Former Hermès Staff in Counterfeiting Ring to Be Sentenced in September

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PARIS — The plot seemed infallible: acquire high-quality crocodile skins and leverage the artisanal know-how acquired at Hermès to create perfect replicas of the house’s most coveted item, the Birkin bag.

Its crocodile versions, especially the ones in sizes 30 and 35, command high prices both in stores and on the secondhand market — a rare diamond-studded version went for a record-setting $379,261 in 2017, while a plain blue one reached $52,500 at a Sotheby’s auction on June 1.

The snag that the 10 defendants, who were on trial from June 24 to 26 at Paris’ Criminal Court, hadn’t anticipated was that investigators would stumble upon their operation while investigating a man suspected of fencing stolen Hermès bags. Subsequent investigations uncovered a structured network that included seven then-current and former employees who allegedly counterfeited an estimated 148 bags over the course of four years between 2011 and 2014, netting more than 4 million euros by selling them to unwitting customers in Asia, especially Hong Kong.

The fake bags, created with offcuts, metal parts and tools squirreled away at their respective positions, were then sold for about 23,500 euros and 32,000 euros, according to court documents — around half of the 44,000 euro price tag of a genuine version in-store at the time.

In addition to these, the ring resold bags created under the “bon au personnel” provision, which allows Hermès employees to acquire the elements and make their own bags, identified by a shooting star stamp, strictly for personal use.

Over the three-day trial, prosecutors explained three men, including two Hermès workers, had hatched the plot. One, an expert leather cutter, left his position at Hermès with, among other confidential documents, a Birkin pattern in his possession. Another, in charge of acquiring the exotic skins, is a former executive of an Italian subsidiary of the company previously ensnared in another counterfeiting scandal.

Among the eight others facing charges of forgery as an organized band, abuse of confidence, and possession and sales of counterfeit goods were skilled leather workers who had been with the company for decades, many of whom expressed deep remorse at having “betrayed the trust” of an employer they were proud to work for.

On the final day, the public prosecutor required sentences ranging up to four years in prison, 200,000 euros in fines, and the confiscation of assets seized during investigations. At the time of the offenses, those found guilty faced up to five years in prison and a fine of 500,000 euros (now seven years and 750,000 euros), with a prior relationship to the plaintiff counting as an aggravating factor that can see sentences double.

Additionally, the execution of an outstanding arrest warrant for a ringleader who moved to Vietnam soon after his indictment and has since failed to honor any court summons or legal supervision was requested. Hermès also made a claim for more than 1 million euros for damages.

Counsels for the defense argued against the validity of the prejudice incurred by the company, both from a financial point of view by questioning the exchange rate and a 70 percent profit margin mentioned by the plaintiffs, as well as in reputation, hinting at a supposed gain in brand equity due to the proceedings.

The scarcity of bags on offer and shop floor practices, especially toward Asian customers, were also brought up several times.

Whether or not the Birkin — admittedly one of the most recognizable handbags in the world — was indeed original enough to be considered intellectual property was another hotly debated point. Its origin story, a design imagined for Jane Birkin by then-Hermès chief executive officer Jean-Louis Dumas and based on an early 20th-century model itself inspired by transport satchels used by gauchos, was trotted out on several occasions.

The court heard Alexandre Lazarègue, a lawyer representing one of the alleged ringleaders, argue that “Hermès couldn’t say what constituted the originality of the Birkin bag,” therefore counterfeiting could not apply. A prior trial last October had been derailed by a request for a preliminary priority ruling on constitutionality by the defense, subsequently rejected by the appellate court.

The verdict is scheduled for Sept. 24.

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