Chinese counterfeiters threaten designer jeans brand abroad and at home
Last month, U.S. Customs & Border Protection announced that a joint operation of U.S. Immigration and Customs Enforcement and the Los Angeles Police Department had seized a container load of counterfeit True Religion jeans. The 21,024 pairs of knock-offs would have had a street value of $1.5 million and a legit retail value of $6.2 million. The August 17 seizure was notable for the size of the haul, and the fact that the entire shipment was devoted to one (fake) label. Extra effort went into concealing the nature of the shipment. The True Religion label on each pair of jeans was covered with another label that read, “Tough-Made in the USA,” and the brand’s signature buttons were concealed under metal covers, according to ApparelNet News.
The counterfeit case brings home the risks U.S. brands face because of inadequate intellectual property (IP) protections abroad, in this case, in China.
Just weeks before the seizure, True Religion singled out China’s lack of IP enforcement as a barrier to trade in a comment letter filed with the Trade Promotion Coordinating Committee in response to the TPCC invitation to recommend ways the U.S. government could boost exports.
According to its comment letter, True Religion first applied in 2005 for a Class 25 (clothing and apparel) trademark in China. In China, trademark registration is required to enforce a company’s IP rights.
The company has since made other applications. All have been denied based “solely on Article 10(8) of the Chinese Trademark Law, which states that trademark protection cannot bet granted to marks that are ‘detrimental to socialist morality or customs.’ The relevant authorities’ explanations have ranged from the suggestion that the smiling Buddha image [see the letterhead] would offend Buddhists because it is anathema to the ‘seriousness’ of the religion, to the implication that the design coupled with the words ‘True Religion’ suggests that Buddhism is the one ‘true belief,’ which would offend people of other faiths.” More recently, the words “True Religion” without the smiling Buddha were also rejected.
In the absence of enforcement in China, counterfeit True Religion merchandise is not only being sold throughout that country, but is also being exported around the world, including to True Religion’s domestic market in the U.S. The designer label works closely with CBP and international investigators and law enforcement agencies to stem the flow of fakes. But, the company says, enforcement costs are steep and the quantities recovered represent a small percentage of the counterfeits in the marketplace.
Datamyne import and bill-of-lading data can be useful in detecting or tracing counterfeit or gray market shipments into U.S. markets. If you’d like to see how our import data assets can be searched and interpreted for signs of illicit commerce, ask for an online demonstration.