Counterfeiters cash in on Coronavirus crisis
By Tom Nener, Legal Director and intellectual property rights specialist, Pinsent Masons
The coronavirus crisis has provided a fertile platform for sophisticated counterfeiters, as highlighted in recent reports by cross-border law enforcement agencies Interpol and Europol.
Although counterfeiting and fraudulent schemes are prevalent online and offline, criminal activity on the internet has risen sharply during the Covid-19 pandemic, with Europol stating: “The emergence of new fraud schemes and a further increase in the number of victims targeted can be expected. Even when the current crisis ends, criminals are likely to adapt fraud schemes in order to exploit the post-pandemic situation.”
Europol’s report also noted that “the sale of counterfeit and/or sub-standard goods on and offline is booming in the pandemic economy”. It said there was particularly high demand for certain types of healthcare and sanitary products (masks, gloves, cleaning products, pharmaceutical products), which has created a substantial market for product counterfeiters, fraudsters and profiteers.
We have all been very busy in the digital space during lockdown. Experienced and opportunist criminals know this and have been quick to respond. Counterfeits have been found for sale on popular online marketplaces, there has also been a rise in illegal products being sold on social media and on websites, and a recent operation coordinated by Interpol took down 2,500 links on these platforms.
Brand misuse and counterfeiting is a serious issue for brand owners, having an immediate impact on the bottom line through loss of sales when custom is improperly diverted to counterfeit products or other fraudulent schemes. It can also have a long-lasting impact on revenue generation, resulting from the brand damage that inevitably occurs when customers purchase what they believe to be genuine goods but which turn out to be very poor quality, or in some cases actually harmful.
Brand owners need to take action against third parties that use online platforms in order to remove counterfeit goods from circulation and to protect consumers against fraudsters, including action against those who misuse their portfolio of intellectual property rights, including registered designs and registered trade marks.
A registered design protects the appearance of goods, including shape and surface decoration. It will be infringed by anyone who makes or sells a product the design of which “does not produce on the informed user a different overall impression”. A registered trade mark will be infringed if an identical or confusingly similar mark is used on an identical or similar product, or used to advertise a fraudulent scheme.
The risk for brand owners is that genuine and illegitimate goods can be mixed in storage, and customers can receive illegitimate goods even if they have purchased them from an authorised seller. Tracking unauthorised products can be difficult in these circumstances.
A robust brand protection strategy to address the heightened risk of counterfeiting is vital for businesses and Pinsent Masons has developed a brand protection platform, Alteria, which allows businesses to monitor a brand online and at the click of a button enables takedown requests to be made to global online marketplaces and social media platforms.
Good monitoring technology is crucial, but only half of the solution. Once instances of brand misuse have been identified, brand owners then need to decide what enforcement action to take. Take down requests to online marketplaces and social media platforms are a good option, but deleted sellers will inevitably pop up again on the same platform in another guise, necessitating further take down requests.
This ‘whack-a-mole’ approach to brand protection can be time consuming and resource heavy. The Alteria platform will enable brand owners to take enforcement decisions quickly on the basis of real time data-driven intelligence, and undertake enforcement action easily and cost-effectively.
Swift enforcement action not only solves the immediate problem of brand misuse. In our experience, being seen to take action can also lead to a reduction of infringements in the longer term, as sellers will be more reluctant to target businesses with a reputation for defending its brand.
Using software to monitor the internet, including online marketplaces and social media platforms, will pick up all instances of brand use and enable brand owners to undertake further investigation to establish whether these uses are authorised or not. We recommend that brand owners invest in the latest monitoring technology as part of their brand protection strategy.