New Levi’s Lawsuit Sheds Light on the Ever-Growing Sophistication of Counterfeiters — The Fashion Law

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Imagine that you head online in search of a pair of vintage-looking Levi’s, which have swiftly emerged as the latest must-have jeans, thanks to the resurge of retro styles on the runway and redone denim a la Vetements. Bloomingdales has sold out of your size, but you locate the exact same pair on what appears to be a perfectly legitimate – even sophisticated – e-commerce site for almost exactly the same price.

The website – which showed up towards the top of your Google search for “Levi’s 501 Skinny Jeans” – bears photos that seem completely legitimate. The site makes you walk through all of the security measures that you would on Amazon or even Levi’s own site. It displays all of the indicia of authenticity and security that you have come to associate with authorized retailers, including the Visa®, MasterCard®, and/or PayPal® logos, and even includes the customary little customer service popup that allows you to chat with one of the site’s employees about sizing and/or the time frame for the delivery of your order.

You were not on the hunt for a fake pair of jeans, and yet, that is what you ended up with because – even with all of these valid-looking factors at play –  what was not necessarily obvious from the looks of or even the experience provided by that website: It is nothing more than a sophisticated front for the sale of counterfeit jeans.

And it is just one of hundreds of perfectly legitimate-looking websites that Levi’s is currently fighting in order to “combat counterfeiting of its registered trademarks” and to “protect unknowing consumers from purchasing counterfeit Levi’s products over the internet.”

The Fight Against Fakes

While it is no secret that brands are routinely forced to engage in what can be time-consuming and costly legal battles in order  to fight fakes, a new lawsuit filed by Levi’s sheds light on the complexity of the problem that brands consistently face online.

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In its complaint, which was filed last week in the U.S. District Court for the Northern District of Illinois, Levi’s alleges that a group of unnamed defendants, who are identified only by domain names, create e-commerce sites “by the hundreds and designs them to appear to be selling genuine LEVI’S® brand products, while actually selling counterfeit Levi’s products to unknowing consumers.”

The defendants, who Levi’s calls “an interrelated group of counterfeiters,” share “unique identifiers, such as design elements and similarities of the counterfeit products offered for sale, establishing a logical relationship between them and suggesting that [their] counterfeiting operation arises [from] the same [group of individuals].”

The websites at issue, according to Levi’s, “include content and images that make it very difficult for consumers to distinguish [between] such stores and authorized retailers.” Many of the defendants, Levi’s says, “deceive unknowing consumers by using Levi’s trademarks without authorization within the content, text, and/or meta tags of their websites and online marketplace listings in order to attract consumers searching for Levi’s brand products.”

Still yet, the defendants make use of “other unauthorized search engine optimization tactics and social media spamming so that [their website] listings show up at or near the top of relevant search results and misdirect consumers searching for [authentic] Levi’s brand products.”

And once you are tricked, you’re tricked. In “an attempt to avoid liability” both with consumers on the receiving end of counterfeit jeans and with brand owners, alike, these sites and their operators “go to great lengths to conceal both their identities and the full scope and interworkings of their counterfeiting operation.”

They aim to shield their nefarious activities in other ways, as well. For instance, the defendants “typically ship products in small quantities via international mail to minimize detection by U.S. Customs and Border Protection.” They also “operate multiple credit card merchant accounts and PayPal accounts behind layers of payment gateways so that they can continue operation in spite of [brands, such as Levi’s] enforcement efforts.”

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In order to avoid having any of the money made from their sales of counterfeit goods seized when brands do, in fact, file lawsuits, counterfeiters “maintain off-shore bank accounts and regularly move funds from their PayPal accounts to off-shore bank accounts outside the jurisdiction of [U.S. courts].” Indeed, Levi’s notes, “analysis of PayPal transaction logs from previous similar cases indicates that off-shore counterfeiters regularly move funds from U.S.-based PayPal accounts to China-based bank accounts outside the jurisdiction of [U.S. courts].”

Even before a court does, in fact, shut down one or many of the domains selling counterfeit goods (the most common remedy that brands can expect in connection with such lawsuits), Levi’s says that these entities will have already “register[ed] new online marketplace accounts under new aliases.” They set up new sites as soon as they are notified that a lawsuit has been filed against them, according to Levi’s.

Now before you, well-meaning, sophisticated consumer, insist that you would never fall for such a scheme, think again. According to San Francisco-based brand protection firm, MarkMonitor’s 2016 study, entitled, The Global Consumer Shopping Habits Survey, almost one quarter of consumers have unwillingly or unknowingly bought a product online – including garments and accessories – that turned out to be counterfeit.

And given the levels of sophistication that counterfeiters use when developing websites and emails intended to direct consumers to those sites, MarkMonitor says “it is only becoming more and more difficult for consumers to recognize a site and its communications as fake.” 



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