Louis Vuitton chases fakes from market

Global luxury brand Louis Vuitton recently slapped some stores in Jiangsu province with lawsuits claiming 500,000 yuan ($78,500) in compensation from each following a string of crackdowns on counterfeits.

The first hearing of a case against a shop in Nanjing Fashion Lady Shopping Plaza was held in Nanjing Intermediate People's Court on July 4.

The case has not yet concluded.

Louis Vuitton said it recently found fake products being sold in the shop, which is in the bustling Xinjiekou commercial area. The company authorized a Beijing-based law firm to send a warning letter to the shopping plaza, requiring it to stop the sales within seven working days.

However, the products were still on shelves a month later, leaving the shop and the mall pointing fingers at each other.

The shop believed the mall had joint liability because it failed to curb the sales.

But the shopping mall emphasized its innocence as it signed an agreement with tenants barring counterfeit products.

"We prohibit illegal business and fake goods, and all the shops made their commitments by signing the agreement. So the shop should bear the responsibility alone," said a man from the executive office of the shopping mall, who declined to give his name.

Whether the shopping mall assumes responsibility may depend on whether it knows pirated goods are being sold, according to some experts.

"A company should inform the mall administrator which shop is selling fake products, because it's sometimes hard for the managers to scrutinize every shop," said Wang Qian, a professor at the Intellectual Property School of the East China University of Political Science and Law.

Huanbei Market and Taotaoxiang, two other shopping malls in Nanjing where Louis Vuitton is making accusations of counterfeit sales, have also been sued, but the court has not yet begun to hear that case.

Fake Louis Vuitton purses and handbags had disappeared from shops in the mall on Tuesday.

"We don't sell those fake goods," said a shopkeeper who is in her 40s.

No counterfeit luxury brands were seen in her shop, which is on the mall's first floor.

However, counterfeit luxury watches and cosmetics, such as Chanel and Armani, can still be seen in many shops.

"We used to see a lot of fake luxury brands, such as Louis Vuitton, Gucci and Prada, in those malls that sell bags," said a girl surnamed Wang, a sophomore from the Communication University of China.

"Many friends prefer counterfeit luxury goods because the prices are attractive," Wang said.

Ye Boping, a judge of the intellectual property tribunal of the Nanjing court, said the Louis Vuitton case may trigger another upsurge of luxury companies suing sellers of fakes.

In May 2010, Louis Vuitton found fake products worth 3 million yuan during a raid of several shopping areas in Nanjing.

The company claimed compensation totaling 11 million yuan, sending 17 shops to court in Dalian, Liaoning province, in August 2011.

But some luxury experts said the actions have failed to solve the problem.

"A considerable number of counterfeits are manufactured and sold by internal workers of a company, which is widely known in the industry," said Zhou Ting, director of Fortune Character Institute, which researches luxury products.

Zhou denounced it as an irresponsible practice to consumers.

"The crackdowns didn't benefit their customers, as the compensation only flowed into the company's internal circulation after sharing some profits with the firms to search for fakes."

Louis Vuitton says it has a department to fight against fake products, and their crackdowns are coordinated with government agencies.