As Americans feast on turkey and count their blessings this year, retailers and counterfeiters are preparing for four days of the world’s largest shopping event of the year. The economic shift to online shopping created by COVID has already created more opportunities for counterfeiters, but with the ongoing pandemic, far fewer shoppers will be lining up outside brick-and-mortar stores to grab one-time bargains. Shoppers will now be parked in front of their electronic devices conducting their holiday gift transactions. In this post-COVID-19 era, the challenge for brands is to capture the attention of consumers online and recoup recent losses. Additionally, shoppers are feeling the financial strain induced by the pandemic, making them more budget-conscious and more susceptible to online counterfeiters boasting lower prices.
Brands have never been more vulnerable to the issue of online counterfeiting, piracy and distribution fraud. According to a national survey from brand intelligence platform Red Points, 65% of respondents are likely to spend more online for Black Friday in 2020 than in 2019. Seventy percent are planning on shopping at online marketplaces, such as Amazon and eBay. These e-commerce platforms allow legitimate products in high demand to be sold by third-party sellers, however, typically at a significant price increase. This price gouging takes advantage of the financially vulnerable consumer and creates both a negative backlash for the brand leading consumers to believe the brand owner (not the third-party seller) is benefitting and cuts into their business’ market share.
Current times dictate the need for brands to be more vigilant in identifying counterfeits. What Can Your Organization do to protect Its bottom line this holiday season?
- Conduct an internal brand protection audit. Assess how well your key brands and products are secured in terms of legal protection, including an assessment of contracts for the management of supply chains and distribution channels.
- Register key IP rights. Combine and layer your company IP rights where appropriate and register and update all key IP rights in countries where your products are sold, manufactured and assembled. Registered IP is a prerequisite for enforcing the takedown of a fraudulent listing.
- Take legal action by securing a preliminary injunction. This is a court order prohibiting an action by a party to a lawsuit until there has been a trial or other court action. This is short-term, extraordinary relief.
A Successful Temporary Injunction
Unfortunately, counterfeits’ negative impact on an organization’s brand reputation and bottom-line necessitates the need for legal action to alleviate the suffering of irreparable harm. Employing the experience and skill of an IP legal team provides positive outcomes, as evidenced by the success celebrated by Ference and Associates on behalf of their clients.
Recently Ference and Associates were successful in securing a preliminary injunction against 30 sellers on Amazon.com, eBay.com, and operators of Shopify stores for their client. This client had been receiving complaints from customers who evidently purchased a knock-off of their original patented design, causing brand reputation damage and lost revenue. A previous lawsuit involving this same client shut down 85 sellers on the eBay, AliExpress, and Wish online marketplaces. This business owner can now enjoy the holiday retail season with the confidence that their product is protected against unethical third-party sellers and substandard fakes.
Ference and Associates can help with your internal brand protection audit and with the development and implementation of your anti-counterfeiting strategy. Please call us at 412-741-8400 or email us at contact@ferencelaw.com for additional information.