2013 saw a huge crackdown on the sale of counterfeit goods both in the open marketplace and on the internet, following a surge in demand in what is now a €1bn market across Europe.
On 9 January 2014, a Southampton man was sentenced to three years and three months in prison for selling fake counterfeit electrical goods online over an 18 month period, which netted him £350,000 in income. The conviction comes from a joint investigation by both Hampshire County Council Trading Standards and Hampshire Constabulary.
James McGovern had been selling the items on Amazon and some of the batteries were in very poor in quality with simple spelling mistakes such as ‘ecplode’ instead of ‘explode’ and ‘conditiom’ instead of ‘condition’.
McGovern was convicted of 14 offences contrary to the Trade Marks Act 1994 and sentenced accordingly.
Unfortunately, this case was not in isolation whatsoever, as the Intellectual Property Office has recently announced some of its statistics on the sale of counterfeit goods over last year. The Police Intellectual Property Crime Unit (PIPCU) worked with other agencies to suspend hundreds of websites selling counterfeit goods.
How does this affect you?
A strong brand will cut through to the very heart of your business and will signify everything that your reputation is built on, and often be your most valuable asset. As such, you cannot disregard the potential threat that the sale of counterfeit goods can bring to your business, particularly if you operate within the retail industry.
One step that could be taken to prevent this threat is by ensuring that your intellectual property rights are enhanced and well protected from having an effective protection, exploitation and enforcement strategy in place.
Another step that is recommended is to continue to raise and maintain awareness of your intellectual property rights within your organisation. This way, your staff will be able to recognise when your intellectual property rights are being infringed and they will have a better understanding of not only the legal issues, but the wider commercial ones that exist.
It is also highly recommended that you market and package your products in such a way that it makes any copying difficult, such as having detailed labels or parts which are difficult to reproduce. Products that are manufactured should be considered as to whether they are susceptible to copying and then steps taken to minimise the risk.
You will often see that the genuine “big” brands that are successful will find ways of reassuring their customers that they are purchasing genuine goods, and will often market themselves in a way that has a clear policy on identifying ways of distinguishing their genuine products from counterfeit goods. This is something that should also be considered when trying to minimise the risk of being exposed to counterfeit goods.
The message is quite clear! There may be a growing industry for counterfeit goods, but these are not only damaging to the economy but the products are also being sold sub-standard and of a far more inferior quality than the original product, thereby potentially exposing your business to a risk of brand association.
It is therefore worth considering the recommendations outlined above and reviewing your intellectual property rights. An intellectual property audit can be very effective in identifying the areas of risk to your business and is strongly recommended.