Category: Online Brand Protection

By Mike Consterdine, Brand Account Development Manager

Globally, many companies have committed to the fight against plastic pollution, with manufacturers changing components and materials to produce more recyclable packaging. The time and investment put into this sustainability goal is also a balancing act with businesses becoming carbon neutral.  

However, a sometimes forgotten consideration is that counterfeit products entering the supply chain may lack sustainable materials and are often unsafe and non-compliant. In this light, an essential component of sustainability efforts is to prevent counterfeiting.

The main motivation for those conducting illicit trade is financial gain. Therefore, there is an overwhelming argument that sustainability is not considered in the manufacturing, distribution and sale of counterfeit products. Counterfeiters manufacture these goods in factories that are often unregulated and include cheaply sourced and substandard materials that are not only harmful to workers but also contribute to the pollution of the environment. 

So the question is, can companies truly achieve sustainability while at the same time not considering or having a plan to remediate counterfeit goods? We’ll see that sustainability and counterfeiting prevention go hand-in-hand.

The Impact of Counterfeiting

While it’s well-known that counterfeiting and intellectual property infringement supports organized crime, there are also other societal impacts to consider:

• Illicit trade rings traffic people across borders for exploitative labor, often in abhorrent conditions with little or no compensation. 
• Across multiple sectors, including apparel, consumer goods, cosmetics, electronics and pharmaceuticals, counterfeit products have been proven to contain hazardous and toxic elements. When those products come into contact with a person or are consumed, they can be harmful or even fatal.
• Counterfeit or non-compliant products may find their way into legitimate manufacturing and distribution channels, compromising supply chain integrity. This results in companies being unable to prove that the product or process adheres to company sustainability statements and practices.
• When counterfeit products are seized, there is an opportunity to reuse or recycle them. However, de-labeling a branded item is not always possible as this process can also be costly, and some product materials are unsafe to reuse. In these circumstances, the products will be destroyed by court order, impacting the environment with further waste and pollution.

The ability to prevent counterfeiting substantially reduces all these risks.

How to Prevent Counterfeiting

There are many ways companies can prevent counterfeiting. First, they should conduct a comprehensive review of intellectual property rights and supply chain channels. This process will provide insight into the strengths and weaknesses of company processes and their IP portfolio. The results allow efficient and effective decision-making by legal, regulatory and enforcement teams and support sales, marketing and operational divisions.

The next essential step, even if the company has an in-house brand protection specialist, is collaborating with key partners. These partners can include regional enforcement teams, online brand protection service providers and those who are experts in securing products through authentication and traceability solutions.

An online brand protection company can assess the market while providing an overall view of the extent of the IP infringement problem, whether that be in counterfeit, design or copyrights. Engaging a third-party provider for brand protection services assists in time management. They also can conduct online takedowns and provide actionable intelligence for prioritizing offline targets.

By applying a unique and secure identifier to a product or packaging, a product can be authenticated or tracked through its lifecycle, with all data on the product stored in a cloud-based platform for various business functions. Consumers or field investigators also can immediately authenticate a product by scanning the identifier via an app, a forensic reader or a mobile/cellular device. 

By implementing these strategies, a company can mitigate its risk of counterfeiting, diversion and non-compliant products entering the legitimate supply chain. 

Return on Investment

Brand protection can be seen as a cost center. But a return on investment can be determined by increased consumer confidence through fewer customer returns, higher sales driven by the removal of infringing online content and offline target prioritization. Brand protection can also help avoid costly product recalls, which will likely increase emissions, representing another link between preventing counterfeits and sustainability. 

Implementing secure brand protection technologies can also lead to more efficient processes and less waste, supporting company sustainability initiatives.

Combining Sustainability and Counterfeiting Prevention

While counterfeiting can be deemed a byproduct of a successful business, it can irreparably damage a brand’s reputation with customers and the general public. It also invites questions regarding what the intellectual property rights holder is doing to prevent unregulated, often harmful, illegal practices.

Corporate social responsibility is often seen as a buzzword. But, when it comes to consumer trust and sustainability statements, it is imperative to consider all factors. Reviewing component sourcing, manufacturing processes, policies and regulations is only the start to increasing sustainability. 

Brand protection, online and offline, is more than “stopping the fakes.”  It’s also about protecting reputation, human life and the environment. 

Trust Your Brand Protection to Authentix

As the authority in authentication solutions, Authentix brings enhanced visibility and traceability to today’s complex global supply chains. For over 25 years, Authentix has provided our clients with physical and software-enabled solutions to detect, mitigate and prevent counterfeiting and other illicit trading activity for currency, excise taxable goods, and branded consumer products. Brand protection is an integral component of our services.

Through our proven client partnership model and sector expertise, we offer custom solution design, rapid implementation, consumer engagement and complete program management to ensure product safety, protect revenue and maintain consumer trust and loyalty for the best global brands on the market. Contact us now to see what we can do for your brand.

Mike Consterdine, Account Development Manager for Brand, Authentix
Mike Consterdine has been involved in the Brand Protection industry for nearly 15 years, helping brands secure their products through protection and enforcement of their IP portfolio. Having worked as an external investigator for a number of global luxury and apparel brands, Mike also developed and managed the international enforcement program for a leading consumer electrical appliance manufacturer.

Using his wealth of knowledge in the field he is able to consult brand owners on best practices in anti-counterfeiting and anti-diversion programs. Representing Authentix, Mike will be able to outline how secure product marking enables authentication and traceability, whilst online to offline brand protection enables business growth.

Mike explains that Brand Protection is “a passion as well as a profession, protecting people is the reason. Whether you have counterfeiting, diversion or fraud issues, it’s key to be proactive and collaborate with your network to be successful in any Brand Protection program.”

To learn more about our brand protection solutions and how we can help you, please email Mike at Mike.consterdine@authentix.com.

By Stephan von Schilcher, Brand Protection Director, Authentix

Brand protection often isn’t the first thing on a company’s mind as they launch a new product. When a company sets out to design a product, they want it to be a hit. They strive to make it useful and helpful to people, and they want their customers to trust and love the new product. Many brand owners refer to their products as their “baby” due to the long and challenging process to get it just right, in addition to the thought and testing that goes into the product research and development process.

One of the most powerful practices a company should apply to their products is often overlooked and that is brand protection, which can protect a company from unforeseen liability costs and customer mistrust in emerging or gray markets. Estimates vary, but the total amount of counterfeit goods impacting the job market is astonishing — it’s responsible for the loss of 2.5 million jobs globally.

When Brand Reputation is on the Line

An expression often used in sales states, “You are only as good as your last deal.” Similarly, brand reputation plays a significant role in the sales of most products. More than ever, customers are informed and do their research, reviewing competitors and finding the best deal according to various factors such as quality, cost, and reputation. A positive brand reputation can take years to build and only moments to collapse. (For example, in 2019, Nike pulled its products from the Amazon marketplace in part to try to lessen the damaging effects that counterfeit goods were then having on its brand). A brand’s positive reputation can be ruined due to a counterfeit product damaging someone’s skin, hair, body, or health.

Any product that is a premium brand and popular (e.g., car parts, cosmetics, pharmaceuticals, clothing, or even bed sheets) will be counterfeited at some point and can severely damage the reputation of the brand name. It can take many years and a significant amount of money in marketing and legal fees to rebuild public trust. The risk of this predicament can be materially reduced or even avoided with an investment in a brand protection program right from the start.

Forgoing Brand Protection Is Not an Option

When companies decide to forgo a brand protection program for the release of a premium product, several adverse outcomes can occur. The product may end up in non-targeted marketplaces where consumers find counterfeited or unauthorized and often heavily discounted versions. In many cases, this could also happen with brand owners’ third-party manufacturers producing unauthorized products for their own benefit.

In these cases, brand owners may also be held liable for those counterfeit products because there is little way to prove the provenance or authenticity of the fakes vs. the legitimately produced goods. For example, if a consumer in the marketplace gets hurt by an unauthorized or fake product, the brand owner is often exposed to liability. The legal fees can pile up quickly with no end in sight, all while product sales drop due to the lack of consumer trust.

In addition to counterfeited products, there is the gray market where consumers may find a company’s genuine products sold by unauthorized distributors at deeply discounted pricing, such as being sold out of the “back of the truck” or through other nonstandard channels. These may include expired or out-of-season products where the selling price is much less than the Minimum Advertised Price (MAP).

Supply Chain Physical Visibility & Traceability Simplified

Navigating a solid brand protection program does not have to be overly complex or challenging to implement. For example, putting a digital identifier or UIM on a product is much like putting a license plate on a car. That plate’s unique letter and number combinations should only be found on the exact vehicle with matching registration.

The same goes for placing a security taggant and/or a secure digital code on a product — it is only made for that specific product. The quantity and size of the product’s merchandising and packaging will determine the best security feature(s) needed to later identify the authenticity and unique attributes belonging to the product.

A covert or visible encrypted QR code with a unique, serialized item level ID can provide track-and-trace insight for a brand owner. This can provide much-needed supply chain visibility and uncover gray market diversion. If there is a question of the authenticity of a product, a consumer or inspector can check for various covert and/or overt security features (depending on the brand protection program the brand has in place).

For example, when a company’s product is entering the country of destination, the border patrol can easily detect the proper security taggants and confirm the validity of the product, allowing it to reach the distribution and retail channel much faster without delays in customs.

Online Brand Protection for Added Peace of Mind

Online brand protection is another factor to consider. If a product is sold in an online marketplace, there are tools today that can make the authentication process even easier. Many providers now have image searching and can digitally compare images for authorized licensed goods offered on non-authorized sites. Also, as part of online brand enforcement efforts, inspectors can view the product image for special overt security features to help identify these suspect products.

Today’s modern online brand protection advancements allow for identifying fake products and providing ancillary services such as cease-and-desist letters and a formal process to request site takedowns from legitimate or dark web marketplaces. Online brand protection services can perform sample buys and help find, chase, catch, and investigate infringing operators in multiple marketplaces, shutting them down and further protecting your trademark.

Consumer Engagement & Authentication Significant to Growth

For traditional core brand protection programs, the growing trend of merging consumer engagement with digital product authentication in a single platform can be insightful for a growth-minded strategy. There are many technology options for both brand owners and authentication providers in developing these hybrid and dual-purpose programs. Such services allow consumer interaction for marketing purposes while forming large data sets to detect trends as the product’s journey is tracked.

As consumers become more vigilant and seek genuine products when shopping for premium brands, including a consumer engagement feature also provides an effective means of protecting products. Moreover, it enables direct engagement with loyal consumers to help increase both customer interaction and continued brand loyalty.

The Value of Complete Brand Protection

The return on investment of implementing a brand protection program from the beginning of a product’s introduction to the market is a valuable and worthwhile investment for several reasons. It can help detect fake or unauthorized products quickly, mitigate potential liability costs that may result, and help support a brand owner’s preferred market pricing by avoiding unauthorized gray market activity. Being able to police all third-party manufacturers can also be a crucial result of a well-implemented brand protection program.

About Authentix

As the authority in authentication solutions, Authentix brings enhanced visibility and traceability to today’s complex global supply chains. For over 25 years, Authentix has provided clients with physical and software-enabled solutions to detect, mitigate, and prevent counterfeiting and other illicit trading activity for currency, excise taxable goods, and branded consumer products. Through a proven partnership model and sector expertise, clients experience custom solution design, rapid implementation, consumer engagement, and complete program management to ensure product safety, revenue protection, and consumer trust for the best-known global brands on the market. Headquartered in Addison, Texas USA, Authentix, Inc. has offices in the North America, Europe, Middle East, Asia, and Africa serving clients worldwide.  For more information, visit https://www.authentix.com.

Stephan von Schilcher, Brand Protection Director, Authentix
Stephan von Schilcher is Director of Brand Protection with nearly 20 years of international experience in anti-counterfeiting technology consulting and operations. His portfolio includes implementation of overt/covert authentication technologies and trademark screening software focused on industries of Consumer-Packaged Goods (CPG), Pharmaceuticals, Health & Beauty, Food & Beverage, Fashion, and Electronics.

At Authentix, Stephan sets priorities and guides strategies for clear solutions that increase consumer confidence and safety. He detects and evaluates vulnerable links in the supply chain to defend against negatively impacted revenue and brand integrity. He has established global partnerships for smart packaging components such as NFC, RFID, and QR, and is part of the leading team for Digital Product Passport packaging.

To learn more about our brand protection solutions and how we can help you, please email Stephan at stephan.vonschilcher@authentix.com.

Footnotes

¹ BASCAP, Estimating the global economic and social impacts of counterfeiting and piracy, Frontier Economics, 2011

² Elizabeth Segran, Nike tried playing nice with Amazon. Here’s why it didn’t work, Fast Company, 2019