Counterfeit spikes and the holiday season

Counterfeit purchases spike before holidays such as Christmas and during designated sales periods, such as Black Friday, Cyber Monday and the January sales.

The Anti-Counterfeiting Group (ACG) has warned of a massive increase of fake goods for sale during the run up to Black Friday and Cyber Monday via online platforms and social media sites.

The terms Black Friday and Cyber Monday were coined to describe the days of bargain-hunting frenzy that traditionally follow Thanksgiving in the US, and mark the start of the Christmas shopping seasons in many countries.

While the days, which fall on 27 and 30 November respectively this year, offer consumers the chance to bag a bargain as retailers slash their prices, it does not come without risks. As studies have shown, there is a higher chance of counterfeit purchases online in the run-up to the holiday period, including Black Friday and Cyber Monday, as well as in the January sales that traditionally follow in the new year.

Too good to be true?

Price drops and online sales make it harder for people to spot a fake, according to the ACG, which cites research by analytics company, Ghost Data, which identified more than 50,000 accounts either promoting or directly selling counterfeit goods on Instagram.

The sales periods tend to tempt consumers into making impulse purchases, enticing them with short-term discounts and adverts online and on social media. These promotions are also used by counterfeiters to market fake goods to consumers and, mixed in as they are with legitimate offers, can often mislead the unwary. This includes not only counterfeit luxury and fashion goods, but also fake toys, electrical goods, pharmaceuticals, mobile phones, chargers, alcohol and beauty products.

However, even those that aren't misled might still proceed to purchase a heavily discounted product, so long as it looks and works like the real deal. The UK IPO’s ‘Annual IP crime and enforcement report: 2018 to 2019’, released in September, reported that in 2016: "more than half of counterfeit and pirated imports to the UK were sold to consumers who actually knew they were buying fake products."

Half of counterfeit and pirated imports to the UK were sold to consumers who actually knew they were buying fake products. 

In that context, the battle is as much for consumer education and awareness, as it is to stop the counterfeiters, and it is a growing battle. A recent report by the EU Observatory described 25 online business models being adopted by criminals as they bring goods to markets, using legitimate shipping and fast parcel operations, trading platforms and payment facilities. These include infringement on domain names (cybersquatting, domain name parking and affiliate marketing); third-party marketplaces; social media and apps; gaming and virtual worlds; email phishing, spoofing and malware; and torrent, streaming and cyberlocker sites.

As the report's authors write: "Over the past few decades the ingenuity of infringers of intellectual property rights appears to have kept track with and even to some extent outpaced the development of the legitimate business models designed to facilitate online commerce. The very success of the legal online business models, often relying on advanced technology, has acted as a spur to those seeking to profit from illegal activity."

What should brand owners do?

As we have previously covered, it’s important to keep in mind that online brand protection differs from its offline counterpart in several important respects. In particular, your online brand protection strategy should respond adequately to the speed and scale at which infringement occurs. That is arguably harder as ever more consumers flock online for their retail needs during the COVID-19 pandemic.

The first step in any online brand protection strategy, therefore, should be to obtain a clear picture of the threat posed to your business and its consumers, and your goals for action.

"Every brand has a different reason to enforce online and must respond to its own set of market conditions and challenges," explains Anca Draganescu-Pinawin, Novagraaf's Head of Online Brand Protection. "This is why Novagraaf's dedicated team of Online Brand Protection attorneys work closely with our clients to craft and carry out a bespoke strategy for online enforcement. The precision strikes that we execute translate into high success rate and a strengthening of the brand’s overall market position."

To find out more about Novagraaf's Online Brand Protection services or to get started with your own bespoke solution, speak to your Novagraaf attorney about a free online brand screening. For additional information or resources, please download our white papers on Online Brand Protection and TikTok best practices.