Dealing with counterfeit products is nothing new for the fashion industry, but the scale of the problem is a continual challenge and one which doesn’t appear to be slowing down on the online shopping scene.
Earlier this year, The Global Brand Counterfeiting and Trademark Infringement Report, announced that the amount of counterfeiting globally has now reached $1.2 Trillion (USD). The report also concluded that approximately $500 Billion (USD) of the total losses incurred is in consumer goods, of which 8 – 10% is from Clothing, Textile, Footwear, Watches, Cosmetics and Perfumes. Furthermore, online sales accounted for 31% of the total counterfeiting-related losses, with fashion items in the luxury sector estimated to have incurred losses of $30.3 billion due to IP infringing goods.
This trend is backed-up in new figures released by the European Commission on customs detentions of articles suspected of infringing intellectual property rights (IPR). The report revealed that over 31 million counterfeit products, with a street value of over €580 million, were detained at the European Union’s (EU) external border in 2017; and in the list of the top five detained categories – clothes! In fact, the category ‘sport shoes’ continued to top the most counterfeited item in terms of the number of found cases, and along with clothes, watches, jewelry, bags, wallets, purses and non-sports shoes, these items have the highest EU domestic retail value (DRV) if sold as genuine on the EU market.
The EU results also confirmed that many of these fashion items were ordered through online channels such as e-commerce sites, online marketplaces and social media networks, having been detained through courier and postal traffic, which accounts for 76 % of cases by means of transport.
Be ready to fight back
With the busy shopping season approaching and online purchases soon to step-up, here are key reminders for brand owners to fight back with, both online and offline, to ensure their profits and reputation aren’t tarnished during the busiest retailing time of the year.
- Keep on top of your IP protection by conducting periodic audits of global registrations, especially in China, where you must be registered to carry out any legal action.
- Cooperate with and educate national governments, authorities and international organizations for better counterfeit product identification.
- Employ in-house or private practice lawyers to monitor, analyze and police the wholesale and retail markets.
- Put an effective online monitoring programme in place which covers all online selling channels, i.e. online marketplaces, e-commerce sites, social media networks and apps.
- Register your IP with online marketplace brand protection programs, e.g. Amazon's Brand Registry, Alibaba Group's Good-faith Takedown Mechanism and Pinduoduo's Pro-active monitoring program.
- Enlist consumers and legitimate traders to report IP infringements, for example, by making it easy to report fakes through a dedicated brand protection page on your website.
- Combine online and offline evidence to carry out effective enforcement.
- Embrace new anti-counterfeiting technology to enhance product security.
- Engage in international anti-counterfeiting efforts and keep up-to-date with changes to the law.
There isn’t a single brand protection strategy that will suit every company and budget. A strategy needs to be tailored for every brand the market that it, and its counterfeiters operate in, but by being vigilant and following an effective anti-counterfeiting program, a brand can disrupt the cycle and get closer to winning the counterfeit battle.
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