Madison Reed has raised $32.1 million since launching 15 months ago.
The counterfeit online market in Italy is worth $9 billion, an expert says.
The market value of counterfeit goods being sold online in Italy is worth about 7 billion euros (US$9.2 billion), according to Gianni Fava, head of an Italian parliamentary committee of inquiry into counterfeiting and piracy.
“The counterfeiting of Italian products has reached such a level that it risks crippling the entire economic system,” he says. Fava says the growth of online retail is fueling counterfeiting and infringement of intellectual property rights. For example, he says many web sites are using high-end name brands in their URLs or throughout their sites. He estimates that 130,000 Italian workers are unemployed because the demand for genuine products has slowed.
The Italian fashion industry is one of the biggest victims of counterfeiting, as swelling quantities of bogus ‘Italian-made’ clothes sell online and offline, experts say.
“Counterfeiting is threatening the whole future of the industry which for so long has been synonymous with excellence in quality and creativity,” Moncler, a high-end clothing brand based in Milan, says. Since launching its new e-commerce site—store.moncler.com—last year, the retailer says it is paying more attention to counterfeiting and trademark infringement.
“The number of unauthorized web sites using the name Moncler in order to trick consumers is multiplying,” the company says in a statement.
Many of the fake goods come from sophisticated organized crime operations that sell millions of euros worth of goods, Moncler says.
In a landmark legal case in November, the retailer lost an attempt to get Italian Internet service providers, or ISPs, to block access to nearly 500 mostly foreign web sites on grounds of trademark infringement for using the word Moncler in their domain names.
“It claimed that the sites, which were mainly from the U.S. and China, were used to organize large-scale sales of counterfeit goods,” Italian lawyers Antonella Barbieri and Marco Bellezza say in a report on the case.
The court overturned its initial ruling for a blackout of the 493 web sites after an appeal by ISPs—setting an important legal precedent. The court said that there was not sufficient evidence that the sites were selling counterfeit goods.
“A trademark holder must produce adequate evidence of the illicit activity carried out through the site,” the report concludes.
Domain names simply using a recognized trademark such as www.monclersale.com, www.monclerhotsales.com or www.moncleroutlet-store.com are insufficient proof of counterfeiting activity, the court ruled.
Despite that loss, Moncler has been actively fighting counterfeit versions of its brand. In October 2010, the company began using a brand certification service called Certilogo e-commerce controller. Authorized online sellers of Moncler clothing add a Certilogo verification button to their sites. Consumers click on the button to see that the e-commerce site they are visiting is an authorized retailer. Manufacturers also add a 12-digit Certilogo code to their products that customers can enter online after they receive the product to check that it is genuine. Consumers can also perform check a product’s authenticity with a phone call or via SMS (short messaging service) text message.
Moncler claims the service is producing good results, and is using the power of shoppers to help fight the sales of counterfeit goods
“Intelligence produced by the Certilogo system has led to the seizure of thousands of counterfeit items in dozens of different investigations conducted by the company over the past 12 months,” the retailer says.