Protecting fashion brands from counterfeiting in the digital age requires an all-out effort by brands, legal counsel, consumer awareness, customs officials and law enforcement.
That was the consensus during Friday morning’s panel discussion “Robot Couture: The Future of Fashion, Law and Technology” symposium at New York Law School.
Knockoff barcodes, stolen training manuals, counterfeit apps and even rings of thieves buying large quantities of outlet store apparel in the U.S. to sell offshore in branded looking stores were among the challenges discussed. Moderator Joseph Gioconda, who runs his own law firm, said “What fashion companies ultimately sell is their reputation — that is what a brand is,” noting that he has worked with Hermès, “a family with a cultural heritage that they have worked for centuries to build. These brands aren’t something that were created 10 years ago in a corporate boardroom that they have to protect.”
Gioconda also distinguished the differences between a counterfeit and trademark. “A counterfeit is a product that bears a name or a logo that is identical or substantially indistinguishable from a federally registered trademark,” he said. “A knockoff is any product, logo or designer name that may cause confusion and may be designed to mimic or imitate the product or name, but is not identical to a federal trademark.”
Kristin Lin, counsel and director for Gap Inc., said, “You can’t find half of these counterfeiters because none of the names or addresses are real. So you’re going down a rabbit hole and not getting to the source, but you have to do the best that you can to protect your consumers, your goods, your design and your brand as best as you can do to make the counterfeiters’ business more costly.”
Just keeping track of the different “take down procedures” for various digital channels requires a dedicated internal staff. “We have issues on social media, Amazon, eBay…just going after all of those and knowing how to do so with each platform is a full-time job,” she said.
While counterfeiters started using advancements to develop what they considered to be a more authentic product, they now use the Internet for a whole other spectrum of problems, according to James Donoian, partner at McCarter & English LLP. Having worked with the New York Police Department to further anticounterfeiting efforts on behalf of his clients, Neil Friedman, partner at Hodgson Russ, encouraged brands to work closely with law enforcement, as well as customs officials.
Melissa Berger, intellectual property counsel for Coach, said via social media venues like Facebook and Instagram are increasingly — and unknowingly — clicking on bogus ads for Coach merchandise, which leads them to sites selling counterfeit Coach goods. “Part of building up a reputation is what consumers expect to get when they buy your goods. They expect cosmetics that are safe for you to use, or a handbag that is really well-made. You just don’t get that when you buy counterfeit goods,” Berger said.
Keeping up with counterfeiters remains a challenge despite Coach’s working with outside counsel, often filing lawsuits to reclaim domains through the State and Local Cyber Protection Act of 2016, Berger said. Recently, she has discovered apps being sold that are dedicated to what was wrongly identified as a Coach outlet store that was actually selling counterfeit goods. “The technology is a problem for us. It’s hard to keep up,” she said.
The Estée Lauder Cos. Inc’s associate counsel Donna Ruggiero noted that when consumers buy counterfeit health and beauty products they run the risk of putting toxic chemicals on their bodies. Should they have a chemical reaction, they will “come after” Estée Lauder mistakenly thinking the products were authentic. Such instances only emphasize the need for consumer education.
As commercialism increased in mainland China Estée Lauder had a huge problem not with counterfeit goods, but counterfeit Estée Lauder beauty counters in stores, Ruggiero said. “They would buy authentic products in Hong Kong because they were cheaper and sell them in mainland China,” she said. “We weren’t the only ones. There were fashion brands as well, but you have to take action.”