Knockoffs of popular luxury brands typically appear in cruise ports and with vendors on busy city streets. Where else can you get a $1,200 purse for $100? These days, these same phony products are making their way online in large communities such as Amazon and eBay.
What can a company do if they come across phony products? One fashion powerhouse recently won a case against fake goods.
The story of Chanel
Chanel has been the purveyor of fine fashion, perfume, purses, shoes and other goods since 1910. It is also one of the fiercest protectors of its intellectual property rights. When the house that Coco built discovered sellers online were faking its iconic logo on T-shirts and handbags, it went to work to find the culprits.
As it turns out, the offending sellers used Amazon to commit these transgressions. The ecommerce giant has long been third-party-friendly and often depends on other small shops and sellers to bring items to the marketplace that are unique and well-priced. Amazon has a strict but friendly seller policy, one which the counterfeiters blatantly ignored.
The case begins
In the summer of 2017, Chanel brought the case to court. Thirty sellers found guilty of selling fake Chanel goods on Amazon had to each pay the fashion house $100,000 in reparations. The amount is a fraction of the $2,000,000 per offender the company was seeking, yet it was still a win. Amazon must now dismantle the online shops, get rid of any advertisement depicting the knock-off merchandise, and, perhaps more importantly, start sending the money held in the merchants' Amazon Payment accounts to Chanel as part of the settlement.
Trademark infringement through the sale of knockoffs is on the rise, especially online where it is easier to fool consumers on mass-market selling platforms such as Amazon, eBay and Walmart. Last year, the federal government reported approximately 34,143 items seized were counterfeit, and they expect those numbers to continue to grow. Knowing if a product is real or fake may not be easy to do, especially on the internet. Consumers and retailers should be on the lookout for deals that may seem too good to be true.