4 Ways Retail CIOs Crack Down Online Counterfeiting

4 Ways Retail CIOs Crack Down Online Counterfeiting

By: Retail CIO Outlook | Tuesday, September 10, 2019

Driving away online counterfeit fraud is essential to secure brand value and goodwill.

FREMONT, CA:  In recent days, customers are pleased by the time-saving facility of searching and selecting their favorite product remotely over the internet. As online retail offers more convenience, people prefer to shop on their mobile phones by a simple touch on the screen. However, the small companies would have remained a pearl in the shell if it was not correctly utilized by the third-party market places like Alibaba, Amazon, and eBay in their online platforms. These global platforms have enabled small retailers to stay competitive online. According to Mary Meeker’s 2019 internet trend report, e-commerce estimate for 2019 Q1  in the United States increased 12.4 percent from Q1 of 2018.

The growth of online marketplaces has fueled a rapid increase in counterfeit merchandise sales, affecting the company’s branding and image. Copying techniques have reached their peak that products look similar to the original brands, and the tricks are mostly carried out by small vendors. They tend to sell these products on online and social platforms that do not verify the products nature as original or duplicate.

According to the Global Brand Counterfeiting Report, overall losses last year from counterfeiting accounts to $323 billion. The report also forecasts the online counterfeit business to blow up to $1.8 trillion by 2020 in counterfeit sales of just handbags/wallets, footwear, watches, and others, which is a giant leap from last year. Some of the fake goods sold can jeopardize consumers’ safety and health. There is an urge to eradicate these fake merchandise across the globe. However, counterfeits cannot be abolished entirely but can be addressed by online retailers by considering the following ways:

Use monitoring software

Monitoring software detects counterfeits on online platforms and displays the results for subsequent action. It is necessary to shut down the counterfeit distribution channels as violators increasingly use new online promotional channels including online marketplaces, e-commerce sites, message boards, and the rest. These counterfeiters follow the same promotion techniques employed by legitimate marketers to sell their privileged brands. This has shrunk the marketing return on investment (ROI) of authentic brands. Using the monitoring software, brands can actively monitor the internet for unauthorized use of their branded terms in domain names. This will aid in the rapid detection of e-commerce sites selling illegal or counterfeit goods.

Employing search tools

Earlier, e-commerce websites were tracked using online monitoring tools for counterfeiters using brands. These days, small retailers sell their knock offs using the photographs of genuine products. Luckily, with the number of new cutting-edge technologies like image recognition, brand protection provider can track down fake products from the millions of images. This technology surpasses other trademark monitoring tools while locating counterfeit products based on photos. Brand protection software is capable of monitoring all products and matches sold under one’s brand name, scanning beyond the registered product database.

Claim design patents 

When it comes to patent, there are generally two—Utility and Design. Utility patents include smartphones, for example, protecting the functionality of a product and are defined by textual claims supported by images. On the other hand, Design patents are a bit different, they preserve the ornamentality of an item, and only images define the bounds of protection. While utility patents are challenging to enforce quickly on the web, online retailers can experience quick successes enforcing design patents online as platforms are built with the enhanced potential to make an immediate visual judgment against knockoffs. In some cases, design patents overlap with copyrights as ornaments and artistry coincide. Thus, a combined rights portfolio of several IP assets can be quite useful in the online enforcement.

Act swiftly and globally

The proliferation of international trade has opened up a new space for illegitimate businesses, thereby offering tremendous benefits to online counterfeiters. While a domestic seller or manufacturer may seem like an easy first target, brands have learned that it’s more effective to launch global anti-counterfeiting initiatives and to get them underway expeditiously. Brands should make sure that their trademarks are registered internationally, especially in China, which observes a “first-to-file”policy that grants registration to whoever files first even if it’s not the actual brand owner.

Retailers should stay abreast with new developments in the anti-counterfeit battle. Besides staying up to date with new tools and technologies, focusing on other ways like making use of trade shows and educating the customers can earn a lot while eliminating counterfeits. 

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