Recent studies show that international trade in counterfeit and pirated products represent up to 2.5% of world trade, or as much as USD 461 billion. In the EU, these products amount up to 5% of all EU imports, worth up to € 85 billion. Annual losses are also substantial but certain goods are more likely to be counterfeited than others. Clothing, footwear and luxury goods are the “champions” with annual estimated losses of € 34,5 billion, followed by pharmaceutical goods with annual estimated losses of € 10 billion.
Why do people still buy counterfeits?
There is certainly a positive evolution into the way EU citizens perceive IP rights revealing a growing respect for IP across Europe. Seven out of ten EU citizens believe that nothing can justify the purchase of counterfeit goods. On the other hand, this still means that 30% are of the opinion that there can be justification to purchase counterfeits. This is for instance the case when the price for the original and authentic product is too high. Unfortunately, there is an increase in the intentional purchase of counterfeit goods by young people (15-24). Finally, customers do not always intentionally buy counterfeit products but are tricked by counterfeiters.
How do counterfeiters act?
Trade routes in counterfeit and pirated goods are complex and can change dynamically. The share of small shipments /parcels moreover, as a consequence of online sales, mostly by post or by express services keeps growing. This is due to shrinking costs of such modes of transportation and to the increasing importance of Internet and e-commerce in international trade. For traffickers, small shipments are a way to avoid detection and thus minimize the risk of sanctions. In turn such small shipments / parcels and present significant additional costs for customs authorities and additional challenges for enforcement authorities.
What brand owners should do!
The online counterfeiting ecosystem offers unique challenges that require a unique approach.
- Register your brand and your designs: Registering key brand and product names as trademarks, and any designs will indeed provide the rights to act against counterfeits.
- Quantify and monitor: Quantify the problem. The good news: approximately ten online marketplaces account for 80 percent of all marketplace traffic. Focus on these marketplaces! Counterfeiters use the same effective promotion techniques employed by legitimate marketers. Monitor promotional efforts! And finally also monitor unauthorized use of your trademarks in domain names.
- Raise awareness: Educate your staff, business partners and customers. Customers and business partners do not want authentic goods lowered in value by the presence of counterfeit goods. Join forces with your business partners and customers to spot counterfeit goods and get them off the market.
- Set priorities: The biggest offenders, offering the greatest number of counterfeit goods in the most highly trafficked venues, should be identified and addressed first. Determine which counterfeit goods are generating the largest sales, and target these first.
- Take action: Once you know where the greatest threats lie, aggressive action is the best strategy.
- Rely on policies and procedures of online marketplaces enabling you to report infringements (although some online marketplaces are occasionally being criticized for not executing their policies, g. Alibaba);
- Rely on the tools that search engines offer and which can result in the removal of ads linking to counterfeit sites and illegal websites;
- Send takedown notices to Internet service providers;
- Work closely with Customs and other law enforcement authorities in order to stop the export / import of counterfeit goods;
- File oppositions against trademark squatters;
- Launch domain name procedures in order to stop the use of your trademark in domain names;
- Finally, if necessary and after a feasibility analysis, introduce legal proceedings before the Courts.
- Let people know that you take action: Brands that visibly, vigorously fight to remove counterfeit goods from online venues often see a dramatic drop in infringement against their brands. Counterfeiters are known to shift their energies to more passive targets.
KOAN helps you put in place your fight against counterfeits online and provides permanent assistance in each of the above mentioned phases. We monitor IP portfolio’s worldwide in order to grow IP value for your company. For more information do not hesitate to contact Christine De Keersmaeker ([email protected]) or Willem-Jan Cosemans ([email protected]).