Beats sues Chinese counterfeiters for billions as Apple sale nears completion
Headphone maker Beats has filed suit against a number of Chinese counterfeiters, alleging trademark infringement and seeking damages that could run into the billions of dollars just weeks before the company officially becomes an Apple subsidiary.
"This action has been filed by Beats to combat online counterfeiters who trade upon Beats' reputation and goodwill by selling and/or offering for sale unlicensed and counterfeit products featuring Beats' trademarks," the filing reads. "The Defendants create [fake internet storefronts] by the hundreds or even thousands and design them to appear to be selling genuine Beats products, while actually selling low-quality Counterfeit Beats Products to unknowing consumers."
Attorneys for Beats paint the counterfeiters as part of a sophisticated ring that has constructed their business to operate in such a way as to maximize profits while minimizing the chance they will be discovered by law enforcement, shipping fake Beats products "in small quantities via international mail to minimize detection by U.S. Customs and Border Protection" while disguising their identities. Counterfeit sites like those Beats is going after are estimated to generate more than $135 billion in annual sales, the company says.
In addition to seeking an importation ban and cessation of sales into the U.S., Beats is asking for the forfeiture of all profits realized from the sale of counterfeit headphones - a sum that is nearly impossible to accurately quantify, but likely runs into the billions of dollars. Alternative, Dr. Dre's outfit will accept $2 million for each incident of infringement and $100,000 per domain name.
The company also wants internet registrars to seize the offending domain names and turn them over to Beats's control.
It is unclear exactly what Beats hopes to gain from the suit -- with damages likely to be awarded, but unlikely to be paid -- though the company has pursued similar litigation in the past. A nearly identical lawsuit filed in 2013 resulted in an order for the seizure of some 1,472 domain names, 50 PayPal accounts, and 14 "online marketplace accounts."
Recently-confirmed Judge Manish S. Shah will oversee the case in the United States District Court for the Northern District of Illinois.
"This action has been filed by Beats to combat online counterfeiters who trade upon Beats' reputation and goodwill by selling and/or offering for sale unlicensed and counterfeit products featuring Beats' trademarks," the filing reads. "The Defendants create [fake internet storefronts] by the hundreds or even thousands and design them to appear to be selling genuine Beats products, while actually selling low-quality Counterfeit Beats Products to unknowing consumers."
Attorneys for Beats paint the counterfeiters as part of a sophisticated ring that has constructed their business to operate in such a way as to maximize profits while minimizing the chance they will be discovered by law enforcement, shipping fake Beats products "in small quantities via international mail to minimize detection by U.S. Customs and Border Protection" while disguising their identities. Counterfeit sites like those Beats is going after are estimated to generate more than $135 billion in annual sales, the company says.
In addition to seeking an importation ban and cessation of sales into the U.S., Beats is asking for the forfeiture of all profits realized from the sale of counterfeit headphones - a sum that is nearly impossible to accurately quantify, but likely runs into the billions of dollars. Alternative, Dr. Dre's outfit will accept $2 million for each incident of infringement and $100,000 per domain name.
The company also wants internet registrars to seize the offending domain names and turn them over to Beats's control.
It is unclear exactly what Beats hopes to gain from the suit -- with damages likely to be awarded, but unlikely to be paid -- though the company has pursued similar litigation in the past. A nearly identical lawsuit filed in 2013 resulted in an order for the seizure of some 1,472 domain names, 50 PayPal accounts, and 14 "online marketplace accounts."
Recently-confirmed Judge Manish S. Shah will oversee the case in the United States District Court for the Northern District of Illinois.
Comments
Apple is subsequently found guilty of copying the Chinese knockoffs.
Good luck.
"Intellectual" and "property" are two words that the Chinese government doesn't like much.
Well… So now we know what's really behind the "China's state-owned media calls iOS location tracking a 'national security concern" story from earlier today.
The sound quality is so bad I would consider Beats to be a Chinese knockoff.
Apple could make the 3 billions or most of it in this suit.
Caching! Best purchase ever.
Good luck with any suit against the chinese. They don't play by rule. Yup. When was the last time that the chinese didn't copy others' products?
They are probably selling far more counterfeits than real ones which doesn't help your poor quality argument. All the reviewers have been duped. Lol
Maybe Apple should delay the purchase of Beats until this legal matter is resolved.
The sound quality is so bad I would consider Beats to be a Chinese knockoff.
I didn't know the chinese were fans of base heavy sound.
Seriously nothing, aside from a few third-party DIY audiophiles on Google that made FR graphs comparing various headphones... and those are all over the map.
Every mainstream tech, news, reporting and review outlet is trumpeting the greatness and cool of Beats products (and making money from that song and dance), and yet, not a SINGLE ONE mentions the thing that matters most to these devices: the accuracy of their reproduction. The simplest measure, "frequency response" is non-existent. Instead "what matters" is all tangled up into clever double-speak and marketing copy and "cool"...
What a shallow, horrible scam!
When you are completely hiding the very specifications that make a truly great pair of headphones, and hiding those behind a bunch of highly polished web pages and marketing-speak? That's the worst kind of 'snake oil' salesmanship and misdirection out there.
Either Apple has been taken in by it, or the buy has nothing to do with the headphones (although, judging by the headphone quality of iPods, etc. Apple doesn't seem to have much clarity or much vested there, really. When it comes to headphones, they only seem to practice the Samsung "good enough" approach).
When a product has great "aesthetic" design, but not much else in delivered quality, what good is it? Honestly, what good is an awesome looking, well-manufactured pair of headphones that sound awful? Other than adding to a wardrobe ensemble?
From the few FR graphs I did see by googling it, these are really REALLY bad headphones...
I won't judge until I hear them for myself, but I'm not sure i"m going to bother, considering their clear level of dishonesty (hiding the facts that matter to a product like this).
From what I've seen though, I'm not sure the "real thing" is going to be any better than the knockoffs.............
I scoured the Beats website and googled for information about the basic frequency response of Beats products (headphones, earbuds, speakers)... not. one. word. about it. A search of the Beats websites for "frequency response" yields "no results".
Seriously nothing, aside from a few third-party DIY audiophiles on Google that made FR graphs comparing various headphones... and those are all over the map.
Every mainstream tech, news, reporting and review outlet is trumpeting the greatness and cool of Beats products (and making money from that song and dance), and yet, not a SINGLE ONE mentions the thing that matters most to these devices: the accuracy of their reproduction. The simplest measure, "frequency response" is non-existent. Instead "what matters" is all tangled up into clever double-speak and marketing copy and "cool"...
What a shallow, horrible scam!
When you are completely hiding the very specifications that make a truly great pair of headphones, and hiding those behind a bunch of highly polished web pages and marketing-speak? That's the worst kind of 'snake oil' salesmanship and misdirection out there.
Either Apple has been taken in by it, or the buy has nothing to do with the headphones (although, judging by the headphone quality of iPods, etc. Apple doesn't seem to have much clarity or much vested there, really. When it comes to headphones, they only seem to practice the Samsung "good enough" approach).
When a product has great "aesthetic" design, but not much else in delivered quality, what good is it? Honestly, what good is an awesome looking, well-manufactured pair of headphones that sound awful? Other than adding to a wardrobe ensemble?
From the few FR graphs I did see by googling it, these are really REALLY bad headphones...
I won't judge until I hear them for myself, but I'm not sure i"m going to bother, considering their clear level of dishonesty (hiding the facts that matter to a product like this).
From what I've seen though, I'm not sure the "real thing" is going to be any better than the knockoffs.............
Was there ever point prior to the sale of Beats to Apple where the Beats board of directors contemplated a sale of the company to anyone else?
Could Apple have negotiated the price down even further? I think they could've.
For Apple to take over a company at the very beginnings of a presumably long and expensive legal battle is not good for Apple.
Maybe Apple should delay the purchase of Beats until this legal matter is resolved.
For Apple to take over a company at the very beginnings of a presumably long and expensive legal battle is not good for Apple.
Baloney and baloney. There is little to no down-side for Apple in this. And with the help of Apple's legal team, this lawsuit has a greater chance for success.
When it comes to headphones, they only seem to practice the Samsung "good enough" approach).
And they shouldn't do any more, in my opinion, because it's a waste. Those people who are into audio and sound use headphones that in some cases costs more than their iPhones and iPads. There is no way that any "Beats" headphone will ever be good enough for those people. And I'm one of those people.
There is no way IMHO Apple were not made aware of this. Any company take over such as this would have very specific limitations on what Beats could do from the time of the initial agreement to when it is concluded. If my suspicions are right then one wonders how this factors into the whole deal.
Was there ever point prior to the sale of Beats to Apple where the Beats board of directors contemplated a sale of the company to anyone else?
Could Apple have negotiated the price down even further? I think they could've.
Why would you care how much Apple paid for Beats, the price could have been doubled and wouldn't have affected Apple in slightest.
And they shouldn't do any more, in my opinion, because it's a waste. Those people who are into audio and sound use headphones that in some cases costs more than their iPhones and iPads. There is no way that any "Beats" headphone will ever be good enough for those people. And I'm one of those people.
Me to, Beats headphones are just overpriced fashion accessories for children and teenagers and young adults. A pair Beyerdynamic DT 770 Pro's is so vastly superior then a similar priced pair of Beats that it is almost comical.
There seems to be a popular misconception that it doesn't matter how one spends one's money if there is a lot of it.
Here's the thing... A company that wastes it's money won't stay wealthy forever.