Fake Raptors merchandise 'bait and switch' unfolds during NBA Finals
TORONTO -- Hours before the Toronto Raptors take to the court during their historic playoffs run, a cat-and-mouse game unfolds outside the team's arena.
On one side, a group of slippery hawkers sell illicit team merchandise in an effort to seek large profits from excited fans. On the other, a crew of NBA executives, private investigators, city bylaw officers and police try to enforce the league's property rights.
It's the first time this type of anti-counterfeit operation has played out for the NBA on such a scale in Canada, given the Raptors' unprecedented ascent to the Finals where they are tied with the Golden State Warriors at one game apiece.
"The finals generates so much interest and the Raptors story is so significant being the first Canadian team that what happens is it creates a tremendous spike with certain types of illicit vendors," said Anil George, an intellectual property lawyer with the NBA based in New York City. "They basically do a bait and switch."
The top items being sold without the NBA's permission are T-shirts, jerseys and caps. George didn't provide specific figures but said a number of counterfeit items have been seized so far.
Such anti-counterfeit operations are set into motion before many of the league's marquee events. For the current Finals, one of the league's intellectual property lawyers has been in Toronto leading a team of private investigators as they enforce intellectual property rights.
The private investigators are the key to the operation, George said, calling them the league's "eyes and ears." They're trained to differentiate between legitimate and counterfeit goods and know where to find the sellers who easily "disappear" when spotted by the anti-counterfeit team.
The NBA also got in touch with the City of Toronto, which has bylaw officers out on game nights looking for those selling wares without a permit, said the city's director of bylaw enforcement, Rod Jones.
Permit-related fines run about $200, he said, but some other bylaw offences, relating to street vending for example, can come with a maximum fine of $5,000.
A city analyst couldn't say how many violations bylaw officers have handed out related to selling Raptors merchandise, but Jones -- who called the role of bylaw officers "minor" -- believes they've laid a few fines.
Plainclothes police officers are also involved, said Toronto police spokesman Kevin Masterman, but they are only along to "keep the peace." The force has not launched a criminal investigation related to fake goods, he said.
When the anti-counterfeit crew catches a seller, it shows them a cease-and-desist letter, informs them they're breaking the law, and asks that they stop their operation and give up their goods, George, the NBA lawyer, said.
"Generally we obtain compliance," he said.
A recent operation during an all-star weekend in Charlotte, N.C., for example, gathered $100,000 in fake goods, he said.
The alleged perpetrators are usually a mix of locals along with others who come in from out of town -- in Toronto's case some peddlers are suspected to have come from the U.S., George said. Fake jerseys are likely made in China and smuggled in, while T-shirts are usually made locally, he said.
The goods are cheap, poorly made, don't last as long, and those manufacturing them don't pay taxes, George said.
"If it's too good to be true in terms of a deal, it probably is," he said, adding that cheap, vague labels, and merchandise without holographic labelling are easy ways to spot fakes.
A pair of Toronto intellectual property lawyers who've been helping brands protect their rights for years said hawkers often have sophisticated, organized operations.
Lorne Lipkus and his son, David Lipkus, aren't working with the NBA but have been part of similar efforts for bands that play at the same arena as the Raptors. They said such operations typically have three teams of at least eight people circling the arena before an event.
Those teams consist of private investigators, paid-duty police officers, at least one lawyer armed with cease-and-desist letters and a group of "spotters."
The hawkers often have their own "counter-spotters," David Lipkus said.
"They get on their phones and say, 'stay away from gate six,"' he said. "Then everyone moves and disappears into the crowd."
Lorne Lipkus said the hawkers typically carry their goods in garbage bags and restock at a van full of fake merchandise that's parked in the area.
"They used to sell it out of the trucks, but they don't do that because we can seize their vehicle," he said. "It's a lot of garbage bags of merch."
On a good night, the lawyer duo said they may find up to 300 fake shirts, each going for $20 to $30.
"We're always trying to stay one step ahead," David Lipkus said. "It's intense."