Counterfeiting

The term counterfeit is defined as something made in imitation of something valuable or important with the intention to deceive or defraud. Counterfeiting is illegal, punishable in most countries both criminally and civilly. With their factories producing 67% of the worlds supply, China leads the world in sales of counterfeit goods.

When it comes to counterfeiting, money and luxury goods are usually the first things that come to most people’s minds, however anything that can be made can be counterfeited. For example, counterfeit drugs have been and continue to be a major cause for concern for both brand owners and consumers.  Not only are counterfeit drugs illegal but they could be very harmful to a consumer’s health. Counterfeit drugs may include drugs which are contaminated, contain the wrong or no active ingredient, or contain the right active ingredient in the wrong doses.

According to the World Health Organization, 200,000 people a year die because ineffective, fake, and substandard malaria drugs don’t remove the parasite from their systems. Also, because these pills often contain enough active ingredient to abate some symptoms but not cure the disease they contribute to the development of drug-resistant strains. The FDA issues warnings on various counterfeit drug findings, most recently including Cialis, Adderall, Viagra, emergency birth control pills and Alli.

Knock-offs

The terms counterfeit and knock-off are frequently used interchangeably, and inappropriately so. As defined above, counterfeiting occurs where an infringer intentionally copies (identically or almost identically) a protected trademark and places the mark on goods which are not authentic with the intention to defraud the consumer into believing that the goods are authentic. An example of counterfeiting is intentionally using the Chanel logo or a logo almost identical to the Chanel logo on a bag that was not produced by Chanel and passing it off as an authentic Chanel bag.

While the term counterfeit is defined by federal law, “knock-off” is a colloquial term used to describe goods that have a confusingly similar appearance to branded goods but do not contain any identical trademarks or logos. Brand owners can bring civil lawsuits for both counterfeiting and knocking off however brand owners should be sure to employ both defensive as well as offensive strategies to protect their brands.

Parallel Imports

Parallel imported goods, also known as gray market goods, do not fall under the category of “fakes” as do counterfeit goods and knock-offs. Parallel imported goods are authentic goods imported into a market for sale without the consent of the trademark owner. Parallel imports differ from counterfeit goods and knock-offs in that they have been manufactured by or under license from the trademark owner. The wrong which exists here is that the products are imported into a jurisdiction in which the trademark owner did not intended.

It should go without saying that developing a brand protection strategy is a big part of brand development. Falling prey to counterfeiting, knock-offs and even parallel imports can cause loss of revenue as well as damage to a brand’s good will.  Contact us to schedule a consultation and/or for assistance in developing your brand protection strategy.