The Hindu Business Line : Designer furniture: A masterful copy

In terms of designer furniture, Denmark has been at the forefront of the international scene since the 1950s. But this may be undermined by the problem of fakes.

J. Srinivasan

The next house-warming you go to and the friend shows off the European designer furniture he has imported, don’t bend immediately to check the label. For not just your head, even your belief could take a knock. Why even your friend may be surprised, nay shocked, to discover that what he thought was a master’s work is merely a masterful copy. The Arne Jacobsen ‘Egg’ chair might just be an egg.

Imitation may be the best form of flattery, but European furniture makers are neither thrilled about it nor amused. Now, in a new initiative, the Association of Danish Furniture Agencies and law firm Kromann Reumert will try to stop sale of illegally copied Danish furniture pieces. The Association President, Mr Keld Korsager, told Copenhagen Post that most sales of pirate furniture copies take place over the Internet.

The new initiative will include the monitoring of companies suspected of selling fake Danish designs on the Net on behalf of the Association members, and offer them the services of Kromann Reumert for any legal action they may take against an infringing company.

In March, 16 containers of copycat furniture from China were confiscated in Denmark. According to the Brand Falsification Task Force, that shipment alone — which included fake Jacobsen and Wegner pieces — would have sold for more than DKK (Danish Kroner) 30 million. (One DKK is worth nearly Rs 8; seven DKK make one euro.) While the bulk of pirate copies come from Asia, Mr Korsager thinks the illegal activity also goes on closer home.

Denmark in forefront

According to Danish Furniture, an industry Web site, the furniture sector in Denmark comprises some 400 companies, which together produced furniture worth DKK 19.4 billion in 2006.

This sector employs about 17,000 people and the combination of advanced technology and a high level of technical competence makes productivity in the sector very high. As much as 83 per cent of the production (DKK 16.1 billion in 2006) is exported, making the furniture sector Denmark’s sixth-largest export industry. Exports go mainly to Germany (21 per cent), Norway (13), the UK (12), and Sweden (10). In terms of designer furniture, Denmark has been at the forefront of the international scene since the 1950s. Design classics by famous names in architecture and a new generation of innovative furniture designers have ensured that this prominent position is maintained.

But this may be undermined by the problem of fakes. Acknowledging the scope of the problem, The IPR Company, an independent outfit that tracks and identifies pirate copies of Danish products, said it costs the country more than just money. “Danish businesses are forced to cut jobs when their products are copied abroad,” IPR Company’s Henrik G. Jacobsen told Copenhagen Post. Mr Jacobsen estimated that illegal pirating costs up to 20,000 jobs within the European Union every year.

Italy’s woes

The problem of fakes also affects another major design studio of Europe — Italy. Italian furniture-makers are at their wits’ end. According to a BusinessWeek report, “the biggest threat to Italian furniture designers comes from unauthorised copies. Chinese manufacturers, and even other Italians, casually replicate the best designs. Just mention China and any businessman in Italian design will angrily lash out about how difficult it is to compete with manufacturers who ‘don’t follow any rules’... The Italian Furniture Manufacturers Association is investing heavily in technology to recognise and block fakes at the border.”

Post the Second World War, as Italy, especially Milan, acquired a reputation for design, it attracted considerable foreign talent also, and the industry rapidly grew into one with 36,000 furniture and lighting companies generating $29.4 billion a year in sales, 46 per cent of which comes from exports.

But, now, international demand has been affected by a variety factors, including fakes, the strengthening euro, strong competition from China and Brazil, rising raw material costs and unexpanded distribution networks. Most players, primarily family-run operations with less than 20 employees, are battling for survival.

Hard to detect

The multi-billion-euro counterfeiting industry is thriving mainly due to falling transportation costs, cheap technology, and a me-too generation. In 1998 Customs officials around the EU seized 10 million items, mostly cigarettes, CDs, perfumes and clothes. Today seizures exceed 100 million items a year.

The key is the labyrinthine supply chain. From the country of manufacture, pirated goods trace a complex path, usually avoiding any inspection that makes detection of fakes almost impossible. Many deals happening on the Internet make detection even more difficult.

The fake business also deals the legal ones a double whammy. Besides lost sales, international law requires that the owner of the intellectual property pay for disposing of the fake goods seized by any Customs authority. The company can recover this cost from the counterfeiter but, of course, only if the latter is caught. Also, legal recourse can take its own time. No wonder many companies prefer to ignore the seizure of fakes.

To stop the pirate trade, the EU has passed a directive to allow Customs authorities greater powers to investigate consignments held in ports. The measures are being introduced into law in the member-states. Also proposed is a directive that would introduce tougher penalties for counterfeiters, including prison sentences.

Till then, perhaps Europe’s furniture makers may not be able to relax on their designer easy-chairs.

(The author is a Business Line Deputy Editor on sabbatical in Denmark.)

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