Do more to keep counterfeit goods out of global supply chain, brand owners and intermediaries told
Speaking at a major anti-counterfeiting conference in Orlando, US, Jeffrey Hardy, Director of the ICC initiative Business Action to Stop Counterfeiting and Piracy (BASCAP), urged brand owners and intermediaries to work together with their business partners to stop the infiltration of fake goods into the global supply chain.
Addressing over 550 participants of the Annual Spring Conference of the International Anticounterfeiting Coalition (IACC), co-hosted for the first time by BASCAP, Mr Hardy called for increased cooperation and collaboration on voluntary practices to keep criminal networks at bay, and warned that brand owners could not afford to wait for governments to fix the problem.
“While advocacy with governments will continue to be an important part of the solution, we must act quickly to get our own house in order,” Mr Hardy said.
The theme of the conference, “Securing the global supply chain against counterfeiting and piracy – rights holders and intermediaries working together to stop fakes,” emanates from a 2015 BASCAP report identifying vulnerabilities of intermediaries to infiltration by criminal networks to sell counterfeit goods and presents solutions to the growing problem.
The conference featured high level speakers representing intermediaries, government, intergovernmental organizations and brand owners. Max Baucus, US Ambassador to China and Mike Evans, President of Alibaba, delivered keynote addresses, each calling for brand owners and intermediaries to work together, especially with the increasingly important group of online intermediaries that sell to consumers over the Internet. “Industry needs to develop a sense of urgency for the war on counterfeiting,” Mr Baucus said.
Industry needs to develop a sense of urgency for the war on counterfeiting.
Mr Hardy also disclosed findings from a new BASCAP paper Best Practices for Removing Fakes from Online Platforms based on a 2015 study on the Roles and Responsibilities of Intermediaries and further research. The paper provides a set of recommendations, for online intermediaries and brand owners to implement independently or collaboratively, to keep counterfeit goods off online platforms.
The paper includes specific steps to pre-empt the availability of fakes online, including the adoption of automated risk management tools to stop fakes from entering online platforms.
“The Internet has become particularly vulnerable to counterfeiters and pirates, with a flood of fake goods being sold online,” Mr Hardy said. “Legitimate online platforms – from e-commerce websites to social networks – are being exploited to sell counterfeits and enable illegal downloads of copyrighted material. Counterfeits have crept into legitimate online platforms and it’s nearly impossible for shoppers to determine what’s real and what’s fake.”
Counterfeits have crept into legitimate online platforms and it’s nearly impossible for shoppers to determine what’s real and what’s fake.
“Industry cooperation would help reduce the risk of illegal content that violates intellectual property rights. At the end of the pipeline, it’s the customer who’s harmed by fakes and it’s the brands, artists and creators whose reputation and trust that are jeopardized,” he said.
Recommendations set out in the new paper aim to help companies improve understanding of the scope and availability of best practices; evaluate the effectiveness of measures undertaken; Identify areas that merit greater attention, and gauge progress over time.
At the end of the pipeline, it’s the customer who’s harmed by fakes and it’s the brands, artists and creators whose reputation and trust that are jeopardized.
The paper covers four distinct categories of best practices for removing fakes from online platforms:
- Outline clear terms of service prohibiting use of a platform to sell or otherwise trade in counterfeit or infringing products or services.
- Stronger enforcement of the terms of service between platform owners and traders.
- Implement due diligence checks by platform owners to ensure a basic understanding of who is trading on their platform.
- Adopt automated risk management tools appropriate to the business to identify high-risk behaviours and potential red flags.
“Establishing and enforcing clear contract terms, knowing who is trading on their platform, identifying and guarding against high-risk behaviour patterns, and adopting automated risk management tools are all tried-and-true business practices that are already available to online platforms today,” Mr Hardy said. “Consistent and enduring application of these practices on all platforms is the best supply chain defence against online counterfeiting and the best consumer protection from fraud.”
A recent report by the Organisation for Economic Co-operation and Development (OECD) confirms that counterfeiting and piracy impact almost every product and service category and is a major economic problem that robs the legitimate economy of jobs and growth potential, and puts consumers at risk to unsafe and ineffective products.
The new OECD report indicates that trade in counterfeit goods has grew from US$250 billion annually in 2008 to more than US$461 billion in 2013. According to these findings, counterfeit products now represent more than 2.5% of all world trade-including 5% of all imports into the European Union. Notably, these figures do not include Internet infringements, in-country sales or indirect losses to governments and consumers.
Download Best Practices for Removing Fakes from Online Platforms here.