NEW YORK — Counterfeiting is more rampant than ever, especially when it comes to accessories.
Of the infringing goods seized by U.S. Customs and Border Protection, 14 percent fell into the handbag/wallet/backpack category as of midyear 2005, up from 11 percent for the same time period the prior year. It was third on the list of top products seized. The domestic value of handbags seized was $6.3 million, according to agency figures. Another 6 percent of goods seized were footwear and 2 percent were watches. Apparel, the top product seized, accounted for 18 percent of border seizures at the midyear mark.
The counterfeit problem is not only an urban one as a desire for luxury spreads.
Purse parties, at which women gather their friends and sell designer knockoffs in a setting reminiscent of a Tupperware party, have grown popular in the suburbs. Counterfeit accessories items have made their way far from New York’s epicenter to rural New England states, where local stores set up displays similar to purse party tables offering knockoff versions of well-known luxury brands.
The fight against counterfeiters has grown increasingly complicated in light of these new venues. Kate Spade faces a multifaceted counterfeiting problem, said Dave Althoff, counsel for the company. Counterfeit bags for the brand crop up both in the counterfeit districts here and at purse parties next to fake bags from Gucci and Prada, he said. The evolution in counterfeiting distribution gives him an endless array of choices for where to focus his anticounterfeiting efforts and who to partner with in the fight.
Counterfeit purveyors have always had a number of diverse niches to peddle goods in cities, from selling watches out of a briefcase to setting up shop in enormous flea-market-style buildings, some of which have been the target of recent raids in New York.
A lot of space is required to sell counterfeit handbags and apparel, space that illegal vendors have found in the warehouses and showrooms of the Garment District along Broadway in the 20s and 30s, said Richard Plansky, Mayor Michael Bloomberg’s deputy criminal justice coordinator. The area is the epicenter of counterfeiting in New York, he said. In the counterfeit “malls” set up in these buildings, popular counterfeited trademarks include Louis Vuitton, Coach, Timberland, Rocawear, Nike, Reebok, Sean John, Phat Farm and Akademiks.
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“Those brands are counterfeited over and over again,” Plansky said.
The U.S. Chamber of Commerce estimated this year that counterfeit goods cost U.S. companies between $200 billion and $250 billion annually.
According to Lynne Beresford, commissioner for trademarks and acting deputy commissioner of trademark operations for the U.S. Patent & Trademark Office, if the figures for global trade in fake products were converted to Gross Domestic Product terms, intellectual property thieves would comprise one of the wealthiest 10 nations in the world. Beresford gave the keynote address at a recent anticounterfeiting conference sponsored by the American Apparel & Footwear Association.
“Brands create desire with advertising,” said Beresford. “People want to be carrying the Gucci bag or wearing the Rolex watch. We need to get consumers to understand that they are helping organized crime and hurting the brand [when they purchase counterfeit goods]. It’s an education thing.”
Trademark holders agree that education is key.
“The truth is nobody gives a damn about our problems,” said Barbara Kolsun, senior vice president and general counsel for Seven For All Mankind, who previously worked as in-house counsel for Kate Spade. “Why should I buy the real Rolex? Why shouldn’t I buy [a counterfeit]? Because if you buy the fake, it’s stealing.”
People need to be personally responsible, she said.