In the world of competitive business, profit lies in innovation and quality. Unfortunately, there are many who unscrupulously copy the hard work of others in the quest for a quick buck. This practice, known as counterfeiting, is big business, and costs legitimate brand and IP holders millions of dollars a year in lost revenue as well as potential irreparable reputation loss and customer harm.
What is Counterfeiting?
Counterfeiting is the act of creating fake and/or unauthorized copies of a brand’s goods and then selling or distributing them on the market for a profit.
Counterfeiting’s close sibling, the knockoff, is similar. They are both unauthorized duplicates of a known brand’s product. Knockoffs, however, are often a much sloppier copy, relying on broad stroke imitation whereas counterfeits, when done well, can sometimes be mistaken for the real thing.
Commonly counterfeited items include apparel, purses, footwear, homecare or personal care products, medicine, cigarettes, electronic equipment, toys, and auto parts. Other forms of counterfeiting can include currency and the unauthorized reproduction of trademarked and copyrighted logos for use on inferior products.
Regardless of the quality of the duplicate, the fact remains that counterfeiting is illegal and continues to be a very real threat to genuine brands, businesses and their customers.
How Counterfeiting Hurts Both Consumers and Brands
The driving force behind counterfeiting is maximum profit. For this reason, counterfeiters often use substandard parts and materials in an attempt to take advantage of the superior reputation and value of the original product. Counterfeiters often create cheap duplicates that are not only lower in quality, but in some cases don’t work or can cause harm to the consumer.
Consumer confusion over these inferior imitation products can result in brand dilution and a decline in brand reputation and consumer confidence.
Other risks include actual physical harm to consumers as many counterfeiters eschew the normal safety requirements legitimate brand holders must abide by when selling to the public.
Counterfeit electronics can short circuit, leading to shock and fire hazards.
Counterfeit automotive parts may perform at levels far below legitimate products, leading to unsafe driving conditions and increased risk for crashes and accidents.
Counterfeit pharmaceuticals have been found to contain everything from placebo fillers to actual toxic ingredients.
Counterfeit beauty supplies and makeup have resulted in serious health risks including burns, rashes, and deadly allergic reactions.
How To Protect Your Brand
Blocking the production and distribution of counterfeit goods isn’t easy, but there are a few simple steps a brand holder can take to help minimize the potential harm.
- First register your brand and trademark; file for any patent and/or copyrights. Registering in the markets where you are operating is essential. Declaring your intellectual property is one of the basic anti-counterfeiting strategies.
- Look for the root cause behind your products being counterfeited. There may be an individual firm imitating your products or a chain of several culprits involved or there maybe grey market activities taking place.
- Supervise your organization's supply chain, look for loopholes and areas where the level of inventory can be manipulated. Digital integration along with track and trace technology will give an efficient and effective supply chain.
- Quick response(QR) code scanning facilities can be beneficial; informative campaigns can extend great help in discouraging the sale of counterfeit goods.
The business of counterfeit goods is embedded in the current business world. Being vigilant and proactive is what it takes to construct anti-counterfeit strategies. Protecting the brand itself and your customers at the same time is essential. A joint effort of buyers and the sellers can put an end to the business of counterfeit.
Concerned about how your brand is being used online and by whom? Our team of brand protection specialists are standing by to create a complimentary digital risk assessment just for you.
 This blog post provides generalized information and does not constitute legal advice or an attorney-client communication. Each situation is unique and requires consultation with suitable professionals.