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When a member of contemporary brand House of Sunny’s trade team walked into a popular boutique in west London’s Notting Hill in September, she was thrilled to see some of the brand’s designs on the shop floor. However, on closer inspection, she noticed they were fakes, despite being labelled with the House of Sunny logo. The store was unwittingly selling the products, which have since been removed.
It's not an uncommon story. While major global luxury brands such as Louis Vuitton and Rolex are most frequently targeted by counterfeiters, according to a report from the Organisation for Economic Co-operation and Development, independent brands are now reporting a surge in counterfeit products bearing their logos as well as a wave of unbranded lookalikes of their best-known designs. Replicated designs are being sold by ultra-fast fashion retailers and through wholesale marketplaces. Sunny Williams, founder of House of Sunny — launched in London in 2011, offering knitwear and trousers in vintage-inspired playful prints worn by the likes of Kendall Jenner and Bella Hadid — says loyal customers send through images of fakes every hour of every day.
Restricted by the heavy legal costs of combating the counterfeiters, independent brands are fighting a tough battle but are hitting back with a smorgasbord of measures, ranging from adding QR labels to making their designs harder to copy.
The counterfeit market was valued at $464 billion in 2019 and continued to grow after the global spike in online shopping during the pandemic. Counterfeits sold via online channels grew 5 per cent from May 2020 to April 2021, according to research by authentication platform Certilogo, which also found that 9 out of 10 fakes are sold online.
Making designs harder to copy
The swiftness with which emerging independent labels can be targeted is alarming designers. “I didn’t think as a young designer that we’d be in this dilemma so quickly,” says Williams.
Designers despair at the scale of the challenge. “To be completely honest, I think there's really only so much you can do,” says Dimitra Petsa, the London-based Greek designer known for her wet-look dresses worn by the likes of Kylie Jenner, Gigi Hadid and Nicki Minaj. “You can’t really patent fashion. You can only patent some aspects of the techniques you're doing.”
Fashion pieces that go viral and are commercially successful are more likely to be copied. For a brand such as House of Sunny, a social media favourite with more than 620k followers on Instagram, it’s an ever-present threat. Products purchased directly via social media are twice as likely to be fake as those bought through other e-commerce channels, according to Certilogo.
House of Sunny is making its designs more intricate to deter counterfeiters. The brand is using mixed media, including leftover cuttings from past collections, to add patchwork details to its knitwear that are harder to replicate, particularly at a low price point. “We can’t really stop [the lookalikes], but they are going to look like trash in comparison,” says Williams.
Emerging South Korean streetwear brand Goodboy, which creates limited edition products as collectibles, only sells through wholesale, so consumers often don’t know that they’re buying fakes. Founder Jinkoo Lee says he is changing the logos of the brand each season to create an element of surprise and excitement for his customers, but it has also proven to be a useful anti-counterfeiting strategy.
Educating the consumer
While it’s hard to stop copies, brands can seek to inform and educate consumers on the difference in quality between the original goods and lookalikes, says Williams. “They may be focused on wanting the fashion trend to the point where they’ll be willing to buy and wear the fake. If we can [get through to] that individual, that’ll stop the demand for fakes.”
Goodboy works hard to make sure its end customers are informed. “Whenever we deliver our collection we explain to buyers what’s different about our products so they can explain to the consumer how to tell the difference between counterfeits and originals,” says founder Lee. “They can copy our logos, prints and fabric colours but the sewing details and fabric qualities are completely different,” he adds.
Direct legal action is always a tough call. The design teams creating ultra-fast fashion lookalikes strive to ensure they are as similar as possible without risking infringement and legal action from the original brands. Cases are rarely considered severe enough for a cease and desist or settlement, says Bharat Kapoor, CEO of anti-counterfeiting software company Strategic IP Information (Sipi). He says lookalike products from third-party online sellers are hardest to deal with: “[They] do everything to try and sell the same product without the branding on it — they make these really tiny variations in the product.”
Much of the counterfeit and lookalike activity is based in China. Experts say this is because, while the situation in China has improved, enforcement isn’t as effective as in the West. In China trademarks and patents can only be protected once they’ve been registered, while in the EU and the US brands can claim trademark protection without registering if an element of a design has been used consistently in the past.
Authentication technology
Big luxury players are now using blockchain as an authentication tool, a method attracting interest from smaller independent brands too. As a stepping stone to blockchain, Goodboy introduced a QR label. “When you scan the QR code, there’s a serial number that can’t be copied which you can scan to lead to a website that will certify the original [purchase],” says Lee. The brand also posts its stockists on social media, informing customers where they can find originals, and issues a letter of authorisation to buyers.
Besides making its designs more intricate, House of Sunny is introducing a QR label for SS22. These anti-counterfeiting strategies are costly. “It’s a huge expense for us, but we’re willing to make less profit per garment to put this into process,” Williams says.
Loke-Khoon Tan, senior partner of the award-winning intellectual property (IP) and technology group at law firm Baker Mckenzie, in Hong Kong and China, and author of IP trilogy Pirates in the Middle Kingdom: the Art of Trademark War, says even the smallest brands should think ahead. “A lot of up-and-coming brands don’t invest enough in IP because they want to wait and see how the brand takes off. But that’s actually not a good strategy — you have to think of it as an investment. If you don’t protect now, you’ll have to litigate tomorrow.”
Financial resources can be stretched thin. “Smaller brands that have limited budgets have to be very strategic about how they pursue IP coverage and protection,” advises Margarita Wallach, managing partner at McCarter & English's New York Office. Copyright applications are typically least expensive, ranging from $300 to $800, if the client has all necessary information for the application readily available, says Wallach. That rises to $2,000 to $3,000 if the attorney needs to do more background work. Wallach says brands should ideally prepare through a mixture of procedures, including obtaining the registration for the IP, maintaining good records and developing a watch system and enforcement strategy with counsel.
However, brands and experts alike acknowledge, through gritted teeth, that counterfeiters are often one step ahead. Wallach points out the counterfeit market has splintered in the digital age into a multiplicity of participants. “Because of the advent of globalisation and the use of online shopping, it’s so easy for small players to enter the counterfeit market whereas years ago it was more of a centralised criminal enterprise.”
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