March 2013 • ABPIA Update



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Dear Mon Cheri Retailer, Partner and Industry Friend and Associate,

It is with great pleasure to report to you today as President of the American Bridal and Prom Industry Association (ABPIA) our progress fighting counterfeiters from China.

At the end of 2012, the ABPIA filed a lawsuit against 45 of the most egregious websites shipping counterfeit merchandise to North America and the rest of the world. The court granted us a temporary restraining order, also referred to as TRO. We returned to court in New Jersey on January 7, 2013 and appeared before the Honorable Judge Wolfson, Chief Magistrate of the Federal Court.

At this hearing, we presented original and counterfeit merchandise from multiple manufacturers and highlighted the damage done to our industry from these offshore pirates. We explained to the judge that approximately 500,000 to 600,000 counterfeit units entered North America in 2012, representing approximately $300 million in lost retail sales. This translates to approximately 100 to 150 units per full-service bridal and social occasion store in the United States.

Within a half hour of testimony, the judge immediately grasped the danger to our industry and ordered the following:

• The granting of a Formal Injunction against the defendant websites to immediately cease and desist from their illegal cyber- squatting activity. Our counsel prepared the paperwork and the order was signed the next day on January 8, 2013.

• For counsel to additionally serve the injunction on all members of the supply chain that aid and abet the counterfeiters. This includes website providers and hosts such as VeriSign, Go-Daddy and other such entities, search engines such as Google, financial entities transferring funds offshore such as PayPal, American Express, MasterCard, Visa, Discover, etc., freight entities transporting goods such as FedEx, UPS, DHL, and any other entity within the supply chain that helps the counterfeiters.

• For counsel to immediately add additional websites as defendants without having to file formal motions to amend the complaint. We have a list of approximately 2,500 additional websites that will be added to the injunction as defendants this week.

• For counsel to instruct all entities conducting business with the counterfeiters to reveal the exact name of the owners of the website, their locations and any other information we feel pertinent in eradicating this threat to the industry. This will aid us in securing damages, shutting down the websites and aiding the court and government agencies to enforce rulings.

• To immediately inform United States Customs and Homeland Security of the injunction to secure maximum help from these institutions to seize illegal websites and counterfeit merchandise.

The judge was clear in her instruction that should any entity fail to comply with the order, she is fully prepared to take additional action. This could include forcing any of these organizations to appear before her in court for rulings, especially if she feels they are in contempt of court.

Judge Wolfson was also clear that the economic damage to the industry is so difficult to calculate that she would place it in the category of “irreparable harm”. The significance of this category is that we could potentially go after large damages from any of the entities should they fail to comply.

It is my great pleasure to report that PayPal has begun to seize funds originally slated to be sent offshore and that we already received notifications of websites that are being shut down by web hosts following instructions of the court order. We expect many more websites to be shuttered over the coming weeks and will remain vigilant in this effort as we add an additional 2,500 counterfeiters to the injunction.

Thus far, the ABPIA is comprised of approximately 400 members including manufacturers, retailers, sales representatives, apparel marts, media resources and other interested constituents of our industry. If you have not yet joined the ABPIA, we respectfully feel it is your responsibility to stand up and be counted. Join us in the fight to save our industry from this horrible scourge. We created ABPIA as a nonprofit 501(c) 6 organization, which allows us to lobby in Washington, D.C. and with other government entities. We plan to visit senators and congressmen to secure federal legislation that would give us even greater leverage against these counterfeiters.

It goes without saying that this grand endeavor takes time and money. I have personally dedicated the last year and a half of my life to working on this project, basically turning my company over to be run by my wonderful employees. However, I cannot do this alone and need your help. Attached is an application to join the organization. As you can see, it is only $100 annually for retailers. If we save you just one lost sale, your investment is more than secure. We also have other plans for the ABPIA including securing affordable health care coverage and already have a consultant working on this project.

Please stand up and be counted. Join the ABPIA today.

Respectfully,

Stephen Lang, President of ABPIA and CEO of Mon Cheri, LLC

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