California Apparel News

Think back to when some people stole your idea and passed it off as their own. How did you feel when everyone applauded that idea, giving false credit?

This question is a small example of an important conversation happening in our public discourse right now. Let me set the record straight: Counterfeiting—including glorified dupe culture and the illicit use of intellectual property—cheats everyone, with far-reaching, unintended consequences.

The brands that consumers most respect work diligently to meet key sustainability benchmarks, conduct in-depth consumer-safety tests, and trace their supply chains to ensure brand integrity. Meanwhile, the producers of counterfeits not only ignore but exploit the lack of due diligence.

Let’s focus on three very tangible, and intertwined, areas of threat by counterfeits:

• Domestic jobs

• The American economy

• The health and safety of consumers, workers and the planet

About 75 percent of the retail value of an apparel article imported from abroad and sold in the U.S. comes directly from American ingenuity, meaning that most of the value found in your favorite T-shirt, denim or shoes was created by Americans and supports American jobs such as design, product development, quality assurance, compliance, marketing and IT.

The National Association of Manufacturers, using 2019 data, estimated that “counterfeiting would have subtracted nearly $131 billion from the U.S. economy, including direct, indirect and induced economic impacts. That means $22.3 billion of lost labor income, 325,542 fewer jobs, $5.6 billion in lost federal-tax revenues, and nearly $4 billion less in state- and local-tax collections.”

In 2022, AAFA unveiled the results of a counterfeit product-testing study that showcased how counterfeit products contain dangerous levels of arsenic, cadmium, phthalates, lead and other hazardous chemicals. Apparel, footwear and related goods continually remain at the top of counterfeit items seized by U.S. Customs and Border Protection year after year.

Counterfeiters—who bypass testing and taxes—reap an estimated $80 billion globally each year. Law enforcement reiterates that if it can be made it can be counterfeited. According to the United Nations Office on Drugs and Crime, there is a link between counterfeit goods and transnational organized crime that “offers criminals a complementary source of income and a way through which they can launder money.” This also presents a way for nefarious operators to potentially steal consumers’ financial information, compromise identities or introduce malware.

Furthermore, counterfeit goods are produced in potentially unsafe and environmentally unfriendly conditions, hurting the workers and communities that make them, with growing evidence of forced labor and other labor abuses with large sustainability concerns such as polluting rivers near factories that make counterfeit products.

Given the explosive growth of e-commerce, where sellers are masked with anonymity, we must all work together to incentivize best practices for vetting sellers and goods, addressing repeat counterfeiter sellers, ensuring consumers have access to relevant information at the time of purchase—and holding those accountable when actions don’t match policies.

AAFA has joined with Buy Safe to advocate for the INFORM Consumers Act, which took effect on June 27. INFORM offers vital enforcement tools to the Federal Trade Commission and state attorneys general when verification of high-volume, third-party sellers are not in compliance. This is a great first step; however, more is needed to ensure consumers have the same protections buying online as they do when buying offline.

We’re tirelessly advocating for the SHOP SAFE Act to hold e-commerce platforms liable for selling counterfeits that threaten the health and safety of consumers, the same requirements any mom-and-pop, bricks-and-mortar store must comply with today.

SHOP SAFE and INFORM are both needed—by brands and consumers.

The New York Times recently ran a piece glorifying knockoffs—essentially giving consumers a how-to book on how they could purchase counterfeit products via shady means of encrypted chats and illicit networks. They even called the handbags “sensational” and “indistinguishable.” But what if that story was copied and pasted without credit or if another paper ran the story without attribution?

Intellectual property is a foundational element of our Constitution to protect and cultivate innovation and invention. Our leaders today must continue to protect and reinforce IP just as they have since the 1700s.

The consequences of not protecting IP are vast.

We should not glorify or justify any type of counterfeiting or trademark infringement; it is illicit, and those standing by the sidelines are complicit. Think beyond instant gratification. Think about the why and the how behind the counterfeit. Think about the tradeoffs—the safety of the consumer, the protection of workers, and the protection of the environment.

Jennifer Scoggins Hanks is the chief advocate and spokesperson for AAFA on intellectual property and brand-protection issues. She serves as the staff liaison to AAFA’s Brand Protection Council, connecting with government officials and representatives of global e-commerce, social and digital platforms to advance AAFA-member online and offline priorities. Before moving to Washington, D.C, her career began working in the California State Legislature and the California Governor’s Office.