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Brand owners suffering from counterfeiting may struggle to reign in their brand protection budget. This article discusses possible priorities and solutions for an anti-counterfeiting campaign with a tight budget.  

Proactive approach

Preventing problems is normally cheaper than solving them after they have arisen. Thus, the first steps in the cost-effective brand protection campaign are to initiate proactive monitoring and do a portfolio audit. 

Preliminary monitoring alongside risk management analysis helps to prioritize the right enforcement targets. For the brand owner, it is important to understand who constitutes the market for the counterfeits and what the main distribution points are. It is likely unwise to spend one’s limited budget targeting locations and channels where counterfeits are, perhaps counterintuitively, rare. Here are just a couple of examples:

  • While counterfeit automobile spare parts are now rare finds at the border, they are often discovered on the internal market. In such circumstances, cooperation with the police or other local enforcement authorities should be a priority. 
  • Counterfeits popular among the young generation are often distributed online. For such goods, it makes sense to focus on marketplaces, accounts in social media, and public channels in messaging apps. 

 

In prioritizing the targets, the brand owner should be guided by the risk hierarchy, which may vary depending on the particular brand:

  1. health security factors (counterfeits potentially harmful to the consumers’ life or health should be treated first);
  2. counterfeit volumes (targets precipitating the highest loss in profits should be prioritized for enforcement);
  3. direct reputational losses (the brand owner may consider combating nexuses of counterfeiting causing negative coverage in the media or related forums);
  4. other infringements. 

A portfolio audit is necessary to ensure the timely protection of IP assets and avoid gaps. Sometimes, simply submitting a trademark application can insure against expensive litigation proceedings. 

The main task during the audit is to check whether all brand names and logos are duly protected as trademarks in the relevant ICGS classes and jurisdictions. The brand owner may also consider registering local translations or transliterations of the trademark. Special attention should be paid to any trademarks registered more than a couple years ago. It is essential to periodically check whether the list of products and services produced under the trademark has changed since its registration. 

While registration of trademarks prior to the release of new products has become standard practice for brand owners, this approach has yet to be adopted for domain names. 

Yet domain names are an equally important part of the brand owner’s portfolio in the modern e-commerce world. Domain disputes are costly and do not always lead to the expected outcome. It can be extremely challenging to retrieve a domain name from an infringer located in another jurisdiction or from a professional squatter demanding a substantial buyout. Meanwhile, the costs of registering a domain name and several of its variations are insignificant compared to the costs of a possible dispute.

Benefits of the digital era

The digital era offers brand owners new possibilities for effectively  protecting their brands on the Internet. The following solutions are already used by many brand owners worldwide:

  • monitoring software which enables automatic screening of websites, search engines, marketplaces and even messengers to detect allegedly counterfeit goods;
  • domain watching software for identifying possible domain infringements; 
  • online enforcement software offering the opportunity to send standardized takedown notices;
  • due diligence software allowing one to aggregate information about infringers gathered from various open sources.  

 

The efficiency of such tools is constantly increasing due to the development of image recognition technologies and machine learning.

The Covid pandemic triggered the rapid growth of conference call technologies, which can now be used by brand owners for delivering brand protection training to the law enforcement authorities. Although in-person meetings remain a vital way to interact with enforcement officials, conference calls may serve as a cost-effective alternative to making visits to distant regions. 

Pre-trial enforcement

As litigation is usually expensive, it is worth  making more extensive use of pre-trial enforcement. This route normally includes sending cease and desist letters, follow-up negotiations and, optionally, entering into pre-trial settlement agreements with infringers implying payment of compensation for IP infringement. 

Focus on manufacturers, not retailers 

As much as one feels the need to combat every infringement, it is challenging to do so within a tight budget. A possible solution is to focus on detection and counteracting the source (origin) of counterfeit products.

The following details may facilitate detection of the source (manufacturer, importer, major distributor):

  • information and documents available in an offline, bricks-and-mortar store (sales receipts, information about the seller in the “customer's corner”)
  • information about it’s the owner found on the website, information from the WHOIS database about the domain owner, any details available in consumer reviews;
  • product packaging, including shipping packaging, labels and stickers;
  • shipping documents and materials; 
  • certificates and declarations of conformity;
  • notifications from police and customs authorities. 

 

The customer is your ally

Many brand owners already have engaged customers in the fight against counterfeiting. Put simply, this includes educating customers on how to distinguish counterfeits and creating reporting forms for suspicious findings on one’s official website. 

Brand owners may consider focusing on the following ways to involve customers in their brand-protection campaigns:

  • publishing general information about the disadvantages of purchasing counterfeit products; 
  • publishing a map of authorized dealers selling authentic goods;
  • publishing a brief guide on distinguishing counterfeits using simple visual verification methods (holograms, specific label design);
  • using automated verification tools (barcodes, serial numbers);
  • setting up a contact form or hotline for reporting fakes.



Maria Aronikova

Karina Skomorokhova