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February, 2018

Canada Goose files lawsuit against Web-based Chinese counterfeiters

Original article: Chicago Tribune

Canadian luxury outerwear maker Canada Goose has filed a lawsuit against web-based Chinese counterfeiters in a Chicago court. According to court documents, the counterfeiters have been selling phony Canada Goose coats through a group of interrelated unauthorized websites.  

Analysis:

Ever enterprising, Chinese counterfeiters are looking to cash in on Canada Goose's ascendancy. Indeed, it wouldn't be a stretch to call Canada Goose the world's hottest cold-weather brand; its revenues jumped 39% annually in 2017 to reach $403.8 million. Nearly 1/3 of its sales are generated online, making the company an easy target for IP thieves operating in anonymous cyberspace. 


Regarding the scene of the crime, the usual suspects are involved. Amazon and eBay, both criticized by IP analysts for having lax anti-counterfeiting policies, are among the channels through which counterfeiters targeted foreign consumers. The perpetrators also set up fraudulent "official" websites to dupe buyers into thinking they were purchasing genuine Canada Goose merchandise directly from the brand. 


Within China, the counterfeiters sold fake merchandise on Taobao at heavy discounts. A recent Global Times report said the parkas sold on Taobao cost just RMB 1500, compared to RMB 8800 on Canada Goose's official website. In the view of O2O Brand Protection, the counterfeiters operating on Taobao were not trying to dupe local buyers - but rather sell counterfeit coats to consumers who wanted a passable fake. 


One Chinese purchasing agent told The Global Times she has direct suppliers of Canada Goose parkas from "foreign markets" and discounts the garments heavily to attract more buyers. She's almost certainly telling the truth. Many price-conscious Chinese consumers knowingly buy fake branded clothing and accessories when they feel the value proposition is attractive.


The price may be right, but the coat won't be, Canada Goose says. After the company analyzed the content of counterfeit parkas, it found that counterfeiters use feather mulch or other fillers teeming with bacteria, fungus and mildew instead of sanitized Canadian down. The fake coats may then actually cause one to come down with a cold instead of protect against infection brought on by exposure to the elements. 


Beijing-based lawyer Hao Junbo told The Global Times that the lawsuit is largely symbolic. Even with a victory, Canada Goose can only prevent Chinese counterfeiters from selling the fakes in the U.S. In China, Canada Goose would have to file a separate lawsuit to take legal action against the counterfeiters. In the meantime, it will need to rely on Chinese e-commerce operators and local authorities to curb counterfeiting of its products. 


For consumers who believe they have been the target of fraud and want to file a report, Canada Goose provides contact information on its official website for the Canadian Royal Mounted Police's Anti-Fraud Center. 


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