After years of debate in the luxury industry about how to publicly tackle counterfeit goods, a growing number of high-end names from Gucci to Moncler and Alexander Wang are suing sellers of fakes, both in China and the West.
Fashion brand Alexander Wang, which sued the owners of 459 websites believed to be selling counterfeit handbags, footwear and clothing last year, won a $90 million judgement this month in a New York district court.
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The lawsuits are a “strategic change” for companies who haven’t always been vocal or public about their battle against fake goods, said Paolo Beconcino, a Beijing-based consultant for Squire Patton Boggs law firm, who represents half a dozen Western brands in lawsuits against counterfeiters.
In the past, many brands focused mainly on raids and seizures of counterfeit goods to shut down shady manufacturers and sellers, but some have questioned how effective this tactic is at deterring production of fakes.
In China — the source of almost two-thirds of the estimated $1.2 billion worth of counterfeits seized by U.S. authorities in the 2014 fiscal year — the government has set up special courts in major cities to deal with a rising number of intellectual-property cases.
Between 2005 and 2014, the number of civil intellectual-property cases filed in Chinese courts increased nine-fold to 133,000, according to an analysis of government data by Martin Dimitrov, an associate professor at Tulane University in New Orleans.
As a swelling middle class in developing countries propels demand for brand-name goods, the concern is that counterfeit products will hurt global brands’ reputation. Higher-quality counterfeits can also eat into sales of authentic goods.
(Source: WSJ)