Dispute Resolution

With the festive season in full swing, a brand new designer handbag is likely to be on a few Christmas lists. But do you know your Plada from your Prada?

It was reported last year that around 2 million infringing items were detained at UK borders. Whether bought knowingly or unintentionally, fake goods have a detrimental effect on the economy as well as a costly impact on brands.

With sales of counterfeit goods made much easier in this digital age, it has never been more important for consumers to be aware of the authenticity of the products they buy and for businesses to consider their strategy for monitoring and protecting their goods and brands against copycats.

Loius Vuitton

Fraudsters have become not only more sophisticated but more brazen, as shoppers in Renhuai, China recently discovered. Looking to piggy back off the popularity of their authentic counterparts, PLADA and Loius Vuitton stores popped up in a new shopping complex. The unobservant consumer could have been forgiven for overlooking the mis-spelling as the impressive shop fronts, the prominent “LV” logo and the stores filled with merchandise gave the allure of designer flare expected from the world-famous fashion brands.

These stores were swiftly shut down, with some quick action by the brands and their lawyers but nowadays this type of shameless intellectual property infringement is an all too familiar occurrence for businesses. Counterfeit goods are no longer just back-alley buys but readily available online as well as on the high street.

Salvatore Ferrogami

Relying on consumers mistaking their goods for the real deal or wanting the “must have” brand for a fraction of the price, counterfeit goods intentionally infringe upon a brand’s intellectual property rights.

Whilst brands have a variety of legal rights and tools to take action against such blatant infringement actions relying on a variety of rights such as trade marks, design rights and copyright, taking legal action in multiple jurisdictions can be time consuming and costly – especially against temporary pop-up or on line stores who close down in response to actions and then often appear elsewhere swiftly. Many well-known brands have diligent teams and use cost effective monitoring software to root out fakes and work quickly to have counterfeit sales shut down. Indeed, Salvatore Ferragamo, the high-fashion Italian brand, won $60 million in damages in the US earlier this year when they brought a case against over 50 online profiles selling fake products under the brand’s name – the highest award of damages for a case of this kind.

However, while physical stores, such as those in China, are easier to police, dealing with the sale of counterfeit goods online is not always such a success story. When one website or marketplace is shut down, another can open up almost instantaneously. So what can brands do to try and combat this potentially never ending battle?

Deisel

To cut internet sales off at the source (or at least one of them), where infringing websites emerge, complaints can be filed with Nominet (.co.uk) or the World Intellectual Property Office (.com) to have these sites taken down. Additionally, to stop infringing goods in their tracks, rightsholders can request that UK Customs monitors imports and exports, specifically for counterfeit versions of their goods.

Taking a proactive approach and to try to secure the strongest position possible, it is always advisable, in addition to any other appropriate registrations, for organisations to at least register trade marks, in all relevant territories, for their business name and any logo their business operates under. In a time of astute fraudsters, as a further preventative measure, brands often additionally register trade marks or buy domain names for common mis-spellings of their brand names.

This was part of a wider strategy taken by Diesel who acquired a DEISEL trade mark when opening a counterfeit “DEISEL” pop-up shop in New York’s Chinatown, earlier this year. Looking to protect its intellectual property rights and beat counterfeiters at their own game, they offered merchandise with mis-spelled versions of their famous slogans at counterfeit prices. Selling out within days, this highlights the worrying appetite for bargain, “fake” goods but as fraudsters become more innovative, so too must brand protection strategies.

With the counterfeit markets thriving both here and internationally, whether preventative, proactive or reactive, brands should take time to consider and implement procedures for protecting and defending their goods and the goodwill therein.

Cara McGlynn

Solicitor at Brodies LLP
Cara McGlynn

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