Luxury brands are getting more aggressive about taking suspected counterfeiters to court.
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. The legal action comes as brands grapple with an explosion of fake goods on e-commerce and social-media platforms.
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. The court froze the websites and transferred their domain names — many of which are believed to originate in China — to the designer.
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.
It can be hard to find out who is selling the counterfeit goods, and therefore who to sue, so the brands sometimes hire investigators and lawyers. No numbers are available on how many brands are filing lawsuits against counterfeiters.
Yet 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, while criminal cases rose 10-fold to 11,000, according to an analysis of government data by Martin Dimitrov, an associate professor at Tulane University in New Orleans.
Gucci and other luxury brands owned by Paris-based Kering SA are also waging a legal battle against New York Stock Exchange-listed Alibaba BABA, +1.18% and its sellers over the widespread sale of fake goods on the Chinese e-commerce giant’s platforms.
A U.S. judge this month dismissed part of the lawsuit, saying that Gucci and other plaintiffs had “failed to allege the existence of a conspiracy” between Alibaba and its merchants. The judge’s decision doesn’t affect other parts of Kering’s lawsuit, which alleges that Alibaba encourages the sale of fake goods on its sites.