In a landmark decision, luxury handbag brand Coach have won an $8 million jury verdict against a customs brokerage firm. The decision is believed to be the first in which someone has been able to obtain a verdict against a customs brokerage firm.
Most importers hire customs brokerage firms to complete the necessary paperwork required to clear customs. Coach launched its investigation when U.S. Customs and Border Patrol advised that it had seized a large shipment of counterfeit Coach handbags and wallets headed for the Port of Los Angeles. Coach then discovered that the defendants created and filed fraudulent customs entry documents to allow the counterfeit product to be shipped to the U.S.
The counterfeit problem is estimated to have grown by 10,000 per cent in the past two decades, fuelled by rocketing consumer demand and advances in technology. The biggest problem faced by luxury fashion designers is the dilution of their brand. When a brand that is synonymous with luxury and exclusivity is copied extensively and inferior products bearing the brand’s logo are made available, the brand is less attractive to its customers. Not surprisingly, stifling the supply of counterfeit goods is of paramount importance to luxury fashion brands.
Coach have a special section of their website devoted to counterfeit education, advising consumers how to spot and report fakes. The brand is also involved in a slew of anti-counterfeiting litigation in a campaign named “Operation Turnlock” which began in May 2009. So far the accessories firm has filed over 650 lawsuits and has received millions in judgments and settlements.
The decision against the brokerage firm wasn’t the only first in the war against counterfeits this week – a city council woman in New York wants to hold consumers responsible for purchasing them. Margaret Chin plans to introduce a bill that could see consumers face a $1,000 fine if caught purchasing counterfeit goods. And that’s not all; violators could also face a year in jail!