IACC: How SMEs are taking on counterfeiters

A little over 40 years ago, a handful of companies joined forces to establish the International AntiCounterfeiting Coalition (IACC). While those founding members, and others who have joined the coalition over the past four decades, include some of the world’s most well-known brands, it is worth taking a step back to consider our roots.

Many brands have become so ubiquitous and ingrained in our daily lives that it is difficult to remember a time when they weren’t around. In reality, however, a significant portion of the IACC’s members did not exist when the organisation was founded, and many others were in their infancy—operating out of homes, garages, or the backs of cars.

It goes without saying that the road from “startup” to “global brand” is an exceedingly difficult one, even under the best of circumstances. Unfortunately, counterfeiting is increasingly making that journey even more difficult for today’s small businesses who are seeking to become tomorrow’s industry leaders.

In recent years, we’ve often heard “if you can make it, they can fake it”. While typically offered to describe the explosive growth that has been seen in terms of the goods and industry sectors impacted by counterfeiting, it can also serve as a reality check for small businesses.

Targets

Counterfeiters are not concerned about where a company’s trademarks land on any of the countless global brand rankings; their primary concern is whether they can make a profit by knocking off a brand’s products, and how much.

Of course, some surely think longer-term as well, so if a brand is seen as unwilling or unable to pursue enforcement, then all the better in their view.

This reward versus risk calculus is, perhaps in part, what makes smaller businesses such attractive targets for counterfeiters. More established brands may be better resourced to obtain trademark registrations globally, to hire dedicated enforcement teams and deploy cutting-edge technologies for brand protection, and to pursue litigation against bad actors. Small businesses, by contrast, are often less able to defend themselves against illicit manufacturers and sellers.

Over the past several years, the IACC has seen a significant increase in the volume of inquiries we’ve received from small and medium-sized enterprises (SMEs), seeking information and assistance to address the threats posed to their businesses by counterfeiters.

Our discussions with those companies have underscored the unique challenges they face in growing their businesses and protecting their brands. In response, the IACC’s board of directors unanimously approved the creation of a new membership category in October 2019, to facilitate the participation of SMEs in the organisation.

Earlier in 2021, we took the additional step of launching a new SME Task Force, to allow for further collaboration between smaller businesses across a variety of product sectors. The SME Task Force has begun working directly with IACC staff on a number of projects targeted to the needs of such companies, including the development of a webinar series and other practical brand protection programmes and resources.

“Counterfeiters are not concerned about where a company’s trademarks land on any of the countless global brand rankings; their primary concern is whether they can make a profit.” - Travis Johnson, IACC

Sharing best practice

There’s no substitute for experience and the practical knowledge (and network of contacts) that rights holders accrue over years of involvement in the brand protection field. That may include things such as how to develop clear and concise training materials to educate law enforcement and customs officials about the challenges faced by their brands, engaging with customers to ensure they’re buying authentic products, or designing a cohesive strategy to efficiently leverage internal resources and external partnerships.

As companies grow, demonstrating the value and return on investment of their anti-counterfeiting initiatives to senior management becomes another challenge to overcome.

Nonetheless, there are short cuts to developing expertise. To that end, we’re working to connect our newer SME members so that they can benefit from the experience of long-time IACC members by creating opportunities for informal mentoring, and sharing guidance and advice. This is proving to be an invaluable tool in helping to develop best practices that will allow smaller brands with more limited resources to more efficiently address their individual needs.

The trafficking of counterfeit goods online, and more directly, finding an economical way to combat those illicit sales, is one area that our SME members have highlighted as a major concern. This should come as no surprise given the exponential growth of online trafficking in recent years, and the significant challenge that it poses for the brand protection teams of even the most well-resourced companies.

To address these concerns, the IACC has sought to expand access to our one-of-a-kind collaborative enforcement programmes with some of the world’s largest e-commerce platforms. For example, our IACC MarketSafe programme, which offers a streamlined approach to enforcement across Alibaba’s various e-commerce platforms, is now available to SMEs at no cost; participation in that programme is open to SMEs regardless of whether they are IACC members.

IACC members also have the opportunity to participate in our IACC-Amazon programme, which assists in resolving a variety of enforcement issues on that platform, again at no cost. The IACC’s long-running RogueBlock programme, developed in cooperation with the world’s largest payment networks and money transfer companies, continues to evolve to provide brands of any size with effective weapons against online sales of counterfeit goods.

The involvement of SMEs in each of these programmes is mutually beneficial; they gain new tools to more efficiently address their enforcement needs, but they also provide new perspectives and insights drawn from their unique experiences.

Small businesses are the lifeblood of the global economy. In the US, they create two-thirds of net new jobs, while employing nearly 60 million individuals—nearly half of all private sector employment in the country. SMEs likewise represent 99% of all businesses in the EU, and 96% of all businesses across Asia.

Decades from now, many of those companies will undoubtedly be household names that our children and grandchildren interact with in their daily lives. That potential will only be realised, however, if they, and we, work to ensure the adoption of sound policies and practical improvements to IP protection and enforcement regimes that benefit brands both large and small.

“Obviously, not every small business will grow into a global powerhouse, but every small business should have that opportunity,” says IACC president Bob Barchiesi. “We’re working every day to make sure that they do.”

Travis Johnson is vice president of legislative affairs and senior counsel to the International AntiCounterfeiting Coalition in Washington, DC. He can be contacted at: tjohnson@iacc.org