By Rachel Jones
We all know that expensive luxury items, such as designer handbags and celebrity-endorsed brands, are often counterfeited. Quality looking fakes can be purchased easily and cheaply online. What you might not expect, however, is the number of everyday items, such as children’s toys, computer accessories and toiletries from smaller vendors that are regularly targeted too.
Online counterfeit retail sales are growing at an annual rate of 20%, meaning that the volume of fake goods sold online will soon surpass those sold by physical vendors.
Businesses targeted by counterfeiters do not simply have to contend with loss of revenue. Counterfeits destroy brand reputations and fakes present a real danger to consumers. Many fail to meet legal quality standards and a toxic coating or loose part on a baby product could even have fatal consequences.
SMEs can be particularly vulnerable to intellectual property (IP) abuse, and every sector is affected. The costs of registering IP and seeing through its enforcement can escalate quickly, especially when operating in an international marketplace. Unlike large companies with expert brand protection teams, small business owners often lack the resources and know-how to protect their intellectual property.
Defend your brand
File your trademark. As an SME, it is vital that you take every precaution to protect your IP and defend your brand against infringement. Before you do anything else, and ideally even before any information about your product appears online, file your trademark. This is a straightforward process, and won’t cost you the earth. Make sure you file trademarks in each country you hope to sell in, and not just where your business is based.
Insist upon an ‘NNN agreement’. China’s factories are unparalleled in their expertise and rate of production, and manufacturing there can be a very cost effective solution for SMEs. Sadly, however, the country is facing a national counterfeiting crisis. Many businesses whose goods are manufactured there find their ideas are quickly stolen and reproduced, and it is notoriously tricky to resolve such a situation. Insist upon an NNN (non-disclosure, non-use, non-circumvention) agreement from your potential manufacturer before you disclose anything about your product. By signing an NNN agreement the factory agrees not to use your design or idea in a way that competes with you – for example, by producing a cheaper, similar product.
Refresh your packaging regularly. Did you ever wonder why there are so many limited edition designs for stamps? It’s to make counterfeiting harder. Switch your packaging with seasonal, limited edition, and new designs often. Update your website and social media with images of the new packaging, and provide your ecommerce vendors with updated product pictures.
Include secret ingredients in your product. Make your product harder to replicate by adding subtle touches and details. You could include a special thread in the stitching or emboss holographic images on the labeling. This will help you prove your product is the real deal, and that even the most detailed counterfeit is not.
But if the worst happens
Keep a cool head and be proactive. You may find, despite your best efforts, that you have still been targeted. Whatever you do, don’t panic! There are still a number of steps you can take to fight the fakes.
- Buy a sample fake product so you can demonstrate the similarities and strengthen your case against the counterfeiters.
- Monitor ecommerce sites for counterfeits of your products. Even global vendors like Amazon and eBay accidentally let some slip through the net. This may seem like a mammoth task, but it is possible, and there are services such as SnapDragon Monitoring available to helps SMEs.
- When you spot a fake, contact the website to find out what their official reporting procedure is.
- Register your complaint and provide evidence that you own the IP rights to the product. The website should then quickly follow through by removing the link from the site.
For SMEs with little in the way of resources to mount an IP challenge but with much to lose in terms of reputation, brand value and unrealised revenue, fighting online counterfeiting has previously been an uphill struggle – daunting and at times exhausting. However, there are now a number of low cost strategies which, when applied in concert, provide a robust and advisable approach to protecting a brand online.
Rachel Jones is Founder and CEO of SnapDragon