November 29, 2022

Mariedelices

Taking The Lead For Fashion Quality

Jewelry Counterfeits: The Age-Old Problem Just Keeps Growing

It didn’t take long for Mitchell Binder’s first taste of international success to turn bitter.

About 30 years ago, the jewelry designer went to a major international trade show in Frankfurt and introduced the kinds of pieces he had been making and wearing in Southern California: skulls and crosses, hefty silver rings, a look that screamed motorcycles and rock ’n’ roll.

“It was edgy stuff, especially for a very traditional market,” Mr. Binder, now 65, recalled in a recent video interview. “I was very brazen about it.” He did so well at the show that he registered for the next event.

But, “to my surprise, six months later when I arrived at the show to set up my booth, I saw my designs all over everyone else’s booths,” said Mr. Binder, adding that he had such a visceral reaction, he felt like he had fallen off a building. The knockoffs were half the price of his pieces, he said, and ranged in quality from good to “godawful.”

“I was devastated. I took it very personally,” he said. He finished the show and filled the orders he received, but decided the business was not for him. “The last thing I wanted to do was make jewelry for somebody else to copy,” he said. “I literally put my tools up and quit making jewelry.”

But after a stint in Hollywood, first in a blue-collar job and then doing some writing and producing, Mr. Binder returned to his first love. He said he had come to realize that “I was born to make jewelry, so I’d better figure out a way that I can live with this problem and not make it so personal.”

In 2000, he introduced a company called King Baby, which now has stores in Santa Monica, Calif., Nashville and Las Vegas, as well as an authorized dealership in New Hope, Pa., and 13 stores in China, owned by a business partner.

The problem of the knockoffs has never gone away, Mr. Binder said, but he now hires others to handle legal issues and puts his energy into the creative process instead of worrying about potential counterfeiters.

“They can’t get into my mind,” he said. “I have the ability to create new designs.”

Counterfeiting across the jewelry industry comes in different forms and inflicts a host of harms — on individual creators, certainly, but also on consumers, companies, even cultures or countries. It is an age-old problem that has intensified in recent years given the ease of online commerce and can involve violations of both trademark, which protects brand identity, and copyright, which covers creative work.

When someone misuses a trademark — a name or logo or some other feature that identifies a brand in a consumer’s mind — the harm can be irreparable, according to Ben Allison, a lawyer in Santa Fe, N.M., who specializes in commercial and intellectual property litigation.

“It’s a theft of someone’s identity, but it strikes much closer to the heart of identity than somebody just using my Social Security number to get money,” he explained. “It’s very personal. A trademark is how the world knows me.”

In the United States, it is not necessary to register a trademark with the U.S. Patent and Trademark Office or a copyright with the U.S. Copyright Office because trademarks are acquired through first and continuous use and works that are copyrightable by law are covered from the moment a creation is finished. But having that registration provides “better remedies and tools and better protection,” Mr. Allison said.

Infringing a copyright or trademark is not the same as one creator simply taking inspiration from another. Cody Sanderson, a Santa Fe-based jewelry designer (and a client of Mr. Allison’s), said he had seen reproductions of his work for sale online that were not labeled as such — and appeared to have been cast from a mold of his original pieces.

“They use my piece exactly,” he said. “They don’t deviate from it, they don’t change it up a little bit.”

For example, he said, a ring in solid silver that he sells for $450 was copied in stainless steel and advertised online for less than $20, including shipping. His initials and the hallmarks identifying him as Navajo and the piece as sterling silver appeared on the reproduction.

Not all fakes are created equal. Some are well-executed and expensive, others the tawdriest of knockoffs. In the case of quality fakes, the victims include the creators of the genuine articles, who might be losing sales, and the buyers who may think they are getting good deals on the real thing.

When it comes to the cheapest fakes, most buyers know what they are getting. “Nobody who’s buying a $10 Cartier Love bracelet is buying that instead of the $10,000 one,” said Alaina van Horn of U.S. Customs and Border Protection (C.B.P.).

Some may think a fake that was sold openly — even promoted on social media as part of fast fashion’s “dupe culture” — must be legal, said Ms. van Horn, who is chief of the Intellectual Property Enforcement Branch of the C.B.P.’s Office of Trade.

But if the fake violated a trademark, she said, its sale would not be legal. And even if the consumer was not deceived, the sale would not be a victimless crime. “The brand good will is eroded. The strength of the trademark itself is diluted,” Ms. van Horn said. “If everybody’s walking around with a gold-looking bracelet with screw designs, it’s going to erode the value of that genuine product.”

That screw-motif bracelet, the Cartier Love, actually topped C.B.P. jewelry seizures in its 2021 fiscal year, according to Ms. van Horn. Other top counterfeited jewelry items seized included pieces with the Chanel double-C logo, copies of the Cartier Juste un Clou bracelet and items from the Van Cleef & Arpels Alhambra collection, as well as pieces purporting to be from luxury brands such as Bulgari and Tiffany & Company.

A C.B.P. report said watches and jewelry were the fourth-leading category of counterfeit products seized in its 2021 fiscal year, totaling 12 percent of all seizures — but the leading category in purported dollar value. Had the seized goods been genuine, the report said, their total manufacturer’s suggested retail price would have been almost $1.2 billion.

The C.B.P. said its enforcement efforts were focused on federally registered trademarks and copyrights in its Intellectual Property Rights e-Recordation System. The fake jewelry that has been seized usually was ordered online and arrived in small parcels, not bulk shipments, and China was the leading source, Ms. van Horn said.

More than 420,000 parcels from China are processed every day, according to the C.B.P., and an interagency operation has found that more than 13 percent of targeted shipments contained counterfeit goods or contraband items.

There is no real way, though, to calculate the full scale of imports of counterfeit jewelry, Ms. van Horn said. “We don’t know how much we’re missing.”

Companies have been acting on many fronts to combat fakes. In June, Amazon and Cartier filed two joint lawsuits against a social media influencer and eight businesses selling on Amazon, alleging that they had been “advertising, promoting and facilitating the sale of counterfeit luxury goods through Instagram and other websites, infringing on Cartier’s registered trademarks and violating Amazon’s policies,” an Amazon news release announced.

The complaints, filed in the U.S. District Court for the Western District of Washington, described a “sophisticated campaign” to sell counterfeit Cartier products — including the Love bracelet — “while disguising the products as nonbranded in an attempt to evade Amazon’s counterfeit detection tools.”

Some of the world’s largest luxury groups have turned to blockchain technology to certify the authenticity of their brands’ products and discourage counterfeits. The Aura Blockchain Consortium — whose members include LVMH Moët Hennessy Louis Vuitton and Compagnie Financière Richemont — said on its website that the technology had allowed brands “to put a tamper-proof digital stamp of authenticity on any product or component.” And the De Beers Group, which introduced its blockchain platform Tracr in 2018, announced earlier this year that it now was using the system to provide “an immutable record of a diamond’s provenance.”

A start-up called Imprint Registry, which markets itself as “a global art registry built to empower artists,” intends to use blockchain so artists can take control of their own intellectual property and assure buyers of authentic products, according to two of the company’s founders, Dogan Perese and Ruth-Ann Thorn. The company introduced a beta version of its digital registry in August at the Santa Fe Indian Market, an annual juried event.

Mr. Perese and Ms. Thorn said that, eventually, anybody who purchased a valuable piece of jewelry or other work of art would demand a secure electronic record, just as someone who bought a vehicle requires a title.

“It’s just coming, because we live in a world right now where people don’t always know what they’re getting,” Ms. Thorn said.

To some extent, that has always been the case.

“The first people to forge ancient Greek art were the ancient Romans,” said Erin L. Thompson, associate professor of art crime, fraud and forensics at the John Jay College of Criminal Justice at the City University of New York. The ancient Phoenicians, she added, made Egyptian-style jewelry, including rings with scarabs or cartouches of pharaohs.

Jewelry has long been a target of looters at archaeological sites, and the demand for such artifacts also created an opportunity for forgeries, Ms. Thompson said. Today there is what she called a “robust” online market for supposedly ancient jewelry — including, she added wryly, identical rings in a choice of sizes that happen to fit modern fingers.

Some buyers apparently are drawn by the chance to get a bargain and do not stop to wonder whether something is genuine, she said. Even if a consumer is not fooled by a forgery, though, she said such practices have a negative impact.

“Who cares if somebody’s knocking off an ancient Greek design?” she said. “It’s certainly not harming the ancient Greek jewelry designer.

“But it does encourage the market for looted antiquities,” she said, adding that it could lead to further destruction of archaeological sites.

Counterfeits of any era also raise concerns about unethical labor and environmental practices that might be associated with producing cheap knockoffs, she noted.

Native American jewelers are all too familiar with the problem of counterfeits. Fake Navajo jewelry has been produced since tourists first began to visit the U.S. Southwest in large numbers more than a century ago and wanted cheap souvenirs, according to Liz Wallace, a Santa Fe-based jeweler who is Diné (the name the Navajo call themselves), as well as Nisenan and Washoe.

As wrong as it is to copy brands like Chanel, Louis Vuitton or Cartier, she said, the people who produce counterfeits of Native American jewelry often are hurting “some of the most vulnerable communities in the country.”

Ms. Wallace, 47, said she had not been a target of counterfeiters, but she had felt the indirect effects of a market flooded with fakes. Years ago, before she realized the extent of the problem, she would see inexpensive jewelry being sold as “Indian” pieces in shops in downtown Santa Fe and felt bad that she could not make her jewelry for those prices.

“I was getting really insecure,” she said in an interview. “Of course, it was all made in the Philippines by people who were lucky to make $8 a day.”

In fact, the U.S. Attorney’s Office for the District of New Mexico has prosecuted several people in recent years for producing Native American-style jewelry in the Philippines and marketing it as authentic in the United States.

Ms. Wallace and several other Native American artists testified as expert witnesses at a 2018 sentencing hearing in one of those cases, which involved violations of the Indian Arts and Crafts Act. (Under that 1990 law, it is illegal to market arts and crafts as Native American if they are not.)

The two defendants in that case pleaded guilty, one of them to felony charges that resulted in a sentence of six months in prison, followed by a year of supervised release, according to the U.S. Attorney’s Office. In 2020, two jewelry wholesalers in New Mexico pleaded guilty in another case involving Filipino-made imports of jewelry marketed as Native American. Their sentences included supervised release and fines totaling $300,000.

But for people who make millions with fakes, such fines are “just the cost of doing business,” said Mark Bahti, who owns Bahti Indian Arts in Santa Fe and Tucson, Ariz. He said he believed counterfeiting was more prevalent than it was even in the 1970s — what he called “the disco era” of Indian jewelry — because of the opportunities to sell fakes online and a lack of consistent enforcement of the laws to prohibit fakes.

“You can have the best-crafted law out there,” he said, “but if you don’t have anybody actively, consistently enforcing it, the people who are violating it can tell that in a heartbeat and go on about their business.”

Mr. Bahti said he saw fakes “all the time” among the pieces that people brought to him for appraisal. In one case, someone had paid $12,500 for a bracelet said to have been made by the Hopi jeweler Charles Loloma, who died in 1991. Mr. Bahti had to break the news that it was a counterfeit worth about $800.

He encourages buyers to do research and shop around. When they do buy, he said, they always should ask for receipts that describe their purchases, the production methods and the makers — so if there are problems later, they will have detailed proofs of purchase.

Consumers need to be more discerning, Ms. Wallace said, adding that some people assume they are protected by law without knowing the law can be hard to enforce. “I want people to really pay attention to the wording of what they’re buying, because it’s so deceptive,” she said. “They see ‘Native-inspired,’ and they just see the ‘Native’ part.”

She also wishes that the government would take the problem more seriously and make more of an effort to protect Indigenous peoples’ economies.

“I don’t know the art market in Europe,” she said, “but I imagine if the French market was flooded with fake Impressionist paintings that were made in China, the French government probably would have stepped in by now.”