In
this case, they are real. But many brands like sunglasses company 100%
find themselves in an uphill battle against cheap knockoff products that
come from China. (100%/Yahoo Finance)
Two months after the new model of sunglasses came out in May, knockoffs started popping up.
“It
was amazing,” says Ludo Boinnard, CEO of 100%, a California-based
eyewear company whose popularity has ballooned in the past year. “Two
months!”
It
was the second time this had happened. Just over two years before, the
motocross-rooted company turned to cycling eyewear, and the fakes sprung
up in early 2017.
For
a small, up-and-coming company looking to gain market share — 100% has
fewer than 30 employees in San Diego — there’s an aspect of flattery at
seeing facsimiles, both branded with the company logo and unbranded,
show up in the marketplace. But it’s also the source of stress.
“They
just started to show up. It’s been just exponential; we used to see a
lot of Oakley knockoffs but we never paid much attention because we were
not in that world. Sometimes you’d see the Facebook and [Instagram] ads
with the fake Oakleys,” said Boinnard. “Now, because we’re in the
eyewear business, we’re more aware of what’s going on and it’s insane.”
Incidents
like these have been going on for a long time, as domestic intellectual
property (IP) is co-opted and duplicated with lesser materials abroad,
either to be sold as cheap counterfeits, fraudulently, or as something
of a generic.
The
ongoing trade conflicts and back-and-forth tariffs with China have
largely been about the President’s interest in closing the trade
deficit, but intellectual property has also been at the forefront of
U.S. complaints: China has been guilty of ripping off American tech in
the past. (The U.S. has long said that theft of intellectual property, including copyrights, trademarks, patents, has cost American companies billions of dollars.)
In
the discussions of IP by China, the focus has often been on the theft
of technology and electronics, often via foreign ownership restrictions
that require U.S. companies to show their cards to China or a Chinese
corporate partner if they want to operate there.
But while a simple copy-paste for consumer goods like sunglasses may
not pose the same security risks or enormous financial damage of a
complex tech algorithm, it does significant damage to a company.
The potential harm to the company has a few layers. The simplest is that they take away business, as some people will buy the cheaper knock-off on eBay or China’s Ali
Express for $25 instead of $150 from an authorized retailer. Many
companies and brands suffer from this issue, from Ray-Ban to Gucci to
Apple earpods.
Sometimes
people know it’s a fake, but mistakenly believe they are getting the
same product from the same factory simply with a different logo, or
maybe the factory stayed open an extra day off-contract. (This is not
the case for 100%, which sources from France and Italy only.)
But
the fakes are sometimes sold at full price to unsuspecting consumers,
which for sports sunglasses that require shatter-resistance, can cause
serious injury. Other times, “people think they’re getting a deal,” said
Boinnard. Unfortunately, the lower prices for knock-offs usually means
that there isn’t a budget for R&D or safety testing.
“One
of the first occurrences is one guy who called and said, ‘I’m very
unhappy about your product, I was injured by it,’” said Boinnard. He
sent photos of the cracked product and cuts of his forehead, and the
company told the guy to send the product. It turned out to be fake. “He
bought it full pop on a Chinese website,” said Boinnard.
In other instances, he said, people import fakes and sell them at events — at full price.
“They
have the experience of touching and feeling it and saying ‘oh this
product is crap,’ which hurts us at a different level,” he said.
A game of ‘Whac-a-mole’
For the most part, 100% contracts out the job of enforcing design patents and IP to Red Points, a firm based in Barcelona
that has the technology to crawl the web for design infringement. The
company told Yahoo Finance’s sister site TechCrunch that catches around
200,000 fake products for sale every month. Tools like reverse-image
search help, as many listings use the company’s actual product photos.
“We
have it automated and we have a clear message to all our distributors –
if you find a link to a fake please send it and that email gets
forwarded to Red Points,” said Boinnard. If there’s a question of
legitimacy, the company does have to manually look through flagged
products to make the final judgment, something that costs time and
money. “It’s a whac-a-mole kind of business,” he said.
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