Counterfeit goods are the world’s largest illegitimate industry. Why should you care? In October, I educated more than 400 attorneys on how to protect their clients’ brands against counterfeiters. These continuing legal education programs were well-received. As intellectual property counsel representing brand owners, we are continually concerned about counterfeit goods as one of the biggest threats to a brand. But, how does this affect your life? Let me tell you why.
Counterfeit goods are the world’s largest illegitimate industry
Counterfeit goods are the world’s largest illegitimate industry. In 2013, counterfeit goods’ estimated value was over $400 billion in revenue, and by most accounts, as an industry, counterfeit goods are expected to top $1 trillion dollars in the next 5 years. Organized crime, drug trafficking and terrorists thrive on this. Counterfeiters do not pay taxes; they employ child labor; they steal your identity. It is estimated that more than 4 million jobs are lost due to the counterfeit goods industry. Do I have your attention now?
Counterfeit goods pose a threat to the health and safety of consumers
Counterfeit goods utilize sub-standard and dangerous components that pose a threat to the health and safety of consumers. Brand owners whose goods are knocked off are often left with a public relations nightmare when consumers are duped into believing the counterfeit, sub-standard product actually belongs to the brand owner. In the end, the defense against counterfeiters leads to increased product costs. In the case of smaller companies, may put them out of business, especially if their goods are knocked off at the beginning of their company’s success or if their intellectual property is not properly protected.
Why does there seem to be a growth of counterfeit goods?
There seems to be a growth in counterfeit goods around the globe. Why? Well, there are a number of reasons for this, including the fact that our e-commerce centric world is more global and we have less barriers at our borders with free trade agreements. Counterfeiting is highly profitable, as there are very few barriers to entry. Our current tariff structure also plays right into the hands of counterfeiters. Consumer attitudes play a role, especially in the United States and western culture, in part because these consumers want to be associated with luxury goods no matter what. Of the brands most likely to be knocked off, those that are deemed luxury brands are more likely to be knocked off and when we consider the top counterfeited brands, the majority are American brands. If consumers were more aware of their actions and/or if there were penalties to consumers for purchasing counterfeit goods, perhaps counterfeiters would not have such a large market.
Consider products that actually pose a serious threat to consumer health and safety – for instance automobile, motorcycle and airplane parts. When these goods are knocked off, they are likely to cause accidents and jeopardize the health the safety of consumers. Pharmaceuticals are another sector that when knocked off has severe ramifications to the health and safety of consumers. In some parts of the world, as much as 30% of the supply of prescriptions drugs are counterfeit. Toxins, rat poison, and the wrong or no active ingredient have been found in prescription drugs. Clearly, if you are intending to purchase a medicine to cure a certain ailment, these substances present an issue. Even when cosmetics and other personal products are knocked off, human feces and rat poison are often found in the counterfeited product.
How can brand owners protect themselves?
There are serious civil and criminal penalties available to those caught counterfeiting, but engaging in anti-counterfeiting strategies is a huge and expensive undertaking for brand owners and their counsel. The cycle usually continues, unfortunately, given the fact that many counterfeiters once caught will just regroup under another name or business. Please stop intentionally buying counterfeit goods and only shop authenticate retailers and distributors to try and undercut these bullies. If you have any questions about this post, please contact us.
Stacey C. Kalamaras is the founding partner of Kalamaras Law Office, LLC. She has extensive intellectual property experience with a particular focus on trademark prosecution and enforcement. She has protected some the world’s largest brands in more than 150 countries and specializes in helping small and medium sized businesses grow and protect their brands. Contact her at firstname.lastname@example.org.
Stacey is also the founder and lead instructor of Trademarkabilities®, an online trademark academy for lawyers, whose mission it is to prepare lawyers to be confident and effective practitioners before the USPTO. To learn more, please visit https://www.trademarkabilities.com/.