Dealing with brand counterfeiting

The counterfeiting of brands is a common challenge the world over. According to the Counterfeiting Intelligence of the Chamber of Commerce, 5 to 7% of all goods traded globally are counterfeit. Contrary to the misconception that this only affects large companies and global brands, brand counterfeiting is a problem to small and medium enterprises (SMEs) as well. Brand counterfeiters target successful brands and these are found in both large companies and SMEs.

The perpetrators of brand counterfeiting do so out of ignorance or willingly to swindle the people who wish to buy genuine brands but cannot afford them. Those who do so out of ignorance believe that copying successful brand names, logos and slogans and pasting them on their own brands with misleading differences is all they need to trade profitably. In the manufacturing sector brand counterfeiting is carried out through refilling used packaging, tampered goods, look-alike brands, illegal trade, illegal franchising and even theft of goods. In the services sector counterfeiting is usually takes the form of unauthorised use of brand logos, names and, sometimes, brand slogans. The risks posed by brand counterfeiting include loss of revenue as brand counterfeits usual sell the counterfeit brands at way lower prices to make easy and quick money which negatively affects the original brand’s bottom line.

In Zimbabwe, like any other country, brand counterfeiting is prevalent.  Brand categories which suffer from the vice include the ice cream and beverages manufacturing. The perpetrators in some cases are former employees who get to know about the process involved in the manufacturing of the target brand. Whether you run a large corporate company or an SME, brand counterfeiting is a real threat and here a few strategies to counter it.

Anti-counterfeiting strategies

These are divided into legal, business, technical, and enforcement strategies.

  • Legal strategies

These are strategies which involve taking proactive legal steps to protect brands through registering brands with the Zimbabwe Intellectual Property Office (ZIPO) and the African Regional Intellectual Property Organisation (ARIPO) as trade or service marks and patents in the case of designs. This makes it easy for the registered trade, service marks or patents to sue perpetrators in courts of law to stop the counterfeiting.  Local brands that have benefitted from this strategy include Amalgamated Regional Trade (ART) whose popular Eversharp ballpoint pen was saved from a local businessman who was manufacturing counterfeit pens from China and Innscor Africa which successfully used courts to stop a Goromonzi SME business owner who intended launch a fast foods business using brand names which closely resembled its own.

  • Business strategies

These are strategies which are pursued in the normal course of business. They include brand vigilance on the part of an enterprise’s management and staff members. The aforementioned Innscor and Eversharp cases were picked as a result of staff brand vigilance on the market. They include advertising campaigns warning the market of the existence of brand counterfeits. The advertisement messages, apart from warning, give counterfeit tell-tale signs to look out for. Enterprises in the same industries which are facing counterfeiting can join forces to fight the vice. Other business strategies include changing packaging designs. In 2016, faced with counterfeit ice cream manufacturers whose vendors’ uniforms closely resembled its own, Dairibord Zimbabwe had its name and the year 2016 embroidered at the back of its vendors’ uniforms. During the previous years it routinely published advertisements educating the market on what to look for in a genuine Dairibord vendor such as a branded cart and a vendor number among others.

  • Technical strategies

Technical strategies involve the use of technical methods to identify a brand. These include bar codes which uniquely identify brands and can be read by scanners. Coding, which is the ability to apply numbers or letters in a structured way which can then decoded to produce variable information. In its simplest form coding can be used to mark information like production batch numbers and best before dates. Coding equipment is expensive and, therefore, most counterfeiters cannot acquire them making it difficult for them to perfectly copy targeted brands. Local companies which use this strategy include Delta Beverages, Lyons Zimbabwe and Schweppes Zimbabwe. Other technical strategies include the use of temper-proof closures. For example, in addition to the use of tamper-proof closures ZLG introduced the shrink-wrapping of its water bottle closures using transparent plastic to further enhance the distinctiveness of its brand and discourage counterfeiting.

  • Enforcement strategies

An enterprise can come up with the best anti-counterfeit strategies but if they are not enforced they can become useless as brand counterfeit perpetrators are always working on ways of continuing their business without falling foul of the law. They are always scheming to copy a trademark-registered brand name or logo without being guilty of infringing the registered trademark. Consistent use of a registered trademark makes it difficult to copy. Inconsistency in the use of the registered trademark gives room to counterfeiters to plot ways of going round the trademarked name or logo. Another enforcement strategy is the use of raids to discourage production of counterfeit goods. Note that raiding the counterfeiting production facilities requires the police. In fact, it should be carried out by the police after receiving a report from a victim enterprise. The police usually seize and destroy the production equipment.

Brand counterfeit fighting is an ongoing process which requires always having boots on the ground and continuous vigilance on the market. It needs commitment in terms of time and financial resources. While daunting, dealing with counterfeiting is surmountable and is key to the continued existence of successful of brands.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s