Avoiding Counterfeit in an Virtual World - Stratford Group Ltd.

My doorbell rang three times today. Each time, another package from an online purchase was delivered. If you’re like me, the majority of my shopping this year (holiday and otherwise) has been done from the comfort of my couch as local restrictions are limiting in-store shopping. And with December now upon us, experts are seeing a record number of online purchases (up 99.3% from February of last year, before the pandemic lock-down) at a time when overall retail sales are down.

With the COVID-19 pandemic entering its ninth month, nearly everything has changed about daily life in obvious ways, but the influence of this virus has reached into places you might not think to look. The uncertain economic climate along with the increase in online shopping has given rise to a perfect storm for counterfeit products. Third-party marketplaces, which rely on consumer due diligence to vet purchases, are often full of similar looking and sounding products.

Here are some of the ways that vendors trying to capitalize on the brand equity of another product have been bolstered by the unique circumstances of 2020:

• • Some items have experienced an unprecedented spike in demand that far outstrips the capacity for many businesses to keep up, meaning people are turning to websites or vendors they may not be familiar with or are not applying the typical scrutiny that might be applied to online purchases, simply because their need for the product is great. If a 3rd party vendor has multiple listings for similar looking products, purchasers may not think to examine each listing for details. 

• • Financial insecurity means people may be enticed by familiar looking products that are offered at a lower price point.  

• • Vendors can use pictures of legitimate products to represent their counterfeit ones quite easily. Consumers, who don’t have to option to inspect a physical product, must rely on the information and photographic evidence they are provided with online.

• • Reviews can be tricky because, if someone is unaware that they have purchased a counterfeit product, they may leave reviews on the incorrect vendor which makes identifying counterfeits more difficult. 

How can this happen if a legitimate business has taken the steps to protect their products and services through patents, trademarks or copyrights? Again, the pandemic has put many in a position where they may be limited in how they can react.  

Businesses had to pivot rapidly to compensate for lost revenue due to shut-downs and restrictions and can be out of pocket for many of the COVID induced safety updates or changes to business operations. This means they may not be as diligent about monitoring for IP infringement because their current priorities are elsewhere, or they may not have the financial resources to pursue legal recourse. 

Consumers can do their due diligence to protect themselves from counterfeit products online but as a business or manufacturer, what can you do to protect your business and brand from counterfeit products or IP infringement? 

Use IP marking whenever possible to help clients and consumers recognize you. Be diligent about keeping records that show a history of product development and branding to back you up in the event of a dispute or claim against you. Make monitoring for competitor products a priority. Know how to recognize IP infringement, just because a product is similar, does not necessarily mean they are guilty of infringement. If someone is infringing on your rights, notify the vendor platform and/or reach out to the seller directly – sometimes this is enough to stop sales before having to resort to expensive legal actions.