Oakley Continues Counterfeiting Fight

Oakley Continues Counterfeiting Fight FOOTHILL RANCH, Calif.–(Sept. 7, 2000–Oakley Inc. (NYSE:OO) Thursday announced the results of continued successful efforts against worldwide counterfeiting operations engaged in the production and distribution of counterfeit Oakley sunglasses and products.

Oakley has a long history of relentlessly pursuing individuals, retailers and manufacturers who engage in patent infringement and counterfeiting activities. This year alone, the worldwide efforts have resulted in the seizure of more than 780,000 pairs of finished and semi-finished counterfeit sunglasses, as well as manufacturing equipment and production supplies.

“Oakley is a company driven by a passion to design and manufacture superior products for the world market,” said Jim Jannard, Oakley chairman and chief executive officer. “We will not tolerate any individual or organization that infringes Oakley designs or trademarks.

“We will pursue, by any means possible, parties that use the company’s name or reputation to sell inferior products to the public. We are serious about locating, raiding and prosecuting domestic and international counterfeiters to the full extent of the law and will not compromise the level of integrity and trust our honest consumers place in our products and the Oakley brand.”

“The continued high level of cooperation with worldwide law enforcement and customs officials ensures the absolute success of these raids,” continued Jannard. “We have averaged more than one arrest per day (263 worldwide to date) in 2000. Last year we recovered more than 2.4 million units of bogus product and arrested more than 334 individuals in conjunction with intellectual property rights violations around the world.”

United States and Web Site Enforcement

In conjunction with U.S. Customs, Oakley continues successful seizures with more than 390,000 items of counterfeit product and 243 arrests to date in 2000. Recently, in an ongoing investigation, law enforcement officials in Massachusetts executed a search warrant against Roy Fielding, who had been running the www.knockoffalley.com Web site.

The raid and subsequent recovery included significant amounts of counterfeit Oakley sunglasses. This site had yielded an estimated US$1 million-$2 million annually in sales of counterfeit goods including Oakley, Rolex, Movado and Hilfiger products.

U.S. Trademark Infringement Ruling

In a trademark infringement ruling this month, the U.S. Patent and Trademark Office’s Trademark Trial and Appeal Board issued an extremely favorable judgment upholding Oakley’s opposition to Killer Loop’s “K with the ellipse design.”

The board refused Killer Loop’s application for trademark protection and ruled favorably for Oakley stating that Killer Loop’s mark was substantially similar to Oakley’s mark for eyewear and sunglasses. The judgment was very strong as the Appeal board agreed that Oakley’s Ellipse logo is a “strong mark indeed” and “serves as a source indicator in its own right.”

The Appeal board further held that Killer Loop’s mark created a commercial impression quite similar to Oakley’s Ellipse mark and that there would be a substantial amount of potential confusion in the marketplace and was therefore denied.

Asian Seizures — Philippines and China

Since 1998, Oakley investigators have been monitoring the Zong Rung Glasses Factory in Hua Du City, Guangdong Province, China, heavily involved in manufacturing counterfeit Oakley product and distributing to the United States. This week, the company’s anti-crime team in Asia, along with Chinese officials, had ample evidence to shut down the operation and seize 20,088 counterfeit Eye Jackets. All product will be destroyed.

Major Esmeralda G. Saplala, District Commander of the Philippines Customs, worked with Oakley to successfully seize more than 144,000 counterfeit Oakley Fives(TM). The counterfeit shipments came from Great Sun Optical Industrial Co. Ltd. based iin Gone Ye Kaifa Qu, China, and were destined for Viva Vision Commercial General Merchandise in Manilla. Customs officials in Manila seized the counterfeit goods.

After numerous investigations throughout 1999 and 2000, Oakley investigators and local law enforcement officials successfully raided and seized 23,400 pairs of counterfeit Eye Jackets from the Dong Ou Glasses Factory in China on July 18, 2000. The order was days away from being shipped to India.

European Seizures — France and Spain

Working closely with law enforcement officials at Le Havre airport in northern France, 81,000 counterfeit Eye Jacket and A Wire sunglasses, along with parts necessary for producing additional counterfeit Oakley products, were seized as they entered French customs. The products were exported from Ningbo Ningshing Group Corp. based in Ningbo, China.

In July, the local Palma de Mallorca Spanish police force seized a total of 22,000 counterfeit sunglasses and apparel items. The goods were being imported directly from China. Additionally, custom authorities in Rome seized a stock of 7,046 counterfeit sunglasses, which originated from China, at Fiumicino Airport.

South Pacific Seizure — Australia

In July 2000, Justice Finn of the Federal Court of Australia delivered his judgment in the matter of Oakley Inc. against OSLU Import and Export Pty. Ltd. and Guo Qiang Tao, the director of OSLU. The case involved the sale by OSLU and Tao of counterfeit Oakley Eye Jacket sunglasses.

Justice Finn found that OSLU had infringed Oakley’s intellectual property rights, including two designs registered in respect of Oakley’s Eye Jacket sunglasses. The judge also found OSLU had infringed Oakley’s namesake trademark. The court formally granted an injunction to restrain OSLU from infringing Oakley’s Eye Jacket designs in the future and ordered confiscation of the infringing sunglasses.