“Counterfeit products are not flattery – they diminish the hard-earned value of your brand”
The recent announcement by Amazon that it blocked 10 billion counterfeit products from its marketplace listing in 2020 before any of the phony products could be sold is welcome news; yet it only tells part of the story, according to Dickinson Wright PLLC intellectual property attorney Andrea Arndt, whose legal practice includes battling counterfeiters on behalf of start-up companies and high-profile clients.
“The goods blocked by Amazon all had intellectual property protection, whether it be a trademarked brand name or logo, patented technology, or a copyrighted image,” Arndt said. “Amazon relies on intellectual property rights owners—not simply brand owners—to enroll their brands and inform Amazon of any suspected intellectual property rights violations. Amazon has no other way of knowing who the product’s real brand owner is, who their approved vendors are, or whether the brand owner even has legal rights to stop counterfeiters from selling its brand.”
Brand owners and product developers, especially those new to the space, often underestimate the value of acquiring the appropriate intellectual property protection before bringing it to market, where it is ripe for the picking by unscrupulous counterfeiters.
“There really is an urgency for IP protection as soon as a product is perceived to have value to a company or inventor because the protection process can take anywhere from a couple months to a year or longer. In fact, an invention does not need to be 100% complete to seek protection,” Arndt said. “An intellectual property attorney can explore various ways to protect the brand and/or invention before offering it for sale. Some brand owners and inventors initially think it’s flattering to have their product copied, but I tell them it does far more damage than good for their brand.”
Some counterfeit products can look identical to the original. In one scenario of an infringed company, Arndt said that at first glance, a company’s president mistook the counterfeit product for the legitimate product. In many cases, even though the two products look very similar, the counterfeit products are typically inferior in quality; yet customers mistake the fakes for the real product. That’s why she says intellectual property protection is also brand protection against inferior products that weaken a brand’s value.
“Looking at small electric appliances as an example, when a branded fan, toaster, or coffeemaker is knocked-off and the counterfeit product malfunctions due to a loose or faulty part and causes a fire, an electric shock, or an injury to the user, that consumer will often go to the legitimate branded maker of the product for a refund, a replacement product, or even an apology. The upset consumer may also turn to social media and website review sections to castigate the product, thereby diminishing the brand’s value and trusted name,” Arndt said. “At the end of the day, the counterfeiter has little to lose, and the legitimate brand owner suffers the consequences.”
Counterfeiters also tend to offer lower prices, undercutting the true value of a product that was brought to market at considerable cost for research and development, production, and marketing. Before intellectual property protection has been registered, brand owners have interim options to protect against counterfeiters. For example, brand owners can incentivize consumers to register the product online, along with purchase price and place of purchase; if a product number is registered more than once, the brand owner becomes aware of the counterfeit product.
Arndt adds that counterfeiters aren’t only lurking on Amazon. Counterfeiters sell their counterfeit goods on numerous websites, and offline in boutiques, flea markets, and through street vendors. Taking counterfeiters to court is an option, which is often successful, but also costly to the brand owner. That’s why Arndt is working with clients on innovative processes to combat counterfeiters. In addition to some trade secret processes, Arndt has devised strategies to quickly obtain enforceable intellectual property rights for use in take-down notices, for example, on Amazon, and temporary restraining order (TRO) proceedings.
“I use clients’ enforceable intellectual property rights to remove the knock-off products from third-party websites and restore the clients’ exclusivity to sell their products online. I also use the clients’ patents to invalidate counterfeiters’ subsequent patents,” Arndt said, adding that she successfully represented a company in invalidating Chinese and European patents granted covering the counterfeit products.
About Dickinson Wright PLLC
Dickinson Wright PLLC is a general practice business law firm with more than 475 attorneys among more than 40 practice areas and 16 industry groups. Founded in 1878, the firm has 19 offices, including six in Michigan (Detroit, Troy, Ann Arbor, Lansing, Grand Rapids, and Saginaw) and 12 other domestic offices in Austin and El Paso, Texas; Chicago, Ill; Columbus, Ohio; Ft. Lauderdale, Fla.; Lexington, Ky.; Nashville, Tenn.; Las Vegas and Reno, Nev.; Phoenix, Ariz.; Silicon Valley, Calif.; and Washington, D.C. The firm’s Canadian office is located in Toronto.
Dickinson Wright offers our clients a distinctive combination of superb client service, exceptional quality, value for fees, industry expertise, and business acumen. As one of the few law firms with ISO/IEC 27001:2013 certification and one of the only firms with ISO/IEC 27701:2019 certification, Dickinson Wright has built state-of-the-art, independently-verified risk management procedures, security controls and privacy processes for our commercial transactions. Dickinson Wright lawyers are known for delivering commercially oriented advice on sophisticated transactions and have a remarkable record of wins in high-stakes litigation. Dickinson Wright lawyers are regularly cited for their expertise and experience by Chambers, Best Lawyers, Super Lawyers, and other leading independent law firm evaluating organizations.