California Attorney General Kamala D. Harris filed lawsuits on Thursday against two international apparel manufacturers for gaining an unfair advantage over American companies by using pirated software in the production of clothing imported and sold in the state.
The companies, based in China and India, did not pay licensing fees for software, including products manufactured by Adobe, Microsoft, Symantec and others, according to Harris.
Harris’ complaints allege that by not paying software licensing fees the manufacturers have a significant cost advantage in the low-margin business of apparel manufacturing, shipment and sales.
“Companies across the globe should be on notice that they will be held accountable in California for stealing our intellectual property,” Harris said in a statement. “This is an anticompetitive practice which harms our state’s economy and is illegal. These lawsuits go after overseas companies whose unlawful actions are eroding California’s garment industry and placing California companies who legally pay for computer software at a disadvantage.”
The lawsuits were filed in Los Angeles County Superior Court. They charge Pratibha Syntex Ltd. of India and Ningbo Beyond Home Textile Co. Ltd., and its sister companies, of China with violating California’s Unfair Competition Law. Since 2010, the Ningbo Companies shipped approximately 713,000 pounds of apparel products into California. Pratibha has shipped more than 19,000 pounds into the state, according to the suit.
Ningbo Beyond Group exports men’s suits, blazers, coats and jackets, as well as fleece cargo pants, fleece jackets and caps to California. Pratibha Syntex exports women’s cotton tops and other clothes for men, women and children.
California’s apparel manufacturers employed more than 580,000 people in 2012 and generated more than $5 billion in annual revenues since 1990, according to Harris. In 2010, the industry employed 40,872 workers in Los Angeles County, which accounts for nearly 70 percent of the industry’s workforce in the state, Harris said.
A study by the Orange County Business Council found that California has lost nearly 400,000 manufacturing and technology jobs over the past decade to countries where piracy rates are as high as 80 percent. This activity has resulted in a loss of $1.6 billion in economic activity and $700 million in tax revenue for California.