A case analysis of sophisticated Ray-Ban counterfeit sunglasses
My story of being an unwitting victim of a fake Ray-Ban RB3320 purchase on eBay
My story with this model of Ray-Ban Sunglasses go back a long way. I first
purchased a pair from Sunglass Hut and really liked them. Unfortunately I lost
them at a friends wedding in May 2010. When I came back to Italy, I wanted to
find a replacement but the lens color I preferred was hard to find. After
failing to order it from a local vendor in Turin, I decided to look in Germany
for it. Around July 2010, I purchased a pair of Ray-Ban RB 3320 sunglasses on
eBay from a German seller. The seller has good reputation judging from his
feedback and guarantees they are authentic. The price I paid was about the same
as if I bought them in Sunglass Hut, so it was not the case of paying for
knock-off price. Few months later when I was taking it off my head normally
without extra force, a temple (arm) of the sunglasses broke. I thought to
myself, how could this arm be so brittle? It surprised me that the quality is
questionable. I waited until I came back to the U. S. to send it back for
repair.
On this trip, one of the first things I did was to send it to Luxottica for
repair, and they returned the
sunglasses to me within a week. When I got the package, I was bewildered to find
my sunglasses not repair. In the same box, I found a letter, stating the
following: "Upon Evaluation of your eyewear we
have determined that the product does not contain any legible markings with
which we can identify a style or brand ... the requested repair material not
manufactured by Luxottica..."
This means that the sunglasses are not genuine Luxottica / Ray-Ban products.
Being a discerning consumer, I am shocked that Luxottica / Ray-Ban rejected my
repair request. At first I suspected that perhaps the person who handled the
repair was not being meticulous and committed negligence, because it is obvious
to see it is a Ray-Ban. I wanted to send it back again, but I hesitated because
I will leave the U. S. soon. So I decided to do some research about the
authenticity of my sunglasses. Mind you that these appear to have all the right
marking and workmanship, down to the leather case and printed care instructions
and cleaning cloth. When I received it, I found the leather case is different
from the other case that came with my original Ray-Ban, they were similar enough
that I thought it was just a difference in the manufacturing. Upon further
reading on the web, I realized that there are some subtle differences between a
genuine and fake Ray-Ban, one of them is the case. The sunglasses themselves
show some differences too, including the material used in the frame and optics.
If it is a fake, it is a very good copy - it was very hard to detect. The next
day I emailed the seller and he responded shocked as I am and agreed to refund
my purchase. I also called the toll free number for Luxottica and gave them the
notification number. They confirmed that the sunglasses are counterfeit over the
phone, in addition to the letter. So it's 100% certain.
I went to Macys nearby where they had a small section of Sunglass Hut. I found
an identical pair like the one I first bought. So I bought and took them home
for comparison. The genuine Ray-Ban case is made of a finer grain leather with
finer stitching, and it also does not have stitching on the upper part of the
edge on the part covered by the flap. In addition, the genuine Ray-Bans frame
arms use flexible rubber and would not break if applied force at the same angle
as I did removing them from my head. The fake Ray-Bans arms are made of brittle
plastic or rubber composition. There are some subtle differences in the placing
of the small printing on the sunglasses.
I am glad in a way that I broke the fake Ray-Ban by accident, otherwise I would
not have known better. By sending them to Ray-Ban for repair, I learned they are
fake. Since they are such good copies, it is possible that the seller was fooled
too, as he had to buy from someone else. It’s also possible that he knows about
it and sold it anyway, knowing that most people will not go through the length
like I did to find out. If they broke after one-year, most people would just buy
another one, instead of sending them for repair. I don’t have enough evidence to
reach a conclusion, but the seller did refund my payment in full.
Luxottica gives one-year warranty to all its genuine products and repairs out of
warranty sunglasses for a fee. Sunglass Hut is a good place to buy because they
offer a one-year replacement plan for any sunglasses you bought from them that
broke. With these stores you can be sure you get genuine and superior quality
products.
Why eBay does not make a good source to
buy authentic fashion products
eBay’s effort to monitor counterfeit fashion products is half-hearted. Granted
by nature it is impossible to monitor the millions of items listed every day,
however, even when someone brings a counterfeit product to its attention, eBay
often does not take any actions. If eBay does not react to the report of
counterfeit item, and the buyer buys it, the buyer suffers two damages:
1. Unknowingly buys a fake product
2. Wastes time and money
3. Could suffer possible prosecution depending on the jurisdiction
eBay has an interest in turning a blind eye to make money from the listing
insertion and final value fee.
It’s one thing eBay cannot take items down arbitrarily and monitor every single
item posted for sale due to the sheer volume. However, once they are notified by
someone, then they must do something, whether to investigate, or automatically
take down the listing. Furthermore, eBay could require sellers to post at least
ten high-resolution photos of each item they are selling. These photos cannot be
stock photo to discourage re-using them for multiple items. The most a seller
could do is to use the same photos for one model.
eBay’s feedback back system works well in most situations, and is a good
indication of a seller’s transactional integrity and product quality. However,
in the hands of a sophisticated counterfeit seller (or a very naïve sellers who
unwittingly sell counterfeit items), the feedback system could be misleading. In
the case of very good counterfeit item, feedback is not useful to judge quality
of the item offered because most buyers don’t even realize they bought
counterfeit and it may only be a good guide of seller’s transactional integrity
(e.g. if he actually ships an order on-time).
Many items sold on eBay came from grey market. While this is not a problem by
itself, sometimes the grey market may have a tainted supply chain. Search on
Alibaba.com for “Ray-Ban” and see how many results return. Most of those
businesses are selling counterfeit Ray-Ban sunglasses by wholesale. Many eBay
sellers often buy a pair of sunglasses for less than $25 and resell them as
“authentic” at near retail price.
A typical on-line counterfeit Ray-Ban
supply chain
Wholesale source in China
Seller finds a source of wholesale supplier in China from web sites such as
Alibaba.com where many companies sell counterfeit Ray-Ban sunglasses at a low
price.
Import into wholesaler’s country
A wholesaler will import the counterfeit products into their country and begin
distributing to resellers.
Sell on main street, or on-line
The seller will finally sell the imported counterfeit on main street, or on-line
such as eBay.
The illusion of eBay’s feedback system
Once a buyer leaves a feedback, it cannot be changed. After sixty-day period, a
buyer cannot post a feedback. Therefore, initially, when a buyer receives a
high-quality counterfeit product, he does not find out and leaves a positive
feedback for the seller. The seller sells many items like this and could
accumulate many positive feedbacks.
If the counterfeit product does not break and requires service within sixty
days, most buyers will never question the authenticity of their purchase.
However, in rare cases when the buyer accidentally find out the purchase is a
counterfeit, it will be too late to post or modify a feedback to reflect the
truth. Hence the seller will continue to enjoy making illicit profit and good
reputation on eBay. A clever seller will refund any buyer who find out about the
counterfeit and not to escalate the problem.
The psychological factors a seller who is willingly to selling counterfeit
relies on to keep his business going:
- The imitation resembles the original almost identically and the differences are small and subtle and come with guarantee of authenticity to assure the buyers a sense of legitimacy. In fact since it’s such a good imitation, most buyers will never know.
- The feedback system portraits the seller as a reputable business with many satisfied customers
- The buyer will most likely not require sending the product back to the manufacturer for service and accidentally find out it is a counterfeit.
- Even if the buyer did find out it is a counterfeit, it is too late to leave or change a feedback to affect the seller’s reputation. Hence, it is not possible to warn future potential buyers. The seller will act surprised, apologetic and offer to refund the complete payment.
- Usually, it will end at #4, which is has a very low probability of happening. Especially if the buyer is from another city or country, he will not likely report this to the police in the seller’s city. Hence, the risk of prosecution is very low.
Contact seller directly
You should first contact the seller notifying him of the problem without direct accusation since it is possible a seller was fooled by his supplier, especially an amateur seller. The easiest way to get your money back is to work with a cooperative seller. If the seller does not want to be make it right, you have to pursue other options.
eBay Buyer Protection
To be eligible for eBay Buyer Protection program, you should have completed a purchase of an eligible item on eBay and submitted a case within 45 days from the date of payment. The problem is similar to the feedback system, as if the buyer is fooled by the counterfeit product and does not find out in time, he loses what little protect eBay offers. Although eBay Buyer Protection has a section that addresses counterfeit products, however, the time limit still applies:
“What happens if a buyer believes an item is not authentic?
Items that are suspected of being counterfeit are covered by the eBay Buyer Protection Policy, subject to the above and these additional terms:
Sellers and buyers must work together in good faith during the resolution process to satisfy buyer concerns that an item may not be authentic. For example, sellers should provide the buyer with appropriate documentation or other assurances that the item is authentic, if such information is available.
If the seller is not able to satisfy the buyer's concerns about the authenticity of an item, sellers agree that the buyer will typically have to return the item to the seller before getting a refund. Buyers agree that they will typically be required to return the item to the seller before getting a refund. Costs of return shipping will be paid by the buyer unless the buyer and seller agree otherwise. When buyers are not required to return the item, buyers agree to cooperate with us to ensure the proper disposal of the item as described below. Due to the unresolved dispute regarding the authenticity of the item, sellers must not later list, advertise, or offer for sale the item on any eBay site or service around the world (including our subsidiaries, joint ventures, and other members of the eBay corporate family).
Generally, buyers will not be obligated to provide third-party confirmation that an item is counterfeit to open a case. Buyers should feel free, however, to seek such written confirmation from the manufacturer whenever they suspect that an item may be counterfeit. In cases in which a buyer has written confirmation from the manufacturer that the item is counterfeit, or in any cases in which eBay requests this confirmation, the buyer must send this information directly to us. We reserve the right to accept this written confirmation directly from other reliable third parties. Buyers agree to cooperate with us to ensure the proper disposal of counterfeit items. For example, buyers may be asked to destroy (and certify that the item has been destroyed), or send the item to the manufacturer or other appropriate third party for disposal. Any costs associated with this destruction or disposal may be paid by eBay, in our sole discretion.”
“… Covered cases that meet the above conditions and are not excluded under the eBay Buyer Protection Policy may be considered as criteria, infringement, or a violation by the seller of our prohibited and restricted items or encouraging infringement policies. As a result, we may impose sanctions on the seller, up to and including suspension of the seller's account.”
Paypal Dispute
If you used Paypal to purchase the counterfeit item, you also have a 45-day limit to file a Paypal dispute. Generally Paypal will ask you to send product in dispute to Paypal and reverse the charge to the seller once determined its status.
Since both eBay and Paypal offer a limited window to make a claim against the seller. It is very unlikely you can get your money back after 45 days if seller does not cooperate. You may have to contact your credit card company. If you paid by bank transfer such as a electronic payment from your checking account, it would be very difficult to get your money back.
Credit Card
Your ability to file a dispute depends on the card. It’s usually no more than 60-days after the purchase. Some cards have 1-year warranty period for only new item. You should contact your credit card issuer to learn more about your options.
Contact local law enforcement
Finally, if you exhausted all your options and still cannot get your money back, you could file a complaint against the seller with the local law enforcement. While this may not get your money back by itself, you could use this to force the seller to refund your money and possibly subject him to prosecution.
A small case of counterfeit touches laws in several countries
Using my case of the counterfeit Ray-Ban sunglasses as an example, its nature is truly international and falls under several international jurisdictions. The sunglasses are manufactured in China, and sold on eBay Germany web site by a German seller, purchased in Italy and brought to the U. S. for service. Ray-Ban itself is an American brand now owned by Luxottica, an Italian optics company. So I did some research on the various laws in different countries applying to trademark infringement (counterfeiting), and the selling and purchase of counterfeit products.
Chinese Law
(Trademark Law Chapter 7, Paragraph 56) The amount of damage to pay for an infringement is depended on: the infringer’s profit earned during the period of infringement, or the amount of loss suffered by the party whose right was infringed during the period of infringement, including such party’s reasonable expenses incurred to stop the infringement activities.
If it is difficult to determine the above-mentioned infringer’s profit or the loss suffered by the party whose right was infringed, the People Court shall consider the infringement activities and circumstance and award damage under five-hundred-thousand yuan (500000).
German Law
In Internet Auction I (I ZR 304/01, March 11 2004) and Internet Auction II (I ZR 35/04, April 19 2007), the court held that online auction houses may be responsible for infringements by third parties when they knew about the infringing offers or did not provide sufficient means to prevent further similar infringing offers.
In the second case, eBay denied liability in such matters as it cannot be expected to check over 90,000 new offers each day. However, the court pointed out that upon receiving sufficient reliable information from the rights holder with regard to a detected infringement, eBay has the obligation:
• to block any related offer immediately;
and
• to prevent further similar infringements
as far as it is technically possible and economically sensible.
http://www.worldtrademarkreview.com/Issues/Article.ashx?g=21a493e3-7844-4995-9bde-a25dab87b7ab
Italian Law
In Italy, the fine for purchasing a single counterfeit item can reach 10,000 euros, or about $12,700. For selling counterfeit products, the penalty ranges from 20,000 to 1,000,000 euros.
E’ quanto prevede il decreto legge n. 35/2005 (noto come decreto sulla competitività convertito nella Legge 14/5/2005 n. 80 e successive modificazioni). Oltre ai reati penali per il venditore (contraffazione, ricettazione e vendita di oggetti con marchio mendace) è prevista una sanzione pecuniaria da 20.000 a 1.000.000 € (pagabile entro 60 gg. con 40.000 €) sono previsti per l’acquirente sia il reato di ricettazione nonché la sanzione amministrativa da 500 a 10.000 € (pagabile entro 60 gg. con 1.000 €).
Why consumers also have to be careful of counterfeit products
In recent years, many countries passed laws punishing consumers for purchasing counterfeit products.
United States
New York City’s proposal to fine buyers of counterfeit goods
"We don't want to be known as the place to come to get counterfeit goods," said Councilwoman Margaret Chin, whose Chinatown district is ground zero for counterfeiters.
Under Chin's bill, which is being introduced Thursday, shoppers caught buying any counterfeit product could be jailed or slapped with a fine of $1,000 -- a little less than the price of Marc Jacobs' frequently copied Baroque Quilting Mini Stam bag, which retails for $1,250.
Read more at New York Post
American fined by U. S. custom for importing fake Rolex
"A guy decided to bring back some obviously fake Rolexes from China as souvenirs for his family. This was probably not a bright idea in any case, but US Customs thinks it's worth fining him $55,300. The fine is allegedly based on the street value of real Rolex watches, but he points out that there's no way anyone would pay a full Rolex price for fakes as obvious as these. The government says he should be glad it's only $55,300, because if Rolex had gotten personally involved it could have been $100,000... per watch."
http://www.techdirt.com/articles/20070509/151831.shtml
France
In France, a law stiffened in 2004 makes the purchase or possession of counterfeit goods punishable by a fine of up to 300,000 euros - at current exchange rates, about $381,000 - plus up to three years in jail.
Great Britain
However, one customer, a Mr. E. Bateman, thought this was ridiculous, and fought it. He pointed out that he simply thought he was buying legitimate Nikes, and it seems rather ridiculous to then be sued for it. The judge noted that, under UK trademark law, the buyer's intent is absolutely meaningless:
"Whether or not the defendant believed the goods were authentic is irrelevant to the question of trade mark infringement. Whether the goods are infringing goods or counterfeit goods is an objective question. The Defendant's state of mind does not matter. Equally the Defendant's state of mind is irrelevant to the question of importation."
http://www.techdirt.com/articles/20101216/03071712300/nike-sues-guy-who-ordered-single-pair-counterfeit-sneakers-over-internet.shtml
Conclusion
In today’s globalized trade system and the wide reach of e-commerce, the supply chain is becoming more difficult to guard from counterfeit. From increasingly sophisticated manufacturers to sellers, many counterfeit products are becoming very difficult to discern, even sophisticated consumers can be fooled. Consumers have to be more vigilant and informed about counterfeit products. The legitimate trademark owners have to increase their effort to monitor infringement, protect manufacturing method, raise the difficulty to copy their products, and seek prosecution of infringement. Unfortunately, while there are consumers who are genuinely fooled by counterfeit sellers; there are also many consumers who vainly seek the bargain of buying fake products just to show they also have such “brands”, this type of mentality and behavior creates economic demand to nourish the businesses in the counterfeit industry and contribute to the growing illicit trade.