A US court has sentenced an online seller of fake handbags, watches, shoes and clothing to two and a half years in federal prison for conspiracy to traffic in counterfeit goods, conspiracy to commit money laundering, and failure to appear. The court also seized the property and funds of David Joseph Gruber (known as ‘China Dave’), as proceeds of the offences.
Gruber was prosecuted for selling goods and products bearing counterfeit trademarks owned by Burberry, Gucci, Louis Vuitton, Chanel, Juicy Couture, Rolex, Hermes, Dolce & Gabbana, Versace, Tiffany & Co., Prada, Coach, Breitling, Nike, and Fifth & Pacific Companies.
Counterfeiting is a major issue for companies and customs officials, with the EU also upgrading its strategy for cracking down on fakes in the last year.
All types of products are at risk
Counterfeiting affects a broad a variety of goods; from t-shirts to handbags, machinery and automotive parts, toys, batteries, pharmaceuticals, perfumes and electrical goods. As a general rule, if a company has a product or a brand that is popular and in demand, then it’s likely that it is or will become a target for counterfeiters.
What can you do about it?
The threat posed by counterfeiting activity can be hard to quantify, but it should not be underestimated. Typically, a company’s sales and revenue will not only be impacted, but it will also suffer damage to brand reputation (e.g. where a customer mistakenly believes that they have purchased an authentic product and are disappointed with its quality), as well as loss of licensing revenue. Counterfeit products also pose considerable health and safety risks to consumers, as there is a high likelihood that they will be substandard, dangerous or faulty. For such reasons, it is advisable for companies to develop an effective anti-counterfeiting strategy if they are to deal with the growing and persistent trade in fake goods.
Tools and techniques for taking action
Brand owners can call upon a variety of tools to act against counterfeit activity once it has been identified, but strategies and techniques to prevent and identify activity are of particular importance. This includes, for example:
- registering key brand and product names as trademarks, and innovative design features as design rights, so that you can seek legal redress for any unauthorised use of those trademark or design rights (e.g. for the manufacture, distribution and sale of trademarked goods);
- raising awareness of the issues within your business by educating your staff, business partners and customers;
- actively monitoring the online and offline market, recording, reporting and carefully analysing the findings;
- working closely with law enforcement authorities such as the Border Force (Customs) and local Trading Standards offices that have a statutory duty to enforce the criminal provisions of Trademarks Act; and
- taking enforcement action where appropriate.
An important element in fighting counterfeit activity is internal education. Your staff, distributors and retailers are your eyes and ears in the market, so it’s important that they know what to do when they spot potential counterfeit or unauthorised sales. Consider running general seminars on IP crime to make your employees aware of the importance of IP assets and the threat posed by the trade in fakes, as well as specific training for those employees that are on the ground to help them recognise and report counterfeit products.