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Before you step into Barbara Kolsun’s loft office in Manhattan, take inventory. Is that Prada bag dangling from your shoulder genuine? How about the Gucci belt? And what about the provenance of that Hermes scarf? Unless they’re the real McCoys, you’d be better off sporting a Gap bag, a Casio watch, and a Dress Barn blouse. To Kolsun, there’s nothing fashionable about fake designer products. A former head of the International Anticounterfeiting Coalition, Kolsun is the much-heralded new general counsel of New York’s Kate Spade LLC, a privately held accessories company known for its sporty handbags. Before joining the manufacturer, she was a counsel at Westpoint Stevens. A longtime warrior against counterfeits, Kolsun has worked in private practice and in-house legal departments protecting some of the biggest names in fashion, including the likes of Ralph Lauren, Calvin Klein, and Tommy Hilfiger. Corporate Counsel associate editor Vivia Chen met Kolsun at the company’s showroom to talk about her plans to eliminate those ubiquitous Kate Spade knockoffs. Corporate Counsel: Why did Kate Spade hire you to fight counterfeiters? Barbara Kolsun: Before I got here, we fought counterfeiting [just] by using outside counsel. That’s very expensive. One year we spent over $1 million [on attorneys' fees]. Outside counsel don’t live here and they bill by the hour, so that’s not cost-effective. It’s a losing battle. It just made more sense to have a general counsel. I know the product line because I sit here. CC: How much money does Kate Spade lose to knockoffs? BK: Anecdotally, for every counterfeit bag sold, we lose one real sale. So as a $70-million-a-year company, we lost $70 million last year. The industry [as a whole] loses billions. And New York City loses $1.25 billion in tax revenue. CC: How much time do you devote to this issue? BK: A huge part of my job is fighting counterfeiting. It’s 25 percent of my job; it could be 100 percent. It involves fighting counterfeiting on the Web, in Chinatown [known for its market in faked goods], at retail stores � especially in the Midwest and the South. I send out hundreds of cease-and-desist letters; right now, for instance, there’s an enormous amount of beauty salons around the country that have sidelines in knockoff bags. I also work with malls [where] we’ve had tremendous problems with kiosks that sell knockoff purses. CC: What if the vendor doesn’t stop? BK: We sue them. But you can’t sue every small vendor. Lawsuits are very expensive. So you pick and choose your battles. Most of the time if it’s a fixed retail location, you send a cease-and-desist letter, and the store will stop. CC: How do you rate your efforts so far? BK: I’ve made a lot of headway. We monitor eBay and Yahoo daily. We’ve had many arrests. We participated in a Chinatown seizure program that seized 30,000 to 50,000 [fake] Kate Spade bags. CC: What about the argument that knockoffs are essentially harmless? BK: When someone says to me, ‘I can’t afford a Kate Spade bag, so what do you care that I buy one on Canal Street [in New York's Chinatown] for $25?’ � well, [I care] because it’s stealing. It’s like people saying, ‘You make more money than I do so I can steal from you,’ or passing a counterfeit $100 bill. It’s theft of the most important thing in free society � which is coming up with an idea, making something fabulous out of that idea, and benefiting from your creativity. That’s what freedom stands for. I couldn’t afford a Rolex, so I bought a Swiss Army watch. It cost me $150; it’s a very good watch. Swiss Army is a legitimate company. Before I had a Swiss Army watch, I had a Timex. My advice to consumers: If you really want a Kate Spade bag, you watch for the sale and buy it. CC: Who takes design protection seriously? BK: I think the Europeans do. The French have been brilliant. They have the concept of “le droit” � moral rights. The French are relentless when it comes to enforcement because they really believe in it; it’s an artistic country, filled with fashion designers and great artists. CC: Is there generally less sympathy about fakes when it comes to fashion? BK: People have to look at the bigger picture. It’s about stealing. It’s not just about handbags; it’s about any consumer product � toys, drugs. Counterfeiters are criminals. Where do people think those $20 Kate Spade knockoffs are made? They’re made by children in sweatshops in China. We also manufacture in China, but we work with the best factories, which are human rights-compliant. Because that’s what good companies do. All of those things go into the cost of a Kate Spade bag. CC: Isn’t stamping out fakes as futile as trying to eradicate roaches? BK: Well, it’s a big, big problem. Will we make it go away completely? Probably not, especially when we have other problems � like terrorism-that take law enforcement time. But it’s not for lack of effort. There are raids constantly. But you can’t chase street vendors. They’re not so much the problem as the source. CC: Is penalizing consumers a solution? BK: That’s not my idea. Somebody suggested that, like johns who patronize prostitutes, we should arrest consumers who buy. Is that going to happen? Highly unlikely. On the other hand, the ladies who have purse parties, like Tupperware parties, who sell out of their houses, are in fact selling at distribution levels. And that’s a felony. I’d like to see those little ladies go to jail in front of their friends. I don’t see how that’s different from selling cocaine. We have very good laws; it’s the enforcement that’s the problem. CC: Ultimately, is this a moral or a legal issue? BK: It’s a moral issue. It goes to the heart of a democratic society, where you should be entitled to the fruits of your labor. It’s about stealing, so it’s a moral issue in any religion. We all have to contribute to society. It’s not fair that people run these multibillion-dollar underground economies. Email: [email protected]

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