Why investigation work is integral to tackling the ever-growing threat of counterfeits and online security

Imitation may be the sincerest form of flattery, and it certainly suggests a company’s success, but when it comes to counterfeits, fake goods are costing brands billions!

The illicit trade of counterfeit goods has been a persistent economic and cross-industry problem for many years. Even before the coronavirus was unleashed on the world, the Organisation for Economic Cooperation and Development (OECD) and the EUIPO updated their figures in 2019 to highlight the scope and scale of IP crime. They revealed that the world trade in fake goods is now worth $509 billion, or 3% of world trade. Almost 7% of products imported into Europe are now counterfeit, corresponding to €121 billion per year!(1)

“It is not only the monetary losses brand owners have to deal with due to counterfeits”, advised BRANDIT’s Senior Online Investigator – Severine Koster, “the damage goes beyond as it also includes the negative impact on the customer experience, long-term loyalty, and reputational damage, not to mention the risks and potential harm fake goods could cause a consumer.”

Due to COVID and the consequential restrictions, we have seen a massive increase in consumers using e-commerce platforms. However, we have also seen an explosion in counterfeits goods in the digital world. It is estimated that almost a third of all good sold online are counterfeits(1). Online shopping has always made consumers vulnerable to counterfeit goods, but, with the pandemic, counterfeiters’ touchpoints have expanded beyond the usual e-commerce marketplaces to social media channels including Facebook, Instagram, and TikTok.

Like hackers, counterfeiters are extremely opportunistic, and as a result, even the most tech-savvy consumers can find themselves tricked. After all, many criminals operate behind sophisticated-looking websites, using fake trademarks, brands and emblems – and even artificial certification labels – to create the impression of safe genuine products.

 

What can be done to stop illicit trade?

Bear in mind that the fight against counterfeits is a long game. The more successful a business is, the more attractive a target it is for copycats and counterfeits. It is important to remember a ‘one size fits all’ anti-counterfeiting strategy cannot be applied. With the constantly changing online landscape, many strategies and initiatives need to be employed to successfully identify and pursue action against counterfeiters, on and offline.

Koster highlights, “While brand protection monitoring and enforcement tactics play a big role in protecting your IP, investigation services provide undeniable benefits when you have specific issues you would like to tackle, in a particular market, product, distribution or manufacturing channel, for example, or if you need to assess the scale of a potential counterfeit issue on a particular platform”. This kind of detailed on and offline investigation enables companies to:

Identify and stop counterfeit infringers

Counterfeit sellers who are cross-channel trading can be identified and investigated in depth. This type of investigative work typically uncovers a network of related companies, their supply chains and sales channels (including social media). Detailed information on a) the infringer(s); b) the products, c) any related companies; as well as d) any relevant sales channels (across all platforms), is consolidated to form a recommended enforcement strategy with follow up actions.

Detect and take down fraudulent Web-shops

By cross-referencing IP addresses, DNS records and other network information, it is possible to identify common clusters that can include fraudulent / newly registered websites. Further information can then be gathered and consolidated on the owners and the network of these copycat websites. This intelligence is crucial in building a case against this kind of illegitimate activity.

Assess a platform’s risk to their brand

Whether it is the grey, black or white market, it is essential that a brand owner understands the scope of a threat in order to focus budget and resources accordingly.  A cross-platform or market analysis provides companies with indispensable information in to not only the brand landscape but also the sales of particular products/brands in a given region. This type of investigation work can then illustrate the extent of online risk, estimate figures (e.g., percentage of infringements, grey market and authorised (re)sellers etc.) and provide strategic insights.

 

It’s fast becoming a world where nothing is what it seems….

The fight against counterfeiting is an ongoing effort. Brands need to be more inventive and innovative to do so. In the past, the points of entry were narrowed with a large majority of these products entering the market through main ports on large container ships. Nowadays, e-commerce is leading to fragmentation and confusion and it is harder to achieve a significant impact unless you are able to link shipments and retrace them back to their source. Faced with the scope and scale of this new situation, brand owners will need to not only rethink their brand protection strategies but lean on external providers who have the investigative expertise to support them in protecting and building on the value of their brand so they can keep focus on the day-to-day operations. As long as there is the demand, counterfeiting is a problem that is not going to go away. However, this does not mean that companies cannot employ all the services available to them to defend their rights and protect their products.

 

(1) https://www.worldtrademarkreview.com/anti-counterfeiting/brand-protection-in-the-digital-world

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