Article

Copy Cat Crimes

The counterfeit war and what dispensers can do to join the fight

Copy Cat Crimes
The counterfeit war and what dispensers can do to join the fight

Oakley seized more than 2.7 million counterfeit items in 2003. Frequently copied is Oakley's M Frame, shown here

At MIDO, Alain Mikli, frame designer and owner of Alain Mikli Ltd., came prepared. One month before the show, he wrote to event officials to let them know he was going to fight the companies copying his products face-to-face.

He won an injunction from an Italian judge to walk through the aisles of MIDO with Italian police and confront those who were making counterfeits. As a result, the Italian Criminal Investigation Department seized a number of counterfeits of the company's product from the stands of four Asian manufacturers and two European distributors.

Counterfeit eyewear remains the biggest challenge of putting on MIDO, notes show president Cirillo Marcolin. But along with Mikli's success story, the night before the show, 74,000 pairs of counterfeit glasses were confiscated. And during the last day of the show, counterfeited Dolce & Gabanna models, a brand licensed by Marcolin, were also seized.

Despite these victories, the counterfeit industry is hard to stop. As much as $440 billion dollars worth of fake goods are being sold throughout the world--comprising almost seven percent of the global economy.

Silhouette has recently taken steps to discourage the use of the company's name in advertising illegal frames. Shown here, an often-copied model, Silhouette Titan Minimal Art Rimless 7395

"The problem continues to grow with Asia as the main culprit, namely China, Taiwan, Hong Kong, and Korea as the front-runners," says Donna Van Green, frame liaison for the Vision Council of America. "Of course this does not eliminate other countries, including European ones."

FINDING THE FAKES

Tracking down manufacturers, however, can be difficult. And counterfeit operations are developing new ways to beat the system daily. "The new trend is that glasses are being shipped in pieces," says Sandy Beattie, U.S. enforcement specialist for Oakley. "The pieces are smaller, making the shipments less obvious." The parts are then assembled in the U.S.

Counterfeiters can also maintain anonymity on the Internet. A company can set up shop on the Web and constantly change its domain name or provide false contact information to the domain registrar to avoid prosecution and detection, explains Darren Pogoda, staff counsel for the International Anti-Counterfeiting Coalition (IACC).

Online stores and auction sites have complicated the issue, making criminals harder to catch and fakes harder to spot. "On eBay, people will purchase a fake at retail price, send it to us for repairs, and then learn that the glasses aren't real," says Beattie. "Or online retailers will use our images to sell fake Oakleys, and when the consumer gets the glasses in the mail, they look nothing like the photo."

Alain Mikli, above, has spent more than $1 million this year patenting his designs. Shown bottom: Model A0021

Silhouette, another company whose designs are often copied, has encountered similar problems. The company brought legal action against Marina's Boutique Store and Verona Eyewear, forbidding them from using any of the Silhouette trademarks to sell products on the Internet. Both advertised on eBay, claiming their products were Silhouettes.

It is the responsibility of the manufacturers to monitor the sale of counterfeit items on the site. Manufacturers can participate in eBay's VeRO program that makes copyright and trademark information available to those who auction eyewear, warning them against counterfeiting and false advertising.

"The Internet is the largest window in the world," says Maurizio Marcolin, CEO of style and licensing for Marcolin Group. "That's why it offers a lot of potentialities, as well as a lot of risks."

FIGHTING BACK

Marchon is globally fighting counterfeiting. The company brought charges against two suppliers to the largest Korean TV shopping channels for importing and distributing Calvin Klein fakes. One company owner was remanded to prison for a year and the other company owner was sentenced to a 10-month suspended prison term. Property was also seized in China, Italy, and South Africa.

Oakley also uses an aggressive strategy. "Whether someone is selling two or 200 glasses, we treat them all the same," says Beattie. "We get leads from our salesforce, disgruntled consumers, and ex-partners or ex-spouses eager for revenge."

In 2003, Oakley seized more than 2.7 million counterfeit items, 1.4 million in the U.S. And the company is finding counterfeit products in some unlikely places. "We are seeing a lot of counterfeiting at baseball tournaments," says Beattie.

"These criminals are opportunists. If they see a company not enforcing their mark, they are going to keep exploiting the brand until they are sued or their products are seized," says Pogoda

Marcolin's Dolce & Gabanna sunwear is one of the most counterfeited brands on the market. Shown here, DG653S

Another side of the fight is to explain the value of the brands to buyers. A consumer who can get a pair of Oakleys on the street for $10 may not understand the value of a $110 pair. "The technology behind our sunglasses sets us apart from the copies," says Beattie.

"Sunglass companies do lots of safety testing on lenses. They will fire a pellet at the lens and it will vibrate or warble a little," says IACC's Pogoda. "Then they do the same test with a fake pair and the pellet shatters the lens. If you buy a fake pair of glasses, if any debris hits your face, you can take your eye out." In addition to sport safety, UV protection is often absent from many counterfeit sunglasses.

 

 

 

Case Study: Alain Mikli

Facing counterfeiters at MIDO head-on required lots of preparation. But precautions are more important than preparation, says Cedric Moreau, executive director of Alain Mikli Ltd.

Without the worldwide patents that Alain Mikli has acquired, it would have been almost impossible for them to fight the counterfeiters. Moreau recounts that as more and more frames began to take on the characteristics of Alain Mikli, the company started to put worldwide patents on not just the frames, but the designs and technical components as well. This is an expensive proposition, but one in which manufacturers need to invest to maintain the integrity of their product.

From September 2003 to present, Alain Mikli has spent $1 million on anti-counterfeiting measures. "I prefer to spend money on protection, rather than promotion," says Mikli. "Some manufacturers don't believe enough in their product to see this as a worthy expenditure," adds Moreau. "By the time their designs are copied it's too late."

For more information on the counterfeiting issue, visit the following Websites.

International Anti-Counterfeiting Coalition
www.iacc.org

International Chamber of Commerce's Counterfeiting Intelligence Bureau
www.iccwbo.org/ccs/menu_cib_bureau.asp

U.S. Patent and Trademark Office
www.uspto.gov

Vision Council of America
www.visionsite.org