How do you stop a global problem like counterfeiting? One that costs economies around the world an estimated $1.8 trillion. One that today means that one in six products that we buy online is a fake. One that fuels organised crime and many of the social problems in the world. One that shows no sign of going away. One that is fuelled by rapid technological advances. Unfortunately, as the old saying goes, "money makes the world go round", which means the rewards of counterfeiting far outweigh the costs today, especially when the rapid growth of both access and usage to the Internet has meant over 40% of the population on earth today has the means to be part of the connected generation.
Despite the ever increasing amounts major brands spend every year on trying to counter the issue of online intellectual property infringement, the problem isn't going away. Tactical wins do hurt the counterfeiters but many continue with impunity, outside the reach of the authorities. Advances in technology, such as the ability to detect brand logos and image marks have been a great success but the onus is still firmly on the brand holder to take action to try and control the volumes of counterfeit products bearing their intellectual property.
The law of supply and demand dictates economic and financial models for both genuine producers of goods and services as well as their less than legal counterfeiting counterparts. If no one is buying your product then you will soon stop manufacturing and selling it. Disruptive strategies are slowly having an impact on counterfeiters across the globe. Major payment service companies such as Visa, MasterCard and PayPal have all been taking action, withdrawing their services from thousands of merchants, who they believe are selling counterfeit goods, hitting them where it hurts. But the infringers have often caused significant damage before any legal action can be taken. And in many instances as soon as action is taken against one website, another pops up in its place. If you could follow the trail upwards you would almost certainly find the same organisations behind these many online entities, acting outside the reach of the authorities.
There isn't a week that goes past where a story hits the headlines of a major counterfeit bust. Last week nearly £16m worth of fake drugs were seized in the UK as part of Operation Pangea, an international operation which saw a total of £51m removed as well as nearly 1,400 websites trading these potentially lethal fake drugs and unlicensed medicines being shut down. "Criminals involved in the illegal supply of medical products through the Internet aren't interested in your health, they are interested in your money" commented Alastair Jeffrey, head of enforcement at the UK's Medicines and Healthcare products Regulatory Authority (MHRA). Newsworthy indeed, but when put in context that according to Black Market risk index firm Havocscope the global market for counterfeit drugs is over $20bn, the $75m (£52m) haul is a drop in the ocean of the problems the pharmaceutical industry faces.
Hope is not a strategy as we are told by the most respected economic advisors so waiting for the authorities to get lucky or the wheels of the legal system to turn brand holders need to take responsibility and accountability for certain aspects such as educating consumers about the perils of buying counterfeit.
Many organisations are now taking this approach, turning their consumers into brand advocates who are happy to act as IP infringement detectives. Brands such as Ugg and Canon have websites dedicated to the detection of fake items, including how to spot them and what the dangers are if using them but also providing a way for their clients to turn detective and report infringers. Most of us do not want to see branded products we use become cheapened and diluted by counterfeits. The authorities are also getting more and more involved in the education of the general public, with various Police forces and local authority Trading Standard teams providing useful guides on tell-tale signs of counterfeiters in action.
Taking this a step further, organisations such as INTA (International Trademark Association) are educating tomorrow's consumers today, developing specific campaigns that are targeted at school children. Their Unreal campaign is a great example of how they are taking the anti-counterfeit message into schools across the U.S, using practical examples of how to spot fakes and what the long-term damage is to everyone as well as the legal aspects.
The top line messages are very clear - It is a criminal offence to try to financially gain by using a trademark without the owner's permission. Counterfeit goods are often bad quality and can be unsafe to a point of being fatal in some instances such as drugs, medicines and car parts. In fact, it is almost a given that no counterfeit goods will have gone through the rigorous safety checks or testing that genuine goods are legally obliged to.
It's not just disappointed that websites who offer counterfeit goods deliver. Many websites will sell on personal and financial information used in the online purchases or even use the opportunity of your digital interaction to give you spyware, malware or other nasty computer viruses as a thank you for your custom.
Anti-Counterfeiting Day won't reduce the number of fake sellers or even the buyers of fakes unfortunately. But it should be a day when every brand holder makes an effort to look at educating their consumers about the impact and risks of buying counterfeit. Keeping It Real should be the marketing message of the day - highlighting what buying genuine means and what purchasing fake could bring. It's also the opportunity for brand holders to move simple consumers of their products and services into true advocates. Whilst according to PWC in their 2013 report on the Counterfeiting market in the UK 31% didn't realise they were buying fake products, over 50% bought based on price alone. It's that last group that brands need to sell the reasons for buying genuine to.
Finally, it would be amiss of us not to end this piece with our top three rules to avoid being caught out by buying counterfeit.
1. If it's too good to be true it probably is. Whilst some firms do sell some of their items through outlet or discount stores or online, very few luxury or high-end brands do. We all love a bargain, and so often prefix our brand searches online with the words "cheap" or "discount". Counterfeiters know that and create their digital strategies to capture this web traffic. If in doubt check the web address on www.brand-i.org that lists legitimate stockists of most big brands.
2. Check the spelling of the domain name for the website you are planning to make a purchase from. Our brands are trained to see what we think is right and not what is always exactly right. A “1” can look like an “I”, a “5” like a “S”. The use of hyphens or grand words such as "authentic" or "official" in the web address may make us think we are in the right place. If in doubt check the domain names true owner on
3. Ensure the website address begins “https” at the payment stage and that there is a little padlock at the start of the browser bar or its green in colour. This indicates that any details you send the firm are sent in a digitally encrypted way and are safe from prying eyes. Any firm worth their salt will have a SSL certificate in place that creates this security.