The people behind Beats are about to rake in several billion dollars in a deal with Apple, but before that the headphone-maker could pull in even more money in a lawsuit going after Chinese counterfeiters. According to AppleInsider the company has filed a suit claiming trademark infringement, and is demanding several billion dollars in damages. Beats claims that a number of Chinese counterfeiters are selling products designed to look like the company’s own headphones and featuring the official Beats trademark. The fake headphones are reportedly sold online through digital storefronts pretending to be connected to the American company. The lawsuit estimates these sites make over $135 billion per year while ruining the Beats brand with low-quality products.
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.