London, 02 November 2024: As the retail sector enters its peak annual sales period with Black Friday and festive shopping well underway, global intellectual property (IP) firm Marks & Clerk underscores the need for brands to step up their defences against spiralling counterfeit activity.
Amid ongoing economic uncertainty and the heightened cost of living, brands are contending with consumers approaching this period of spending with more caution and restraint than usual, while the need for cost-effective alternatives is also driving demand for counterfeit products. Compounding these challenges, rapidly evolving technologies are accelerating the proliferation of counterfeit goods.
As part of its ongoing efforts to help businesses navigate these challenges, Marks & Clerk today publishes Brand Security in a Modern World, an e-book that shares practical guidance on the steps brand owners can take to safeguard the value and investment made in their brands. The e-book outlines how retailers can protect their brand, and the associated products and services, through IP rights and safeguard them through enforcement against copying and counterfeiting activity all over the world. With over 80% of counterfeit products shipped to the EU originating from Hong Kong and mainland China, it is critical to consider relevant IP protection in these markets to enable brand owners to take action at the source, which is why Marks & Clerk have a dedicated team to support retailers with the IP nuances of those markets.
With economic pressures mounting, the stakes are high. Recent figures illustrate the scale of the challenge; in 2023, the UK Border Force intercepted nearly one million counterfeit items valued at approximately £200 million ahead of the holiday season. Across the Channel, the European Union Intellectual Property Office (EUIPO) reported an average annual loss of €12 billion for the European clothing sector from counterfeiting between 2018 and 2021, equivalent to 5.2% of all clothing sales across the EU.
Kirsten Gilbert, Head of Brand Exploitation, Protection, and TM Litigation UK at Marks & Clerk and co-author of Brand Security in a Modern World, explains:
“Businesses suffer a huge loss of revenue to counterfeit sellers every year. The direct financial impact is vast, but that’s only one part of the overall picture. The longer lasting consequence is the effect these incidents can have on brand reputation. The reality of brand infringement is much more dangerous – for businesses and customers alike. Advances in technology are making it increasingly difficult for consumers to spot counterfeit goods amidst genuine sellers, with research finding that as many as 1 in 4 consumers may unwittingly buy a fake product on Black Friday. As well as severely harming sales, the danger of untested electricals or harmful cosmetics can have serious, long-term impacts on brand reputation with end consumers. Even when the counterfeit products are not dangerous, the presence on the market of large numbers of counterfeit goods can make consumers reluctant to spend significant sums on genuine products when their exclusivity has been undermined by large numbers of fakes on the market.”
Counterfeiters aren’t the only threat. Competitors sailing close to the wind with lookalike products have taken centre stage in recent years and there have been a number of high-profile retailer disputes over look-a-like copycat products on supermarket shelves turning IP infringement into a pop-culture touchstone in the media. Businesses are fighting for attention in a hugely competitive marketplace and it is vital that brands are sufficiently protected against infringement from competitors and counterfeiters to maintain their distinctiveness in the market place.
John Ferdinand, Partner at Marks & Clerk and co-author, shares his advice:
“By preparing at every stage of a brand’s lifecycle and looking at every aspect of a brand – name, logo, design, product shape – businesses can give themselves the best chance to keep their brand exclusive. Too many businesses leave worrying about IP rights until they move to launch and advertising – but simple considerations at conception could avoid significant difficulties later in the brand’s journey.
“That said, it isn’t all down to giving this thought at conception: there are vital steps to take throughout the evolution of a brand that enable businesses to better anticipate, prevent and ultimately respond to counterfeiting threats.”
The challenges facing brands are also evolving. Technology has revolutionised the market landscape, and brand protection strategies have had to rapidly evolve to cope with this. Social media and the digital marketplace have enabled brands to connect with customers more effectively and innovatively than ever before. Yet the rapid-fire trend cycle has provided prime opportunities for bad actors to capitalise on the latest consumer trends with cheaper imitations.
Megan Rannard, Associate at Marks & Clerk, concludes:
“Dupes have become a market of their own, resulting in brands facing growing challenges when it comes to distinguishing themselves between imitation and outright infringement of their products. The rise of social media influencers has further complicated the counterfeit landscape with these figures playing a key role in the promotion of fake and imitation products. The challenge is particularly prevalent within the beauty, fashion and jewellery sectors, where Government research reveals that goods are most frequently purchased based on influencer recommendations. As vulnerabilities change, brand owners must remain vigilant and adaptive, ensuring their IP strategies evolve in step with market dynamics.”
