California Apparel News

Since the beginning of the year, Antik Denim, the Los Angeles–based premium-denim label, has gone on the war path to catch counterfeiters selling Antik knockoffs on the Internet.

In March alone, Antik Denim filed 43 federal court cases in Los Angeles against counterfeiters and trademark violators peddling fake Antik Denim jeans on various Web sites.

At the same time, another high-end Los Angeles bluejeans company, True Religion, has gone to court with a flurry of federal lawsuits to send knockoff artists, both online and offline, a message: Don’t mess with True Religion.

And 7 For All Mankind, the Los Angeles denim label launched in 2000, is filing about one criminal case a week in various U.S. courts to shut down counterfeit operations.

Blue-jeans companies are no strangers to the world of knockoff artists. Just ask Levi Strauss & Co., the venerable San Francisco–based denim company founded in 1853 by German immigrant Levi Strauss. For decades, big-name brands such as Levi’s have constantly policed the world looking for phony look-alikes.

Just last year, Levi’s found hundreds of fake Levi’s 501 jeans being sold for $15 a pair out of a Los Angeles warehouse where the counterfeit items had been sewn. A raid uncovered 888 fake pairs of jeans as well as reams of denim fabric, 2,800 buttons with the Levi’s logo on it and more than 17,000 pocket rivets.

“We have been committed to brand protection in the United States and globally,” said Thomas Onda, Levi’s global intellectualproperty counsel. “Counterfeiting is like world hunger. Everyone wants to end it, but we have to prioritize.” He said Levi’s concentrates on finding counterfeiters in countries including China, Italy, Spain, Russia and India.

Since the premium–blue jeans market took off in the late 1990s, $150 to $200 denim has been particularly vulnerable. Now fashion companies are flexing their legal muscle to go after not only operators at swap meets, a traditionally popular venue for knockoffs, but also online sellers of fake goods.

“Counterfeiting is huge,” said Barbara Kolsun, senior vice president and general counsel for 7 For All Mankind. “For us, we’ve been doing anti-counterfeiting for a long time. But the Internet has made our lives miserable.”

The Internet has been a particularly difficult venue to attack. If a Web site is located in China, most companies have no recourse. But if they are operating in the United States, it’s tough but not impossible to find the culprits selling fake jeans.

The popular online auction Web site eBay has a program called the “Verified Rights Owner Program” (VERO) that allows brands to have an item taken off the Web site if it’s a fake. But apparel companies say the purveyors of fakes take down an item and put it right back up under a different seller’s name or on a different auction site.

Another obstacle is finding the owners of Web sites selling the fakes. Often the Internet service providers hosting the sites don’t share information about the Web site operators.

“It is very difficult to go after small fish [on the Internet] for the only reason that at the end of the day you are going to lose money,” said Samuel Bellahsen, general counsel for Blue Holdings Inc., the parent company of Antik Denim. Legal fees make it expensive to prosecute just one Web operator, he explained.

But Antik Denim has teamed up with Los Angeles law firm Gareeb Pham to attack fakes on the Web. Attorneys Alexander Gareeb and Christopher Pham devised a plan that is netting them some money and helping Antik protect its brand, distinguished by its distinctive pocket design.

Antik Denim gave Gareeb and Pham $50,000 in seed money to buy suspected fakes on various Web sites. The attorneys purchase about 20 products a week. The ones that appear fake are analyzed by the Antik Denim staff.

If a knockoff is encountered, the attorneys take the address from the package in which the jeans arrived to track and sue the sender. Or they use their credit card receipts on the blue-jeans purchases to track the sellers. The court filing fees come out of the $50,000 in seed money.

“They [the Web site operators] receive a complaint and start to freak out,” Bellahsen said, noting that most of these online people are small-time operators. “Now they have to defend themselves in the court of law in Los Angeles and hire a lawyer. Ninety percent of them pick up the phone and say, ’We are sorry. We didn’t know what we were doing.’ They all come up with a story. When we settle with them, we get a little money for the law firm.”

In the last six months, the firm negotiated a handful of settlements valued between $4,000 and $8,000, Bellahsen said. The lawyers also ask the defendants to turn over the names of their big-fish suppliers. But so far, that hasn’t happened.

If any settlements are ever more than $100,000, Antik Denim gets a percentage.

True Religion is employing the same law firm to attack online counterfeit sales, and the denim company is finding some success, said Deborah Greaves, True Religion’s general counsel.

“We’re getting everything from $5,000 from one person to $20,000 from one Internet host. And that’s not the operator of the Web site. There is a litany of levels,” Greaves said. “The eBay seller is a smalltime operator, and you have to determine whether they fit the profile worth pursuing. What we have found is that once you start suing people on eBay and other sites, it has a quelling effect. Word spreads. That is what we want. We want people to know we prosecute.”

Blue-jeans companies are also working with U.S. and European customs inspectors, training them to recognize fakes when they see them. It can net some lucrative finds.

Six months ago, Bellahsen said customs officials at the Prague airport seized 1,000 fake skirts bearing the label Taverniti So, another brand owned by Blue Holdings. The fake skirts were being imported from Vietnam.

And just a few weeks ago, a cargo container filled with 6,000 pairs of fake 7 For All Mankind jeans, labeled as hot-water bottles, was seized in New York by well-informed customs officials, Kolsun said.

While the hunt for counterfeiters may not win a lot of money in penalties and damages, it does help to protect a brand’s name and value.

“You have lots of stores that are carrying your product, and you want to protect them because it is not fair that they lose customers because someone is selling counterfeit products all over the place,” Bellahsen said. “We’re doing the best we can to find the fakes, but we will never be able to stop everything.”