SAY “NO” TO FAKES & COUNTERFEITING
The EU set its priorities for the next four years of combating severe and organized crime in May 2021. Within the framework of the European Multidisciplinary Platform Against Criminal Threats (“EMPACT”), a strategy plan has been developed and will be put into action between 2022 and 2025.
EMPACT has a clear methodology for setting, implementing, and evaluating priorities in the fight against organized and serious international crime. Intellectual property (“IP”) crimes are also on EMPACT's radar. With a focus on products harmful to the EU economy, consumers' health and safety, and the environment, the main objective is to combat and disrupt criminal networks and criminal individual entrepreneurs involved in IP crime and in the production, sale, or distribution of counterfeit goods or currencies (both physically and online). In other words, as the trade in counterfeit products becomes widespread, the sales and revenues of the companies are negatively impacted, and economic, health, safety, and security problems arise.
I. Effects of Counterfeiting on Companies
Product piracy and counterfeiting are serious threats to any company. If someone is making counterfeit versions of your company’s products, offering them for sale, and distributing them, this will have negative consequences for your company, such as:
1. Loss of sales: The main effects of counterfeit products are losses in sales and earnings. Especially nowadays, when online sales are at their peak, it becomes very difficult to understand whether a product is original or fake. This can lead the customer to unknowingly buy the counterfeit product and reduce the company's sales in this context.
2. Damage to the brand image and product liability: It is common for counterfeit goods to be of poor quality, so the businesses also risk brand image loss and the product liability. It is possible that the customers are unaware that they have purchased a counterfeit and believe they have purchased a high-quality product manufactured by the company. They will blame the original manufacturer if it malfunctions, breaks, or fails to meet their expectations.
3. Negative impact on the company’s recognition and reputation: Counterfeit products do not meet the company’s quality standards, which reduces brand recognition and credibility.
4. Loss of trust between business partners: Product piracy leading to a lack of trust will reflect on the partnership and result in an unsuccessful business.
Because of all these reasons, a promising and effective strategy for combating product piracy must be developed.
II. Effects of Counterfeiting on Public Health, Safety and Security
Counterfeit products jeopardize public health and safety. For example, counterfeit cigarettes contain wood dust, mold, insects, insect larvae, and other very dangerous additives. Alcoholic beverages, particularly the methyl alcohol used in the mix, can poison and blind people. Creams that claim to prevent hair loss cause serious skin diseases. Fake perfumes can cause serious disorders in the lungs and kidneys. Contact lenses, dental equipment, tanning products, baby formulas, etc. were among the potentially dangerous counterfeit goods.
Dangerous counterfeit products are not only dangerous for where they are produced. Given today's transportation and logistics possibilities, counterfeit goods produced in one country can be exported to another country from thousands of kilometers away. Preventing counterfeit products will therefore protect both companies and the public.
III. Taking Preventative Action to Stop Counterfeiting
Counterfeit products must be removed from the market in order to protect the company's profits, avoid a drop in sales, and maintain brand value, on the one hand, and avoid environmental, health, and safety issues, on the other.
Legal measures can stop counterfeits from entering the market. One of the most important and basic actions to take is to register your trademark. Trademark registration helps to put a chokehold on counterfeiters' operations. Other possible measures are an application for border seizures via customs authorities, criminal or civil court actions, etc.
A brand protection strategy should be established based on the nature of business, including market surveillance, test sales, digital/online strategies etc.
To protect companies, especially brand value, measures should be taken to prevent counterfeit products. If counterfeit products are already on the market, legal action should be taken. Preventing the production, sale, and international trade of counterfeit products is crucial for both companies and the public’s health, trust, and safety.
For more information, please see https://www.europol.europa.eu/crime-areas-and-statistics/crime-areas/intellectual-property-crime/counterfeiting-and-product-piracy for counterfeiting and product piracy and https://www.oecd.org/publications/dangerous-fakes-117e352b-en.htm for dangerous fakes.
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