Intellectual Property Attorney

China And United States Conduct Joint Operation To Shut Down Counterfeiting Of Brand-Name Bags

As reported by China Daily and the Asian News Network, a joint operation between China and the United States has resulted in the seizure of more than 20,000 counterfeit bags with fake LOUIS VUITTON, HERMES and COACH tags. An “international gang” operating in China had sold approximately 960,000 counterfeit bags worth more than $800 million, mainly in the U.S. and Middle East. During a raid in May, police seized more than 20,000 counterfeit bags and enough material to produce about 50,000 more, arrested 73 suspects and “destroyed” 37 production and sales sites.

In 2011, the counterfeiting ring expanded to the United States when a fake-leather goods wholesaler in the U.S. began to purchase product and introduced the manufacturers to several other U.S. clients. Business was apparently doing so well that the suspects responsible for the operation recently purchased a large parcel of land in China to build new factories.

Counterfeiting is the act of using a third party’s exact trademark on unauthorized goods. It is a major problem for brand owners, who spend years building up the goodwill symbolized by their brands. Counterfeit goods are often cheap imitations of inferior quality, which erodes the goodwill that brand owners painstakingly seek to build. In this case, for example, the counterfeit bags at issue were made from “low-quality leather” that had an “irritating smell.” They had “poor workmanship” and a “rough feel.” The cost to manufacture each of the counterfeit bags was a mere $1.30 to $8.70 per bag.

In commenting on the seizure, a senior official with China’s Economic Crimes Investigation Bureau stated: “We’ll continue to intensify efforts to combat intellectual property rights infringement crimes, as such cases hurt the public interest, the legitimate rights of companies, national innovation capabilities and China’s image.”

Grimes LLC has long been at the forefront of efforts to combat the sale of counterfeit goods on behalf of its clients. Commencing in 2005, when counterfeiting surfaced as a problem for the firm’s client, Altadis U.S.A. Inc., the firm’s Managing Partner, Chuck Grimes, worked with undercover operatives, private investigators and federal, state and local law enforcement officials to develop a program to carry out numerous investigations of South Florida’s cigar counterfeiting industry.

For example, as part of Grimes LLC’s ongoing efforts to protect the intellectual property rights of Altadis U.S.A. in its famous Cuban heritage brands, the firm worked with investigators from the Monroe County, Florida State’s Attorney’s Office, assisted by officers and agents from U.S. Department of Homeland Security, Immigration and Customs, the Marathon County, Duval County and Monroe County Sheriffs’ Offices, Key West Code Compliance and the Florida Department of Revenue, to simultaneously raid seven Key West retail establishments and arrested five individuals who own those establishments as part of a nationwide crackdown on cigar counterfeiting. The authorities seized a substantial number of boxes of counterfeit MONTECRISTO, H. UPMANN and ROMEO Y JULIETA cigars, and also counterfeit COHIBA cigars as a result of the cooperation of General Cigar.

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