By and  on September 10, 2007

As eagle-eyed knockoff artists are already no doubt transmitting Internet images from the runways to factories in China, there is a new sector being targeted for counterfeits: fine jewelry.

From Tiffany to Gucci, Van Cleef & Arpels to David Yurman, counterfeiting is becoming a plague for brands in the sector.

Long a thorn in the side of apparel and accessories companies, copycat products — produced mainly in China — are now flooding the market in the fine jewelry arena as the industry becomes more brand-driven by way of high-profile marketing campaigns. It's a problem that has no simple solution except vigilance and the courts. Brands have become much more aggressive in suing the distributors and retailers of counterfeit products, since jewelry design, unlike apparel, is protected by copyright law. But it can be an expensive process chasing down mom-and-pop retailers or e-tailers, and even more costly when giant firms like eBay are taken on, as in a pending case involving Tiffany.

Last week, Cartier, Cartier International NV, Cartier Creation Studio, Van Cleef & Arpels SA, Van Cleef & Arpels Inc., Van Cleef & Arpels Distribution Inc., Gucci America Inc. and Bulgari SpA as plaintiffs, filed suit in Manhattan federal court against Elena Castaneda, who does business as Overstockjeweler.com. Castaneda could not be reached for comment.

In court documents, the jewelry brands allege Overstockjeweler.com sells jewelry and watches that it claims are "inspired by," "copies of," "replicas of" and "knockoffs of" a laundry list of jewelry designers, including the defendants in the case, as well as Chanel, Hermès and David Yurman.

The lawsuit was filed for infringements that included trademarks of Cartier, Van Cleef, Gucci and Bulgari, as well as Van Cleef's Alhambra design and Gucci's horse-bit pattern.

In all, the suit includes 45 counts of trademark infringement, false designation of origin, false advertising, trademark dilution, copyright infringement, design patent infringement and trade dress infringement.

The defendants asked the court for an injunction, damages and trial costs. They also asked the court to order Overstockjeweler.com to recall all the allegedly infringing items, as well as advertising and promotional material.

This is the second lawsuit filed against Overstockjeweler.com this year. In February, David Yurman filed suit in Manhattan federal court in a case that is pending.Jewelry fakes can range from inexpensive base metal bracelets, necklaces and rings to 14-karat gold and semiprecious gemstones and sometimes small diamonds. The jewelry is made mostly in China, but India and Italy have also been cited as places where the merchandise is manufactured. Italy is known to produce higher-quality pieces, which show up everywhere from local neighborhood jewelers to Web sites.

Protecting a piece of jewelry from intellectual property infringement is different than protecting apparel. The primary protection available for apparel is trademark protection. Any item bearing an illegitimate version of a company trademark is considered a counterfeit.

But not all pieces of jewelry have a trademark on them. Copying the look of a necklace or bracelet by a well-known brand without expressly stating it is made by that brand is a more understated and devious way of committing counterfeiting in the jewelry business, said Louis Ederer, an attorney with Arnold & Porter. Ederer represents several jewelry brands.

David Yurman files copyrights on nearly every collection of jewelry it creates — even the cuts of the gemstones are copyrighted. The David Yurman cushion cut is the company's exclusive diamond cut, for example.

"This is a major initiative for this company," said Yurman chief executive officer Paul Blum, who blamed the problem on factories in China that have improved their capability to produce fakes, crossing over copyright and counterfeit laws. "China is real. As their production capability gets better and better and their quality gets better and better, their ability to copy jewelry gets better."

Blum called for better copyright law in China. In the U.S., jewelry is eligible for protection based on how it looks. Unlike apparel and handbags, jewelry is already subject to copyright protection — as a work of art if it is original enough and in some cases to a design patent if it is unique enough. The current effort being spearheaded in Congress by the Council of Fashion Designers of America seeks to extend copyright protections to apparel designs, similar to those available already on some jewelry.

Counterfeits of jewelry are not declining, and if anything are increasing, said Susan Scafidi, a visiting law professor at New York University and author of the blog Counterfeit Chic that tracks intellectual property issues in the fashion industry."The venues for the sale of counterfeit jewelry are different," Scafidi said. "There are not so many in black plastic bags on the street. They are more likely to be in shops or somewhere more discreet. You see them with other things as well, and you see a lot more online, a lot of replica sites."

Tiffany & Co.'s problem with copies is mostly with the firm's silver collection. The company has encountered fake 1837 pieces, as well as Elsa Peretti styles, namely the designer's signature heart.

"It's a growing concern," said Linda Buckley, vice president of worldwide public relations for Tiffany. "The Internet has fueled a lot of it."

Between October 2003 and January 2005, Tiffany filed a group of six lawsuits against Overstock.com for alleged infringements of some of its bracelet and necklace designs. A source said that litigation unrelated to that involving Overstockjewelry.com was resolved.

Judith Ripka ceo Ronald J. Berk said at any given time the firm has up to a dozen lawsuits pending against copyright infringers.

"We're fairly successful with knocking mom and pops out of the knockoff business," he said. "Because the costs of litigation are extreme, they'll usually settle."

Ripka requires the offenders to forfeit the goods and their books, pay Ripka the profits earned from them and also name the distributor that supplied the goods.

In a raid in May 2006, federal marshals confiscated more than 100 allegedly counterfeit Judith Ripka jewelry pieces from four companies.

"It's a chronic problem," Berk said. "Until politically it's solved, we're going to run into this. It's part of the Chinese culture to copy."

Berk has contacted other large jewelry brands in order to band together against the imitators.

"Without having the big boys leading it, it's harder for the little boys to take it on," he said.

Private investigator Andrew Oberfeldt said: "Most of the jewelry I see [during raids] is some type of fake silver, unless it's trying to be white platinum. There's not as much gold jewelry faked and not as much bejeweled jewelry. We're talking about bracelets, earrings and necklaces without jewels where the name or symbol is prevalent."Oberfeldt works for a number of luxury brand owners doing investigations and enforcement work.

The small size of jewelry items also complicates enforcement efforts for brands. Fake necklaces, bracelets, rings and earrings don't typically get shipped into the U.S. via ports where customs can unearth them, said a spokeswoman for one luxury jewelry brand. Items are either air-freighted in, or in some cases, carried into the country by an individual.

It can also be difficult to gain the sympathy of enforcement officials, the spokeswoman said. "On a sliding scale of safety, jewelry knockoffs are at the bottom."

Large companies aren't the only ones with worries. Smaller designer jewelry companies such as Faraone Mennella have been fighting to protect its designs.

On Sept. 5, the U.S. Patent & Trademark Office granted a patent to independent jewelry designer Sonya Ooten for her signature crocheted metal Cosmos earrings. The patent expires in 2021. Ooten has over a dozen copyrights and patents on her signature designs and has a utility patent pending on her signature metal crochet jewelry process.

Van Cleef & Arpels spoke with WWD recently about the number of cases it has filed to protect its Alhambra jewelry line. The company said it has filed more than 10 lawsuits in the last year in federal courts and sent countless cease-and-desist letters to infringers of the distinctive clover motif.

Since then, the company has stepped up efforts to monitor trade shows, said a company spokeswoman. Undercover investigators will visit trade shows to root out wholesalers selling infringing jewelry. The tactic helps stop the items from reaching points of sale.

John Hardy has also been very aggressive in protecting its intellectual property.

"The main intellectual property challenge we have is with copyright and trademark infringers who copy our jewelry designs and use our name to sell poor quality replicas," said Damien Dernoncourt, ceo of John Hardy.

The infringing products that John Hardy encounters come primarily from China, Thailand and Indonesia and are sold through the Internet or through wholesalers and street vendors in the U.S., Dernoncourt said.

"Our brand is more and more well known and our products are beautiful and successful, therefore there are more and more infringers," he said.In May, the company obtained a judgment for damages of $1.3 million in a lawsuit filed against an alleged infringer in federal court in Manhattan. The case was filed against Jay Friedman, who did business as RealImposters. In June, the company settled a case against Sam Moon out of court for an undisclosed sum, according to company statements.

One of the most watched jewelry lawsuits in recent years is Tiffany's pending lawsuit against eBay. The case, originally filed in 2004, has been closely followed by jewelry and apparel brand holders for its potential to set precedent regarding infringements online. The lawsuit is set to go to trial in October.

"We all have a common goal here," said Yurman's Blum. "We think it's extremely dangerous for the brand, the business and the industry. We're going after these guys."

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