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Merrick, NY—Imitation may be the sincerest form of flattery, but it’s also the scourge of luxury brands, including jewelry and watches. It’s nothing new, but counterfeiters have found a wealth of opportunity in China, and the situation isn’t improving very much, says a recent article in Luxury Daily.

Between China’s role as producer to the world and its reputation for lax intellectual property laws—and even laxer oversight of the laws they do have—it’s a counterfeiter’s paradise. But as a result, brands need a hefty legal budget to defend their trademarks, money that ultimately comes out of both company profits and consumer pockets. There has been some improvement, says the article, likely the result of lawsuits. The Chinese government does recognize that companies from other countries won’t do business there if their intellectual property isn’t protected, but it’s still slow progress.

Cartier, which has had a long-standing reputation for vigorously defending its intellectual property—30 years ago, then-chairman Ralph Destino famously rode a steamroller over fake Cartier watches in New York City—won in a Shanghai court after it filed a lawsuit against two jewelry companies and a Chinese online supermarket for using the brand name without the French jeweler’s consent.  

More recently, luxury conglomerate Kering—parent of Gucci, among other brands—filed suit against Alibaba (similar to eBay in China), stating the online retailer has not only been allowing, but possibly encouraging, the sale of fakes.

But significant improvement in the Chinese counterfeiting problem won’t be made until both the government and large companies there focus on cracking down, says the article.

Read the full article here.