Beats Electronics Files Lawsuit Against Websites That Sell Counterfeit Headphones
Posted by Joseph Lee on 07.22.2014
It was filed last week...
Billboard reports that Beats Electronics has been granted a restraining order against several websites that are selling counterfeit headphones, infringing several copyrights and trademarks. The lawsuit was filed on July 9. It wanted an injunction in Illinois against the websites and is the fifth complaint of its kind filed by Beats this year. Beats claims that the people involved are a group of Chinese counterfeiters working together to create and sell fake products, but it's impossible to learn how the process works or the identities of those involved.
Counterfeit headphones with the Beats logo are mass-produced, almost exclusively in Asian countries, then sent to distributors and retailers, similar to a legitimate business. Beats is going after websites using the company name like www.ilovebeatsbydrdre.com, along with the same website design and copyright images as the official website. It's unknown how tied together the websites, distribution, sales and manufacturing are exactly. In each, the products are measured on an A-C grade scale. A is the most legitimate and sold for almost the same amount as the actual product while C is a product that only has the logo in common with the actual product. The C-level headphones may cost between $10-$15.
Beats wants all profits from the sales, plus damages or $2 million for each use of the trademarks and $100,000 for each infringing domain. Here are highlighted quotes from the lawsuit and from those involved with the case:
Negin Saberi, Beats' Director of Global Brand Protection, on Beats using all legal avenues to stop pirating: "In most countries it's illegal to sell counterfeits. So in addition to the civil legal system like our cases in Illinois, we are able to use the criminal system and work with law enforcement locally to do raids of stores, of warehouses, of manufacturing sites to see seize the counterfeit products and get them destroyed. And when we engage in that process, because counterfeiting is illegal, we are able to have arrests as well."
The lawsuit's description of the company's success: "Beats and its authorized retailers and partners have expended tens of millions of dollars annually on advertising, promoting and marketing featuring the BEATS Trademarks. … Beats' savvy marketing, innovative headphone designs and cutting-edge sound have lead to unprecedented growth in the headphone industry. A mere four years ago, $59 million worth of premium headphones (those priced $99 and up) were sold in North America. In 2012, sales ballooned to $850 million, and nearly two out of three pairs of headphones carried Beats' authorized iconic 'b' logo."
Saberi on why counterfeiting is bad: "Counterfeit products are of inferior quality. Counterfeiters do not invest the time and resources, research and development or comply with consumer safety laws that real consumer electronics companies are dedicated to providing like Beats. Counterfeiters are just making something that steals the consumer's money – the product doesn't sound right, won't be durable and may not be safe."
Saberi on protecting their copyright: "It is so important to police our brand because we don't want our consumers to be tricked. We don't want them to pay top dollar — or any dollars — to then get a fake, inferior product."