Beating The Bootleggers: How Small Businesses can Protect Their Brands Online
As the global e-commerce boom continues, how can companies protect their intellectual property? Rachel Jones, the CEO and founder of SnapDragon IP shares her knowledge of counteracting the counterfeiters.
Whether it’s clothes, electrical equipment, children’s toys or even suncream, having a poor imitation of your product can be extremely damaging from the point of lost revenue. In addition, it can affect your reputation among buyers who may not realise the mediocre goods are not what your business sells. And word of mouth is very powerful in the world of sales.
Online counterfeit retail sales have grown at an annual rate of 20% since the rise of e-commerce, meaning the volume of fake goods sold online will soon surpass those sold by physical vendors. In China, over 40% of goods purchased from the internet are said to be fake, or bad quality, despite efforts by the government to deal with the problem.
Unlike large companies with expert brand protection teams, small business owners often lack the resources and know-how to protect their intellectual property.
So, how do you protect your business and Intellectual Property (IP) from being stolen?
Trademarks are the most effective tool in defence of your brand. Aim to register them wherever you can – ideally in your home market, in China and in any other markets where you hope to trade. If it is proving too costly to focus on all of these, make sure you cover your home market and China.
Registering your brand with the Customs Authorities with Application for Action (or CITEX) is free. Taking this step means that customs agencies across Europe will keep an eye out for goods that resemble yours and gives you the chance to subsequently get involved for prosecution if any counterfeits are discovered.
I say all this with years of experience of defending my own, and other baby products in global marketplaces, and now also toys, luxury fabrics, gifts and fancy dress – to name but a few. We monitor key online marketplaces for trademark and copyright infringement and remove from sale, anything which infringes our clients’ IP – whether registered IP (such as trademarks) or unregistered IP (such as images). Keep copies of all your old images and marketing materials – they are a hugely valuable and often badly filed resource!
Another valuable tool is to include secret ingredients in your product so you – and anyone with whom the secrets are shared (for example Customs Authorities) – can tell it from a fake. This could be a holographic security image, or a partially invisible thread that creates a brand specific design, visible only under special lighting.
Educate yourself about IP infringement issues, and keep an eye on the latest scams. Counterfeiters are constantly looking for ways to create and sell fake products, so make sure you know what to look out for. Refresh your packaging regularly.
If counterfeiters target your product, steps need to be taken as soon as possible. Buy a sample fake product so you can prove the differences and see the similarities for yourself. Lawyers are not usually necessary as the first step in removing IP infringing goods from the online marketplaces. Each website has an official reporting procedure – register your complaint, prove the IP is yours and the link should be removed.
It is vital to involve the legal experts at the correct time, particularly to protect brands in new territories and to take counterfeiters to task.
Cut Off The Oxygen Supply
China is notoriously difficult to enforce, however steps can still be taken. While online brand protection is just one part of the anti-counterfeit strategy, it’s the quickest, cheapest way of making an impact. Removing infringing links (and sellers) cuts off the ‘oxygen supply’ (ie sales outlets) – which means the illicit traders get noticed and tracked by the platforms, as well as by the brands. The more tracking, the harder it is to sell … and eventually they will give up.
It’s worth being aware of the potential for you to inadvertently infringe existing IP in another country. Even for an original idea, registered IP rights can have a wider scope than the product or idea they were created to protect. Fully research similar products to the one you are hoping to develop, even if there are notable differences, to ensure you don’t mistakenly commit IP infringement.
Protecting your business from counterfeiters can seem like a daunting task. Taking the correct steps from the outset can go a long way to minimising the potential damage and, if the worst does happen, being aware of your options is key in stopping the bootleggers and securing your company’s sales and reputation in the long term.