LVMH and Rakuten go to War Against Fakes 27/9/10

LVMH and Rakuten Inc. have just signed a deal to band together in the fight against brand terrorism. As Japan’s biggest online retailer expands into Europe, Rakuten have developed a system that will flag and notify the real brand owners when fake items are sold on the site. It’s an online shopping service similar to Amazon.com, in that it connects consumers with small-scale vendors. We love that they are taking the initiative to ensure that the vendors being connected are legitimate ones only. This will be an enormous deterrent to counterfeiters, who generally like to evade responsibility for the fakes they peddle. By making vendors accountable for their product, it makes life very difficult for the frauds.

Luxury brands have certainly clashed with online retailers as of late- see ebay Vs Tiffany & Co. Brands are increasingly furious that online retailers facilitate the sale of fake goods, and that counterfeits are able to be sold anonymously with no apparent repercussions. Hopefully this move will set a precedent that will see stronger safeguards towards patent protection. It’s a great first step towards protecting the future of the brands we love.

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Frauds At It Again, Another Victory Over Counterfeiters 22/9/10

The frauds have been foiled again! Five London men were charged yesterday, in connection with a global multi-million pound designer good counterfeiting ring. We can’t speak out enough against the damage fakes cause. We know that illegal copies of brands like Gucci, Versace, Ralph Lauren, etc. seem harmless. There’s certainly a strong sentiment out there that these brands can ‘afford it.’ It’s not like ripping off a quaint local label, right? True. Luxury brands work with enormous budgets, and we haven’t seen any go under yet. What is all the fuss about?

Counterfeits are like brand cancer. Mutated, replica bag-cells, are out mixing with the population, causing more destruction that most consumers care to realise. Did you know that annual sales of counterfeit goods total around US$600 billion worldwide? And that this figure accounts for almost 7% of global trade? (These figures do include industries other than luxury goods, by the way). In Australia, counterfeiting robs businesses of over $1 billon AUD a year. Slowly but surely, brand integrity, quality, labour standards, and economic performance are slowly eroded. We’ve spoken extensively about intellectual property and brand degradation, but it’s also important to realise that purchasing fake goods has economic ramifications, too. We are glad to see that those behind this pseudo-industry are being held responsible, and are proud to support the fight against it.

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Thailand Agrees- Fakes Are For Frauds! 17/9/10

Thailand has made a dramatic stand against counterfeit goods, burning over 80 tonnes of fakes. We’ve made it quite clear where we stand on this issue– ‘fakes are for frauds’ has become something of a slogan here at MO Luxury. We are pleased by Thailand’s recent demonstration of their commitment to observing intellectual property rights. In destroying fake goods, the Thai government has made a public stand against further production, and delivered a significant blow to the entire ‘fakes’ industry. Counterfeiting is finally being taken seriously.

Research has shown that people will pay twice as much for an item when they think they use it to send cues about their wealth and taste. When consumers can’t afford the original, the fakes do the job just fine. To us, this distorts, and somewhat undermines, everything that luxury brands stand for. Because it implies that the goods some people pay thousands for, aren’t worth the price tags they carry- and they are. We know that when we buy luxury, we are paying for the very best. A handbag from Louis Vuitton is so much more than a nice print, and if you can’t see that, then you probably shouldn’t be buying one in the first place. The price tag signifies the finest and purest of materials, innovation, and thousands of years of heritage. Don’t even get us started on comparing manufacturing processes and labour standards. Contemplating a harmless bargain? Think again.

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eBay Defeats Tiffany & Co- Fakes Not Its Fault 15/9/10

It seems that eBay is under scrutiny lately, accused of being a vendor of fake goods. Last week, the MO Down reported on a suit initiated by luxury giant LVMH. On Monday, eBay won dismissal of a lawsuit by Tiffany & Co, that accused the website of deceiving customers and selling counterfeit jewellery. Ultimately, its an issue of trademark infringement, and Tiffany think eBay have been involved in false advertising. Interesting, given that eBay simply host other people’s transactions and are not involved directly with trademark violations. While this does not make counterfeiting their fault, some would say eBay facilitates the sale of fake goods, and that this therefore implicates them in harbouring those actually responsible. Nonetheless, the ruling has been hailed an indisputable validation of eBay’s business practices, and the world’s largest online auctioneer can rest easy.

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eBay Counterfeiting Conviction... Too Soft? 6/9/10

We have been very vocal about our objection to counterfeiting lately, here at the MO Down. This week, a Paris court has drastically reduced damages demanded from eBay, following a suit from LVMH for selling fake goods. The original conviction of €38m ($53.4m AUD) was reduced to €5.7m (approx $8m AUD), and we aren't really sure what to make of this. Both sides have claimed victory. Excuse us?

The real issue here cannot be expressed in dollars or euro. eBay have had its wrist slapped, and LVMH is pleased to have a precedent. But will this stop counterfeit products being sold online in the future? Is it enough? We worry that the crime of counterfeiting is not being taken seriously. Sure, fashion knock-offs might not be a crime priority in the realm of drug trafficking and credit card fraud, but they are a breach of intellectual property in the same league as plagiarism and film piracy. The future of the innovation and investment in quality that these brands represent is contingent on their ability to uphold their high standards. These standards falter in the hands of counterfeiters who peddle mediocre products under their names.

LVMH contended that it was hurt by the sale of fake products on its site. Lost revenue is only the half of it. The real damage is to brand identity. No matter what, there is always someone who argues for fakes, claiming they raise brand awareness. We beg to differ– see Fake Goods Are Fine...Not from last week! Luxury companies spend millions of dollars each year to provide an exclusive service to a specific market. Anything less is directly opposed to the interests of their brand awareness. Fakes are not fine!

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Fake Goods Are Fine...Not - 31/08/10

According to a new European Union-funded report "buying designer goods can benefit consumers and the companies whose brands are being ripped off." This has definitely got us on our hand tooled soap box. "Professor David Wall, who co-authored the report and advises the government on crime, said the real cost to the industry from counterfeiting could be one-fifth of previously calculated figures." "It's probably even less," he said. "There is also evidence that it actually helps the brands, by quickening the fashion cycle and raising brand awareness." Right, we’d like to know which brands he is talking about here. What kind of brand awareness are we raising from products that are in colours the designers never developed, with different finishing details and not in the same raw materials, the list goes on. This ‘awareness’ is simply impure and incorrect.

Although we agree law enforcement has its hands full, we also believe time should be spent on counterfeiting and 'fake' anything should not be encouraged. In our book, to not take seriously a very large part of the counterfeit trade which is clothing and accessories manufacturing is sending a huge nod of encouragement to all of those operators manufacturing counterfeit goods to say it is OK. In essence the general take out from this report appears to be irresponsible and will serve to only further damage the luxury industry and encourage the counterfeiters.

It is a truism that the majority of people who purchase 'fakes' would not be able to purchase the real thing anyway, and the old adage "to be copied is the highest form of flattery", the cost to luxury brands more than anything is the erosion of their brand value. What this report seems to forget is that luxury products are rare, exclusive and unique due to their raw materials and often bespoke manufacturing methods, whereby the process is expensive and therefore only available to a specific target market. Luxury companies spend millions of dollars each year, out of their own respective monogrammed billfolds, to tackle these issues head on.

As reported in The MO Down earlier, Fakes Goods Can Equal Fake People, do we really want to encourage a growing rate of fake folk? We really don't think so. Whilst in the UK there is a crack down on people who trade fake goods, the government have turned against criminalizing those who buy into the trade- when and where can we expect a steady level of action?

Here is some food for thought: Did you know that annual sales of counterfeit goods total an estimate US$600billion worldwide, almost 7% of global trade? Whilst these figures include industries other than luxury goods, one can see the 'fake' business is incredibly lucrative. As we've said before and we would like our readers assistance in this quest, to educate friends, family and foes that Fakes really are for Frauds!

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Burberry Sues Boutique Store Over Counterfeited Merchandise - 19/08/10

This is definitely a week of Fake vs Genuine, as counterfeiters are striking luxury labels all around the world. Earlier we brought you news surrounding Coach counterfeited goods and the latest addition to the bag involves Burberry, who are now suing a luxury boutique chain store Variazoni, for selling fake merchandise. The lawsuit is sitting at $2 million, and it’s not the first time the store has been caught out selling counterfeit items- last year in June they were busted for selling 86 Burberry fakes, and clearly they can’t keep a promise after signing a contract saying they would never do it again!

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Luxury News In Brief - 18/08/10

Last week we brought you news of ‘Operation Turnlock’ run by Coach, who were focusing their efforts on busting the counterfeiters on the Ocean City Boardwalk in Baltimore, US. It seems Coach are on their way to victory, as two shop owners were arrested early this week for allegedly counterfeiting luxury labels including Prada, Coach and Louis Vuitton. One of the charged men Michael S. Miller, has denied the allegations, with his attorney stating “we deny the allegation that he [Michael] was knowingly selling any counterfeit merchandise.” With emblems found at the stores, which would be used to make the fake luxury labels, we find Miller’s denial hard to believe…

Tiffany & Co will be releasing their quarterly numbers on August 27th, and many analysts are already placing their bets on the expected outcome. Analysts, on average are expecting Tiffany & Co to report earnings of $0.53 per share on sales of $694 million. The company is also expected to post EPS of $2.59- there isn’t long to wait now until the true results are revealed.

Whilst Chanel has battled claims they are a ‘dusty brand’ this week, the company have lost faith in Apple, due to the restrictive control that Apple has resided over Chanel in their upcoming iAd campaign. Chanel were signed up to run an advertising campaign with Apple’s latest iPhone invention- the iAd, which has seen other companies like J.C Penney, Walt Disney Co, and Nissan involved. However, due to the apparent tight control from Apple over the creative process, and the alleged slow actions of Apple, Chanel have decided to pull out of the latest ad campaign all together.

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Counterfeiters Strike In Egypt - Remember, Fakes Are For Frauds! - 17/08/10

The focus is in Egypt today as more news has reached us of a vast criminal counterfeiting community. The poor in Egypt are being granted ‘luxury’ goods, with a genuine Cartier ring priced at only $8, hold on, who are they kidding…

As elitist as it sounds, luxury is not for everybody, and that is a reality. Whilst people may one day aspire to own a Cartier, Bulgari or Chanel piece, like the millions others who want the same, it might not be possible, in this lifetime at least.

For manufacturers and distributors of counterfeit goods they are feeding a vulnerable and not so vulnerable audience to buy into the dream of luxury. But what dream we ask? One of fake gold, incorrect logos and packaging (if there even is packaging), and of course the list goes on.

The affordable imitation of precious metal being sold in Egypt is called ‘Chinese gold’, but as the real gold in Egypt is becoming more expensive for the vast majority of people, this new ‘Chinese gold’ is too. But what is really happening behind the counterfeiting industry? The money earned from the sale of such goods as the Cartier ring, is feeding criminal industries including drugs, weapons and prostitution. Unfortunately the majority of people buying into this industry (especially Egypt where 40% of the population earn less than US$2.00 per day), are unaware, or worse, choose to ignore this growing issue.

For counterfeiters to make a successful entry into Egypt with its population of 80 million is to line the pockets of the unsavoury business people operating in this ever growing, hard to control industry. It’s sad but true. So what is the answer? Education, education, education!

What we need is for everyone, from Egypt to Australia and the world over, to think that their 'counterfeit' product purchase 'does' count and it is fuelling this evil business. It is simple- think and act. Just don't do it, you are adding to the problem, no matter how small or inexpensive your purchase. It all counts.

Image credit: Cartier

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Louis Vuitton Fakes Strike Again - 16/08/10

Whilst Louis Vuitton has adopted a zero tolerance policy against counterfeiting, they can’t control every fake representation out there, despite their huge efforts. The latest case has seen Idol judge Mara Louw, wearing a fake Louis Vuitton outfit at the new Idol auditions. Whilst the TV star was backed by PR who claim Mara “has fine taste in clothing and detests counterfeits”, an upside down LV logo screams an obvious fake. We stand by our belief that Fakes are for Frauds. Whether you are a singer, or not, famous or not, just don’t do it.

Image credit: louisvuitton.com

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Coach Lay Down The Law On Counterfeiters - 12/08/10

As the counterfeiters are becoming sneakier, designer labels are becoming fiercer in their methods to bust illegal counterfeit sales. A prime example this week has occurred in Baltimore, USA, where “Operation Turnlock” is not taking any prisoners. “Operation Turnlock” is Coach’s anti-counterfeiting campaign, and the company have been busy this week, as they are filing lawsuits against thirteen shops on the Ocean City Boardwalk.

We love the commitment that Coach is showing, they are not just paying lip service to counterfeiters, they are also about action and with 250 lawsuits filed since the operation commenced in 2009, they are making headway.
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Fakes Really Are For Frauds - 14/6/10

In what the US "Justice Department on Friday called one of the biggest counterfeit cases in US history", two intellectual property thieves have finally been bagged.

Responsible for importing 300,000 handbags and wallets from China at a value of US$100million sporting brand names such as Chanel, Gucci, Coach and Louis Vuitton to name a few, the two fraudsters are looking at 30 years in prison and over US$4.75million in fines between them when they face sentencing in 15th September. Their very serious manufacturing and distribution operation was finally outed.

Many say counterfeiting is the 'highest form of flattery', well not on this watch we don't. It also warms our cockles to see action continues to be taken with on-line sites selling luxury 'replica' handbags being successfully targeted by the luxury brands and their silks.

Remember say NO to fakes, Fakes Are For Frauds.

Image Credit: www.allthebesthandbags.com/

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Italian Police Adopt Anti-Counterfeiting Operation To Clean Up Beaches - 9/6/10

Remember: Fakes are for Frauds. Whatever you do, don't go down to the beach today.... and try to buy a fake anything. If you are planning a holiday in Italy there is a very serious police squad in a covert operation not only fining the sellers but also the purchasers of counterfeit goods. Some police officers are using quad bikes to chase beach vendors! This is an excellent strategy as like every business practice, it is a case of demand and supply. This is no ordinary patrol, it's Bag Watch!

Image Credit: http://www.guardian.co.uk/

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Counterfeit Goods Cleanup Worth $240 Million – 27/4/10

During a 30-city, 2 month counterfeit “spring clean,” U.S. officials have seized US$240 million of pirated goods. Serious spring cleaning indeed...

In 2009, the largest seizure was US$26 million and the entire year saw a total of US$260 million. So the result of the recent spring clean is incredibly impressive and 'should' send a strong message to those who make it their business to pirate goods.

Who's responsible?
According to this Wall Street Journal article: "Chinese criminal gangs are the biggest purveyors of fake goods in the U.S., accounting for about 80%, by value, of the counterfeit goods seized last year.

What’s most popular?
Footwear tops the list of fake goods, followed by consumer electronics, luxury goods and pharmaceutical products."

We said it in April, when scientific research concluded “Fake Goods Can Equal Fake People,” but we want our message to be loud and clear - FAKES are for FRAUDS - Say NO to FAKES!

Image courtesy of The Fashion Row.

Fake Goods Can Equal Fake People, Say Scientists – 9/4/10

Finally, there is scientific proof that buying counterfeit goods is bad for your health …

Research cited in the Huffington Post’s article, The Psychology Of Knockoffs, has discovered people who purchase counterfeit goods are generally unethical across other areas. It says “ ‘Faking’ it makes us feel like phonies and cheaters on the inside, and this alienated, counterfeit ‘self’ leads to cheating and cynicism in the real world."

We believe that knowingly purchasing counterfeit goods puts people in two camps:

1. It's a 'real' CHANNEL (CHANEL) and I only paid X for it... They know the brand through seeing advertisements of lipsticks and fragrances etc., but have no real exposure to the brand and associated costs. So to purchase a CHANNEL handbag for $150.00 may be expensive to them, therefore (unless they purchased it on the street corner), they genuinely do believe it is authentic. As often happens, they may receive the 'fake' item as a gift... the recipient therefore knows nothing about the environment it was purchased in and also how the wrapping, finishing, tissue, care labels, guarantees, etc. should look...

2. They know it is fake and don't care, they 'want' to be seen to be wearing brands, and are using these items as props to signal success to others. These are the disingenuous folk, the real fakes amongst us. They, we believe, are whom the psychologists are talking about predominately in this very fine and interesting report.

Weed out the fakers we say, it's all about ethics and as the report says it goes beyond just the purchasing of fake merchandise... a slightly skewed and cynical view of many other people and things.

Our new slogan is: FAKES are for FRAUDS - Say NO to FAKES!

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