Brand Protection Strategies and Complimentary Resources
The following discusses severe problems that can be caused by the lack of a brand protection strategy, presents a new possibility where infringements and losses are reduced, and proposes a solution that funds itself while simultaneously stopping infringers.
The Problem: Billions Lost Each Year Due to Trademark Counterfeiting, Infringements, Knockoffs, Fake Goods, and Fake Websites
The type of losses experienced by businesses due to knockoffs is widespread and tends to evolve over time as technology progresses presenting new opportunities for ill-gotten profit. Examples of losses include lost sales, leads diversion, initial interest confusion, angry customers, misdirected complaints or reviews, confused customers, damage to goodwill and reputation, misdirected product returns, higher pay-per-click bidding costs, reduced margins, and even theft of customer credit card numbers.
Generally, for most businesses, a specific pain point leads to a discussion of how to stop the losses. For example, this could be infringing use of trademarks to divert leads and sales by potential customers seeking a brand online. In other words, this is a “lost sales” scenario. A closer investigation may reveal misdirected reviews or complaints about the infringer’s knockoff product by third parties believing to have purchased the brand’s authentic product. While this type of harm is harder to “quantify,” it is real nonetheless.
You can find a detailed discussion of Losses Caused by Knockoffs and Infringement in our blog series.
The Possibility: Protecting Brands Through Anti-Counterfeiting Measures
Once a brand owner has quantified the harm and losses incurred by the knockoffs and infringement, preliminary “wins” for an IP-enforcement program to be considered successful can be set. “Wins” may include stopping infringement, correcting false reviews, generating revenue to fund further enforcement efforts, and/or obtaining federal court injunctions to ward off future infringers.
With a clear view of the program objectives, we next determine the program deliverables and stages. For example, a simple brick and mortar campaign against trademark counterfeiters of physical luxury goods could include (i) an initial demand letter, (ii) request for an audit of the sales of the counterfeit product, (iii) supplier information, and (iv) a subsequent settlement agreement with a payment based on the audited sales information. At any point in the process if the counterfeiter becomes non-compliant, litigation or other alternatives can be added as an additional stage. The specific stages and their order are highly dependent on the type of infringement occurring as well as the place it occurs (e.g., online marketplace versus physical retail) targeted by the bad actors. A high functioning program should fund itself through recoveries from the infringers.
One strategy that helps with future infringers is implementing a deterrence program. For some companies, the infringements are committed by a diffuse group of bad actors that have no relationship with each other. For other companies, there is a specific bad actor or group of bad actors. A victory against this group largely stops the infringement. Deterrence is needed for future infringers. A diffuse infringement situation presents a different problem often referred to as a “whack-a-mole” situation where one infringer is defeated and two more pop up. For this scenario, achieving agreed injunctions that can be shared with future infringers can be very effective. Additional steps include promoting infringement victories in social media and public relations.
The Path: Setting up a Comprehensive and Self-Funding IP Enforcement Program
So how do brands fight counterfeiting and infringers? Through handling thousands of IP disputes and implementing numerous intellectual property enforcement programs, we recommend that brand owners take the following six steps to eliminate harm to their brands:
Step 1: Identifying and Quantifying Losses Caused by Knockoffs and Infringement
Step 2: Marshaling Intellectual Property Assets to Combat Knockoffs and Infringement
Step 3: Designing the IP-Enforcement Program to Increase Market Share by Stopping Knockoffs and Infringement
Step 4: Implementing the IP-Enforcement Program
Step 5: Optimizing the IP-Enforcement Program with Metrics
Step 6: Growing Future Market Share through Proactive IP Strategy
One of the key aspects of a well-designed program is that the legal costs should be offset by the enforcement recoveries. This effectively allows brand owners to turn losses into a revenue stream, which can fund even more comprehensive programs. See our initial post, Importance of Intellectual Property Rights: Increasing Market Share Through Stopping Knockoffs and Infringements, for a complete overview of the above series.
Resources for Brand Protection Strategies and Programs
For more details on the specifics for each of the 6 steps, visit our brand protection resources page for more information as well as access to our comprehensive e-book, which discusses anti-counterfeiting measures, online brand protection, trademark counterfeiting, brand protection strategy, gray market goods, how to fight counterfeiting, and related topics.
