Not Made in the USA: Levi's

“I wish I had invented blue jeans. They have expression, modesty, sex appeal, simplicity…all I hope for in my clothes.”
-Yves Saint Laurent

Of all the trends America has tried to export, from baseball to democracy, nothing seems to have caught on quite like blue jeans. It’s more than a little striking that Yves Saint Laurent -- perhaps the greatest fashion designer France (and thus the world) has ever produced -- should confess to having wished he’d created them. After all, blue jeans are the one piece of fashion that's transcended all times and styles: They're worn by Americans from all walks of life -- from James Dean to Jerry Seinfeld to Joe the Plumber.

And for that, we can thank Levi’s.

The company that started it all was founded in 1853 when Levi Strauss moved from Bavaria to San Francisco. His company began manufacturing denim overalls, and by the 1920s had invented the modern pair of jeans.

For a long time, jeans were worn mostly by cattle ranchers and farmhands, soldiers and poor boys. But by the 1950s, jeans were embraced by the counter-culture. It didn’t take long for mods and hippies to cast Levi blue jeans out into the world, where they became an international sensation.

It was around the same time that Levi’s followed suit by quite literally casting its jeans out into the world by opening more than 50 plants and offices offshore. It was in these factories where America’s favorite fashion was manufactured using cheap labor. Today, most Levi's are still made offshore. Check the label on the pair you’re wearing now.

But we’ve all heard the complaint before: By moving its manufacturing offshore, Levi’s abandoned its American soul. What’s less well-known, however, is that Levi’s turned to another American tradition to fill that hole: suing (quite literally) the pants off its competitors.

Sure, Americans have a reputation for their love of litigation. But few companies embraced it quite like Levi's. Since 2001, Levi’s has engaged in over 100 trademark infringement lawsuits, more than General Motors (GMGMQ), Disney (DIS), and Nike (NKE), according to the New York Times.

So what’s got Levi’s all hot and bothered?

For starters, Levi’s invented jeans, so basically any other company that dares to sell denim runs the risk of ripping their design off, whether they know it or not. Levi’s most common complaint is that competitors copy its design of the two arcs and folded piece of cloth that are sewn into the back pockets of the pants (aka, US trademark #1,139,254). In addition to dozens of other small companies, Levi’s has sued Guess (GES), Esprit Holdings, and Lucky Brand Jeans. Often, they sue multiple times.

Most of the time, the cases are settled out of court -- and in Levi’s favor. With styles changing so quickly, competitors often say it’s easier just to destroy the litigious jeans and design new ones rather than fight it out in court.

Often, the defendants point to how poorly Levi’s performed during the denim boom of the 1990s as to why it's gone sue-crazy. Levi executives deny this claim, arguing that the rapid-fire litigation is all about protecting what’s rightfully theirs.

But the fact is, Levi’s sales have plunged more than 40% since 1996. It's been forced to close down nearly half of its work force and close multiple plants. Last year, net revenue in Levi’s American market fell 13%, from $580 million to $504. (Only 3 million shy of 501, Levi’s classic design!)

Which is all to say, it might not be long before Levi’s will need to dip its toe into the newest and greatest American trend: the government bailout.