Cleaning Up Counterfeits & Infringements – Working the Supply Chain
There were two sides to our client’s challenge. Both stemmed from products with labels bearing the client’s trademark appearing on Facebook marketplace, offered by numerous sellers. Although it was easy for our client to determine that the products were not genuine, the labels affixed to the plastic containers were misleading to consumers. Some of the labels only depicted the client’s trademark, while others featured the client’s trademark and a “Compare to” reference.
The Vaudra team was tasked to investigate the sellers in efforts to determine the larger players & sources of the labels. Partially guided & timed with the investigative efforts, the client also worked to reduce the visibility of the related product listings in the online marketplaces.
An organized investigative approach was critical as the network of sellers continued to grow. Over 100 individuals, entities or other related parties were investigated as part of these two initiatives – one focused on the counterfeit labels and another on the “Compare to” variant.
On the counterfeit side, potential leads came in all shapes and sizes. As was demonstrated during the investigation, marketplace sellers were regularly borrowing photos of the counterfeit products from others, so the same images popped up repeatedly. When engaging these sellers in undercover dialog, they would talk a big game – but in requesting specifics and/or arranging to meet for a purchase, it would be a bait-and-switch with non-labeled product. In these instances, we coordinated with the client to have the listings submitted for removal from the marketplaces.
As an example of a seller that developed into a more substantial target – Vaudra arranged to meet with the individual to execute a buy/bust operation with the North Carolina Secretary of State’s Anti-Counterfeiting Taskforce. In meeting the individual at an agreed upon location with law enforcement (undercover), we completed a purchase of the counterfeit product and witnessed the seller sticking the counterfeit labels on the product. At that point, the individual was charged with possession with intent to sell counterfeit goods (NC GS 80-11.1). The individual admitted to printing the labels himself at a local pack & ship store.
On the “Compare to” side, sellers offering these products were primarily located in five southeastern states. There were a few different iterations of these “Compare to” labels, some which appeared more blatantly infringing than others. Through diligent investigation & strategic communication with sellers, we worked our way up the supply chain from the lower-level marketplace sellers to mid-level suppliers, to the primary label distributor. After establishing rapport, we garnered this indvidiual’s cooperation. We determined that he was the original creator of the artwork, obtained details on his extensive sales history, voluntary surrender of all labels remaining in his possession (10,000+) & the identity of the label manufacturer.
The online marketplaces were cleaned of products with the counterfeit & “Compare to” labels, with sources identified and inventory surrendered. Many of the parties identified agreed to cease & desist from any future infringing activities. As these issues had plagued the brand for years, the client was relieved to have significant answers & substantial actions within weeks of putting Vaudra on the case.
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