Collette Callister and her two sisters launched Lime Ricki in 2007 after recognizing what they called a need for “cute and modest” swimsuits.
Eleven years later, in June 2018, Lime Ricki experienced a sudden drop in sales. The drop was especially strange, Callister said, since it occurred during the company’s most successful month.
She said she was shocked when she first saw photos of her company’s products on a knockoff website.
“What we started seeing was a super aggressive marketing campaign toward all our customers on all social (media) platforms,” Callister said.
Most of the campaigns targeting Lime Ricki would use photos taken from Lime Ricki’s website and sell knockoff copies of Lime Ricki swimsuits for a fraction of the original price.
“It’s really, really hard to compete,” said Callister. “It’s just stealing, and I think the average customer doesn’t really realize that. We didn’t realize it for a long time.”
Lime Ricki purchases most of its fabric from Chinese supply chains since they are typically less expensive. The companies in China print the patterns and fabric and send them to production sites where the suits are sewn together.
Callister said Lime Ricki does its own prints and styles, working with a pattern maker in Los Angeles. As the process of creating a line is laborious, they begin months in advance, Callister explained.
Lime Ricki pays for photographers, videographers, models, and hair and makeup stylists when preparing to launch a line. Callister said considerable time and resources go into the line before a single swimsuit is sold.
Knockoff companies simply steal the photos and slap a cheap price tag onto the suits in order to avoid all production costs, she explained.
“They can do it for really cheap because they don’t have all of those upfront costs that everyone who is in the business (has),” Callister said.
According to Callister, the knockoffs have had hundreds of thousands of dollars worth of an impact on Lime Ricki’s sales.
Callister said her company initially struggled to decide how to fight the knockoff companies. Once they took a deeper look into the situation, she said, they realized there were dozens of Chinese companies selling cheap copies.
“Frustratingly, you can’t really sue a company in China ever,” Callister said. “It’s just a bottomless pit because they are backed by government and lots of money.”
BYU law professor Clark Asay said copyright law is territorial. Typically, a copyright must be obtained in the U.S. and China if a company wants to enforce it in Chinese courts.
“There’s some sort of tendency for Chinese courts to protect their own,” Asay said.
Callister estimates there are 20 companies stealing from Lime Ricki. At one point she considered using copyright as a solution, but quickly found it to be ineffective.
“Copyright is not supposed to protect functionality, and design is often very functional,” Asay said.
But, in the 2017 Supreme Court case Star Athletica, LLC v. Varsity Brands, Inc., the court ruled that design elements on clothing could be copyrightable if the element could be separately identified and exist independent from the clothing as a form of art. If the design on a swimsuit can be imagined separately from that swimsuit, then the design can be copyrighted.
Asay said still, no one is quite certain about what can be protected by copyright in fashion.
Callister began reaching out to social media companies like Pinterest and Instagram.
“Anytime we see it (a knockoff post), we report it, and everyone but Facebook will pull it off,” she said.
Callister said she is not sure why Facebook doesn’t remove the posts.
Anne Yeh, an employee over communications at Instagram, which is an app owned by Facebook, said fraudulent goods don’t have a place on Facebook. All products and services sold on both Facebook and Instagram must comply with their commerce policies and community standards.
Though Callister is able to get social media sites to remove posts, the knockoff companies just create new ones. Callister said lodging a complaint with the U.S. government would be costly and is something they haven’t yet done.
This is happening to companies both global and local. “We just don’t put forth the resources that a company like Apple might,” Callister said about combatting copies.
Callister is working with Utah Sen. Mike Lee’s office and the Office of the United States Trade Representative and said she is looking into using watermarks on photos and working with other countries for printing.
Mike Hendron, a professor in the Marriott School of Business, said one trick to avoiding knockoffs is to find a trusted person who can represent you in China and deal with manufacturers.
Hendron works directly with students who are starting their own businesses. He teaches his students the best defense against imitators is to have a solid business model.
“I think you’re better off focusing on improving sales. You find better partnerships, alliances and other retail channels you can use; focus on growing the business,” Hendron said.
Despite Callister’s current efforts, Lime Ricki has begun to cut back on production while also spending extra time reporting fraudulent posts on social media.
“There have just been challenges all along the way of one kind or another,” Callister said. “(But) challenges present opportunities for us to look at things a different way and to change, improve and get better. There’s always, always lots to learn and do better.”