The True Cost of Not Having Brand Protection

Pharma IQ
Posted: 02/16/2011

With the performance of new and existing IPs potentially being the difference between success and failure in the modern business world, it is arguably more important than ever that these are protected from criminals.

Counterfeiters are constantly on the lookout for potential access points and so it is vital that organisation take steps to prevent such occurrences.

This was highlighted in a recent report by MarkMonitor, which estimated that online counterfeit sales will cost businesses $135 billion (£87 billion) in revenue this year.

It comes after the International Chamber of Commerce calculated that sales of fake merchandise currently represent five to seven per cent of world merchandise trade, and MarkMonitor noted that online counterfeiters seem to be growing in number and developing new ways of fabricating products or conning consumers into believing they are selling legitimate goods even if no product exists whatsoever.

The report suggests that the problem is growing because the volume of counterfeit goods produced is rapidly increasing, particularly in nations such as China, where manufacturing capacity is continuing to grow.

In total, 89 per cent of seized counterfeit products originate in China, the US Customs & Border Protection report 2009 estimated, and this is set to grow even further.

As well as monetary losses, brands also suffer other losses, according to MarkMonitor, which says that an organisation's value can suffer when counterfeit goods are easy to find and offered at lower prices.

In addition, resellers and affiliates may drop a brand if demand for products drops as a result of the numerous fakes being sold, while the availability of cheaper counterfeit goods may put pressure on organisations to lower the price of their own, legitimate products.

However, the report noted that there are many ways in which retailers can combat counterfeit sellers, such as by searching the web on a regular basis, as there are just ten online marketplaces which account for 80 per cent of all marketplace traffic.

A further tip is for brands to monitor advertisements and promotions that use their own names, by adopting techniques such as scanning paid search ads that come up when search terms relevant to their products are typed in.

Searching social media sites for links related to their brands and generally being proactive are both excellent ways of protecting the brand, the report noted.

It said: "Counterfeiters obviously encounter more success when left to operate unchallenged; they're also known to shift their energies to more passive targets when brands visibly fight back. Once a brand understands where the greatest threats lie, aggressive action is the best strategy."

When it comes to making a decision about which counterfeiters to clamp down on, brands should try to target the greatest offenders first, such as those which market the fake items in the most highly-visited areas, both online and in the real world.

It also advised both manufacturers and retailers to attempt to determine which counterfeit goods are generating the most sales, and to target these first.

In addition, other tips include monitoring unauthorised use of brand names and terms in domain names as well as trying to become a "difficult target" - something MarkMonitor says can be achieved through reporting any counterfeit goods being sold on marketplaces to managers and search engines.

In addition, as search engines have certain procedures in place to remove any search pages in vio­lation of copyright laws, this can help to curb illegal activity.

Through collaboration between internet service providers, the International AntiCounterfeiting Coalition and the Anti-Counterfeiting Group, organisations across the planet can help to clamp down on the counterfeiters.

Protecting IPs is essential in the current climate and every possible step needs to be taken to ensure they are not compromised – something which an increasing number of firms are now realising.

Pharma IQ
Posted: 02/16/2011

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