Today's Daily Telegraph reports on a real disaster for jeans manufacturer Levi Strauss. Local police in Mexico City, pressured by one the company's lawyers, targeted a factory run by Mexican enterprise Comexma was suspected of producing fake goods. Local media were invited along to witness the raid. Comexma's factory was indeed producing Levi branded jeans, but that was just what it was supposed to be doing: it was one of Levi's own suppliers, legitimately producing clothes under licence from the US company. Comexma then sued Levi's, seeking compensation both for commercial loss and for damage to its reputation as a result of the raid. A court in Mexico City has now ordered Levi's to pay $24.5m in damages and lost income, plus a further $20.5m for harm to Comexma's reputation.
Levi has now admitted its mistake, claiming that its Mexican trade mark protection counsel failed to check with the company's US headquarters before proceeding. A Levi's spokesman is however reported as saying that the US company "strongly disagrees" with the court decision, against which it was appealing: the raid occurred after Levi Straus had told Comexma it was terminating its contract and the Mexican company was in the process of shutting down the facility. Levi Strauss said that, even if the damages awards stand, its operating income would be higher in the first quarter than during the same period last year.
The IPKat says this is a nightmare scenario which -- irrespective of the rights and wrongs of the Mexican court decision -- both should and could be avoided by adequate policing of licensees' activities. "I didn't know Mexican courts awarded such large sums by way of damages", adds Merpel. "Is it only because Levi Strauss is a US corporation, or would a similar award be made against a local business too?"
Levi's jeans and social responsibility here
Invention of Levi Strauss blue jeans here; swinging blue jeans here
Levi Strauss and the structural study of myth here