The scale of online counterfeiting has exploded. Global trade in fake goods is worth nearly half a trillion dollars a year, according to the Organisation for Economic Co-operation and Development and the European Union’s Intellectual Property Office.
Dispersed across digital channels, such as online marketplaces, websites and social media, brands often do not know where to begin when confronted with the reality of counterfeit products that cause enormous revenue and reputational damage.
Rapid growth in internet shopping has allowed brand infringers to weave a tangled online network of professional-looking websites and social media accounts.
Simon Baggs, chief executive of INCOPRO, an online brand protection business, says: “Counterfeiting is a problem that has ballooned alongside the internet shopping phenomenon. Global marketplaces, such as Amazon, Alibaba and Taobao, the massive development of mobile apps for iTunes and Google Play, and the boom in social media have made product purchases available anytime, anywhere. Now anyone can buy a product instantly at the click of a mouse.
“If you can think of a product, you can find multiple counterfeit versions online.”
Luxury goods, such as watches, jewellery and perfume, are commonly targeted for trade mark infringement, along with branded clothes and pharmaceuticals.
At one end of the scale, counterfeiters blatantly advertise fake goods for sale to customers happy to buy a replica £10,000 watch for £100, but at the other they are more subtle and fool buyers into believing they have found a bargain when all they are buying is an inferior fake copy. It is a constant battle for intellectual property (IP) lawyers and brand protection professionals to know where and how brand IP is being infringed and to protect unwitting customers.
Not only do brands suffer from lost revenue, but there is a reputational risk from losing brand exclusivity. Fake goods can also be dangerous, made from poor quality materials, using unethical labour practices and without the safety checks authentic goods require. In the case of bogus pharmaceuticals, it is a matter of life and death.
One example of a product that is a leading target for counterfeiters is fake football team merchandise such as team shirts, fake tickets and fake “fan experiences”. The world’s top ten football clubs alone sell 20 million shirts every year, according to SportingIntelligence.com.
Last season, the English Premier League seized a record 500,000 counterfeit items worth £3.1 million. Since that number does not include clubs’ and jersey makers’ seizures, it represents only the tip of the iceberg, robbing the game of income and threatening the reputation of legitimate shirt makers and sponsors.
Tournaments such as the UEFA Euro 2016 Championship generate interest from fans and counterfeiters alike.
In the months around the Euro 2016 finals, intelligence uncovered by INCOPRO showed the increasing sophistication of counterfeit operations.
By identifying clusters of suspicious activity, TALISMAN allows IP attorneys and brand owners to go after the biggest offenders turning out counterfeit goods on an industrial scale
INCOPRO’s proprietary technology TALISMAN, which was developed by experts in IP law, technology and criminal investigations, identified numerous instances of infringement, involving substantial organised operations.
One counterfeiting operation sold fake goods through 80 channels, including 47 websites and 11 social media accounts, including Facebook, Twitter and YouTube.
TALISMAN tracks huge amounts of data online and offers a sophisticated but simple-to-use system to trace a single infringement or an organised network of counterfeit goods distributors operating across multiple platforms.
By identifying clusters of suspicious activity, TALISMAN allows IP attorneys and brand owners to go after the biggest offenders, turning out counterfeit goods on an industrial scale.
In the worst case, INCOPRO has identified counterfeit operations using 16,000 routes to market, but 1,000 is not unusual.
Social media has become increasingly important to the rogue sellers, who often build up a loyal customer following of their own. When a website is shut down, infringers can quickly open another, but when their social media presence is turned off, it has a dramatic effect on their operations.
Like the internet, counterfeiters operate across the globe, in different regions, currencies and languages. They might use sites such as eBay, Amazon and Facebook alongside Chinese sites such as Taobao, Alibaba and WeChat.
INCOPRO can track infringements across many international jurisdictions. The data it produces can be used to take effective enforcement action according to the laws of the country concerned, either using TALISMAN or an IP lawyer.
The company has forged strong links with legitimate marketplaces and web hosts around the world. Once counterfeiters have been identified, INCOPRO issues notices seeking their removal.
“For obvious reasons, app stores and online marketplaces do not want counterfeits on their platforms, but it is hard for IP lawyers and brand protection professionals to police infringement. We have built up good relationships with global marketplaces, such as Amazon and eBay, plus mobile app marketplaces and social media,” says Mr Baggs.
By working closely with IP lawyers, INCOPRO enables brand owners to take effective enforcement action on a number of fronts. TALISMAN is already in use by a network of law firms in Europe and the United States. INCOPRO is actively expanding and retaining partners in other parts of the world.
Mr Baggs is an IP lawyer at UK law firm Wiggin that co-founded INCOPRO in 2012. He explains: “As a company that was founded by a law firm, we see ourselves as working in partnership with other IP law firms to help their clients secure a strategic and intelligent approach to the problem. We understand the unique needs of law firms and are committed to their success. Brand protection services need to come to the forefront of business and legal strategy.”
The company has staff in the UK and US, drawn from a variety of nationalities, including multi-lingual infringement analysts, speaking languages including Japanese, Korean, Arabic, Russian, Mandarin, Cantonese and Punjabi. INCOPRO recently forged an alliance with Corsearch, a Wolters Kluwer company, that provides trademark search and watch services.
IP infringement is a massive problem for brands, but one they ignore at their peril.
By capturing intelligence through data to identify common attributes of suspicious activity, INCOPRO offers brands and their IP lawyers the ability to target and shut down large-scale offenders.
For more information please visit www.incoproip.com