Discover our guide to intellectual property infringements as we reveal how brand reputation and sales are suffering as a result of counterfeiting and brand abuse online.
Has your brand been affected by abuse online? Are you aware of the different risks and have you taken measures to safeguard the future of your company? Regardless of whether you own an international brand or employ just a handful of people operating in local markets, it’s time to smarten up on the topic of digital infringements.
Counterfeiters copy your most popular products, and sell them for a fraction of the price, but did you know that today they’re using ever more sophisticated methods to dupe shoppers? These methods are destroying consumer confidence, brand reputation and sales.
We share some of the most common forms of online brand infringements.
Perhaps when we think about the different types of infringements, counterfeit copies are the most obvious form of abuse. The objective for counterfeiters is to create an identical looking copy of the original item. In doing so they are adding value and profiting from the worth of the imitated product, with the intention of selling it under the false pretences that it’s the real deal.
Without the brand owner’s authorisation, these counterfeit copies are of course illegal, using the official logo, designs, colours and other forms of intellectual property, infringing on the trademark, patent or copyright of the brand owner. They’re usually marketed and sold with significant discounts in comparison to the official item which generates further appeal, duping customers into making a purchase.
Counterfeits products are renowned for being made of low-quality materials, offering an inferior look, feel or fit, and may even be unsafe or dangerous to the consumer. These are all features which business owners do not wish to have associated with their products or brand.
Lookalikes or copycat products are another form of brand abuse. They are similar to counterfeit copies however they do not infringe on all the intellectual property of the original product. Nevertheless, they do apply some distinctive features such as color, type font, shape, or iterations of the brand name and logo to mimic or associate themselves with the original products. These lookalikes often originate in countries or regions where intellectual property laws are less stringent, with China and Hong Kong leading the way.
They are produced with the intention of adding value, and confusing shoppers who often purchase these items believing it’s a product from the original brand, sharing its values, reputation, look, feel and quality.
In March 2019 the Organization for Economic Co-operation and Development (OECD) reported that 3.3% of the world trade is in fake goods, equating to USD 509 billion. Footwear, clothing, and leather goods are the industries cited as being the hardest hit by counterfeit copies.
The European Commission supported these claims, sharing the news that they had intercepted and detained almost 27 million articles that infringed on intellectual property rights in 2018 alone. A figure which had risen 20.75% since 2017.Pierre Moscovici, Commissioner for Economic and Financial Affairs, Taxation and Customs said:
"Customs officers across the EU have seen success in tracking down and seizing counterfeit goods that are often dangerous for consumers. Their job is made even more difficult by the rise in small packages entering the EU through online sales."
Design is a form of intellectual property, and registered designs should in theory be protected against infringements, preventing third parties form copying the visual appearance of the item. Unfortunately, these design infringements are rife across the internet; and with the growth of social platforms, marketplaces, apps, websites and multibrand online stores; the challenge of protecting brand designs online represents a significant and daunting task.
Design infringements usually imitate the look and feel of another brand, copying specific, standout features, whilst excluding the use of any logos which would make the product a counterfeit.
Trademark squatting is another form of intellectual property infringement. Trademark squatters exploit legal systems by registering trademarks of well-known or up and coming brands in countries or territories where the brand does not currently operate or have a registered mark.
They often look to exploit the situation by attempting to sell the trademark back to the brand for disproportionate sums of money. Alternatively, they may begin selling counterfeit or lookalike products to shoppers who believe the products are being sold by the official brand store.
Trademark squatting is a significant issue in China. When foreign companies look to register their trademark, they find it already exists. Although new trademark laws have been put in place, allowing the rightful owner to take steps to reclaim their trademark. The complicated process may take years to complete and, in many cases, companies opt to set up new brands or simply pay the asking price to the squatter to resolve the issue.
Brand impersonation is conducted across social channels. Accounts are created which mimic the look and feel of the official brands social page to gain the trust of consumers. Brands are experiencing these difficulties daily, and on many occasions are forced into searching for and dealing with the growing issue internally.
In November 2019 Facebook admitted that they had already shutdown a staggering 5.4 billion fake accounts in just 11 months. They also confessed that many millions more likely remain as Facebook continues in its struggle of differentiating between legitimate and fake accounts. Anyone can setup a page, allocating a name and profile picture which imitates the official brand which explains why the problem has grown so significantly.
Many of these fake posts lead through to false listings within marketplaces such as Amazon and eBay or through what we know as rogue websites…
These websites are designed and set up to deceive consumers who land on them, convincing that they’re shopping on the official brand website. The layout, the style, the logo and imagery, colour coding and content is often a direct copy of that used on the official brands website, making it almost impossible for the untrained eye to identify it as being a rogue site.
On these sites, customers are likely to discover what appear to be genuine products listed for sale, using genuine imagery and descriptions to promote products so as not to raise suspicion. In fact, what shoppers believe they are purchasing will not be consistent with the product delivered to their specified address. Counterfeits, lookalikes, or even products which bear no resemblance to the brands style are being sold in this manner. In fact, there is no guarantee that anything will be delivered at all.
Counterfeiters using these methods to target unsuspecting shoppers are damaging customer confidence and brand reputation, which ultimately have an adverse effect on sales and revenue. The day has arrived when e-commerce companies can no longer afford to turn a blind eye.
All forms of brand abuse have a negative impact on consumer trust, brand reputation and revenue. The importance of adopting a strategy which protects your brand and products online is essential.
Have you just discovered that your brand is being abused or counterfeited online? Wondering how to develop your strategy to fight back? Find out more in our informative guide and take control of the situation today.