Brand Protection: IPR Violation through Counterfeiting – Is it now being perceived as a ‘Victimless Crime’?

May 6, 2015 9:01 am
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Investigation of Counterfeit goods

As the brand protection investigators from the major global brands start to make inroads into the many instances of Brand and IPR violations, many questions are starting to be asked. For instance, is counterfeiting being perceived as a victimless crime? It is a bold statement, but one worth looking into.

The products, that are subject to counterfeiting, often carry the brand markings of the true manufacturer and supplier. This becomes a marketing effort by proxy at no cost to the brand owner.

The mere fact that a person walks down the street wearing an imitation of a tracksuit from a recognised sportswear provider will be noticed and so will the brand markings.  Therefore by default, whether genuine or not, the marketing process  takes its effect and it’s likely that many genuine articles are sold as a result.

Who is a victim: the brand owner or is the person who purchased the garment?

This is certainly, down to the perception of the involved parties.

Chances are that the consumers who have purchased the product at a price considerably less than the real article and therefore believe they got a great deal may or may not know the product is a fake but even so they perceive it as value for money.

This raises an interesting question: does the purchase of a counterfeit product make a consumer a victim or contributor to the Brand/IPR violation?

It is complicated, but the truth is: at the end of the day there will be losers (not necessarily victims!). The brand owner, not only loses in terms of revenue by missing out on sales and marketing effort; but also their reputation that is being affected, due to substandard quality of the  counterfeit products.

The poor quality also affects consumers, as they are very unlikely to receive a refund. Moreover the counterfeit goods can be harmful or dangerous. Especially when involved are electronic goods, drugs, alcohol, tobacco or medical equipment.

Consumers and brand owners are not the only losers. The governments and other statutory revenue gathering organisations are losing revenue on VAT and other equivalent purchase tax. This ultimately means, we are all losing money due to counterfeit crime.

Brand/IPR counterfeiting is certainly a crime and therefore there are always going to be victims. I have no doubt that the Brand Owners will consider themselves as victims but the truth is the purchasers probably don’t and of course quite possibly vice versa.

With a joined up approach relating to how Brand Protection and IPR is managed, and the assistance of the various law enforcement agencies, there is a good chance that the counterfeit issues are going to be addressed. The problem is: counterfeiting is a massive industry,  especially for organised criminals and, as recently discovered, the terrorist movements.

Brand owners should become intelligence led in respect of their investigations but they need the tools to do this efficiently and effectively.

So how can the investigation process be helped?

The use of refined investigation, intelligence and analytical software tools will ensure recording of accurate data and use of the subsequent outputs to ensure a more robust approach to identifying problem areas and thus helping with tasking and resourcing. It is becoming very apparent that a more structured and joined up approach is needed moving forward to reinforce the intelligence led investigations.

More pressure is being put back onto the private sectors to carry out their own investigations. As it is a global problem, private organisations need to have a capacity to cross boundaries and borders and collect their intelligence and commence investigations a lot easier. Once completed, the case and intelligence can be passed to the relevant law enforcement agency to action or the case can be handled by the in house lawyers or IPR counsel to handle appropriately. In either case the importance is the accuracy of the data and case papers being produced from the system.

Counterfeit crime is no longer a “victimless crime” therefore it requires appropriate, intelligent measures to protect the interest of all affected parties: the consumer, brand owner, governments and ultimately all of us.

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