Counterfeit goods are also known as imitations. They are products that are manufactured and sold under another company’s name and without permission from that company. Today, the counterfeiting problem affects virtually every industry. Commonly counterfeited goods include car parts, electronics, personal care products, handbags and wallets, computers, shoes, jewelry and clothes. There are even imitations for medication.
Counterfeiting is big business around the world. It is estimated that $700 billion worth of fake merchandise is produced every year. Losses incurred in the U.S. as a result of counterfeit trading are estimated at $1 trillion annually and in excess of 75000 jobs. The Organization for Economic Co-operation and Development (OECD) has estimated that counterfeit trading may cost the global economy as much as $250 billion every year.
Closely associated with counterfeiting are two similarly despicable practices – tampering and diversion. Tampering involves altering of product ingredients. The consequences can be lethal. In 1990, for instance, 89 children in Haiti died after ingesting pharmaceuticals laced with antifreeze. Diversion, on the other hand, involves the selling of a manufacturer’s product via an unauthorized seller or channel.
What risks does counterfeit trading pose for your business?
Well, in addition to lost revenues, counterfeits can potentially ruin your business’ reputation and erode its goodwill.
So, what are the various techniques that you can employ to fight the counterfeiting menace?
1. Registering your trademarks
Federal trademark registration is a vital aspect of brand protection. Doing this will enable you to enforce your trademark anywhere around the country. You will also get access to federal courts. You should also ensure that your trademark is registered in all countries where you do business. Foreign registration can assist in stopping the exportation of counterfeits that bear your trademarks.
2. Registering your trademarks with customs agencies
Your trademarks should also be registered with customs agencies, both locally and in countries where you do business. The U.S. Department of Customs and Border Protection (CBP) runs the Intellectual Property Rights (IPR) Enforcement program tasked with preventing the inflow of counterfeit merchandise into the country. Based on the information you have provided, the CBP will be able to curb the trade of counterfeits as it carries out its shipment monitoring mandate.
3. Investigating the market
As a proactive business owner you should regularly monitor the market to ascertain that what is being sold as your merchandise is actually genuine. Regardless of where you sell your products, online or through brick-and-mortar retailers, three factors should be able to inform your curiosity: price, packaging, and location.
Don’t hesitate to take immediate enforcement action in the event that counterfeit goods are found. Pursuing civil litigation will send out a strong deterring message to other potential sellers of counterfeits.
The following are some of the legal measures and settlements you (the plaintiff) can demand of a person (the defendant) caught selling imitations bearing your trademark:
- Monetary compensation
- A recall of the counterfeits sold
- Ongoing audits of the defendant’s inventory and records
- A permanent injunction preventing the defendant from importing and selling imitations
To practically distinguish your products from counterfeiters’ merchandise you can employ the following technological defenses:
4. Placing brand-specific patterns on clothing
The use of a partially invisible thread to produce brand-specific patterns on fabrics can help clothing manufacturers to identify and nab counterfeits. The thread used for this purpose is produced cheaply but is not easily reproduced. The customized patterns made with the thread are only visible under special lighting.
5. Using iridescent security images
Courtesy of Nanotech Security it is now possible to emboss a security image of your choice on your merchandise. This image can be applied on a variety of surfaces, ranging from metals to fabrics. This anti-counterfeiting measure will set you back a few pennies per unit. For counterfeiters, however, replicating your security image will be quite impossible.
6. Adding pigments to plastics
You can also opt to include custom additives or pigments in the plastics that your company produces or uses. Being specific to your company, these additives, and which can easily be identified with the help of a handheld device, will help to separate genuine merchandise from market imitations.
7. Using the uFaker app
With the help of the uFaker app you can be able to monitor counterfeiting activities that involve your brand. This information can then be forwarded to law enforcement agencies, private investigators and lawyers.
8. Using the Authenticateit app
You can use the Authenticateit smartphone app to identify, track and deter counterfeiters from selling imitations. Consumers can use the same app to ascertain the authenticity of a product prior to making purchase.
9. Using the Black Market Billions app
Yet another useful solution is the Black Market Billions crowdsourcing app. Users use the app to take photos of possible imitations and upload the images to an online map linked to a GPS locator. Alerts are then sent to consumers of counterfeited merchandise in specific locations.
10. Consumer education
Providing consumers with information about your product will help them to make informed purchases and effectively protect them from the risks of using imitations.
You can use various websites to share information about your product and where genuine merchandise can be purchased. These sites include:
DesignsFauxReal – A website that sells fictitious counterfeit goods. It educates consumers about the negative consequences of purchasing imitations.
The Counterfeit Report – A website through which manufacturers pass information about counterfeits to consumers. Consumers are encouraged to report counterfeits.
Unreal Campaign – This teen-focused website teaches young people about the economic, health and social risks that result from using counterfeits.