Fendi Waging the War Against Counterfeiters with sophisticated Holograms

In our role of independent luxury designer authentication and appraisal specialist, we view some of worlds most sophisticated counterfeit items ever made. These items, most everyday consumers never get exposed to, but due to the counterfeit market opening up and the ease of obtaining such materials and new countries entering into this lucrative arena.

We are aware that these items are filtering through to the general domain. It is no secret that Delortae Agency is committed to brand protection, designers copyright and trademark infringement. Our Authentication Service is recommended by Major Brand Houses, PayPal, law enforcement, Trading Standards, Office of Fair Trading, small claim courts, respected auction houses, insurance and credit card companies.

Over the last five years we have seen a growing number of more sophisticated counterfeits being presented. A worrying trend that has not been overlooked by the major brand designers who are victims of this new wave of sophisticated counterfeiters.

We are all too familiar in the industry, what lengths major brand houses will go to in order to protect their product and the consumer against counterfeiters. We have seen straight stitching, angled stitching, alligator skins not to mention gold zippers to help us set apart the authentic from the counterfeit, now the house of Fendi are introducing holograms.

Nothing new about that. Holograms have been used for years to in the war to combat counterfeit activity to identify authenticity of many luxury goods much of the appeal due to holograms being hard, not to mention expensive, to copy. Holograms are known to use machinery that uses create patterns using laser various different laser beams. These holograms invariably incorporate images, numbers and bar codes that are visible under forensic equipment.

The Italian fashion house Fendi, a unit of LVMH Louis Vuitton Moet Hennessey, the worlds largest luxury goods group, have been for some time stitching holograms into the lining of their bags, suits, scarves, boots not to mention mink coats. No one has used holograms quite like Fendi are doing.

The coloured, rectangular stamps with encrypted codes, are visible only with a special magnifying device. The devices are being made available to the Police and Custom Officials to help identify a Fendi branded authentic item from a counterfeit. The holograms also have a wireless tracking device embedded into them which allow Fendi to track if a product has gone a stray from the strictly controlled distribution network or sold in an unauthorized store as the tags are deactivated once an item has been sold.

Michael Burke, Chief Executive of Fendi says "The best way to fight is to stay ahead" also added "We want the certainty of quickly determine whether an item is fake" their familiar two mirroring 'F's in brown and black, is one of the most copied labels in the world.

French fashion house Louis Vuitton have also acknowledged copies of their handbags are so good that their customers only realise their purchase is counterfeit when taken to a boutique for repair. We also only repair authentic luxury items in our own Luxury Handbag SPA and have seen an increase in our own returns of restoration items that have been presented to our Technicians Studio.

Fendi is not the only luxury goods company using holograms. Gucci Group, owners of Gucci, Bottega Veneta and Yves Saint Laurent, confirms it also uses similar technology to protect its brands.

It costs approximately 15,000 Euro to create a holograms encrypted image with an additional few euros tagged on to the actual product. For major brands that represents one Euro out of a thousand but for counterfeiters it is one Euro out of ten says Marc-Antoine Jamet, General Secretary of LVMH and serving Head of France's Union des Fabricants, known for lobbying anti counterfeit measures.

No longer can luxury goods company rely on their exemplary craftmanship, quality skins and ahead-of-their-times designs to ensure authenticity. The luxury goods industry is notoriously reserved when it comes to talking about their anti theft protection. An industry, that up until recently, have only admitted publicly they even have a counterfeit problem.

Police in Naples have already reportedly uncovered a warehouse with photocopiers used to create fake holograms with the basic design without the deep colours and multidimensional images, for counterfeit handbags. A Fendi spokesperson said they have already seen a counterfeit Fendi complete with hologram.

So even luxury goods executives admit holograms are not fool proof. "Holograms are better than nothing but they are already being copied," says Claudio di Sabato Head of Security at Italian fashion house Prada Group NV.

Luxury goods experts say the holograms should allow consumers who buy for secondary retailers or pre owned used goods stores to know whether the product is authentic. But what if the consumer does not know how the authentic hologram or product should look, it would appear holograms offers no protection whatsoever.

Having said that Fendi hope the added complexity of it's holograms and the fact the Police and Custom Officials can root out fakes more efficiently will provide an extra deterrent against counterfeiting. The technology is considered so valuable at Fendi that only two people at its fashion house know the code behind the encrypted holograms.

Exclusive! Counterfeit Website reveal exactly how they make the perfect fake! Word-for-word, how the perfect fake is actually made! HERE

Is this the way forward?

EU customs seize $1.4 billion of fake goods in 2010

(Reuters) - Customs officials seized fake goods worth more than one billion euros ($1.4 billion) at European borders last year as they paid more attention to shipments ordered online, the European Commission said in a report on Thursday.

China was the source of 85 percent of the fakes, with substantial quantities of counterfeit goods also from Turkey, Thailand, Hong Kong and India.

Nearly 80,000 incoming packages were seized in 2010, containing counterfeit goods such as cigarettes, clothing, toys and medicines. That was nearly double the number from the previous year, due to more investigations into postal shipments for online orders.

The 103 million items seized would have had a value of more than one billion euros if sold as authentic goods, the report said.

"The goods are entering the EU in smaller packages but in bigger numbers, which gives an additional workload for customs," EU customs commissioner Algirdas Semeta said.

He said nearly 50,000 of the packages intercepted last year were in the post. Medicines such as fake Viagra and diet pills made up more than two-thirds of the items destroyed.

(Tony Zafiropoulos)

The EU report is located at the EU site Europa.eu . The most prominent section:  "Stresses that on-line sales caused a spectacular increase of detentions in postal traffic where 60% of the goods detained were medicines."  the combination of online sales and  the difficulty in policing websites creates a challenge to catching the criminals.

That's no Starbucks: What's with China's fake stores?

A man (seen in larger image) walks past a Xing Bake Cafe shop Wednesday Jan. 4, 2006 in Shanghai, China. (AP / Eugene Hoshiko)

Shopping in China can give you a serious case of déjà vu.

You can follow the arrows to browse bookcases in an Ikea-like blue-and-yellow warehouse. There are employees in familiar blue shirts selling iPhones under an Apple sign that isn't Steve Jobs-approved. Even the food court, serving foot-long subs and thick Oreo ice cream treats, could fool you into thinking you're at a Subway or Dairy Queen.

There have been dozens of cases of Chinese businesses spotted emulating the retail experience of major world brands such as Nike, Ikea or Starbucks, right down to the smallest detail.

Counterfeit products have long been available in the Chinese marketplace, but now it's the retail experience that is being counterfeited. Due to weak copyright laws and a growing population of shoppers hungry for Western brands, the knock-off retail market has proliferated in recent years.

Here's a list of some of the pirate stores found in China:

A man walks past windows of a shop masquerading as a bona fide Apple store in downtown Kunming, in southwest China's Yunnan province, Thursday, July 21, 2011. (AP Photo)

• 11 Furniture, a 10,000-square-foot furniture warehouse, is bathed in Ikea's well-known blue and yellow colour scheme. There are miniature pencils to write down the numbers of furniture, and the merchandise bears more than a passing resemblance to the common-sense look of Ikea. Mock-up rooms? The Chinese version has them, too. Plus, the minimalist cafeteria serves Swedish meatballs that can also lead to authentic tummy regret.
• In Kunming, China, five stores selling real Apple products were investigated in July because they imitated the actual Apple store to such an extent that customers unfamiliar with the real deal couldn't tell the difference. But three were allowed to stay open because officials couldn't find any actual fake products. Apple only has four official stores in China.
• Also in Kunming, there are four Nike stores on one popular pedestrian-only street. Trouble is, Nike lists only three of its stores on that street, meaning one is an imposter.
• In 2006, Starbucks won a copyright lawsuit against Shanghai Xing Bake Café, which was using the company's Chinese name and copying the design of the Seattle-based coffee shop.
• Western fast-food chains are also finding stores mimicking their brands. For example, there are sub shops selling six and 12-inch subs (like Subway), and one shop will even accept Subway stamps. But since Subway has only about 200 shops in China, the mimicry may actually be expanding its brand awareness.
• Shijingshan Amusement Park was forced to close down in May because their characters looked just like Disney's Mickey and Minnie Mouse. And the park's familiar centerpiece, labelled "Cinderella's Castle," could easily be mistaken for being in Disney World. A promo banner for the park even said, "Disney is too far, so please come to Shijingshan."

Get rich quick?

According to Panos Mourdoukoutas, an economics expert in New York, China's desire to copy and clone Western brands comes from a series of factors relating to culture, politics and weak laws.

Writing in a recent article for Forbes, Mourdoukoutas spoke about a pervasive "get rich quickly mentality" as China attempts to recover from years of poverty and failed communism.

However, Mourdoukoutas notes that despite this desire to raise living standards at home, some business owners "have yet to grasp the meaning of modern capitalism: a system of wealth creation within certain social norms, including respect for other people's property."

On the other hand, scarcity may be contributing to the issue, as Chinese entrepreneurs move in to take advantage of consumers with increased spending cash.

While brand knock-offs are garnering headlines and legal action in China, are North American entrepreneurs much better?

Eddie Murphy fans will remember the fake fast-food spot McDowell's in the 80s movie "Coming to America" as a key reminder of domestic rip-off artists.

In the real world, it's common to find fast food spots named Dairy King or B&W in many towns and smaller communities that haven't been granted franchises by bigger chain restaurants.

Plus, while many fake brands are made in China, Canadians have no problem purchasing cheaply made imitation iPods and other devices at big-box stores.

In fact, the Office of the United States Trade Representative placed Canada on a "priority watch list" in 2011 for counterfeiting, alongside nations like China, Russia and India.

"Unfortunately, Canadian efforts in 2010 to enact long-awaited copyright legislation were unsuccessful," the U.S. report said.

The report also recommended that "Canada should provide its customs officials with (official) authority to effectively stop the transit of counterfeit and pirated products through its territory."

Certainly, it's something to keep in mind this winter, when you spot a "down-filled Canada Goose parka" online for a fraction of the price.

Some say the real problem lies with the Chinese government. They allow and encourage all of these fake stores and counterfeit products because they are making money off of it and that they don't care about the west or anyone else but themselves.

What's your view?

via http://edmonton.ctv.ca

Counterfeit Stores Are Not New, Remember Fake Balmain Store in Dubai!

In the midst of the recent fake Apple Store in China, we have to remember that this is not a 'one off'.

We have, over the years, been made aware of this activity going on all over the world. We remind you of the fake Balmain Store, told by INDIA-JEWEL JACKSON  back in 2009 reproduced below.


"How does the saying go? “If it’s too good to be true, it probably is…”

I should have listened.

A couple of weeks ago, I made the 13-hour journey to the United Arab Emirates, a.k.a. shopper’s paradise. Virtually everyone has set up shop in the golden city of Dubai; YSL, Manolo Blahnik, Dolce & Gabbana, Chanel—the entire fashion set is present and accounted for. And with the current state of the economy, it wasn’t uncommon to see storefronts peppered with signs that read “Sale!” “25% off!” “Buy One, Get One Half Price!”

Imagine my surprise when I ran across a standalone Balmain boutique at the base of my hotel. All kinds of thoughts of fashionable grandeur ran through my mind… Rihanna, Kate Moss, exaggerated shoulders, Beyonce, Cassie, crystal studded sandals, Kate Moss, Victoria Beckham, marching band ‘drum major’ vests… It was all too much to process. Balmain? In my size? On sale for 75% off?
I should have know something was fishy—who advertises a sale on neon poster-board?

Against my better judgment—lured by the thought of buying Balmain at Bebe prices—I bought two pairs of jeans and scurried upstairs to try them on with the YSL shoes I’d bought earlier that day. Since I’ve been on Weight Watchers, I’d actually unknowingly dropped a pant size, so my new fancy jeans were a bit too big. I scurried downstairs to make a quick exchange when I was told, “No. All Sales are Final.”

Slightly angry, but more confused, I decided to do a bit of investigative research. (A bit late, I might add.) First, I Goggled. No information on a Balmain store in Dubai. Then, I searched for legitimate store locations. No Balmain boutique south of Turkey. Finally, I called the flagship Balmain boutique in Paris. Definitely no Balmain store in Dubai.

I’d been duped.

Selling knockoff purses out of a warehouse in Chinatown is one thing, because if you’re shopping in Chinatown, you’re obviously looking for fakes. But setting up an entire store under the guise of a haute couture brand is another. They’d blatantly ripped off the current runway collection, the shopping bags, the price tags, even the logo was perfect. (How do these people sleep at night?)

Needless to say, I’ve returned to NYC with two pairs of fake denim that I can’t be bothered to wear, but can’t bear to get rid of. I guess I just think of them a reminder of why I hate fakes.

At the end of the day, I was the posterchild for ‘American greed.’ Ah, well. You live and you learn!" quote~India-Jewel Jackson.

This is just one of the countless stories we have had confirmed over the years, this poses a new threat for brand protection as the audacious grow bolder.

Counterfeit goods fund violent gang activity

 

LOS ANGELES (KABC) -- LAPD investigations show that gangs are deep into the counterfeit goods business, enabling gang members to fund illegal activities.

It takes low risk but yields high reward.

"They're using every single penny of that to fund their criminal activity," explained an undercover police officer.

For Los Angeles street gangs, counterfeit goods make for big business.

"They're making more money selling pirated CDs and DVDs than they would selling narcotics," said LAPD Senior Lead Officer Randy McCain. "They make a lot of money and they make the money faster."

Investigators say it's important for people to understand that buying those cheap counterfeit purses, sunglasses or shoes is not a victimless crime.

"We've found it tied to murder, extortion, human trafficking, insurance fraud," listed Kris Buckner, a former L.A. County Sheriff's deputy. Buckner now trains law enforcement personnel on how to spot and investigate counterfeit goods.

"In the past couple of years, we've seen a huge surge in gang members, 18th Street, MS-13, 42nd Street Little Gangsters," said Buckner.

Why? It's all about economics.

"They're now trying to run their organizations like Fortune 500 companies. They need to raise revenue, but if they're out there shooting each other, doing drug sales, their potential to make higher revenues is actually lower," explained Buckner.

So every time you buy a fake Fendi or a knock-off Chanel, you could be putting cash in the pockets of some of L.A.'s most dangerous gangs, including the Mexican Mafia.

"What does the Mexican Mafia do with that money? Smuggles drugs into the prison system, kills people, all sorts of things," said Buckner.

Investigators say cutting off demand from shoppers will cut down on crime as a whole.

"They come here and sell DVDs for super cheap, make a lot of money to fund buying guns that could either take someone off the street or a fellow officer," explained LAPD Officer Matt Shafer.

An undercover LAPD officer who could not reveal his identity said that gang members also use the money from counterfeit goods to buy cars.

"Escalades, Lexus and Mercedes," lists the officer.

In one case, he testified against two Compton gangsters caught selling counterfeit Nike shoes.

"They are Compton Crips with extensive rap sheets, weapons charges, murder, attempted murder," described the undercover officer.

Also, it's not just a matter of safety. A 2005 study found that the sale of counterfeit goods cost L.A. County alone $483 million in lost tax revenue and 106,000 jobs. That's just for one year.

And it's not just bags and shoes.

"Airplane parts, brake pads, medicine, dog food," lists Buckner.

Shafer describes it as a "turf war" among rival gang members.

"One gang member or crew will be territorial over their turf, and if another comes over, fights ensue," Shafer said.

Home video seized from a Carnales gang member shows a gang initiation, but earlier on the tape, footage shows the gang members staking out a corner of a parking lot to sell their counterfeit DVDs.

"So basically what they're doing is, they're up here selling their DVDs and smoking marijuana and just acting like the little fools they are," said McCain.

In another incident, the LAPD set up a sting where an undercover officer rolled up to a gang-infested neighborhood with a car full of counterfeit cigarettes. The officer left the car door open with the music blaring. In less than a minute, a man jumped into the car and attempted to steal it. Unfortunately for him, the engine was cut off by police. One more gang member trying to profit off counterfeit goods was taken off the streets.

(Copyright ©2011 KABC-TV/DT. All Rights Reserved.)

via Get more Los Angeles News »

Counterfeit Apple Stores surface in China - report

Chinese counterfeiters have a long history of cloning hardware from major tech manufacturers, but now they're going a step further by cloning entire stores.

A US blogger living in Kunming in Southwest China noticed what appeared to be an Apple store pop up in her town, complete with the store's trademark spacious, airy interior, blue-shirted staff, products to play with, and upstairs seating area.

Counterfeit Apple products are nothing new but evidence suggests that counterfeit Apple Stores are cropping up in parts of China. Photographs suggest that Apple brand is being abused.


The author of the Bird Abroad blog, an anonymous 27-year-old female living in Kunming, China, claims that she walked into one of the counterfeit stores recently, just a few blocks away from where she and her husband live.


Photographs on the blog entry show what looks like, to all intents and purposes, an Apple Store. The author was apparently stopped from photographing by shop staff and security guards. One photograph bears the legend 'Apple Stoer' above some Chinese characters.

"They looked like Apple products. It looked like an Apple store. It had the classic Apple store winding staircase and weird upstairs sitting area. The employees were even wearing those blue t-shirts with the chunky Apple name tags around their necks," the author writes.

"This was a total Apple store ripoff. A beautiful ripoff – a brilliant one – the best ripoff store we had ever seen (and we see them every day). But some things were just not right: the stairs were poorly made. The walls hadn’t been painted properly.

"The name tags around the necks of the friendly salespeople didn’t actually have names on them – just an Apple logo and the anonymous designation 'Staff'. And of course, Apple’s own website will tell you that they only have a few stores in Beijing and Shanghai, opened only recently," she continues.

The author also contends that in a ten-minute walk in the surrounding area, she and her husband found two more rip-off Apple Stores.

Ironically, Apple reported yesterday that China was key to the company's quarterly revenue of $28.57bn. "I firmly believe that we're just scratching the surface right now. I think there is incredible opportunity for Apple there," Cook said.

If the report on the Bird Abroad blog is true, then it seems that the clamour for Apple-branded products in China is perhaps even greater than Cook believes.

via macworld.co.uk

Fake Out: The Crackdown on Chinatown's Counterfeit Empire

By: Alexandra Phanor-Faury 

Even though Georgia native Audrey Estilette had heard about the counterfeit designer handbags sold in New York’s Chinatown, on her recent trip to the city, the fourteen year-old was more interested in exploring the authentic side of the neighborhood—or so she thought. Standing on Canal Street, surrounded by a swarm of vendors vying for her attention with whispers of Louis Vuitton and Chanel, it quickly became obvious to Estilette that sightseeing might have to take a back seat to bargain shopping. “Everywhere you turn, someone is trying to sell you a bag,” she says, she and her girlfriends proudly toting the knockoff Longchamp “Le Pliage” handbags they scored. “You don’t have places like this back home. You know, all out in the open and stuff.” 

On an average day in Chinatown, illegal counterfeit vendors and their lookouts snake through the crowds, peddling their fake bags. For soccer mom Terry Johnson, on vacation from Florida, the illicit nature of the not-so-discreet transactions and the prospect of swinging a “designer bag” on her shoulder for a fraction of the price provides a strange thrill. “It’s a fun game to come to Chinatown to buy bags,” she says smiling, clutching four nondescript black plastic bags full of fake handbags. “I always get a rush from a good deal,” she adds, before zeroing in on a vendor holding a laminated sheet of images of Chanel bags. “Oh, let me try to get this guy.”

For years, Chinatown has been so synonymous with fakes—bags, watches, perfumes—that it’s become part of the fabric of the community. That’s why Chinatown’s Council member Margaret Chin is on a mission to rid the lower Manhattan neighborhood of its unofficial title as the Capital of Counterfeits with a proposed bill that would make it illegal to purchase counterfeit goods in her district.

“There is a huge growing demand for these low-cost illegal trademark goods,” explains Chin over the phone from her office. “There are illegal vendors crowding in front of the businesses and apartment buildings. Our constituents and people in the community are sick of living this way. Local businesses have to deal with shoppers coming in trying to negotiate a price, as if they were counterfeit. Why is that okay?”

If Chin’s bill becomes law, anyone caught buying any fake goods would be slapped with a misdemeanor charge that will come with a $1000 fine—or up to a year in jail. Italy and France have both adopted a similar law that goes after the shopper. “That’s crazy,” says Estilette, echoing the sentiment of most of the shoppers we spoke with. “Why don’t they just arrest these vendors? They are the ones selling it in front of everyone.”

That would seem to be the logical course of action. In fact, there’s already a law on the books that makes selling counterfeit goods illegal, although it’s difficult to enforce without a consistent police presence to catch vendors in the act. While there have been small victories in the fight against counterfeiters in Chinatown, like the 2008 police raid that unearthed over $1 million worth of knockoffs and closed down 32 illegal storefronts, with the NYPD stretched thin on issues like terrorism, the problem continues to grow. Accordingly, Chin believes it’s time police turn their focus on the buyer.

“This bill will stop shoppers from coming here specifically to purchase these counterfeit goods. They should experience what Chinatown really has to offer. If they want a bargain, there are a lot of places in the city where they can purchase a designer bag for an affordable price. I go to those places,” says Chin.

But not everyone thinks locking up shoppers is the best way to clean up Chinatown. The Chinese Chamber of Commerce’s David Louie thinks Chin’s efforts are misplaced. “What’s the goal? To get rid of the sell of counterfeit goods, right? You don’t have to be a Dick Tracy to figure out who is selling illegal goods. Why not enforce the law that’s already on the books? If they wanted to enforce it, they would,” offers Louie. “But it’s certainly not gonna help our image if we start looking up tourists.” While it was difficult finding vendors willing to talk about the proposed legislation, one laughed at the idea of the bill saying, “It’s never going to pass. No counterfeit, no tourist, no money!”

“Poor tourists and their bags, I’m tired of hearing that,” says an exasperated Paul Cantor, who’s in full support of Chin’s proposed bill. “They know what they are doing and they should suffer the consequences. How do you allow straight out lawlessness to exist out in the open?” Cantor, a community board member, has lived in the neighborhood for 16 years. “Why do I have to ask them to move from my doorway so I can get in and then the vendor yells at me? They punched a neighbor who asked one of them to move from in front of his building. There is no reason why at the very least the people out there selling can’t be cognizant of who lives in the neighborhood. I know who they are.”

If arguments about the poor quality of life and revenue loss in Chinatown don’t do much to dissuade shoppers from coming to the area for knockoffs, than Robert Barchiesi of the International Anti Counterfeiting Coalition hopes the sobering facts behind the production of cheap fakes will have shoppers thinking twice before bargaining for a Gucci tote replica.

“I think Margaret Chin’s bill is a creative idea, and will be a deterrent. Shoppers need to be educated on the big issues linked to counterfeit goods, like child labor, prostitution, gangs, and in some instances, terrorism. This is far from a victimless crime,” says Barchiesi. “If people knew just what their money is supporting...”

But even when confronted with the moral arguments against purchasing counterfeit goods, Johnson says that her $95 Louis Vuitton bag or $200 Chanel purse isn’t responsible for the world’s ills. “I’m not hurting anyone. Sorry if I can’t afford the $2000 version.”

Says Rory Chadwick of Midtown Authentic, a reputable consignment shop that sells vintage designer bags, “I know people who don’t have a lot of money and want to get a nice bag. Every week, they save up or buy a vintage bag for half the price. That’s the right thing to do. Instead, these people are cutting corners with these cheap bags.” An expert at detecting fakes for over 16 years, Chadwick sent an email to Chin when the bill was announced to offer support, along with his help in training the NYPD in spotting knockoffs. “It’s not just one person getting one bag. Now, people are coming from Florida and buying 200 bags, and then selling them on eBay or Craigslist as the real thing. Council Member Chin’s bill may be a landmark stepping stone to combating counterfeit bags.”

Enforcing the law and starting a dialogue on the illicit counterfeit trade—as well as debunking the notion that it’s a victimless crime—might be the first step to dealing with Chinatown’s counterfeit vending issues. Still, it’s difficult to image legislation will be anything more than a stopgap, when the real problem here is our insatiable appetite for status symbols, at any cost.

via BlackBookMag