Battle of the Brands

December 2, 2009

A Louis Vuitton handbag once made a woman look rich. Today, a low-budget Chinese knockoff can make almost any woman look rich—or, at least, look like she’s desperately trying to look rich. Luxury brands have become victims of their own success, feeding a culture that idolizes symbols of wealth and giving birth to a counterfeit industry estimated to be worth $600 billion annually. Companies like Apple, Chanel, Coach, Electronic Arts, Gucci, Pfizer, Nike, and Tiffany are plagued by pirated versions of their products. “The problem has gotten so bad,” says Michael Manson, a lawyer at Smart & Biggar/Fetherstonhaugh who works on behalf of brand owners like Chanel and Louis Vuitton, “that four out of five Louis Vuitton handbags spotted on Robson Street are fake.”

Manson, 54, who studied law at UBC, is one of Canada’s top intellectual property lawyers; he specializes in trademark and patent prosecution and licensing. “Once these fakes are in the distribution channel, the knockoff trade is hard to stop,” he says. “For brand owners, it’s death by a thousand cuts.” His office, on the twenty-second floor of a building on West Georgia, overlooks the port, with its gantries and continuous intake of containers—only about two percent of which, he says, are examined by Customs. How many contain counterfeit goods from Asia? 

China, Manson points out, is not the only country where enforcement of anti-counterfeiting laws are lax. “Canada has a bad reputation,” he says. “The Americans often compare us to Guatemala. We have certain obligations under TRIPS [the Agreement on Trade Related Aspects of Intellectual Property Rights, administered by the World Trade Organization], and we’re doing the bare minimum to meet them.”

Customs officers lack the power to seize shipments of counterfeit goods, he explains, and Crown counsel do not have strong enough laws to warrant pursuing most cases. So luxury-brand owners turn to the law firms that did their initial trademark work, directing them to use the civil courts to go after illegal retailers.

It can be a frustrating process. In 2007, Louis Vuitton filed suit in federal court against Tim Yang Wei-Kai (also known as Wei-Kai Yang) and his mother, Lin Pi-Chu Yang (also known as Pi-Chu Lin, Wai Ying, Coco, and Martina). The two were doing business in Richmond as K2 Fashions. While being served, Lin Pi-Chu Yang left the store and was seen driving away in a red Porsche. Her son fled to Taiwan. Neither bothered to respond to the lawsuit or attend the civil trial. Louis Vuitton obtained a default judgment and damages of about $250,000. Yang sought to overturn that judgment, claiming that she was merely the landlord and that another woman, named Martina, was involved in K2 Fashions. The court found that she was not credible, and upheld the default judgment against her.

Six months after the K2 case, Manson went after another trademark infringer, again on behalf of Louis Vuitton. This time the B.C. Supreme Court awarded damages against Wynnie Lee Fashion, a group of retailers operating in Surrey Place Mall, Lansdowne Centre in Richmond, and Metrotown in Burnaby. The court ended up awarding damages of more than $1.2 million, the largest such award in Canadian history. “These cases send a strong message,” says Manson, “but they are not a deterrent in the long term.”

In the short term, at least, the civil actions seem to be working. I visited the Summer Night Market in Richmond expecting to find fake Gucci, Coach, and Louis Vuitton handbags for sale everywhere. I found only a hairclip and an iPhone case sporting the LV logo. Vendors responded to a request to see “Louis Vuitton” merchandise with a shake of the head. “They’re against us,” said one vendor. “If they catch us selling designer copies we will not be allowed to sell at the night market.”

Then again, the legal proceedings may simply be driving the trade deeper underground. The vendor finally told me where I might get counterfeit handbags—or, more precisely, he told my wife where to find them: Park Place Mall, Lansdowne Mall, and a few shops on Kingsway near Metrotown.

“Go alone,” the vendor suggested. “Maybe with a group of girls, they might sell.” He nodded in my direction. “But they won’t sell to you with him around.”

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