Counterfeiting

Counterfeiting scandals now affect all regions of the world and all types of products. 

Counterfeiters can easily and safely make as much profit with entry-level and mid-range products as with luxury goods. More and more consumers are questioning the authenticity of the products they buy. 

Your consumers need to be able to be sure of the authenticity of the products before they even buy them.

I

COUNTERFEITING,
AN UNFAIR COMPETITION

Developing your brand is essential to ensure your positioning in the market and to differentiate yourself from your competitors.

Unfortunately, there are 2 main types of competition

Legal competition

Applies in an open market respecting the rules of free and undistorted competition

Illegal competition

Set up by economic actors who do not respect the law, such as counterfeiters

Counterfeiting can be seen as an illegal act that infringes your intellectual property rights. 

But you can also see trademark counterfeiting as unfair competition.

II

TYPES OF COUNTERFEITS

Counterfeiters can put products on the market that they will copy illegally

Your brand

TRADEMARK INFRINGEMENT

Your products

DESIGN INFRINGEMENT

your innovations

PATENT INFRINGEMENT

In these 3 cases, there can only be counterfeiting if you have previously registered your trademark, design or patent with an intellectual property office. Without registration, there can be no infringement in the legal sense of the term.

Once your trademark, design and/or patent has been registered, you can enforce your rights in the geographical territory concerned. Please note that not all countries apply the same rights. 

Thus, a trademark registered in one country is not de facto valid in another. The same is true for a design and a patent.

01

TRADEMARK INFRINGEMENT

Counterfeiters will use your brand (name and logo) to give value to fake products. This may involve the reproduction of products that are identical, similar or even completely different to those in your range. 

If your product range is very wide and constantly changing, consumers may not be familiar with all your products. 

It is relatively easy for a counterfeiter to create derivative products using your brand identity.

EXAMPLES: Shoes with a jeans brand || Toys with a video game brand || Phone shell with a phone brand

02

DESIGN INFRINGEMENT

The design of your products or packaging contributes to your brand awareness.

It is relatively easy for an unscrupulous competitor to copy the design of your products while maintaining its own brand.

03

PATENT INFRINGEMENT

Your company invests in research and development of new technologies or products. 

These investments can easily be taken advantage of by competitors who will analyse your products and reverse-engineer all or part of your innovation.

You must file a patent before marketing your innovation and then indicate on your products that they are patented.

III

THE APPEARANCE OF COUNTERFEITS

For many people, counterfeiting is seen as the price of success. Indeed, it seems unlikely that someone would copy a brand or a product that is not interesting and does not sell.

In our exchanges with industrialists, we notice 3 types of reactions when the problem of counterfeiting is mentioned.

01

Ignorance

SITUATION AS SEEN BY THE BRAND

The company’s manager, like a consumer, thinks that he will only be counterfeited if his company succeeds.

Considering his current development,  he does not feel concerned by the problem at all.

INTERPRETATION

We are faced with an industrialist who has never been counterfeited or who does not know if he is currently counterfeited.For him, counterfeiting does not concern him, it is a problem that concerns others. 

He has not integrated this risk factor in his strategy and does not know how he will react if this happens.

02

Denial

SITUATION AS SEEN BY THE BRAND

There is no counterfeit!

We have never had a counterfeit!

This does not concern us at all!

INTERPRETATION
In the field of counterfeiting, unfortunately, no one can be so certain. Such a typical response is that of a company that has just realized that it has a counterfeiting problem. 

The dream becomes a nightmare, and the company goes into a phase of denial. 

IT REALIZES THE IMPACT THAT THIS COUNTERFEITING PROBLEM WILL HAVE: 

  • Revenue lost due to consumers unwittingly buying fakes
  • Revenue lost due to customers who no longer want to take the risk of buying a fake and turn away from the brand
  • Cost of unjustified customer complaints about quality problems not attributable to the company
  • Deterioration of the brand image
  • Legal risks faced by the company if one of the counterfeit products causes a problem to a consumer

03

Realism

SITUATION AS SEEN BY THE BRAND

“We have a counterfeiting problem and must put measures in place to limit the consequences”.

INTERPRETATION

The company with more or less maturity enters in the implementation of a brand protection strategy. 

This brand protection strategy may include a legal component and a marketing component.

IV

DEFEND YOURSELF AGAINST COUNTERFEITING

To fight against counterfeiting, it is possible to carry out actions of protection of the marks aiming at :

01

Counterfeits Production

When a company has correctly registered its intellectual property rights, it can enforce them.

It is therefore imperative to be able to identify the counterfeiting products and then to identify the actors who put them on the market and those who produced them to launch a seizure operation for counterfeiting. It is interesting to have implemented an anti-counterfeiting technology on the product or its packaging to prove the authenticity of the products.

 Whether this technology is overt or covert, it must be able to prove authenticity by being sure that the counterfeiter could not reproduce it.

The company’s internal or external legal departments will set up a strategy to defend the company’s rights by bringing the infringement case before a competent court.

Beyond the punctual action linked to the appearance of a counterfeit, the company will have to set up a market scanning action to identify the appearance of these counterfeits on various markets. 

The identification of counterfeits will then give rise to an investigation to go as high as possible in the distribution network to identify the material origin of these fakes. 

Once the place of production has been identified, legal action must be taken to shut down this establishment.

These strategies are often put in place by structured groups with the means to project themselves onto distant fields of action. It is often a long-term action with an uncertain outcome due to local legal constraints.

02

Counterfeits Distribution

The act of selling/reselling a counterfeit is in most countries just as reprehensible as the act of production.

The distribution networks are diverse, and the growing development of e-commerce greatly facilitates the distribution of fakes. In the fight against distribution networks, the company will have to work on the physical distribution networks and on the Internet. The implementation of an anti-counterfeiting solution offering the possibility to customs officers to verify the authenticity of products in a simple and unambiguous way is a considerable advantage in their field action.

In the case of a physical network, the appearance of counterfeits on a point of sale can lead to legal action against the point of sale, but it should also allow to identify the wholesalers to then take action against them. The customs authorities may be called upon to help identify the flow of counterfeit products to stop the distribution of counterfeit products. In all cases, it is preferable to implement secure packaging that allows honest distributors and consumers to verify their authenticity.

It is much more difficult to stop the flow of products linked to an online sale. Indeed, counterfeiters will take advantage of a mass effect to make their deliveries go unnoticed by customs officers. It is therefore preferable to take action directly at the level of the sales sites. If it is a question of reputable e-commerce platforms, they increasingly have a service that allows them to derefer sellers who sell fakes. If this trade is held on secondary sites, then there are companies able to derefer these sites on search engines. The goal of these actions is to make this distribution network disappear from the eyes of the consumer.

03

Counterfeits buyers

Another strategy to fight counterfeits is to help consumers choose products properly.

There are 2 TYPES OF CONSUMERS:

  • The voluntary buyer of counterfeits
  • The buyer who is a victim of counterfeiters

 

In the first case, it must be considered that this consumer is not a customer of the brand. They do not adhere to the values conveyed by the brand. His buying act is often motivated by a low price for a poor-quality product. Even if we should not let these acts of purchase develop, their disappearance will not allow the brand to increase its sales. To limit the purchase of counterfeits by these indelicate buyers, it is preferable to have a communication action towards consumers by making them aware of the risks incurred by buying fakes. Such communication campaigns are often implemented at the level of an interprofession, or public authorities because they often concern more than one brand.

The brand must concentrate its action on the second case to take back market shares from counterfeiters. In this situation, it is a real consumer who has been duped by the counterfeiters. He or she has purchased a product that looks very similar to the real thing, at the same or slightly lower price. This is the most unfavorable case for the brand. To avoid this kind of situation, it is necessary to give consumers the possibility to verify the authenticity of the products. It will be necessary to privilege an anti-counterfeiting technology overt not reproducible.

The implementation of an anti-counterfeiting solution must be accompanied by a communication plan towards consumers allowing to reaffirm the authenticity values of the brand and its action to protect them. It is a positive and proactive speech that involves the consumer and takes him as a witness.

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