Of Rags and Richemont: Chloé goes to court

Chloé's legal team give a whole new meaning
to the concept of making an appearance in Court

As a great believer in the old-fashioned virtues of spelling, punctuation and grammar, and as a great supporter of the much-neglected comma (note for some of our younger readers: that's the thing which looks like ' ), this Kat has always had a soft spot for a publication which, though now generally perceived as WWD.com, is really Women's Wear Daily. Muck it up and you can easily be left with Women Swear Daily which, as Merpel will tell you, is not the same thing at all.

Anyway, it was a chance encounter with Women's Wear Daily that bought a slightly unusual event to the Kat's attention. Richemont (or Compagnie Financière Richemont S.A., if you want to be formal), is a company that is built on some fairly luxurious brands: Dunhill, Baume et Mercier, Cartier, Chloé, Montblanc, Piaget S.A. and Van Cleef & Arpels float easily into the mind.   As a company, Richemont is a little unusual.  In a world of aggressive corporate beasts that strut and stomp and generally breathe plumes of flame at anyone whom they deem to be an inconvenience to their businesses and a threat to their IP portfolio, Richemont's profile is more that of an amiable herbivore, prepared to resolve its problems peacefully without first pressing the destruct button.  Evidence of this can be found in the relative infrequency with which Richemont's name, and that of its brands, crops up in the law reports, as well as the slightly shocking notion espoused by the luxury house that online and offline traders shared the same planet, it being better for brand owners to work closely with auction hosts like eBay rather than waste their energies and resources in trying to hit them over the head -- a policy which Richemont has pursued over the past decade.

Yet there are limits to even Richemont's patience.  As WWD reported yesterday, Chloé and three of her friends have been moved to commence proceedings in the District Court for the Central District of California against Pakistan's Tradekey.com and its parent, Saudi-based Sawabeh Information Services Co., alleging that they have knowingly engaged in the sale of counterfeit replicas of Richemont products through the activities of unauthorized sellers, manufacturers, suppliers and distributors.  This is no David v Goliath dispute: Tradekey is believed to be the second-largest business-to-business global marketplace e-commerce site after Alibaba.

So why is it good to talk to eBay but sue Tradekey? WWD explains why Richemont opted for something more robust than a fireside chat over tea and muffins:

"According to the plaintiffs, who waged a yearlong investigation, Tradekey not only helps manage listings by counterfeiters, editing postings and removing the term “replica” from their title, but it also provides search engine optimization services to its members, who sell counterfeit goods. ..."

It's also the case that, while eBay is more consumer-facing and also operates the Verified Rights Owner (VeRO) programme for IP-driven businesses to report sites that sell infringements, while Tradekey is more business-to-business and its mechanism for dealing with vendors of infringing goods is somewhat low-profile.

Quite a bit of homework has gone into this action, WWD reports. Richemont's investigation was led by Rob [any relation of Sherlock?] Holmes (IPCybercrime.com), who tried out the GoldKey and SilverKey membership schemes for Tradekey's sellers:

"After paying $3,000 to become a GoldKey member, Holmes was contacted by a TradeKey representative who helped him promote his sell offer listings using certain keywords that would enhance his chances of being at the top of searches looking for fake Chloé bags, for example.
One of his Chloé ads stated: “We work directly with the #1 factory in China for perfect mirror quality fake Chloé Paddington handbags.” Another one more blatantly added: “The quality is mirror image and looks just like the real thing!” 

Holmes said in his declaration to the court that his Tradekey representative told him that, by using the company’s search engine optimization (SEO) savvy, some listings could pull in buyers from Google. The rep even boasted that Tradekey hired a former Google employee to help with its SEO work".

The launch of this action has brought some speedy results.  The first was a response from Tradekey's US attorneys that the case was “seriously flawed".  The second was a complaint that Tradekey was never given notice, nor had it received any request, that the infringing listings be removed. The third was a statement that

“It [Tradekey] has terminated thousands of listings — generally in no more than 24 hours after receiving notice — and has implemented expedited takedown procedures for bulk notices, a process utilized by many leading brands".

The IPKat will be watching the outcome of this matter with great interest.  Merpel too: she says, actively promoting the sale of fakes and then agreeing to stop only when asked to do so is a bit like actively hitting someone over the head and then agreeing to stop only when asked to do so, isn't it?

Reporting sellers of fakes to Tradekey? Click here