Experts insist on collaboration and education as e-commerce and advanced tech threaten brand protection
With the proliferation of e-commerce platforms and the advancement of innovative technologies, counterfeiters are constantly evolving and redesigning their methods. Against this backdrop, it has never been more crucial to understand the greatest threats to brands so that they can stay one step ahead. WTR asked contributors to the latest edition of the Anti-counterfeiting and Online Brand Enforcement Guide to share their insights on these issues and highlight the key considerations that brand owners should incorporate into their anti-counterfeiting strategies.
While advanced tech is a huge problem, it is also the solution; experts cite anti-counterfeiting technology as central to an effective mitigation strategy. Education and collaboration between e-commerce platforms, brand owners, law enforcement and judicial authorities are also essential for maximum enforcement against illicit trade – both online and offline.
Bad actors increasingly able to evade detection as e-commerce platforms prove “treacherous”
Counterfeiters have “exploited the anonymity of the Internet”, say Saif Khan and Meghana Kudligi of Anand and Anand. Indeed, it is unsurprising that e-commerce platforms play such a pivotal role in facilitating counterfeit activity on a global scale, given the ubiquity of the online world.
With the growing trend of “long-trusted retailers opening up their online platforms to unknown third-party sellers”, Maia Woodhouse and Kristina Montanaro Schrader of Adams and Reese express their concern over the resulting influx of counterfeits on these platforms and thus the increasing number of consumers who are unwittingly purchasing products assumed to be directly supplied by the brand owner.
Alongside the threat of third-party sellers, counterfeiters are targeting consumers with “treacherous” baits, such as hidden links to secondary sites, says Cesare Galli of IP Law Galli. According to Georgina Danzig of Heer Law, these malicious tactics are becoming increasingly sophisticated and allow counterfeiters to evade detection and limit liability.
Rafael Lacaz Amaral of Kasznar Leonardos also expresses concern that counterfeits on e-commerce sites facilitate “large-scale distribution, challenging authorities' monitoring and control”, which limits the authorities’ and brand owners’ capacity to tackle perpetrators.
Bad actors are also exploiting the proliferation of video e-commerce – where products are sold through live-stream videos. Alan Chiu, James Choi, Nicole Huo and Nicola Kung of Ellalan warn that the “unpredictable nature” of live-streaming sales makes it extremely challenging for the authorities to trace and track activities, which renders monitoring, obtaining and preserving evidence of infringement nearly impossible.
Cutting-edge technology creates fresh challenges for brand owners
For Amaral and Raquel Barros, the growing sophistication of counterfeit networks and the use of advanced technology to create near-identical replicas is a big problem for brand owners and the authorities. This is also a serious concern for Reinhard Fischer and Tamara Moll of Cohausz & Florack, as generative AI and deepfake technologies can do just that. “Deepfake technology and advanced counterfeiting techniques now enable the creation of near-perfect replicas of products, documents, and digital identities,” they warn. “Cryptocurrencies add another layer of complexity by facilitating anonymous illegal transactions,” they add.
Fighting tech with tech
Despite naming advanced technology as a major threat to anti-counterfeiting efforts, many trademark experts also cite it as a solution.
“AI is currently both parasitic and symbiotic to global commerce,” say Danzig and Dzisiak. While AI presents countless hurdles in the fight against counterfeiting, it also has huge potential to mitigate the issues that the authorities and brand owners face. Brand owners are adopting AI and machine learning tools to “shore up their supply chains, analyse and predict patterns in counterfeit activity, and proactively identify potential threats on-line and on the ground”, Danzig and Dzisiak note.
Similarly, Davide Luigi Petraz and Daniele Giovanni Petraz of GLP Intellectual Property Office advocate for the use of AI to review current anti-counterfeiting tools and create “cross-cutting technologies that would make it possible to trace the production chain even in the digital market”. Fischer and Moll also champion AI’s ability to “analyse and predict counterfeit patterns, identifying potential threats early”.
For some, digital authentication technologies are the way forward. Amaral suggests the use of holograms and RFID tags, while others point to blockchain as a crucial tool to mitigate counterfeiting threats. “Blockchain-based solutions can provide end-to-end supply chain transparency and product authentication,” Khan and Kudligi posit. The fashion industry in particular is a trailblazer in using blockchain to verify the authenticity of luxury goods, Fischer and Moll report, highlighting the Entrupy app as a key example. Nano-optics are also playing a significant role in improving the protection of design rights and offering holographic features in packaging that are “almost impossible” to copy – an invaluable tool to have in any anti-counterfeiting arsenal, Fischer and Moll add.
Brand owners can also harness data analytics to “collect data from e-commerce platforms and monitor infringement patterns”, report Chiu, Choi, Huo and Kung at Ellalan. Meanwhile, Anand and Anand representatives champion “robust cybersecurity measures and maintaining strict online surveillance” as an effective approach to tackling illicit activity online. “Investing in advanced authentication technologies (eg, digital watermarking and blockchain) can enhance product traceability and verification,” they add.
Education and regular training essential
A major problem in the consumer goods industry is the lack of “understanding of what counterfeiting is and the risks posed by counterfeit goods, both financial and from a health perspective”, says Michael Lamont at Spoor & Fischer. Naturally, education is the remedy.
One of the most effective mitigation strategies in the fight against counterfeiting is educating brand owners, consumers and law enforcement. Fischer and Moll insist that regularly training enforcement authorities, customs and border protection to recognise fakes is crucial, alongside educating consumers about how to identify genuine products – an initiative they cite as “a powerful tool in this fight”.
Opportunities to carve out fresh legislation
“Several jurisdictions have proposed or passed legislation imposing liability on online marketplaces for third-party sales of counterfeit goods on their platforms,” Schrader and Woodhouse report. This indicates a growing trend towards the regulation of e-commerce marketplaces, presenting what Schrader and Woodhouse call an “incredible opportunity for rights holders (and intermediaries) to weigh in on such legislation, either directly or through organisations like INTA, before implementation”.
Similarly, Galli reveals that the fight against counterfeiting in Italy is “enabling new strategies” for stakeholders, particularly through border controls, which are “becoming increasingly effective and are followed by criminal proceedings”.
Elsewhere, in South Africa, governmental support for anti-counterfeiting has “drastically increased”, according to Lamont. This is “enabling brand owners to take action against the sale of counterfeit goods in countries which were previously considered unenforceable”, he reports.
Embedding principles of collaboration
Trademark experts champion the opportunities for collaboration that come with anti-counterfeiting efforts. Integration and collaboration between government agencies, private companies and international organisations are creating an environment that is “more resistant to illicit activities”, says Barros. Collaboration between e-commerce platforms and brand owners to swiftly remove suspicious listings is essential, he adds.
Brand owners must also “maintain close working relationships with local IP or brand protection associations, local administrative departments and customs”, Ellalan representatives insist.
Considering the global and cross-border proliferation of counterfeiting – both online and offline – Lamont says that “meaningful engagement… between brand owners and law enforcement officials” is paramount for effective enforcement.
The Anti-counterfeiting and Online Brand Enforcement Guide combines the latest strategic analysis with practical, country-by-country exploration of the best protection around the world. The latest edition is available here.