The Curse of Von Dutch: A Brand to Die For

A few weeks ago I saw a suggestion come across my Hulu welcome screen entitled “The Curse of Von Dutch: A Brand to Die For”. My first impression was that I knew all about the brand, especially the many details of how it was counterfeited into oblivion. Either way, I knew I wanted to watch it to see if my account was correct or if there was more to the story.

Turns out, as comprehensive as I thought my perspective might have been, there were some things I missed, or was not privy to. I worked for their lawyers during the peak enforcement process and I knew things were a little off. And this documentary helps bring that to light.

Bobby Vaughn and Mike Cassel were two surfer dudes who appropriated the IP of a counterculture icon named Kenny Howard a.k.a. Von Dutch (1929-1992). Howard’s philosophy about Intellectual Property was that no one owned anything and that all creativity was meant for the world to share. So, in 1999, Vaughn and Cassel spun off the Von Dutch brand from another fashion line they had that was not doing well.

Before Bobby and Mike knew it, the Von Dutch brand took off. Celebrities were all over it, wearing their apparel on every television channel available. Along with the success of the brand came organized criminals they had previously tapped for startup funds. This made life difficult because there were established cartel captains that demanded cuts from the sales.

But the two surfer dudes, as savvy creatives as they were, could not manage the explosive success of this brand. It was then that they welcomed investors and a CEO from Europe. All of a sudden, French fashion designer Christian Audigier was the face of the brand. Christian blew the brand up to levels no one dreamed. But, as the genuine product sales grew, the counterfeit sales grew exponentially.

“Here’s the problem. When you are already a logo-driven brand where your logo is your main seller its easy to slap a logo on a piece of thing and sell it and call it Von Dutch. We were the second most counterfeited brand in the world next to Louis Vuitton.” ~ European Investor Tonny Sorensen.

This was where my team and I came in. In the early 2000’s, counterfeiting fashion brands on the Internet was at its peak. Yes, the flea markets and street vendors were also going bananas, but Internet sales were new, and I was the guy that handled these types of cases.

What was discovered was that the folks behind this brand never laid a proper foundation for enforcement. They didn’t spend the few cents per item required to tag the genuine goods properly so that they could be differentiated from the fake. By the time they brought in the proper attorneys and investigators, the problem was out of control there was very little that could be done.

“In the height of our business, we were doing probably around the $300 to $400 million mark. The counterfeits were north of a billion for sure.”~ Niels Juul, Von Dutch investor

I’ve met both of the original creatives Bobby and Mike during my years living in Venice Beach and find their stories fascinating. I don’t blame them for the counterfeiting problem (bringing in the cartels is another story). But, when the European investors came in and hired high-priced attorneys corners were cut while people were too busy making money.

The lesson to learn here is that, before your brand takes off, make sure you have already laid the foundation for a good enforcement plan. We can help you with that. Contact us at MI:33 and we will be glad to get things going for you.

BOOK REVIEW: Black Market Billions

Knockoff Report - BOOK REVIEW Black Market BillionsAs I do the last few days of every April I was preparing for the International AntiCounterfeiting Coalition Spring Meeting.  Per my normal routine, I downloaded the agenda and devised a conference plan.  I noted that this year, unlike last, the conference had a host: Hitha Prabhakar, author of the new best seller Black Market Billions: How Organized Retail Crime Funds Global Terrorists.  In preparation of the possibility of carrying on a conversation with her, I decided to extend her the courtesy of purchasing the book on my favorite book site, audible.com.  Don’t laugh.  Come on.  You didn’t expect a narcissistic guy this hopped up on Starbucks to be able to sit down and actually read a book in three days, did you?  Besides, I love listening to non-fiction books.

Black Market Billions began with the author receiving an instant message from a friend offering her handbags for sale at a very attractive price.  Knowing that she is a full-time fashion reporter, the friend explained that the items he was selling ‘fell off the truck’.  What followed was a rabbit hole I was not expecting.  Most books that involve the world of counterfeit goods focus on the counterfeit goods industry (makes sense, doesn’t it?), but not this one.  In order to set the table properly to explain the role that counterfeit goods play in our society, Prabhakar first takes us deep into the varied world of shoplifting, human trafficking and Organized Retail Crime.

Most of my readers know I grew up in the anti-counterfeiting industry so one may assume I was schooled in all of the ways counterfeit goods are tied to the dark parts of the world’s economy.  One would be wrong.  I knew all about cargo theft, human trafficking, parallel imports and (of course) product counterfeiting and cybercrime.  Although I knew that retail boosting existed, I didn’t know how organized it was and that it is directly tied to the same black market.  I know we can watch an episode of reality television to learn something new, but Black Market Billions added a new view to even this easily jaded joker.  Early on, she moves right to the ties between counterfeit goods and radical terrorists.  Some of these stories were cases I had worked on, so it hit home as closely as it was well-written.

Moving through the chapters, I first was trying to figure out where she was going because the structure was not organized like most books, where there would be claim, evidence, conclusion, rinse, repeat.  She told stories of individuals through their eyes and provided case studies with insight into their effect on these individuals.  As the book unfolded I felt myself engrossed in a story that I thought I knew but saw it in a different light.  Perhaps this insight was partially due to the fact that it was written by a woman.  The stories felt personal and the street crime was real as it was woven into the larger picture of Big Fashion.

I recommend this book, not only for those interested in anti-counterfeiting, but anyone who reads true crime or even thrillers.  Keep an eye on this author as well.  To top it all off, I did end up chatting with her at a party, so my reading it in time was worth it!

Now I’m going to finish my coffee.

SOPA: Taming the Wild West

Set in the year 1865, the television show Hell on Wheels centers on the individuals working on the construction of the first transcontinental railroad.  Colm Meaney plays Thomas “Doc” Durant, a greedy entrepreneur and the driving force behind this railroad, where he hopes to take advantage of the changing times and make a fortune. Although his mad quest is noble in many ways he goes, for the most part, unwatched.  He successfully kept the US government at bay by occasionally returning to lobby Washington while his operation ran as he saw fit.

Here we are in the 21st Century, where new railroads have been constructed and new entrepreneurs are taking subsidies and lobbying the US government on how they think their throughways should be governed.  The Internet is not just a bunch of wires and tubes, but the sidewalks, highways and railroads of our nation.  Profiteers want to bamboozle you into thinking that this is not the wild west.  It is.

I was recently on Capitol Hill presenting along side many of America’s labor unions in support of the pro-jobs bill known as Stop Online Piracy Act (SOPA).  We were regular working joes presenting to congress and outside were teams of Google suits with wolfish grins.  I can tell you first-hand that those leading the charge against SOPA are the richest people in the history of mankind.  They want to make sure they can run their operations without regulation as long as they can.  The non-billionaires that oppose this bill are the gunslingers who also profit from this lawlessness.

Every nation has border security.  If a swindler tries to make his way across the American border he will likely meet with an enforcement agent and, if found a threat to American consumers, will likely be turned around and not make it across the border.  If a swindler makes it across the border, and is caught, he is deported.  SOPA is nothing more than a border protection act.

Google and Facebook are not their own nations and they do not deserve their own laws.  They are companies incorporated in the United States and want to do business here.  They also stand to benefit from the sale of illegal goods to American consumers.  Because they believe older generations’ learning curves are slower, they are making outrageous statements like we are going to “break” or “censor” the Internet.  Heed my warning — Do what is best for the consumer, not the billionaires and the gunslingers.

A great American Eleanor Roosevelt chaired a committee to draft The Universal Declaration of Human Rights.  In 1948 it was adopted by the United Nations.  Article 27 Section (2) of this declaration states, “Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.”  In 2011 those rights are under attack.  Under attack by faceless perpetrators who are hiding behind these Rogue websites.   Forty-seven per cent of America’s gross national product now comes from Intellectual Property.  That means our nation’s most precious resource is its IP.  Rogue sites are not only the vessel of choice of the modern criminal, I have seen first-hand terrorist and other criminal organizations selling counterfeits online to fund their activities overseas.  I will tell you this —  They don’t care about the economic impact, labor standards or consumer safety.

The Internet is a real place with real people, and real businesses need real laws.  Don’t let these billionaires swindle you into thinking otherwise.  Wyatt Earp needs to clean up.  Let’s do this!