Fakes and how to fight them

It is complex but essential work to develop an effective anti-counterfeiting and anti-piracy strategy in China, explains Ray (Lei) Zhao of Unitalen Attorneys at Law.

With the popularisation of the internet, intellectual property protection has become the focus of concern for enterprises and individuals.

In this digital age, how to protect intellectual property rights both online and offline to prevent counterfeit goods has become a problem that brands must face. We must make it clear that enterprises fight against counterfeiting and defend their rights not only for their own interests but also for the rights and interests of consumers.

In the market, the existence of fake and shoddy products causes immeasurable damage to the brand reputation of enterprises. When consumers mistakenly buy fakes and experience inferior quality completely different from the original products of the brand, they often think that the quality of the brand has declined, which is a fatal blow to consumer trust in the brand.

Especially for some products with high quality requirements, such as food, medicine and cosmetics, the existence of fake and shoddy products may even threaten the health and safety of consumers.

Therefore, enterprises that fight against counterfeiting are not only protecting their own interests, to prevent market share eaten by fakes, but are also maintaining consumer safety and brand credibility.

In this context, anticounterfeiting rights protection has become an action that every enterprise that focuses on brand and customer experience must take.

The challenge of anti-counterfeiting rights protection

Although enterprises have made some achievements in combating counterfeiting and defending their rights, this does not mean that the road to combating counterfeiting will be smooth sailing, and enterprises still face some challenges in the process of combating counterfeiting and defending their rights.

1. Fake producers are becoming more secretive: In order to evade the crackdown, producers of fake goods often take various measures to hide their identity, such as frequently changing sales accounts and locating production factories in remote areas. This requires enterprises to continuously improve technical means in the process of anti-counterfeiting, and further strengthen the monitoring and tracking of the market.
2. Defending IP rights is becoming more expensive: Combating counterfeiting and protecting rights is a long-term and costly task. Enterprises need to invest a lot of human, material and financial resources, especially in the process of legal proceedings, both in lawyer fees and time. This is not a small burden for some small and medium-sized enterprises.
3. Technological innovation will become a powerful tool for combating counterfeiting and safeguarding rights: In the future, anti-counterfeiting rights protection will increasingly rely on technological innovation. The development of technologies such as artificial intelligence, big data analysis, and blockchain traceability will help enterprises more efficiently monitor counterfeit products in the market and improve the success rate of anti-counterfeiting. For example, tracing products through blockchain technology can make it easier for consumers and businesses to trace the source of fakes, so as to combat fakes more accurately.

Strategies for fighting counterfeiting and protecting rights

So, how do enterprises carry out anti-counterfeiting rights protection actions to effectively combat counterfeit and shoddy products in the market?

Here are some practical strategies to help you effectively fight against counterfeit goods:

1. Have the perfect IP protection scope to cover necessary goods or services: Brand owners should register the trademark with the CNIPA to ensure that only they have the right to use the trademark on the relevant goods or services. This prevents unauthorised use of the trademark by others, thereby protecting the market rights of the brand.
2. Establish a comprehensive monitoring system: Effective anticounterfeiting rights protection first needs to find the existence of fake goods in time. In order to do this, enterprises must establish a comprehensive monitoring system to keep abreast of the movement of goods in the market. Brand owners need to regularly monitor their products and markets to ensure that no pirated goods are entering the market. This can be done by hiring professional teams or working with local law enforcement to combat piracy. At present, many enterprises choose to cooperate with third-party monitoring platforms, through big data analysis, machine learning and other technical means, to establish a commodity asset library, real-time monitoring of major e-commerce platforms, social media, and offline shops, to find suspected counterfeit products. For example, through the commodity price monitoring system, companies can quickly detect those goods that are below the normal market price, because these goods are likely to be fake.
3. Step up publicity: Brand owners can enhance consumer awareness of the brand by strengthening publicity. Make it easier for consumers to distinguish between genuine and pirated goods, thereby reducing the sale of pirated goods. Brand owners can cooperate with other third parties to jointly conduct education programmes to consumers, relevant associations, market supervision authorities, such as the Market Regulation Office and customs. Through cooperation, piracy can be more effectively recognised and detected.
4. Collect evidence to confirm the infringement: After the discovery of suspected fakes, enterprises need to carry out further confirmation, which requires the collection of sufficient evidence. Companies can obtain samples of suspected fakes by clandestine purchasing and confirm whether these products are counterfeit through laboratory testing or expert identification. After confirming the infringement, the enterprise also needs to prepare the relevant rights confirmation materials, such as brand registration certificates, product certification information, etc, which are very important in the subsequent rights protection process.
5. Adopt hierarchical compliance measures: For different types and severities of infringement, enterprises can take hierarchical compliance measures. For the seller of the first infringement, you can choose to send a notice to warn the other party to correct the issue. If the other party refuses to rectify or repeatedly infringes, the enterprise can take more severe means such as complaints, purchasing traceability, and litigation. For example, a well-known food company found a large number of counterfeit products on the e-commerce platform, and they first communicated with the platform and submitted relevant evidence to request the removal of the goods. For the seller who has not changed repeatedly, the company has filed a lawsuit through legal means and demanded compensation from the other party.
6. Cooperate with law enforcement departments to combat offline fakes: Online counterfeiting is only one aspect of corporate rights protection, and offline fakes also need to be paid attention to. Many fake-producing factories are located in remote areas, making it difficult for companies to crack down on them on their own. At this time, enterprises can choose to cooperate with local law enforcement departments, cooperate with industry and commerce, market supervision and other departments, to crack down on counterfeit products. For example, some enterprises find the source of fake goods through secret purchasing, and then jointly with the local industry and Commerce Department to carry out surprise inspections and successfully shut down the counterfeit production dens. This approach is very effective in combating offline fakes, especially against the source of fakes, which can greatly reduce the number of fakes.
7. Use legal means to safeguard the rights and interests of enterprises: When the enterprise has collected enough evidence, it can choose to defend its rights through legal channels. Counterfeit and shoddy products involve a variety of illegal acts, such as trademark infringement and patent infringement, and the enterprise can file a lawsuit in court to ask the infringing party to stop the infringement and compensate for the loss. Although the legal approach requires a certain investment of time and money, it can effectively deter those who try to profit from counterfeit goods. Many fake goods merchants in the face of legal sanctions often choose to admit mistakes and compensation, which can not only make up for some losses for enterprises, but also play a deterrent role.
8. Strengthen supply chain management: Choose suppliers with a good reputation and legitimate business qualifications, and avoid cooperating with unknown sources or suppliers with a poor reputation. The supplier is required to provide proof of product origin, such as a purchase invoice, authorisation certificate, etc, to ensure the legitimacy of product origin. Regular audits of suppliers to check whether their production, storage and sales processes comply with legal and regulatory requirements.
9. Establish a product verification mechanism: Carefully identify the documents provided by suppliers to ensure their authenticity and effectiveness. This can be done by communicating directly with the supplier, checking official channels, or hiring a third-party agency. Conduct in-depth analysis and review of product composition, quality, packaging, etc, to ensure product compliance with relevant standards and requirements. Check the correlation between production and sales, in conjunction with the flow of inventory, to ensure that the entire chain of products from production to sales is legitimate and authentic.
10. Strengthen internal supervision and training: Establish and improve an internal supervision system, clarify the responsibilities and authority of various departments and employees, and ensure that counterfeit goods cannot flow into the company’s sales channels. Regularly conduct anticounterfeit goods training for employees, and improve their legal awareness and identification ability, so that employees can identify and prevent counterfeit goods. Encourage employees to actively report counterfeit goods or suspicious behaviour found, and give appropriate rewards and protection to whistleblowers.

Summary

Through the above measures, brands can effectively fight against counterfeited goods, and protect their intellectual property rights and market interests.

Only by constantly strengthening brand construction and improving consumers’ recognition and loyalty to the brand can the number of pirated goods be effectively reduced.

It is complex and necessary work for enterprises to fight counterfeiting and defend their rights.

Only through effective anti-counterfeiting measures can enterprises protect their legitimate rights and interests and maintain the credibility of the brand.

From the establishment of a comprehensive monitoring system, to the hierarchical treatment of infringements, to the use of legal means and joint law enforcement to combat fakes, every step requires companies to invest a lot of resources and energy.

In the future, with the progress of science and technology, the means of combating counterfeiting and protecting rights will become more and more intelligent and efficient.

For enterprises, only by constantly updating anticounterfeiting strategies and combining technical means can they be in an invincible position in the contest with fake goods and ensure that the interests of brands and consumers are effectively protected.

Ray(Lei) Zhao has over 23 years of experience in IP. He solves trademark disputes and infringements through administrative and judicial procedures, and has successfully dealt with many difficult litigation and non-litigation cases. He can be contacted at lei.zhao@unitalen.com