A Sports Clothing Company Wins the Battle Against Counterfeiters

Mitchell & Ness deals with Asian counterfeiters, then stops thousands of fake eBay sales dead in their tracks.

None of them is naive enough to think those sellers will just disappear, but their options for doing anything else are limitedand expensive. "We've just been trying to knock off as many people as we can and hope that it's a deterrent," Suzy says.

Novick keeps in touch with an anticounterfeiting group established by the sports leagues, and also with U.S. Customs and Border Protection, which has on occasion seized and destroyed thousands of counterfeit jerseys. Capolino and his crew have trained Customs agents on spotting fake jerseys. And Capolino is trying to get trademarks filed in several European and Asian countries, after having to fight off an entrepreneur in Korea who registered the Mitchell & Ness trademark (Capolino hadn't) and tried to collect royalties on it.

Meanwhile, Capolino sent Danny to a factory in Seoul posing as someone who wanted to purchase overstocks. So far, Danny hasn't found any takers.

The overarching problem for Capolino is a lack of resources. He would like to have an in-house attorney take some of the sellers to court, for instance, but he can't afford the salary. He would like to set up raids of wholesale distributors, but must instead count on the sports leagues fighting the upper echelons of the distribution channels. He would like to have tighter control of his manufacturing facilities, but can't afford to hire the security. Indeed, despite the fact that the problem isn't getting any smaller, his anticounterfeiting budget is going downnot upas revenue falls. Capolino estimates that the company spent $600,000 to $700,000 fighting counterfeiting in 2003, but can only afford half that this year.

Asked if he's making progress or pushing a rock up a hill, Capolino doesn't even pause. "Pushing a rock up the hill," he answers. Turning to Novick, he asks, "Do you think we're making any headway?"

"There's just so much of it," she answers.

"I'll do what I can to slow down the pipeline," Capolino continues. "As my company has done less volume, I've had to shrink my budget, but I'm never going to stop fighting counterfeiting. If my retailers believe that I'm fighting the counterfeiters, they'll keep buying Mitchell & Ness. If I let them know that the counterfeiters have beaten me, they'll quit selling my product.

"I'm never going to give up," he says. "There's no alternative."

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