counterfeit

Even if you consider yourself a savvy shopper capable of spotting a fake a mile away you might want to double-check your favorite UGGs, some of the counterfeits up for sale lately are more than a little convincing.

The tricky part is that the latest UGG knock-offs aren't made of chintzy materials or with poor technique -- they actually have some quality behind them. Both boots pictured here are made of quality sheepskin with reinforced seams. They're both heavy, comfortable, and substantial boots. The only obvious difference is in the logo -- the overly large one on right marks the black boot as the imposter.

So how to tell if you've got the genuine article or have been duped with a knockoff? Besides the logo we've got four other telltale signs to look for in the gallery below, courtesy of the WSJ.

Giorgio Gucci made his first visit to Washington yesterday as part of a forum discussion entitled "Intellectual Property Rights in the Fashion Industry and Its Effects on Our Nation's Economy." Gucci, descendant of the famous Gucci dynasty, is the third generation of Gucci heirs that began with his grandfather, Guccio, who established the Gucci House of design in 1905. Panelists included Caroyl Miller, deputy textile negotiator from the U.S. Trade Representative Office, Jean Bonilla, director of the Office of Intellectual Property Enforcement and Steve Hicks, director of trade policy and agreement at the office of U.S. Customs and Border Protection.

First the shoppers, then the retailers, and now the counterfeiters. It's official: the recession really is affecting everybody. The economic downturn hasn't exactly hurt the multi-billion dollar knock-off industry but what it has done is change the way counterfeiters do business. The usual victims, high-end retailers like Louis Vuitton, Gucci, and Coach, are being replaced by less expensive luxury brands like Samantha Thavasa, Anya Hindmarch, and Kooba. Smaller labels are appealing to counterfeiters for many reasons: they're easier to sell online, can often be priced higher, and because the designers run smaller operations they're less likely to trigger a lawsuit. One of the most common new tricks is to offer brand name bags at fairly small discounts, i.e. $190 for a $250 bag, on small but well-designed websites. The result is unwitting consumers who think they've found a good bargain on a genuine article and buy, often being none the wiser until it's too late.

Unfortunately there's not a lot that can be done as there will always be crooks out there looking to make a buck (and the internet is notoriously difficult to patrol) so your best bet is to always buy from reputable retailers you trust and to remember: if that bargain looks too good to be true it probably is.

If there is anything that watch brands hate more than a bad economy, it is fake watches. Asia pumps out fake watches faster than ever, and Swiss watch brands have been lobbying lawmakers and law enforcement all over the world to help out. First of all, fake watches are illegal. As far as watch brands are concerned, they are as bad as hard drug trafficking. While replica watches (and other luxury goods) don't represent a violent crime, they are very damaging to the luxury goods economy, and are severe infringements of intellectual property rights. For a long time many Asian countries (especially China) have a bad reputation for utterly disregarding intellectual property rights. It is hard enough to enforce such laws in those countries, but when the goods travel here, the US is pissed off.

A major dealer of fake luxury goods including Rolex watches who was arrested last year had his good endure a unique public spectacle. The take down was operated by the US Immigration and Customs Enforcement agency (ICE), who apparently worked closely with Rolex. The arrest last year was after years of investigation and gathering evidence. The culprit was one Binh Cam Tran of Pennsylvania. After importing the parts for the fake watches, the replica timepieces were assembled in his home outside of Philadelphia. Tran is currently serving 6 years in jail and has been ordered to pay over $2 million dollars to Rolex USA.

Nice makeover, Benjamin. The new $100 bill -- due to be released February 10, 2011 -- is super secure and full of new, hidden features.

"As with previous U.S. currency redesigns, this note incorporates the best technology available to ensure we're staying ahead of counterfeiters," said Secretary of the Treasury Tim Geithner. What's especially nice is that with this new hundred dollar bill, you don't have to be an expert to see if you're being fooled.

For example, see that blue ribbon? That's a "3-D Security Ribbon." The bells and 100s move and change back and forth like those hologram cards from the 80s. There's also a bell in that inkwell you can just barely see; it changes color from copper to green when you tilt the note. The watermark portrait of Benjamin Franklin is also very hard to replicate, so know your Founding Fathers and you should be all set.

A few days ago my colleague Rigel Celeste wrote an interesting story about what your handbag says about you. In the story she posited that "carrying a knock-off bag can say that you're putting a fake front to the world." According to an intriguing story on Bloomberg, a study done by Renee Richardson Gosline, an assistant professor of marketing at MIT's Sloan School of Management, showed that if you want to get away with wearing a fake you need to have a certain attitude. Her research revealed that people are more likely to peg a handbag as being a real designer bag if the woman carrying it is wearing expensive clothes or has an aura of wealth.

Her methodology involved showing 100 owners of luxury handbags photos of bags alone and photos of bags worn by people in social settings. The study subjects were more able to ascertain an item's authenticity and potential cost of the item when it was in context. Gosline, who also happens to be a former brand manager for LVMH Moet Hennessey Louis Vuitton, found that even a nice fake won't fool many consumers if the rest of the package doesn't match up. I would suggest that a similar principle is often in effect with jewelry. A costume piece can appear more or less authentic depending on the person wearing it. Individual pieces of a person's wardrobe seen in context can elicit very different reactions from observers.

Gosline's research also showed that people are willing to pay twice as much for an item that they think will impress others and can be used to trumpet wealth and status. In another study she found that many purchasers who buy knock-off bags later gone on to buy real ones. Quoted in the Bloomberg article she says that the counterfeit served as a "placebo for brand attachment" leading people to become attached to a certain brand even though they never actually owned it.

Art crime is running rampant around the world. More of the modern Russian art on the market is fake, according to an ArtInfo report, and authenticity is a problem in Vietnam, as well. There are lawsuits here in the United States, as well. So, ArtInfo asks the fair question: why are the wealthy, usually financially savvy so vulnerable when it comes to art?

Excitement is certainly part of the problem. The high prices, limited supply and egos involved create an emotionally charged environment. As hedge fund spouse Danielle Ganek observes in her (rather painful) novel, Lulu Meets God and Doubts Him, "Art is the new cocaine." Yep, and that leads to some hasty decisions.

Experience usually makes a difference in protecting collectors from fakes. New collectors rush into the bidding process, not always understanding the quality or history of what they're buying, though there's also plenty of room for seasoned buyers to make mistakes. For the newcomers, the risks include wanting to gain access to what is seen as an exclusive club, social pressures to abide by this subculture's conventions and an unwillingness to ask questions ... mostly because of those social pressures.

Yet, for all the regrets that top collectors have related about impulse buying, there are others who lament not having been faster on the paddle.

Illegal cigar factories, called "chinchals," have been among the few alternatives for Cubans looking for work in the midst of this global economic crisis. Risking time in prison, employees roll counterfeit Havana cigars in order to make a living. The risk may be worth the return, but it's hard to say.

One roller refused to reveal the extent of his pay raise when moving from state factories to the black market ... but "raise" was implied. Working in the legit world, this employee earned $17 a month. Counterfeit cigars tend to sell for $30 to $40 per box of 25, a price that's up to five times lower than the official price set by the Cuban government.

The price competition is only one reason for the government's distaste for the counterfeit cigar business, but it's a powerful one. Cuba's official cigar company, Habanos S.A., saw a 3 percent drop in sales last year. The government also cites the need to protect the image of the brand and fight corruption on the island. Authorities confiscate 1,500 to 1,700 boxes of illegally manufactured cigars every month.

It could be a losing fight, however. Barriers to entry are low, as supplies are easy to secure. And, desperation plays a role. When you need to put food on the table, risks become more realistic.

Every luxury watch brand has knock-off versions, in varying degrees of quality and effort, but if you want a timepiece that can't be copied then the Quai de L'ile by Vacheron Constantin is for you. The Qaui de L'ile is named after the watchmaker's historic address in Geneva and has a laundry list of high-tech features that are said to make the watch "counterfeit-proof." Some of the most interesting are tiny words printed with special inks like those used to make money, laser engravings on the dial so small they can't be seen without a magnifying glass, and layers of invisible markings that only show up clearly under UV light (you can almost see one, a sun symbol, in the picture above between the 1 and the 2 on the dial).

The Vacheron Constantin Quai de L'ile was just launched last month and, depending on features, is priced between $29,000-$60,000.

Via DVICE

Finally some good news for eBay. The company which just lost a big suit against LVMH in France is having better luck on this side of the Atlantic. The AP reports that a federal judge in Manhattan has ruled in favor of eBay over Tiffany & Co. in a trademark infringement lawsuit. In the suit Tiffany & Co. claimed that eBay's sale of counterfeit goods resulted in trademark dilution, false advertising and unfair competition. When the case opened last November, James Swire, a lawyer for Tiffany, said that a full 75% of 325 items that Tiffany has bought on eBay through a buying program the company started in 2004 were counterfeit.

But the entered by Judge Richard Sullivan at the U.S. District Court for the Southern District of New York on Monday puts the onus for policing its brand on Tiffany. The ruling said the company failed to prove that eBay was liable for the sale of the goods.

As in other cases, eBay argued that it is merely a host for buyers and sellers. That argument didn't fly in France but but Judge Sullivan said in his opinion that "Given Tiffany's choice to sue eBay, rather than individual sellers, and this Court's conclusion that eBay does not continue to supply its services to those whom it knows or has reason to know are infringing Tiffany's trademarks, Tiffany's claims against eBay must fail."

If the decision had come back in Tiffany's favor it would have been a decisive blow for eBay, showing that they were liable for the actions of their sellers. But this decision, combined with the LVMH lawsuit, which puts forth a different view, show that right now there is no clear answer in the question of who is responsible for counterfeit goods on eBay. As always, if you are buying on eBay, caveat emptor.

For the consumer who wants to avoid counterfeit merchandise on eBay, a little research can make a big difference. Looking at the feedback score of the seller and reading the comments can give you some insight into the seller's history. A feedback score of at least 99 percent is best. Also when you are in the seller's history click on the past auctions. If this seller has sold a lot of similar or even identical branded items this is a big red flag. Also, sadly, if it sounds too good to be true and the price is really low you may be looking at a fake.

We all know that counterfeit goods cost luxury companies a fortune but Forbes reports that companies such as Coach and Louis Vuitton have taken a new course of action, funding college classes on counterfeits. The International Anticounterfeiting Coalition which includes companies such as Cartier, Chanel, Calvin Klein and Tiffany gave from $5,000 to $10,000 to seven colleges for a course that instructed students in the negative effects of counterfeit goods. Colleges such as Hunter College in New York, California State University, Sacramento and the University of Miami took the money which was given for course materials. Things didn't turn out so well at Hunter College last year. Once professors found out about the class which co-taught by public relations rep., there was a bit of a protest. Check out the the article on Inside Higher Ed which details the class, including the fact that students were asked to create a fake blog that told a story about counterfeiting as seen through the eyes of a fictional college student. While it is not unheard of for corporations to sponsor certain classes or research, the particular nature of this class, which was taught by a professor with limited knowledge of the subject who was asked to present a one-sided view of the problem, has angered many.

UPDATE: In a related story, WWD reports that outside of the Brooklyn Museum Murakami event tonight, Louis Vuitton is setting up 10 street vendors to sell authentic Louis Vuitton product and special Monogramouflage canvases that Murakami has created specifically for the exhibition. The presentation is meant to highlight the issue of counterfeit goods.

Fendi has filed suit against Wal-Mart after accusing the retailer of selling counterfeit bags while representing them as the real thing. The bags in question were sold at the warehouse Sam's Club stores, which are owned by Wal-Mart. Fendi asserts that Wal-Mart never purchased products from them, nor did they inquire as to the authenticity of the goods they were buying from their suppliers. As the stores were selling the bags for 45% below retail, it  does seem quite possible that they "fell off the back of a truck" somewhere, though Wal-Mart declined to comment.

Somehow, the "don't ask, don't tell" acquisition strategy seems like it is most effective when purchasing a single bag in a back alley somewhere - though still not great from the designer's perspective - than when the world's largest retailer, already under a lot of scrutiny, starts buying them in bulk.