Business Law & Compliance

Dealing with counterfeiters: How to spot the signs

6 min read

04 September 2015

Many counterfeiters are being drawn to online shopping sites such as eBay and Etsy to sell their fake goods. Here is what you can do if your brand is being abused.

A report by Etsy recently revealed around two million items sold on its site could be counterfeit or constitute a trade mark or copyright infringement. 

In a further recent development, Paris-based Kering, which owns a number of luxury brand makers including Gucci, YSL and Balenciaga, is suing Alibaba for making it possible for shoppers to order counterfeit goods in bulk from their sites. 

According to the Intellectual Property Annual Report, around seven million people per month visit websites offering illegal content in the UK. The internet has allowed some counterfeiters to go under the radar and move quickly across online spaces and it can be harder for law enforcement agencies to bring them down. 

Online auction sites such as eBay and Etsy are sometimes targeted by counterfeiters and brand owners should work with e-commerce sites to prevent the circulation of fake goods online.

If a company discovers fake products in an online space, brands should simply report their concerns and request that the offending goods are removed from sale. It could be counterproductive to take legal action against the e-commerce site itself and it is unlikely they will be held responsible.

How to spot the signs

To guard against counterfeiters, brand owners should stay alert to indicators such as irregular sales data or an increase in customer complaints linked to product quality. 

A dip in sales in a particular country could be cause for concern. If nothing else has changed, this could be a sign that someone is selling imitation goods under your brand name.

If a company becomes suspicious about fake goods reaching the market, they should carry out an investigation to find out who is responsible. Businesses can seek the support of professional investigators who specialise in this area of work. 

They should also consider using any intellectual property rights they own to block the sale of the fraudulent goods. Businesses should also bear in mind that such activity is organised crime and it should be reported to the relevant authorities. In an attempt to stifle the goods moving through a brand’s most prosperous markets and eating away at profit-margins, companies should contact trading standards or its equivalent in the country the business trades in order to make them aware.

Registered trade mark protection

It is unlikely brands will be able to stop illegal counterfeiters but they need to be prepared to tackle potential infringements head on by utilising the International Trade Mark System. 

To protect against counterfeiters and enforce rights in a particular country, such as China, companies must file for specific protection in that territory. It might be that fake goods are being exported and sold to a number of different countries, but without specific registrations in each location, it is unlikely that brand owners will be able to challenge such activity.

Read more about trade marking your brand and products:

When filing a trade mark on registration for a specific product, brands must demonstrate an intent to use it commercially in a specific territory. When the trade mark is due for renewal, every ten years, the company should take steps to ensure it still fulfils any relevant criteria.

Broaden your contacts

A specialist trade mark attorney will hold strong relationships with native enforcement agencies.  

By enlisting their help, brand owners will be able to ensure they get the right type of protection required in each country and report information in a timely way to the appropriate authorities.

Companies should also keep up to speed by monitoring counterfeit movements and stay in touch with distributors and suppliers. This includes setting up regular meetings with those that have presence in the relevant countries to identify any unusual activity.

Be prepared to take action

Businesses need to be prepared to take action to bring counterfeiters to justice. As well as challenging any IP infringement, companies need to liaise with criminal law enforcement agencies to pass on important information. 

The fight against counterfeiters is about prevention, spotting fraudulent activity and knowing how to deal with it. Ultimately this will help to block such activity and minimise the risk it poses both reputationally and commercially.

Mark Armitage is a trade mark attorney at Withers & Rogers.