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 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 products such as masks and gloves which has created a substantial market for product counterfeiters, fraudsters and profiteers. We have all been very busy online during lockdown.
Experienced and opportunist criminals have been quick to respond. Counterfeits have been found for sale on many websites, and a recent operation coordinated by Interpol took down 2,500 links. 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 fake goods 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. 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. 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 lets firms monitor a brand online and 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. Takedown requests to online marketplaces and social media platforms are a good option, but deleted sellers will inevitably pop up again.
This “whack-a-mole” approach to brand-protection can be time-consuming and resource-heavy. The Alteria platform will let brand-owners 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 fewer infringements in the longer term.
Using software to monitor the internet 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 brand-owners invest in the latest monitoring technology as part of their protection strategy.
Tom Nener, legal director and intellectual property rights specialist, Pinsent Masons
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