THE FASHION INDUSTRY vs INTERNET PIRACY

The GLOBAL BLACK MARKET 

“For the 2012 Presidential Inauguration Ball,

 Design by....Jason Wu

First Lady Michelle Obama wore a stunning ivory-colored one-shoulder chiffon gown adorned with Swarovski crystals.  An emerging young gown designer, Jason Wu, created the dress as a one-of-a kind piece for Mrs. Obama with no intention of reproducing versions of it for sale.  Nonetheless, in a matter of days, fast-fashion retailers were selling copies of the dress online.  This phenomenon is known as design piracy or knocking off and is standard operating procedure for many [companies] both large and small.” (Tan, 2013, pg. 893-894)
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     The raft of internet piracy has wreaked havoc on virtually every major industrial sector.  The world of U.S. fashion designs is no exception to the rule.  In recent years, selling counterfeit goods on the internet has become Big Business.  Havocscope, a reliable web portal for reporting global black market issues,  list the United States as number one in the counterfeiting  of consumer goods which generates 625.63 billion dollars annually http://www.havocscope.com/.  

     This number encompasses a 24 billion dollar loss to the clothing and shoe industry. Each of the industries rank in the top 26 - clothes (#8) and shoes (#9) - respectfully in forfeiture to the counterfeit market.  The 26 billion dollar revenue from on-line shopping represent approximately 13% of the US domestic gross product (DGP).  Nearly 72% of women use the internet as an outlet for shopping making online shopping the most popular cross-shopping category.  According to Forrester Research, the US online retail industry will be valued at $279 billion dollars by 2015. 

See http://www.forrester.com/home/

     While fashion designers in other countries are extended trade mark, copy right and intellectual property right protections equivalent to their counterparts in non-apparel sectors, such legal protection elude fashion designers in the US. Worldwide, counterfeiting is a multi-billion dollar industry where  the legal consequences and punishment for getting caught are relatively marginal. Although, counterfeiting is classified as illegal in the U.S., deliberately copying another's design know as design piracy is an unregulated practice in the country. Ethically, it can be viewed as morally corruptible to intentionally copy a product produced from another person's intellect and hard work. Yet the customary habit of knock off - replicating an original design - is a global phenomenon with little legal recourse for US designers.   

^{Much like foreign designers, US designers take measures to authenticate their products.  For example:  Ugg shoes come with reflective stickers on shoeboxes; special colors; position of letters; and certificated tags are all approaches to combat design piracy.   This concept is called trade dress.  Yet, buyers must be aware.  Authenticated measures are fabricated as well which makes it difficult for buyers to know if it’s the real McCoy or a fake.}  

CONSUMER ALERT

American Designer Marc Jacobs' Boots

http://www.marcjacobs.com/

Which One is FAKE?  Which One is REAL

Answer:  First picture is an authentic design.  What makes it authentic?  

Visit http://www.ebay.com/gds/spotting-fake-marc-jacobs-shoes-/10000000001205826/g.html

According to ConsumerReports.com, buyers should do the following when mislead to purchasing counterfeit goods.  http://www.consumerreports.org/cro/2012/06/how-to-spot-counterfeits/index.htm

How to spot counterfeits

Inspect deals on designer goods before you buy

Consumer Reports Money Adviser: June 2012

Say you spend thousands on a Rolex watch, then discover later on that it’s counterfeit. Here’s what you can do.

Don’t resell it. Even if you disclose that it’s counterfeit, you could expose yourself to criminal prosecution.

Demand satisfaction. You’re legally entitled to a legitimate version or a refund. It doesn’t matter what the seller’s return policy is, says Dean Richard Alderman, director of the Center for Consumer Law at the University of Houston Law Center. You’re also covered if you buy merchandise that the seller failed to disclose was gray market, meaning a genuine product sold through unauthorized channels.

Do a charge-back. If you used a credit card, request a charge-back from the card issuer. File it as a billing error, not as a problem with product quality, which might limit your rights. If you’ve used an escrow service or a buyer protection program, be sure to notify it within the allowed time period.

Contact the authorities. File a complaint with your state consumer officials. You can find a list at USA.gov. Selling fake items might violate state statutes on unfair trade practices and federal criminal laws barring the trafficking of counterfeit products. For major fraud, contact your local law enforcement.

File a lawsuit. At a minimum, you’re entitled to a full refund. If the seller engaged in fraud and you proceed under a state’s unfair-trade-practice law, you might be entitled to your attorney’s fees and triple damages.

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     Unfortunately, with limited legal protection, US designers are particularly vulnerable given the US is the world's largest consumer nation.  Since the emergence of the internet the online retail industry has rapidly grown along with the nemesis - design piracy.  While online retailers have a responsibility to regulate and monitor counterfeit merchandise fraud, not all online retailers are respectable, replicable business with a personal and monetary investment to maintain longevity, image and/or its stockholders.  Even with legal protections, and piracy protocols fashion designers and notable online retailers are susceptible to design piracy.  

eBay Loses Court Case To Louis Vuitton

Paris court rules against eBay

By Mike Sachoff · February 11, 2010 · Posted in the Business Channe

The Paris District Court ruled today that eBay is liable for harming the reputation of luxury goods maker Louis Vuitton through its use of trademarks, company name and domain name.

The Paris court has ordered eBay to stop using keywords which harm the reputation of the Louis Vuitton brand to promote its sites and will impose penalties of  $1,372 (1,000 euros) for future violations.

"Louis Vuitton welcomes this decision, which confirms established case law that aims to protect the consumer from the illicit use of company trademarks," said Nathalie Moull-Berteaux, Global Intellectual Property Director of Louis Vuitton.

The court also ordered eBay to pay $274,407 (200,000 euros) in damages to Louis Vuitton. eBay has also been ordered to pay $41,161 (30,000 euros) to reimburse the legal costs of Luis Vuitton.

"This case is about the use of Adwords to direct buyers’ listings for authentic goods from eBay sellers," said Yohan Ruso, director general of eBay France.

"This issue is being used by certain Rights Owners as an excuse to retain total control of what people can buy, where they can buy it from, and how much they have to pay. This is why 750,000 Europeans signed a petition to the European Parliament last year, protesting barriers to Internet trade."

     Despite efforts by renowned fashion designers and industry lobbyists including the Council of Fashion Designers of America (CFDA), the US Congress has not enacted legislation to protect fashion designers.  Irrespective of this, the US fashion industry continues to rally for protection against design piracy.  Currently, Congress is considering whether to afford copy right protection to fashion designers in the form of the Design Piracy Prohibition Act (DPPA).  If the DPPA is passed, it would provide copyright protections to fashion designers for a period of three years (Tan, 2013).  
     However, not everyone thinks this is a good idea.  Opponents of DPPA say the trade dress concept is enough for designers to protect their work.  On the other hand, the fashion industry advocate that trade dress is no match to confronting the ramped, widespread practice of design piracy.  In the meantime, the US fashion designers await the ruling by Congress.  

     As long as the internet exit, the online retail market will be in business.  Design piracy isn't going anywhere.  Just how do designers and consumers safeguard against design piracy is a matter of epic proportions to resolve.  The genie is out of the bag and he/she is running wild.