Battle of Supremes: How 'legal fakes' are challenging a $1B brand

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Streetwear brand Supreme is loved by celebrities and valued at $1 billion. But overseas it's waging war against "legal fakes," companies that are legally imitating the brand in countries from Spain to China.

Posted: Mar 19, 2019 5:00 PM
Updated: Mar 19, 2019 5:00 PM

When Samsung revealed, in late 2018, that it was collaborating with cult US streetwear brand Supreme, it came as quite the surprise.

The announcement was made during the launch of Samsung's Galaxy A8s smartphone in Beijing, where logos of the Korean tech giant and the New York skate brand unexpectedly shared a huge screen. Two men, introduced as Supreme executives, unveiled ambitious plans for their company in China, including an inaugural event at Shanghai's Mercedes-Benz Arena and a seven-story flagship store in the capital. Headlines soon followed.

But there was a problem: It wasn't Supreme. Not the New York-based one, at least.

It was, instead, an entity known as Supreme Italia. With roots in Italy, the label is run through a limited company in the UK and has opened four physical stores in Spain.

Supreme New York quickly denounced the brand as a "counterfeit organization." Samsung initially stuck to its guns, however. In a since-deleted post on Chinese microblogging platform Sina Weibo, the tech firm said it always knew it was working with Supreme Italia, which, it said, was the legitimate owner of the Supreme trademark in China.

Shortly after, Samsung said it was reconsidering the collaboration and eventually canceled it entirely. But Supreme Italia, which denies being a counterfeit operation, was already planning to expand into China and beyond.

Birth of a cult brand

Supreme started as a humble Lower Manhattan skate store, opened by British-American entrepreneur James Jebbia in 1994. It has since grown into one of the most sought-after brands in fashion, boasting collaborations with the likes of Louis Vuitton, Lacoste, Nike and Timberland. The label is valued at more than $1 billion, after private equity firm The Carlyle Group acquired a 50% stake for $500 million in 2017.

Jebbia has rewritten the rules for streetwear brands in the process, building Supreme's fame through social media hype and scarcity. Its clothes can only be bought online or through a network of just 11 stores worldwide: one each in LA, Paris and London, two in New York and six in Japan.

It was in Japan that Supreme perfected a sales tactic known as the "drop" -- releasing a limited quantity of new clothes on a weekly basis, rather than an entire new collection every season. The strategy, now widely replicated by traditional fashion brands, prompted long lines at Supreme's stores and fueled online resale marketplaces where prices skyrocketed.

"Over time, it really became a huge frenzy," said David Fischer, founder of streetwear and lifestyle website Highsnobiety. "It became a huge event, where Supreme fans from around the world would line up in front of Supreme stores to get a hold of the latest product ... It's not only about standing in line to buy a new product. It's just as much about being there with a community that you're a part of."

Supreme's most valuable asset is arguably its simple logo, a red rectangle marked with the word "Supreme," which fashion platform Lyst crowned the industry's most powerful logo in 2018. It can turn almost anything into a collector's item. Supreme's latest collection includes a branded water gun, a coffee maker, a drum kit, a snorkeling mask and even Band-Aids. When the New York Post ran a Supreme cover ad in August 2018, newsstands sold out of the paper by early morning; Supreme New York MetroCards from 2017 are currently listed on eBay for $500. But there are weaknesses in Supreme's all-powerful logo and brand that Supreme Italia has used to its advantage.

A difficult one to trademark

The color and typeface of Supreme's logo -- red, with white lettering in a font called Futura Heavy Oblique -- is precisely the same combination used by conceptual artist Barbara Kruger since the 1980s.

The Supreme logo had been hastily designed to stamp on T-shirts when the first store opened in 1994, and it was, by the company's own admission, directly influenced by Kruger's work. Three years later, the brand even reproduced Kruger's 1987 "Untitled (I shop therefore I am)" work -- a consumerist take on Descartes' 17th century maxim, "I think therefore I am" -- on a T-shirt, substituting the titular phrase with the word "Supreme."

In fact, the company has a long history toying with other brands' designs without permission. Almost two decades before its 2017 collaboration with Louis Vuitton, Supreme received a cease-and-desist letter from the French fashion house for using its iconic monogram print on a series of products, including skateboards, which were then recalled.

But the label has now itself become the target of imitation. In 2009, Jebbia told Interview magazine that "Supreme wasn't meant to be a brand ... It's a good name, but it's a difficult one to trademark."

Chapter 4, the company that does business as Supreme, did not obtain a successful registration of its trademark in the US until 2012. Nearly a year later, the firm filed a $10 million trademark lawsuit against streetwear brand Married to the Mob, after it used a parody "Supreme Bitch" logo on some of its products. The parties settled out of court.

Kruger, however, has never sued Supreme ("I don't own a font," she told The Cut in 2017). But the irony that her anti-consumerist art is being used to sell clothing is not lost on her. In 2017, the artist staged a live performance called "Untitled (The Drop)" which featured a shop full of Supreme-esque merchandise branded with phrases like "Don't be a jerk" and "Want it. Buy it. Forget it."

A Supreme by any other name

In 2017, the company was busy defending itself from more than just mockery. Supreme is now one of the most counterfeited brands in the world and its fakes are among the most searched for.

The case of Supreme Italia, however, is more complex, with the brand often referred to as what trademark lawyers call a "legal fake."

"It's a practice that involves registering a trademark in a certain country before the original owner of that trademark has a chance to do so," explained Alessandro Balduzzi, a trademark lawyer at Studio Legale Costa Creta - Bugnion in Italy.

Giovanni Casucci, a lawyer for Chapter 4 who's litigating the ongoing case in Italy, questions the very premise of the term: "I find it very funny because it's an oxymoron, a completely self-contradictory definition. You can not be legal if you're fake," he said in a phone interview.

Casucci instead draws a parallel between Supreme Italia's actions and cybersquatting, the practice of registering domain names similar or identical to popular brand names, with the intent of later selling them at a profit. "It's a phenomenon that was highly criticized 20 years ago and now it's clearly an evident abuse," he said.

Supreme Italia claims to have started out in 2012, but it first made its mark on social media in 2016 during Pitti Uomo, an international menswear fair held in Florence, Italy. Images from the event showed the brand's hoodies and T-shirts bearing large versions of the famous red logo.

Chapter 4 took notice. In 2017, it sued Supreme Italia, or, more precisely, the two companies behind it: an Italian company that produced and sold the clothes online and in shops under license, and a UK private limited company called International Brand Firm (IBF), which had registered and licensed the trademark in Italy and other countries. IBF is essentially the business behind the Supreme Italia brand and its ramifications.

The high court in Milan ruled in Chapter 4's favor twice, in January and April 2017, issuing an injunction that made Supreme Italia's operations in Italy effectively illegal. A definitive ruling could take years to emerge, however. Supreme Italia's lawyers have already appealed once (and lost) and they plan to appeal again. Simona Lavagnini, a lawyer at LGV Avvocati in Milan who's litigating the case in Italy for IBF, told CNN the case could ultimately reach the country's Supreme Court.

To be effective, a so-called "legal fake" must register a trademark before the original brand does. But IBF did not file for a trademark with Italian authorities until Nov. 18, 2015, more than a month after Chapter 4. This is one of the reasons why the court sided with the original Supreme.

"Another reason was unfair competition," said Balduzzi, "Because not only was (Supreme Italia) producing clothing using a trademark that they did not own, but they were also acting on the market as if they were the legitimate owners of the brand."

Despite this, Lavagnini maintains that Supreme Italia is "not a copy," claiming that when IBF filed its trademark, Chapter 4's existing registration did not yet appear in online searches. She also believes that the word "Supreme" is too generic to be trademarked in the first place. "Our claim is that Supreme is a word (typically) used to refer to the quality of a product, like 'super,' extra,' or 'extraordinary,'" she said in a phone interview. "'Super' is actually the root of supreme, and is considered by Italian case law to be a classic case of descriptive trademark, which cannot be registered but must be free for all competitors on the market."

However, these claims were rejected by the Milan court. The judges ruled that Chapter 4's Supreme brand was sufficiently well-known in Italy to acquire a "secondary meaning" and be considered a de facto trademark, even in the absence of advertising or physical stores.

Better luck in Spain

A similar legal case has also occurred in October 2018 in Spain, where IBF registered another trademark: Supreme Spain. But here, things unfolded quite differently. A court in Barcelona ruled in favor of IBF, because, in this instance, it had registered its trademark before Chapter 4.

Chapter 4 used the "secondary meaning" argument that had proven successful in Italy, but in Spain it didn't work. As trademark lawyer Balduzzi explained: "The burden of proof can be very high and it is difficult to overcome." The decision has since been appealed, and another ruling is expected in the next two months, according to Casucci.

As a result, Supreme Spain continues to operate its own website, which sells around 100 items of clothing, as well as accessories, and offers shipping to around 40 European countries. Perhaps more notably, it also owns four physical stores, in Madrid, Barcelona, Ibiza and Palma de Mallorca. The logo is different -- black text on yellow, with the word "Spain" at the bottom -- but the clothes still feature the classic red box design, among other familiar variations.

"The fact is, there is no distribution of the physical products in Italy or Spain," argued IBF attorney Lavagnini referring to Supreme New York products. "There are a few shops in some privileged European countries like the UK and France, then there is a website where it is theoretically possible to acquire the products, but they immediately sell out ... And then the only way to buy the product is to go to these resellers websites where the products are sold at much higher prices." IBF's official Instagram account claims "We are against the illegal and immoral practice of reselling."

Chapter 4's attorney Casucci dismisses this as "the frivolous argument of a free rider. They are not Robin Hood." He acknowledges that the Supreme Spain operation is legitimate, but adds "my impression is there's a typical case of undue profit off the reputation of another brand."

IBF has scooped Supreme trademarks in a number of other territories. Listings on trademark website TMView show that the company has filed registrations in 67 countries, mostly in Europe and Africa, as well as China. IBF is "working with the Supreme trademark in nearly 90 countries," the company's PR representative Anna Boccoli told CNN.

Casucci believes that IBF's approach is in bad faith and in violation of the Paris Convention, one of the first intellectual property treaties ever signed, which protects "well-known marks" in 177 countries even in the absence of local presence.

A search on the World Intellectual Property Organization's website returns 28 entries filed by IBF that relate to the word Supreme. They include variations such as Supreme Sailing, Supreme Underwear, Supreme Toyschool, Supreme Home, Supreme Sport, Supreme Optical Wear and Supreme Skate Snow Wear.

According to Casucci, this volume of registrations could have cost "dozens if not hundreds of thousands of euros" and can only have been motivated by "an expectation to steal some markets or at least to enter in a parallel way in those markets."

The man behind Supreme Italia

The man behind Supreme Italia, IBF director Michele Di Pierro, declined CNN's request for interview. He is, according to his PR representative Anna Boccoli, a private man who avoids the spotlight.

In a phone interview, Boccoli said that Di Pierro -- whom she claims to have known for many years -- is the talk of Barletta, his home town in southern Italy, due to the fact that his brand is "worth what it's worth internationally." According to publicly available filings, IBF reported sales of around £514,000 ($682,000) in 2017, up from £173,000 ($230,000) the year before.

Boccoli described Di Pierro as "an energetic man who follows his instinct," adding that he frequently travels to China. He also produces clothes for other fashion brands, which Boccoli said he "has regularly acquired." Among these she says are Airwalk, VisionStreetWear and Pan Am, which were presented at Pitti Uomo in early 2019.

The idea for Supreme Italia came about in 2012 and began with a batch of test T-shirts, according to Boccoli. The plan was "spontaneous," she said, and Di Pierro "did not want to make an Italian copy, but rather his own project." Prior to the Milan court ruling, Supreme Italia distributed its products to 1,000 stores in Italy, although it had none of its own, Boccoli said.

On the expansion into China, Boccoli said that IBF's local distributor, which brokered the canceled Samsung deal directly, plans to open 60 stores in the country over the next two years. In fact, it opened an IBF-licensed Supreme store in Shanghai in early March, she confirmed, with a second one opening soon. In a written statement sent to CNN after our phone interview, Casucci said "Chapter 4/Supreme has taken action in China against the counterfeit organization IBF/Supreme Italia and their Chinese partners and landlords with regards to their store opening. IBF impersonates Supreme, sells counterfeit goods and misleads law enforcement, reporters, and even companies like Samsung who have not undertaken full diligence on this counterfeit operation."

Boccoli also claimed that more IBF-licensed stores will be opening in countries worldwide, beginning with Serbia, Belarus, Cyprus, Portugal and the Gulf states.

How do the clothes compare?

To compare IBF's creations with those of the original Supreme, CNN recently ordered three items from Supreme Spain: a black hoodie with a large printed red box logo, a "SupremeKids" T-shirt featuring what appeared to be Mickey Mouse's ears and hands, and a men's T-shirt with an embroidered logo.

The two orders -- which were shipped from Italy and Spain -- were delivered to London via courier within a few days. They did not include any printed invoice or return label. There are differences between these garments and the originals, according to Yuri Mishka, a moderator of one of Italy's main Facebook reselling communities (which is affiliated with neither Supreme New York nor Supreme Italia). The black hoodie's logo is much larger than that of the classic Supreme item it resembles, and is printed rather than embroidered. Conversely, the men's T-shirt, has an embroidered logo rather than the original's printed one. The "SupremeKids" T-shirt appears to reference a 2009 collaboration between Supreme and Disney, although with a significantly altered design that does not show Mickey Mouse in his entirety.

Luigi Goglia, another lawyer for IBF, said that Supreme Spain's business "is not just legitimate, but more than legitimate" pointing out that the design of the clothes "is totally different, it's another concept of fashion."

The care labels all claim that the items are made in Italy, and all bear a yellow "Supreme Spain" logo alongside references to IBF's trademark registrations, a hologram with a serial number and the flags of 50 countries, including territories where IBF has registered Supreme trademarks. IBF confirmed that Supreme Spain manufactures clothing in Italy and accessories in China, whereas original Supreme products are manufactured primarily in the US and Canada.

The prices also differ. An original Supreme logo hoodie retails for $148 but can fetch upwards of $450 on the resale market, according to Mishka, while the Supreme Spain one cost 71.20 euros (about $80).

A loss in Europe

Citing its trademark registrations in Italy and Spain, IBF has claimed another victory against Chapter 4: In April 2018, the European Union Intellectual Property Office opposed Chapter 4's application for a trademark in Europe from a year earlier. Chapter 4 has since appealed and a decision is still under examination.

If the decision is overturned, Supreme's trademark registration would cover the whole European Union, saving the company time and effort to apply separately in each country. But despite what will likely be a heated battle, Casucci does not believe that IBF has significantly impacted Chapter 4's business as of yet.

"It's not a threat, frankly speaking, at all ... It's just really an annoying thing, something that cannot be tolerated, because in some markets, the less informed ones, there's a risk that some consumer will be misled into buying this product thinking it's the original.

"And that is a fraud -- against the consumer, not against Supreme and Chapter 4."

Samsung did not respond to CNN's request for comment on this story.

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