashion brands including Mont Blanc-Simplo, Cartier, Chloe, Alfred Dunhill, Officine Panerai, and Lange Uhren. Holmes said he found thousands of cases of large-scale counterfeit listings during his undercover work.

Holmes told Venture Beat how, at the request of Richemont’s lawyers, he organised the undercover investigation with luxury brand company’s legal team as it pursued TradeKey, a site that had more than 5 million members at the time of the investigation. The tale is a case study in how big brands are going after shadowy counterfeiters and how tricky it can be to collect evidence that will bring those counterfeiters down.

The case could set a new legal precedent, since an earlier ruling in 2010 put the burden of stamping out counterfeiting on e-commerce sites on the brand claiming to be a victim. In the case of Tiffany v. eBay, the U.S. courts ruled that eBay was not responsible for policing its market for counterfeits sold by third parties. That decision put the burden on brands to provide proof to eBay if they wanted it to take down a counterfeit sale.

But in the TradeKey case, the evidence of counterfeiting was so widespread throughout the site that a federal judge ruled that TradeKey was in fact responsible for curbing counterfeit sales. That ruling by U.S. District Court judge Gary Allen Feess in Los Angeles is the latest result of a one-year investigation and three-year legal case against TradeKey. The judge found that TradeKey had “actively promoted and facilitated the sale” of counterfeits. He ordered it to monitor its sales.

TradeKey counterfeit listings. Source VentureBeat

“This is the first case that holds an online marketplace liable for contributing to counterfeiting,” Holmes said in an interview with VentureBeat. “And they were the No. 1 counterfeiting site in the world. This was the big, bad one.”

It’s hard to verify if TradeKey was the biggest counterfeiting site, but Holmes does work for about 50 brands, and the lawyer for Richemont agrees it was a big one.

“We believe the case is groundbreaking in the magnitude of the counterfeiting on TradeKey.com,” said Susan Kayser, legal counsel for Richemont at the law firm Jones Day, in an interview. “Rob Holmes’ investigation was essential to the case. The court relied heavily on the investigation’s findings in its ruling.”

TradeKey’s attorney, Erik Syverson of Miller Barondess, said in an e-mail, “We completely disagree with the court’s ruling, factual findings and application of the law, particularly with respect to contributory liability principles. Followed to its logical conclusion, this ruling requires web sites that permit user-generated advertising to proactively screen for infringing or counterfeit items listed for sale. That is not the law.”

He added, “The law has always required that trademark owners perform such a function. Furthermore, the ruling impermissibly restricts the legal use of trademarks in meta data and Adwords, even by third parties not connected to this lawsuit. For example, under this ruling, I cannot list for sale on my client’s website my own collection of authentic Mont Blanc pens, or even mention Mont Blanc for comparative advertising purposes.”

He said TradeKey is considering its options.

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Content thanks:VentureBeat

eBay defeats Tiffany in counterfeit jewellery suit

NEW YORK | Mon Sep 13, 2010 5:34pm EDT

Tiffany & Co.

EBay Inc on Monday won dismissal of aTiffany & Co lawsuit accusing the auctioneer of deceiving customers by allowing the sale of counterfeit Tiffany jewellery on its website.

U.S. District Judge Richard Sullivan in Manhattan rejected Tiffany's allegation that eBay engaged in false advertising, the last remaining claim after a federal appeals court on April 1 dismissed the rest of Tiffany's trademark infringement case.

The case has been viewed as a challenge in the United States to Internet companies such as eBay, Google Inc and others that host services that other people provide, and do not responsible for users' trademark violations.

"Tiffany failed to establish that eBay intentionally set out to deceive the public, much less that eBay's conduct was of an egregious nature sufficient to create a presumption that consumers were being deceived," the judge wrote.
Mark Aaron, a Tiffany spokesman, declined to comment. Michelle Fang, eBay's associate general counsel, called the ruling "an unequivocal validation of eBay's business practices."

About $3.99 billion, or 46 percent, of eBay's 2009 revenue came from the United States, a regulatory filing shows.

Tiffany accused eBay of advertising the sale of its goods through ads on its website, and through sponsored links on search engines, which would sometimes link to its own website and exhort readers to "Find Tiffany items at low prices."
Sullivan agreed with Tiffany that eBay knew "a portion" of the goods being sold were fake.

But he said Tiffany failed to show that eBay's advertisements misled customers or necessarily implied that all Tiffany products sold on its website were genuine.
"Tiffany has failed to present evidence that rises to the high level of egregious misconduct required to demonstrate that eBay had an intent to deceive customers," he wrote.

Sullivan also pointed to eBay efforts to fight fraud, which the company has said costs up to $20 million a year.

In its April 1 ruling, the U.S. Second Circuit Court of Appeals had upheld Sullivan's July 2008 dismissal of most of Tiffany's lawsuit, saying that "eBay did not itself sell counterfeit Tiffany goods; only the fraudulent vendors did."
Tiffany is based in New York and eBay in San Jose, California.

The case is Tiffany (NJ) Inc et al v. eBay Inc, U.S. District Court, Southern District of New York, No. 04-04607.

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Taobao Marketplace Teams up with Louis Vuitton to Combat Counterfeits

TAOBAO MARKETPLACE has taken another step against counterfeit luxury goods by inking an agreement with Louis Vuitton to proactively remove intellectual property rights (IPR) infringing listings on it platform.

This is not the first time China's leading online e-tailer has collaborated with a luxury retailer as March last year they announced a similar deal, Taobao Teams Up With Apple, Gucci To Remove Counterfeit Products.

Alibaba Group, China’s massive e-commerce firm, has announced a partnership with French high fashion label Louis Vuitton that aims to stop the sale of counterfeit luxury goods in China. The Alibaba-owned Taobao marketplace, China’s largest consumer-to-consumer online shopping outlet, is often flooded with knock-off designer goods in a country that largely turns a blind eye to their distribution. Alibaba, as a whole, handles more web transactions annually than both Amazon and eBay combined.

Louis Vuitton, owned by LVHM Moët Hennessy, is world-famous for its distinctive brown monogram leather merchandise. Due to both their popularity among celebrities and high price tags, the brand’s accessories are a prime target for counterfeiters. The brand have recently launched their upmarket line in order to distinguish themselves and reach a more elitist market.

Earlier this year, Chinese authorities in Guiyang broke up a high-profile counterfeit goods operation that was based in a high-end hotel. Police confiscated more than 6,000 fake items worth more than 81 million yuan ($13 million).

“The store owner admitted his bags cost around 100 to 200 yuan (US$16-$32) but that he sold them for over 1,000 yuan (US$160). The bags were of high quality and most of the buyers could not tell the difference from genuine items,” reported Want China Time. “Most of the goods were counterfeits of luxury brands Louis Vuitton and Gucci.”

Under the agreement with Louis Vuitton, Taobao Marketplace will proactively take down product listings of suspected counterfeit goods and implement preventive measures to stop sellers from listing fake items. These measures strengthen the current system in place whereby brand owners notify Taobao of intellectual property rights (IPR) infringing items and then Taobao acts to remove them from the giant online shopping website.

Alibaba Group online shopping site

The agreement is part of ongoing efforts by Taobao Marketplace to work with brand owners to curtail fakes.  In August, Alibaba Group signed an agreement with world’s largest anti-counterfeiting group, the International AntiCounterfeiting Coalition (IACC) to work together against pirated goods. The agreement called on IACC members, which include Apple and The Walt Disney Company, to assist Taobao in identifying copyright-infringing products listed on the site. Taobao Marketplace reached a similar agreement last September with the U.S.-based Motion Picture Association (MPA). The website is also working with Chinese government agencies and law enforcement to identify and shut down factories and other sources of counterfeit goods.

The agreement between Louis Vuitton and Taobao Marketplace will go toward building a fairer and more transparent online business environment, the companies said in a joint statement on Friday.

“Such collaboration is invaluable to us, in order to prevent the manufacture, transport and sales of counterfeit goods, online as well as off-line,” said Valérie Sonnier, Global Intellectual Property Director for Louis Vuitton.

Last August, Alibaba signed an agreement with the International Anti-Counterfeiting Coalition (IACC), proving that the e-commerce giant was serious about running a legitimate business.

In 2012, about $1.5 billion worth of counterfeit goods were stopped by European Union customs officials, according to an EU report. Fake watches, bags and clothing made up 46 percent of the value of the intercepted merchandise. China remains the top source for counterfeit items to the EU, said the report published in August.

Although China has taken steps to toughen its anti-piracy initiatives and laws in the face of mounting international criticism, experts say the enforcement of those laws have been mixed and the fluid nature of China’s labour economy means that when one factory closes another opens somewhere else.

Taobao Marketplace, which was removed from the United States Trade Representative list of “notorious markets” for piracy last year, was once a magnet for these counterfeit sellers eager to reach a bigger audience. Taobao’s efforts to clean up its platform has made it harder for counterfeiters to successfully list and sell items, say company officials.

"Taobao Marketplace is dedicated to the protection of intellectual property rights and the fight against counterfeiting, said Ni Liang, Senior Director of Internet Security, Alibaba Group. “We firmly believe that the collaboration between brands, platforms and government agencies will create visible and significant results in the intellectual property enforcement space.

“If Alibaba wants to remain the top dog in China's e-commerce, maintaining credibility with consumers is crucial,” said Duncan Clark, an investment advisory firm chairman who specialises in the Internet and e-commerce, in an interview with The Wall Street Journal.

Alibaba Group Vice President Brian Li added, “The Internet is not a place that generates piracy problems, but it’s a place that exposes them.”


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Taobao Teams Up With Apple, Gucci To Remove Counterfeit Products

First reported March 20 2011

China’s leading retail website – Taobao has joined hands with some of the world’s best known brands on a sting operation to remove the sales of counterfeit products from the e-commerce website.  A total of 89 brands including Apple, Louis Vuitton, Gucci, Chanel, Estee Lauder, Samsung, Panasonic and Swarovski are participating in the “Special Covert Anti-Counterfeit Operation” announced by Taobao on March 14.

With more than 10 million daily new product listings on Taobao, the sheer number made it very difficult to track counterfeit products. The introduction of a sting operation was inevitable to eradicate fake goods.

The method is simple and effective. Everyday a list of suspected products will be purchased by Taobao itself. These goods will be screened for authenticity and merchants with counterfeit products will punished according to Taobao’s guidelines. Taobao has already purchased 608 items and 586 sellers were found guilty. Taobao disciplines merchants by assessing points against them for violations of its trading policies. The seller will be shut off from Taobao when he or she reaches 48 points within a calendar year.

“This collaboration with brand owners is a further step by Taobao to fortify and escalate its commitment to eliminate counterfeit products from the site, which will advance Taobao’s goal of being a retail destination where consumers can shop with confidence,” said Justine Chao, a Taobao spokeswoman.

In addition to the sting operation, Taobao has implemented a series of safeguards designed to keep counterfeit products off the site, as reported on Alibaba Group’s news site. The safeguards include:

Automated filtering: Product listings that do not match manufacturer SKUs (indicating they are authentic) or are priced abnormally are removed by an automated filtering system. Taobao maintains databases of SKUs and standard product prices.

Manual filtering: A dedicated team monitors the site around the clock and can remove problematic goods from circulation at any time.

Reporting by users: Every product-listing page contains a button so shoppers can easily report suspicious items.

Coordination with brand owners: Taobao received complaints from more than 6,000 brand owners in 2010 and as a result removed approximately 14 million product listings. Taobao is currently in discussion with 214 brand owners on further cooperation.

Taobao officials said that all these programs result in an average of 20,000 product listings being removed from the site each day.  I particularly like how Taobao has leveraged users as gatekeepers. In its efforts to make the site increasingly authentic, Taobao is seriously doing a great job.

Content thanks: TechInAsia

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Louis Vuitton steps up accessories revamp with new designer

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Darren Spaziani

LOUIS VUITTON has hired Proenza Schouler accessories designer Darren Spaziani as part of the luxury brand's efforts to reposition itself as more exclusive and upmarket reports Reuters, 25 September 2013.

Louis Vuitton, the world's biggest luxury brand and part of French group LVMH, has been trying to become more elitist after suffering a dip in demand for the 600-700 euros ($810-$940) logo-embossed canvas bags on which it built its profitability.

Earlier this month, a survey of store managers showed its new and pricer bags, such as the 3,500-euro Capucines, were flying off the shelves at European fashion capitals, signalling that the strategy was starting to bear fruit.

Louis Vuitton Capucines bag

Louis Vuitton said Spaziani would create new collections made with "leather of the highest quality".

Delphine Arnault, daughter of LVMH Chief Executive Bernard Arnault and recently appointed No.2 at Louis Vuitton, on Tuesday described Spaziani as "one of the most talented designers of his generation".

"He knows the maison well and will bring modern vision and professionalism to Louis Vuitton's creations," Arnault added in a statement.

Spaziani, 38, who graduated from the elite fashion school London's Central Saint Martins and London College of Fashion, worked for Louis Vuitton from 2004 to 2006.

As well as Proenza Schouler, he has previously worked as accessories design director at Balenciaga, part of Kering, in Paris and did consulting work for Diane von Furstenberg and Tory Burch in New York.

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Content thanks: Reuters

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