Dec 22, 2024
How to Protect Your Brand from Counterfeits & Build Consumer Trust
Imagine you’re a business owner, and your products are selling like hotcakes. Then, out of nowhere, you start noticing low-quality knock-offs of your products being sold online. To make matters worse, these fakes hurt your sales and damage your hard-earned reputation. Sound familiar? Unfortunately, this scenario is becoming increasingly common as counterfeiting becomes more sophisticated and prevalent. So, how do you stop these threats from ruining your business? This article will discuss how to protect your brand from counterfeit threats. You’ll learn to effectively safeguard your brand from counterfeiting to ensure customer trust, legal protection, and long-term business success.
One way to protect your brand from counterfeit threats is with Bustem's copycat detection tool. This valuable solution will help you safeguard your brand by detecting lookalikes and copycats before they cause your business harm.
Table of Content
What is Counterfeiting/Intellectual Property (IP) Theft?
Counterfeiting is a crime involving the theft of someone’s trademark. Small and large businesses use trademarks to help consumers like you identify their products. A trademark is often a word, phrase, or symbol identifying the source or origin of a particular good or service sold in commerce.
Counterfeit Consequences
A counterfeit is an item that uses someone else’s trademark without their permission. By making or selling a counterfeit, criminals seek to profit unfairly from the trademark owner’s reputation.
Counterfeiting is a fraudulent imitation (a forgery) of a trusted brand and product and is a serious crime. Under U.S. Federal law, for example, criminal counterfeiting offenses can be punished by life in prison and up to $30,000,000 in fines.
Legal and Reputational Consequences of Counterfeiting
Counterfeiting can also be prosecuted as a felony in most states in the U.S. Counterfeiting damages a company’s reputation and consumer confidence in the global market. It affects businesses and consumers alike by sowing mistrust in genuine products made by reputable brands.
Intellectual property theft (IP theft) includes a range of violations that can impact businesses, consumers, and the economy as a whole. IP theft occurs when someone uses or reproduces another party’s intellectual property without permission, such as:
Patents
Trademarks
Copyrights
Economic and Societal Impact of IP Theft
The U.S. Department of Justice notes that IP theft affects the economy by undermining innovation, harming legitimate businesses, and posing public health and safety risks. For example, counterfeit products may not meet regulatory standards or consumer safety requirements.
IP theft can severely damage a business’s reputation and brand. Consumers may lose trust in a brand’s genuine products if they encounter counterfeits, even if the brand has no control over the situation.
Intellectual Property Theft: The Basics
Intellectual property (IP) theft includes a range of violations that can impact businesses, consumers, and the economy as a whole. IP theft occurs when someone uses or reproduces another party’s intellectual property without permission, such as patents, trademarks, or copyrights.
The U.S. Department of Justice notes that IP theft affects the economy by:
Undermining innovation
Harming legitimate businesses
Posing public health and safety risks
For example, counterfeit products may not meet regulatory standards or consumer safety requirements.
IP theft can severely damage a business’s reputation and brand. Consumers may lose trust in a brand’s genuine products if they encounter counterfeits, even if the brand has no control over the situation.
The Four Types of Intellectual Property
The four main types of intellectual property that your business can own include:
Patents: Under 35 U.S.C. § 271(a), a patent issued by the United States Patent and Trademark Office (USPTO) gives the holder the right to exclude others throughout the United States from:
Making, using, offering for sale, or selling the invention
Importing the invention into the United States
Trademarks: A trademark or service mark is any word, phrase, symbol, design, or combination that identifies your goods or services and distinguishes you from your competitors in the marketplace.
Copyrights: Copyright protects an author’s or artist’s original works once they are fixed in a tangible form of expression and applies to things like:
Books
Articles
Video games
Song lyrics
Scripts
Photographs
Computer programs
Artwork
Trade Secrets: Trade secrets are formulas, methods, techniques, processes, or other information compilations kept secret by your company because they provide actual or potential economic value. The holder must proactively protect all of these forms of intellectual property.
Common Methods of IP Theft
There are many ways that someone could violate your IP rights. While watch agencies and law firms can monitor your IP rights for you, the best way to defend your IP rights is to be mindful of violations on your watch.
The sooner you detect and stop the violation, the better chance you will have to protect your profits, business or product’s goodwill, and overall market position. Some of the most common types of ways that IP rights are violated include the following:
Patent Infringement: All types of patent infringements are either manufacturing or selling a product protected by your patent or by using your patent in a way you did not grant permission.
Infringing on Your Trademark: Other individuals or companies that use your trademark either exactly without your permission or purposely design their trademark to look like yours to get your business are all ways your trademark could be violated.
Copyright Violations: Stealing your written work, photographs, videos, or other protected works is very serious and can result in copyright violations that can be enforced and protected.
Selling Counterfeit Products: Unscrupulous individuals or businesses that sell counterfeit products could be violating your patent and/or copyright, and if they use your logo, also your trademark. This vast problem can result in serious business or product harm if a counterfeit product is inferior to your product (as is often the case).
The Challenges Posed By The Growing Ecommerce Industry
1. Rise in Counterfeiters and Rogue Sellers
Gray-market or unauthorized sellers have been around for quite some time. Nevertheless, this problem has increased in the last few years. COVID-19 further accelerated the problem as more shoppers started relying on online channels, and the demand rose.
According to a recent Intelligence Node survey, 26% of shoppers encountered a rise in counterfeits during the pandemic.
The CBP noted that in 2020, it seized “26,503 shipments containing goods that violated intellectual property rights. The total estimated value of the seized goods, had they been genuine, was nearly $1.3 billion.”
Counterfeit products also found their way into essential items, with 38% of shoppers we surveyed coming across counterfeit essential items online during the pandemic.
2. Growing Customer Concern and Distrust
Our survey found that many customers have started to lose trust in third-party sites, with eBay (80%) and Amazon (53%) getting the most votes for selling counterfeits online. This damaged reputation hurts brands and third-party sites; one out of four shoppers said they have stopped purchasing from eBay.
Many brands have raised concerns about getting bad product reviews on third-party sites due to customers receiving fakes instead of originals, further adding to consumer distrust.
3. Erosion of Brand Identity and Integrity
The rise in counterfeit products has been a massive blow to many significant fashion and luxury brands. Counterfeits can be very close in appearance to the originals and can mislead consumers into believing they are purchasing original products for lower prices.
In the process, both the brand and the consumer are duped, and consumer perception of the brand is affected. We found that Louis Vuitton (56%) and Gucci (52%) were the leading luxury brands that had been counterfeited.
4. Loss of Sales and Margins
An adverse outcome of gray-market goods and counterfeits is the lost income for brands, manufacturers, and authorized retailers. These unauthorized sellers eat into the margins and sales of brands by engaging in price gouging and heavy discounting, disrupting the market balance and resulting in frustrated retail partners and confused consumers.
As it is the innate nature of consumers to look for competitive prices for products, they are often deceived into buying a near-identical fake product in place of a legitimate one for a much lower price. Along with consumer dissatisfaction, these unauthorized channels and sellers can affect sales and margins and sever relationships with partner retailers.
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How to Protect Your Brand From Counterfeit
Registering your intellectual property is the most elementary step in protecting your brand from counterfeits. When detecting fake products, you can prove and claim you are the IP owner. As a brand owner, consider registering these intellectual properties:
Copyright
A copyright protects the creator's original works. This includes:
Literary work
Music
Art
Software codes
Architecture
Many more
While copyright does not protect ideas, a copyright owner has the exclusive right to sell, publish, and/or reproduce the protected work. Copyright protection doesn’t need formal registration, as creators are automatically granted protection for their work. Nevertheless, registration is recommended if you want to sell or start enforcing your copyright.
Patent Protection
A patent prevents an invention from being created, sold, or used by any third party without permission. The patent owner holds the right to commercialize his patent, including selling or giving licenses for the invention to another party formed in a mutual agreement.
You can distinguish between design patents that protect the ornamental appearance of an item and utility patents that cover the functional aspects of an item. Patents, as well as copyrights, expire after a certain period. In the EU, patents usually last 20 years.
Trademark
Trademarks are symbols, words, phrases, sounds, smells, or color schemes that allow consumers to identify and distinguish the source of goods and services of one company from another.
The Nike symbol and Apple logo are examples of trademarks. While patents protect one innovation, a trademark can cover a range of products or services.
Registering your intellectual property in your own country allows you to start protecting your brand internationally. IP usually must be registered in each country under national law, as copyrights, patents, and trademarks are not globally valid.
How to Legally Protect Your Brand From Counterfeits
Now that you have built your IP portfolio, you can legally claim your rights and enforce illegitimate listings. Before choosing an enforcement strategy, it is essential to be clear about the goals you want to achieve and then check what strategy suits you best.
Going Through Litigation
Filing a lawsuit to stop counterfeits should be considered thoroughly and only applied when the litigation's potential risks and rewards are gauged. In court, you must prove that fake listings have misled customers and that your brand has suffered. Courts can grant an order to stop further infringements. Infringers are sometimes forced to:
Compensate for monetary damages
Give off their profits
Pay lawyer’s fees
Nevertheless, when your goal is to immediately remove illegitimate listings, protect your brand reputation, and prevent sales losses from fake products, filing a lawsuit is not the most effective strategy. Going through litigation is time-consuming and expensive, and there is no guarantee of success.
Enforce the Counterfeit Listings
If you detect counterfeits of your product online, the first step is to take them down. The enforcement process depends on the platform where the infringement takes place. Usually, e-commerce platforms and social media networks know the problem and support the enforcement process.
Knowing how to proceed on which platform helps you to act timely and efficiently. Bustem provides a continuously updated guide on how to take down counterfeits from top e-commerce platforms and walks you through the necessary steps to protect your brand from counterfeits in the future.
Scan the Internet for Potential Infringements
Once I’ve taken down a counterfeit, it doesn’t mean that the problem is solved. Online brands often play whack-a-mole with counterfeiters because infringers place fake listings on multiple marketplaces across many countries.
That’s when individual enforcements reach their limits, and you should consider submitting takedown at scale with technology. Our anti-counterfeit solution can monitor and enforce your IP internationally and across marketplaces. These efficient technology solutions streamline the process of protecting your brand.
Strengthening the Supply Chain
Counterfeiters take advantage of supply chains with loopholes. Ensure strong supplier contracts and maintain traceability in your supply chain to prevent any form of weakness that counterfeiters could exploit.
Leveraging Anti-Counterfeiting Technology
Anti-counterfeiting technology refers to various advanced tools, techniques, and solutions to detect, prevent, and deter counterfeiting activities. By leveraging these technologies, brands can enhance their brand protection efforts and ensure the authenticity of their products. Some anti-counterfeiting technologies and their role in protecting a brand:
1. Holograms and Security Labels
Holograms and security labels are widely used as visible indicators of product authenticity. These technologies incorporate unique patterns, colors, and features that are difficult to replicate, providing a visual cue for consumers to identify genuine products. Holograms can be applied to packaging, labels, or directly on the product to act as a security feature.
2. Unique Serial Numbers and Barcodes
Assigning unique serial numbers or barcodes to each product enables traceability and authentication throughout the supply chain. This technology helps track product movement, identify counterfeit items, and facilitate product recalls if necessary.
3. RFID (Radio-Frequency Identification)
RFID technology utilizes radio waves to transmit information stored in electronic tags attached to products or packaging. RFID tags can be embedded with encrypted data that verifies the product's authenticity. RFID readers can scan these tags to ensure the product's legitimacy.
4. Tamper-Evident Packaging
Tamper-evident packaging provides visible signs of tampering or unauthorized access. This technology is crucial for ensuring the product reaches the consumer in its original state without tampering or substituting.
5. Track and Trace Systems
Track and trace systems utilize a combination of technologies, such as barcodes, RFID, and GPS, to monitor and trace the movement of products across the supply chain. This technology enables businesses to:
Track product authenticity
Detect diversion
Identify potential points of counterfeiting
6. Authentication Apps and Mobile Solutions
The widespread use of smartphones, authentication apps, and mobile solutions has emerged as practical tools for brand protection. These apps allow consumers to verify the authenticity of products by scanning unique QR codes or barcodes. The app instantly provides information about the product's origin and manufacturing details and ensures its genuineness.
7. Online Brand Monitoring and Enforcement
In the digital realm, brand protection extends beyond physical products. Online brand monitoring and enforcement involve active monitoring:
Online platforms
Social media channels
eCommerce websites
Marketplaces for counterfeit or unauthorized listings
Advanced software and tools can help automate this process, enabling swift detection and takedown of infringing content.
8. Collaboration With Law Enforcement and Industry Associations
Collaboration with law enforcement agencies and industry associations is crucial in combating counterfeiting. By working together, brands can:
Share intelligence
Coordinate enforcement efforts
Support legal actions against counterfeiters
Building strong relationships with relevant authorities and associations strengthens the brand protection ecosystem.
9. Educate Customers
Take another step forward at countering counterfeit products by educating your customers on the benefits of opting for legitimate products and the channels where they can find these. List important information about unauthorized products in the market, how to identify them and ways to report them in case consumers suspect buying fakes.
Encourage your customers to leave reviews on websites as shoppers often rely on reviews and ratings while making an informed purchase decision.
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Find and Take Down Copycats with One-click Today
Bustem is a powerful copycat detection and removal tool for e-commerce merchants. Our platform automatically scans billions of websites to identify unauthorized use of your store:
Content
Videos
Headlines
Text
Once we spot copycats, we streamline the entire takedown process with pre-filled DMCA forms and comprehensive case management. Built by people who know the game inside out, our service offers:
24/7 monitoring
Instant detection
Bulk takedown capabilities to protect your brand assets
With over 2M DMCA notices filed daily and businesses losing $29B annually to content theft, we've made protection simple and cost-effective. Whether dealing with competitors using your product images, copying your ad content, or stealing your copy, Bustem helps you identify and eliminate copycats efficiently.
Get started with a free scan and see who's been stealing your content. Find and take down copycats with one click today with Bustem.
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