Recently, Louis Vuitton discovered a massive counterfeiting operation in China run by a store employee who started a business on selling fake bags.

In August, the Chinese police arrested 62 criminal gangs for manufacturing and selling counterfeit Vuitton bags, seizing more than 30 sets of counterfeiting equipment, 2,000 counterfeit bags and 100,000-plus pieces of various raw materials worth more than 100 million renminbi, or $14.6 million, according to the state news outlet CCTV.

 

It has been discovered that a key role was played by a sales representative at the Louis Vuitton Guangzhou store, with the surname Shi, whose was well known on selling “yet-to-be-released bags” to counterfeit makers at a higher price so that the criminal gangs can sell the fake bags at the same time that the real bags are released, or even earlier, while she makes a profit from it.

The convicted criminals also had an arsenal of sophisticated equipment that enabled them to produce “high-tech” bags complete with what would appear to the average consumer to be instruments aimed at identifying counterfeit goods. This kind of technology is not new in the luxury environment, many other brands such Moncler or Hermes use various measures to distinguish their products from fakes and protect consumers in the process.

Indeed, it is called Near-Field-Communication (“NFC”) tags which are against the infringing bags. In fact, the little sensors, which are often attached to the insides of certain upscale garments and/or accessories, enable brands to program any information they want into the tags, which can then be viewed by consumers by way of their smartphones or other NFC-capable devices.

Nonetheless, if a consumer scanned the NFC tag attached to one of the counterfeit bags, they would be directed to the official Louis Vuitton website, further boosting the appearance of authenticity, and likely, significantly upping the price that the counterfeiters were offering up the bags for.

In a statement, a representative for Louis Vuitton told WWD (“Women’s Wear Daily”) that it “has a zero-tolerance policy in regards to counterfeiting and this remains one of Louis Vuitton’s main commitments to its clients”.

The brand, which is known to devote a percentage of sales every year to the enforcement of its valuable intellectual property, further states that “counterfeiting is the violation of the craftsmen’s talent, skills and the creativity of the artists to whom Louis Vuitton owes its success. Louis Vuitton is more determined than ever to preserve creativity in protecting its brand in the interest of its clients, its employees, and those who suffer at the hands of the counterfeiting industry”.

The Paris-based brand revealed that the Chinese convicted sales associate has been fired from her position, but did not confirm what legal action it is taking against that individual and for people directly involved with the counterfeit manufacturing and sales.

At present, according to the law, 35 criminal suspects, including Ms. Shi, who are suspected of counterfeiting registered trademarks, and 13 criminal suspects who are suspected of selling counterfeited products are detained by Qingpu police.

The remaining 6 suspects who are suspected of counterfeiting registered trademarks, and 8 suspects who are suspected of selling counterfeited products have been taken criminal coercive measures. The criminal case is currently under further investigation.