Klipsch Group, Inc. Pursues Second Wave of Legal Action Against Headphone Counterfeiters, Follows $60 Million Judgement

INDIANAPOLIS (September 4, 2012) — Klipsch Group, Inc. (KGI), owner of the Klipsch®, Energy® and Jamo® audio brands, today announces legal action against a newly identified group of 16 headphone counterfeiters. This follows a prior lawsuit initiated by KGI in January 2012 when the company filed suit against 23 different defendants involved in the manufacturing and selling of counterfeit Klipsch headphones. KGI was awarded a $60 million judgment in the first lawsuit and is approaching $1 million in anti-counterfeit collections to date.

All 16 defendants named in the current lawsuit are China-based sellers hiding their identity and selling fake Image® S4® and Image® S4i® headphones under the Klipsch brand name. The company has recently received an order from the U.S. District Court for the Southern District of New York allowing the suspension of service to domains and sellers on trade boards selling counterfeit Klipsch headphones. KGI has requested that the Court award damages and a permanent injunction against the defendants.

“Though we’ve made significant strides in addressing this issue, we will continue to extensively monitor counterfeit activity and employ all available resources to fight counterfeiting,” said Mike Klipsch, president of global operations for KGI, whose role includes running KGI’s headphone business. “Our obligation is to our brand, product integrity, and most importantly, our customers, and we will provide the utmost protection to each by utilizing the law when necessary.”

As the plaintiff in the lawsuit, KGI is alleging that the counterfeiters have violated the Lanham Act, which governs U.S. trademark registration and prohibits trademark counterfeiting and infringement, among other activities. Specifically, the action relates to trademark counterfeiting, trademark infringement, unfair competition and false designation of origin. The products that the identified counterfeiters are manufacturing and distributing directly infringe on Klipsch trademarks.

KGI has been investing substantial funds to fight the counterfeiting problem including:

  • Ongoing purchases around the world to identify counterfeit sellers;
  • Dozens of cease and desist letters from its legal counsel to individuals selling counterfeit product online resulting in cash settlements and agreements to stop this illegal activity;
  • Training for hundreds of U.S. Customs and Border Patrol officers and local law enforcement to identify counterfeit Klipsch products;
  • Employment of private investigators in North America, Europe and Asia to identify and track counterfeiting activity;
  • and Constant interaction and cooperation with marketplaces, such as Taobao, Amazon and EBay and sites worldwide, resulting in counterfeit sellers being removed.

To further prevent counterfeiting, KGI has recently implemented an authentication program that protects its products from the threat through the use of a holographic label with targeted security features, allowing investigators, retailers and consumers to verify the authenticity of Klipsch branded goods.

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About Klipsch Group, Inc.

Klipsch Group, Inc. (KGI) is a leading global manufacturer of premium sound solutions for the consumer and professional markets. With the legendary Klipsch®, Jamo® and Energy® brands under its corporate umbrella, KGI offers more than 160 collective years of superior engineering and world-class research and development experience. Today, KGI is responsible for the sales of hundreds of premium speakers for every lifestyle, application and budget. The company’s diverse product portfolio encompasses home theater, professional cinema, installed whole-house contracting, commercial, computer speakers, iPod docks and headphones. Klipsch Group, Inc. is also a wholly-owned subsidiary of VOXX International Corporation (NASDAQ: VOXX).