How Brands Are Using Outsourced I.P. Investigators to Successfully Battle Counterfeiters
Introduction: The Counterfeiting Conundrum
There can be no doubt that counterfeiting is a global crisis. In fact, the International Chamber of Commerce predicts that by 2022, “counterfeiting will extract over $4 trillion from the global economy and cause a loss of over 5 million lawful jobs.”
Although counterfeiting is not a new phenomenon, it has been exacerbated in recent years by the emergence of online marketplaces. Of particular concern are the mega-retailers (such as Amazon.com, eBay, and Walmart.com) that allow sales of products through third-party retailers.
The United States Government Accountability Office (GAO) recently conducted a study on counterfeiting within those marketplaces. As part of its investigation, the GAO purchased 47 products from third-party U.S.-based retailers operating within popular online sites. Twenty of those products turned out to be counterfeits. The government’s conclusion? E-commerce has given counterfeiters a vast (and seemingly legitimate) venue for peddling phony products.
Notably, counterfeiting impacts nearly every industry. While many people are aware that items like shoes, handbags, and watches are frequently faked, fewer realize that potentially dangerous knock-offs are also being produced – pharmaceuticals, aftermarket auto parts, and airline parts among them.
By way of illustration, counterfeits are believed to cost the automotive aftermarket industry over $45 billion per year (https://www.manufacturingglobal.com/technology/nissan-and-markmonitor-remove-thousands-counterfeit-auto-parts-global-marketplace). Frighteningly, many of those parts are purchased by unknowing consumers and mechanics. Once installed, they may become life-threatening safety hazards. These products not only put the public at risk of injury or death, but also create significant liability and reputational risks for brands.
Not surprisingly, brands are scrambling to put a stop to counterfeiting. From hiring throngs of outside lawyers to assembling large in-house teams, major brands are expending substantial resources on the problem. What some may not yet realize, however, is that specialized intellectual property private investigators (“IP Investigators”) can play an important role in anti-counterfeiting strategies.
We have identified four primary reasons why many brands are already using IP Investigators to fight counterfeiters. We call them the 4E’s: Expertise, Evidence, Enforcement, and Efficiency.