Combating product piracy

It was a sensation: At the beginning of December Birkenstock announced that it would cease supplying Amazon EU at the beginning of the year. The family-owned company therefore drew attention to a major problem: product piracy and counterfeit brands cause enormous damage every year which is expected to reach 2.2 trillion euros by 2022.

Birkenstock complains to the world’s largest online retailer that a number of legal infringements occurred on Amazon’s “Marketplace”, which the platform operator had not prevented on its own initiative. Birkenstock had repeatedly complained that there were recurring product counterfeits of inferior quality, infringing trademark rights and deceiving consumers about the origin of the goods. In January 2017, Birkenstock had already stopped supplying Amazon USA after a series of similar incidents in the United States. In an interview with Luna Journal, Birkenstock’s press spokesman gives further details:

Damage caused by counterfeiting runs into trillions

The sales and image damage caused by plagiarism is considerable. The German mechanical and plant engineering sector alone, which is particularly hard hit, estimated the damage caused by product piracy to be 7.3 billion Euros in 2015 – that corresponds to 34,000 jobs. There has been a strong increase in the number of cases worldwide: According to the International Trademark Association, the value of counterfeit brands is expected to rise from 882 billion euros in 2013 to 2.2 trillion euros in 2022. That would mean a loss of 5.4 million jobs.

Favorable price and lack of product safety

The Internet is making it increasingly easier for fraudsters to produce and sell their goods in intricate ways. High quality branded products are often copied and sold as originals. Especially when buying online, it is difficult for the customer to see through. Many of them are lured by the low price. For this reason, the brand is threatened to lose not only sales but also its image when it comes to counterfeit products. Not to mention possible damage that may be caused by improper processing of the plagiarism. Heike Wilsdorf, press spokeswoman of the main customs office in Dresden, which confiscated products suspected of infringing intellectual property rights in more than 3800 cases in 2016: “Many goods ordered via the Internet and originating from a non-EU country do not meet the necessary product safety requirements. From the EarPod to electrical and electronic parts to medical instruments, we continue to identify goods that can endanger the safety and health of our people.”

High-quality toys are also copied

The Plagiarius campaign selects the most audacious counterfeits every year. A toy excavator from the Fürth-based toy manufacturer Bruder, which was copied by a French company, was also included. All typical elements such as the handle to move the excavator arm were adopted, the only difference being that the plagiarism was somewhat smaller than the Bruder’s original. The opinion of the Plagiarius experts is clear: “The Internet and digital communication are currently the main cause of the rapid increase in product and brand piracy. Although international police authorities successfully close tens of thousands of websites every year due to trade of counterfeit products, the supply of illegal brand and design products remains high. Usually the fraudsters successfully continue their business within a very short time under a new company and domain name.”

Affected companies find customs support

What can companies do if they become aware of counterfeit products on the Internet, at trade fairs or other channels? Among other things, you have the possibility to assert claims for injunctive relief, damages or destruction. It is, therefore, advisable to collect as much evidence as possible. Adidas, for example, asks its customers for information such as product and packaging photos and a copy of the purchase receipt if buyers suspect they have purchased an Adidas counterfeit. Customs can also help. Its central intellectual property office approves applications for the confiscation of goods at the border. Every holder of an intellectual property right has the possibility to file such an application with the ZGR. If the application is granted, all customs offices in Germany or – depending on the application submitted – in the European Union take action if they detect goods which infringe the rights of an applicant in connection with the cross-border movement of goods.

Product piracy specialists can be helpful in the pursuit of piracy

There are also service providers who specialize in the prosecution of product piracy. Counterfights Anti-Piracy made a name for itself in May 2017, when it helped to catch a top e-book pirate. According to the company’s cautious estimate, the offender had sold several hundred thousand euros with his illegal offer. Counterfight’s anti-piracy owner Andreas Kaspar estimates that counterfeiting has increased the level of product piracy via online platforms, whereby counterfeits have become much more valuable over the years and come onto the market faster. Kaspar proceeds as follows when commissioned by a customer: “As a rule, we carry out an initial analysis in which we obtain a comprehensive picture of the platforms on which the counterfeit products are offered. Based on the results, we can assess how extensive the piracy problem is for the customer. In discussions with him, we present various measures to curb or prevent the sale of counterfeits. Here, it is particularly important to examine whether it would be sufficient to have only the counterfeit products removed from the sales platforms in order to deprive counterfeiters of their market. If the counterfeit products are mainly imported into Germany from abroad, confiscations at the border by customs should also be exported. We also recommend that the manufacturer informs consumers of the counterfeit goods and, where appropriate, advises them not to use the counterfeit goods. In addition, we assist customers in identifying and legally prosecuting traders of counterfeit products or trying to locate the production sites.”



Image: Birkenstock


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