The team is joined by Guest Kats Rosie Burbidge, Stephen Jones, Mathilde Pavis, and Eibhlin Vardy, and by InternKats Verónica Rodríguez Arguijo, Hayleigh Bosher, Tian Lu and Cecilia Sbrolli.

Tuesday, 5 December 2017

Why is it so difficult to the make the case against counterfeiting (or does it just seem so)?


With the recent Black Friday sales seemingly have become an international marketing device to jump-start the holiday shopping season, this Kat, perhaps feeling a bit perverse (he hates shopping!) asked himself: Why do there seem to be so many willing purchasers of counterfeit goods? After all, counterfeiting is a business and it works only if there are willing purchasers. Unless one is prepared to believe that all purchasers of counterfeit products do so on an innocent basis, then the reasonable conclusion is that at least some of them are complicit. Why is it so difficult to make the case against counterfeiting to those central to enabling its illicit activities to be carried out?

Moral arguments, equating counterfeiting with stealing, do not seem to go very far with swathes of certain populations (have you had a talk about counterfeiting with a millennial lately?). Criminalizing counterfeiting, and the penal sanctions that go with it, may carry some weight, especially against the middlemen who import and then distribute the counterfeit goods. But the criminal sanction reaches only a small number of offenders. So what strategic measures are left? The United States Chamber of Commerce has chosen to appeal to consumer self-interest, as witnessed in a recent piece written by Kasie Brill, executive director of the Global Brand Council for the U.S. Chamber's Global Innovation Property Center (GIPC) (“Count Out Counterfeits this Holiday Season: Top Ten Tips to #ShopSafe “).

Ball’s primary argument focuses on the claim that counterfeit goods are "dangerous" and “pose a serious threat to consumers and businesses alike”, with special emphasis on product safety. The second line of attack is that counterfeiting contributes to economic hardship at the aggregate level, affecting innovation, stealing from legitimate companies, evading the payment of taxes, assisting illicit trade and even terrorism. These are weighty accusations. So what is the consumer to do? Brill has offered ten suggestions for better consumer conduct (all taken verbatim from her article):
1. Trust your instincts. If it’s too good to be true, it probably is.

2. Insist on secure transactions.

3. Watch for missing sales tax charges.

4. Seek quality assurance in the secondary market.

5. Buy medicines only from licensed pharmacy website.

6. Be vigilant when buying abroad. [Merpel says: she lives “abroad” and does not see the need to be more vigilant than a US consumer buying on his or her home turf.]

7. Guard your personal information. Don’t install add-ons or apps if you don’t know their purpose and don’t click on suspicious pop-up ads.

8. Scrutinize labels, packaging, and contents. Look for missing or expired “use by” dates, broken or missing safety seals, missing warranty information, or otherwise unusual packaging.

9. Report fake products. Report unsafe products to the Consumer Product Safety Commission. Spread the word. Share these tips! Teach your family, friends, and coworkers about counterfeits.

10. Spread the word. Share these tips.
These seem like sensible suggestions, even if they describe prudent consumer behavior more generally rather than being specific to counterfeit products. Which brings us back to the original question: if they are so obviously prudent, why do they need mentioning? Stated otherwise, why do consumers act in a manner contrary to the behavior outlined in these suggestions? Positioning counterfeiting within the domain of health and safely is rhetorically easy, as is suggesting steps that make it less likely that a purchaser will be harmed by a faulty counterfeit product. Most people can be relied on to do things that will not likely cause them injury.

But this approach avoids the really difficult rhetorical question: What about the large number of product categories for which there is no health and safety risk, and the attraction of a reduced price is presumably worth the risk that the purchased product will be less durable? We are told: “Trust your instincts. If it’s too good to be true, it probably is.” That may be the case, but this exhortation can only go so far—a seductive bargain is a seductive bargain.

An Italian colleague described for this Kat an Italian case wherein, as this Kat understood the result, no liability for the product was found because the price differential was so great that no one would deem it to be a counterfeit. A fake luxury watch, whose price is a tenth (or a hundredth) of the original product, fools no one and gives the purchaser short-term pleasure as a badge of prestige, no matter how faux it is. After all, if a purchaser is aware of the risks, buying a problematic product may cause her little or no harm and even provide her with some psychic benefits in owning a not-genuine positional good. Rhetorically countering this state of affairs has proved to be a daunting, indeed almost intractable, challenge. Or does it just seem so?

Photo on upper right by JoelnQueens is licensed under the Creative Commons Attribution 2.0 Generic license.

Photo on lower left by stallio is licensed under the Creative Commons Attribution-Share Alike 2.0 Generic license.

By Neil Wilkof

8 comments:

Anonymous said...

Neil, vigilence when buying abroad is a perfectly sensible suggestion, assuming that one understands "abroad" in its usual sense. Abroad means not at home, and is a relative term. If it were meant to mean "outside the US", it would say so. It's trite to say that we are all generally more familiar with home than with abroad. It makes sense to be viligent when buying in an unfamiliar market.

Barbara Cookson said...

The complicit buyers are those that want something they can't afford. Its a common condition. Sometimes its poverty and other times its greed. If you want to own an exclusive brand you have to work on the exclusion element and that means making life as difficult as possible for counterfeiters while showing some compassion to those you exclude in order to generate your brand value

Peter Smith said...

Many of the official pronouncements about counterfeits seem to be based on the dubious premise that each sale of a counterfeit product equates to a lost sale of a genuine product. In contrast, I suspect that many buyers justify the knowing purchase of a counterfeit to themselves on the basis that they could not (or would not) have afforded the genuine product anyway.

IP Factor said...

One of my clients won a NASA prize for best domestic product (mifold) last year. His product is a foldable child seat for a vehicle that is about the size of a book. It fits into glove compartment, under the front seat (not advised), in child's school bag or mother's handbag. Now we've registered TMs, designs and patents in major jurisdictions, but that has not prevented copycat products with very minor difference in name being sold on Amazon for reduced prices around the world. The fakers have even lifted photos from clients website, so are using photos of his kids to sell their fake product. Now despite having the full gamut of registered IP rights, we've found Amazon to be less than helpful in taking down the advert for the fake. We've contacted their IP dept and had banal responses.

What we did, which worked, is to point out that his product has safety approval and the fakes do not. Amazon could be considered responsible in case of the seat failing in a collision. Clearly safety is not an issue for all design registrations. Where it is an issue, this may be the most effective way to enforce. We've used the issue with Amazon but also in other ways in a number of jurisdictions.

Cynic said...

The problem is not easily resolved because, particularly in fashion, copying is accepted by the market on both sides. A look becomes that season’s look which is copied by all and sundry. How then to convince someone that buying the same style (even with inferior material or finishing) in a shop such as Primark is allowed but buying the same from a flea market is wrong?

Anonymous said...

You aren't going to persuade people not to buy known fakes on the tax argument when there are regular stories breaking about multi-national companies employing complex tax avoidance strategies solely to minimise the tax they pay. It appears quite possible that the manufacturers of the cheap copies are paying a higher rate of tax than the brand owners themselves.

In the absence of evidence that terrorist groups are genuinely funding themselves through the sale of knock-off fashion items, I think the public are rightly cynical of the terrorist funding arguments.

If these two arguments fall away, it is extremely difficult to persuade people that buying a $30 copy of a $3,000 handbag is wrong.

Anonymous said...

I had a client who said they would love it if their brand became desirable/luxury enough for it to be counterfeited!

Chris Meadows said...

I remember back in the ’90s, SonMay CDs were often available at anime conventions. Counterfeit copies of Japanese original soundtrack CDs, they were considerably cheaper than the $30 it would run you to get a “legitimate” Japanese original—and since they were digital in nature, the counterfeit was a bit-for-bit copy of the original.

Some fans took the moral high ground, but a lot didn’t. (And really, it was a little hypocritical for those fans to take that moral high ground, given how the entire fandom was built on illegally copying Japanese shows and superimposing English words over them.) And to starving college students, anything that got them the same music for much less money was a great deal.

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