How do you stop a global problem like counterfeiting? One that costs economies around the world an estimated $1.8 trillion. One that means one in six products we buy online is a fake. One that fuels organized crime and many of the social problems in the world. One that is fueled by rapid technological advances. And one that shows no sign of going away. 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 to and usage of the Internet has meant over that 40% of the world’s population is now connected.
Despite the ever-increasing amounts major brands spend each year on trying to counter online intellectual property infringement, the problem remains very real. 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 IP.
The law of supply and demand dictates economic and financial models both for genuine producers of goods and services as well as their less-than-legal counterfeiting counterparts. If no one is buying your product, then you’ll 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’d almost certainly find the same organizations behind these many online entities.
There isn’t a week that goes by without a story hitting the headlines of a major counterfeit bust, such as nearly £16m worth of fake drugs being seized in the UK as part of Operation Pangea – an international operation that 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 the context that, according to black market risk index firm Havocscope, the global market for counterfeit drugs is over $20bn, the $75m (£52m) haul is just a drop in the ocean.
‘Hope’ is not a strategy, as we’re told by the most respected economic advisors, so waiting for the authorities to get lucky or the wheels of the legal system to turn is not going to cut it. Brand holders need to take responsibility and accountability for certain aspects, such as educating consumers about the perils of buying counterfeit, and they need to act now.
Many organizations are indeed now taking this approach, turning their customers 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 of using them – and also providing a way for their clients to report infringers. This can work well, as most of us are proud of the brands we consume and don’t want to see their reputations become cheapened and diluted by counterfeits. The authorities are also getting more and more involved in educating the general public, with various police forces and local authority Trading Standards teams providing useful guides on telltale signs of counterfeiters in action.
Taking this a step further, organizations such as INTA (International Trademark Association) are educating tomorrow’s consumers today, developing specific campaigns that are targeted at school children. INTA’s Unreal campaign is a great example of how it is taking the anti-counterfeit message into schools across the US, 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’s almost a given that no counterfeit goods will have gone through the rigorous safety checks or testing that genuine goods are legally obliged to.
And it’s not just disappointment that websites pedaling counterfeit goods deliver. Many will sell on personal and financial information used in the online purchases, or even use your digital interaction as an opportunity to give you spyware, malware or other nasty computer viruses as a thank you for your custom.
World 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 makes an effort to look at educating its consumers about the impact and risks of buying counterfeit. ‘Keeping It Real’ should be the 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 its 2013 report on the UK counterfeiting market, 31% of people didn’t realize they were buying fake products, over 50% bought based on price alone. It’s that last group who brands need to convince of the reasons for buying genuine.
Finally, it would be remiss of us to end this piece without our top three rules for avoiding being caught out by counterfeit products:
- If it seems too good to be true, it probably is. Although some companies do sell some of their products through outlet or discount stores (including online), very few luxury or high-end brands do. We all love a bargain, and so often prefix our online brand searches with the words ‘cheap’ or ‘discount’ – but counterfeiters know that and create their digital strategies to capture this traffic. If in doubt, check the web address on www.brand-i.org. It lists legitimate stockists of most big brands.
- Check the spelling of the domain name for the website you’re planning to make a purchase from. Our brains 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 an ‘S’. The use of hyphens or grand words such as ‘authentic’ or ‘official’ in the web address may make us think we’re in the right place when we’re not. If in doubt, check the domain name’s true owner on www.whois.com.
- 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 that the bar is green in color. This indicates that any details you send the firm are digitally encrypted and safe from prying eyes. Any firm worth its salt will have an SSL certificate in place that creates this security.