The advent of the internet has provided many avenues for businesses to grow in a global market. The technology has positively and negatively affected many markets across the world. The negative impact of technology is growing and many businesses are bearing the brunt of that. Brand owners invest a lot of money, time and resources on protecting their brands and trademarks. But even after all the measures, the counterfeit market is booming rapidly.
The Global Brand Counterfeiting and Trademark Infringement Report, 2018 has addressed the issue of proliferation of trademark counterfeiting in this technologically driven era. As per the report the amount of total counterfeiting globally has reached up to 1.2 Trillion USD in 2017 and is bound to reach 1.95 Trillion USD by 2022.
The report has analysed that out of the total losses incurred due to counterfeiting approximately 500 Billion USD is from consumer goods and 8 to 10 percent of this is contributed by – Clothing & Textile, Footwear, Cosmetics and Perfumes, and Watches.
The globalization of trade and communication has offered unparalleled opportunities for organized crimes to engage in illicit trade and counterfeiting so as to increase their economic influence. The report has focused on those economies where the consumers have the highest buying power namely, France, Germany, Hong Kong, China, Italy, Japan, Singapore, UAE, UK, and the USA.
As per the report global online luxury fashion market is growing at a rate of 15% per annum and will reach up to 11 billion USD by 2020. Whereas, 1 out of 5 luxury goods sold on online platforms is a counterfeit product. In addition to that cross-border trade in counterfeit goods fuel the organized crime network which in turn affect the whole economic growth of a country.
A counterfeit trademark passes through many countries to reach its final destination. And these activities are conducted without any knowledge of the trademark owner. This sort of unawareness has been created due to the furtive and global nature of illicit trade, and also the freedom with which such trade activities are conducted in the global economy.
The report has emphasized on the fact that the growing scale of trade in counterfeiting goods can be attributed to globalization. As globalization, has turned out to be the main reason for the growth of counterfeiting activities, the customs officials have been recognized as a key component of an effective and efficient anti-counterfeiting strategy. They are updating their technologies constantly to discover counterfeited goods, and they approximately seize fake products with a value of more than 5 billion USD annually.
Customs officials in most of the countries are open to collaboration with brand owners, so as to easily identify the counterfeit goods. The brand owners have also taken a step forward by helping the customs authorities to stop counterfeiting.
Globalization has also lead to the establishment of free trade zones. These zones provide leverages to the illicit counterfeit sellers. Currently, there is an estimate of 4,200 free trade zones and special economic zones around the world.
The report has suggested that the enforcement of border measures by customs authorities especially in the FTZs should be done within the appropriate time so that the counterfeit goods are stopped from entering the legitimate distribution channel.
The methods and tools which are used by the offenders are becoming very sophisticated and varied with every passing moment. With the innovation in 3D printing technologies, this menace is scaling like never before. The report finds that more than 22% of the 3D printers are somehow linked to production of fake products and prototypes.
The emergence of e-commerce and social media platforms is also one of the chief reasons for the constant growth in the counterfeiting. According to the report, Asia Pacific accounts for more than 50% of the total counterfeited products that are being sold online.
The report focuses on greatest challenges faced by the law enforcement agencies regarding illicit trade and intellectual property crimes. These crimes have generated serious economic challenges along with social and environmental harm. The illegitimate acts also have a bad impact on the overall growth of the businesses.
A substantial number of governments of various countries have enacted laws and legal regulations for safeguarding the rights of the brand owners. Many international laws and treaties have been signed so as to combat counterfeiting, but despite all the efforts, there is no end to this crime. In EU alone the authorities are detaining almost 115 thousand counterfeit trademarks every year and yet the amount of counterfeiting is still increasing. Many luxury brands have suffered huge losses due to increase in trade of counterfeiting goods.
The report explicates that the problem of counterfeiting is longstanding and is growing more and more in scope and magnitude. The government and businesses are concerned because of the adverse impact of such illicit activities. Counterfeiting also poses threats to the welfare of consumers, along with that it also disrupts the whole society on various levels and harms the reputation of the businesses. Counterfeiting has amounted to great losses for the brand owners and especially the luxury brands. The report has made conscious efforts to curb this issue by providing various legal and technological recommendations which are very valuable for the brand owners in order to protect their trademarks from being infringed.
1. Executive Summary
2. Scope and Approach
2.1. Background – The Era of Global Online Shopping
2.2. Definitions & Terminologies
Section 1 – The Fault Lines of Trademark Silhouette
3. Drivers of Counterfeiting
3.1.1. Borderless world
3.1.2. 3D Printers
3.2. Economical Drivers
3.2.1. Manufacturing Outsourcing
3.2.2. The Price Equilibrium
3.3. Social Drivers
3.3.1. A Customer driven by Self Actualization
Section 2 – The Demand for Counterfeited Goods
4. The Market Size of Counterfeit Goods
4.1. By Value
4.2. By Industry
4.3. By Region
4.4. By geography
5. Sales Medium of Counterfeit Goods
5.2. Online Medium
5.2.2. Social Media
Section 3 – Supplying the Counterfeits
6. Illicit Value Chains – Shipments & Drop Shipping
7. Trade Routes - Borders & International Trade
7.1. Clothing and Textile
7.3. Cosmetics and Perfumes
7.4. Leather Articles and Handbags
Section 4 – The Buyers Psyche
8. Global Counterfeiting Perception Index
Section 4 – Governance for Safeguarding Creative Industry & Trademarks
9. Analysis - Agreements on Intellectual Property Rights
9.1. Trade Related Aspects of Intellectual Property Rights, (TRIPS)
9.2. Anti-Counterfeiting Trade Agreement
9.3. EU Directives and Regulations
9.3.1. EU E-commerce Directive
9.3.2. EU Customs Regulation
10. Analysis - Secondary Liabilities
10.1. Auction Sites
10.2. Internet service providers
11. Country Analysis
11.1. China – Trademark & Anti-Counterfeiting laws & frameworks
11.2. France – Trademark & Anti-Counterfeiting laws & frameworks
11.3. Germany – Trademark & Anti-Counterfeiting laws & frameworks
11.4. Hong Kong – Trademark & Anti-Counterfeiting laws & frameworks
11.5. Italy – Trademark & Anti-Counterfeiting laws & frameworks
11.6. Japan – Trademark & Anti-Counterfeiting laws & frameworks
11.7. Singapore – Trademark & Anti-Counterfeiting laws & frameworks
11.8. United Arab Emirates – Trademark & Anti-Counterfeiting laws & frameworks
11.9. United Kingdom – Trademark & Anti-Counterfeiting laws & frameworks
11.10. United States of America – Trademark & Anti-Counterfeiting laws & frameworks
Section 5 – Strategic Insights & Recommendations
12. Recommendations for Anti- Counterfeiting
13. Case Studies
13.1. Too Big to Check & Validate
13.2. Under Someone else’s watch
14. Logistics – Packages & Parcels
15. The Fault Lines
15.1. Brand - The insignia
15.2. The Case of Brand Ambassadors
15.3. Digital Marketing – Where you are getting it all wrong
15.4. Advertisement - When You don’t sell, you provoke to buy
15.5. Boundless Possibilities - of Tags, Hashtags & Search
15.6. Short Sightedness - Fast Fashion
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