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Counterfeit Fight

Businesses must not be distracted from brand protection efforts in the economic downturn a trade association has urged.

According to a recent survey carried out by intellectual property firm Marks & Clerk, as many as 80 per cent of managers are ‘too busy’ to spend more time on brand protection or only get involved once a counterfeiting or competitive threat has emerged. Just a fifth are spending more time on brand protection.<br><br>Against this backdrop<br><br>The International Authentication Association (IAA), a global organisation set up for the fight against counterfeits, has stressed the need for brand and product owners to have a comprehensive and constant anti-counterfeiting strategy in place. It warns against a reduction in time and investment on brand protection.<br>The results come at a time when the need for brand and product protection has never been greater with the threat of counterfeiting and piracy spiralling. The latest report by the Organisation of Economic Development (OECD) estimates that the global counterfeiting market has topped $200 billion, while the Counterfeiting and Intelligence Bureau (CIB) predicts fake goods will make up to 7 per cent of world trade.<br>Chair of the IAA, David Howard, explains: “There’s no doubt that budgets are under threat in the current climate but not protecting your brand correctly is not an option.<br>“Counterfeiters need little excuse at the best of times and economic hardship is likely to be a recipe for increased criminality. If companies are cutting back on their anti-counterfeiting efforts, the market will be more attractive for fakes.”<br>While companies will inevitably be taking a hard look at their costs, combating counterfeits is proven to be an effective way to maintain turnover and market share.<br>Howard added: “The costs of protecting your products are low compared to the problems and financial headaches that counterfeiting and infringement will bring a business further down the line. Authentication technologies should be a key component of this.”<br>The IAA comprises 20 of the world’s leading brand owners and suppliers of authentication technologies. Among its prominent voices are flagship brands Johnson & Johnson, Honeywell, 3M Brand and Asset Protection, Authentix, Dupont Authentication and Hologram Industries to name a few. <br>The organisation’s raison d’etre is to promote the use of authentication technologies as an integral part of an effective anti-counterfeiting strategy, protecting products, documents and their users from counterfeiting and fraud. Education is a key element of this agenda, with the IAA playing a prominent role in educating government agencies, inter-government organisations and brand owners about the roles and uses of authentication.<br>Howard, who is also director of product protection at Johnson & Johnson, explains: “While counterfeiting and piracy are age old problems, the globalisation of world trade has seen an exponential increase in the scale and effects in recent years. Increased trade, new technologies and ‘grey’ markets, particularly the internet, have intensified already acute problems.<br>“The scale of the threat, and the damage that can be caused, means there’s a compelling need for today’s brand owners to protect their products. Governments too need to ensure the validity of key documents including currency, passports and identity cards. <br>“The International Authentication Association is an important voice for the authentication community. It will promote and explain the uses of authentication in a climate when the potential to benefit from these technologies has never been greater.”<br>AUTHENTICATION TECHNOLOGIES<br>Today, technology provided by members of the International Authentication Association protects global products valued in the hundreds of billions. This includes the majority of the world’s currency, numerous passports, ID cards and other vital documents as well as everyday items such as jewellery, mobile phones, computers and clothing – although we often don’t know it. <br>The threat of counterfeiting is felt across all industries worldwide. All consumer goods, from high-end, luxury goods to everyday items such as clothing and cigarettes, are targets with counterfeiters turning their attention to anything that generates a profit. So too are products as diverse as automotive parts, pharmaceuticals, software and music. The costs, both economic and social, are significant. The revenue, profitability and reputation of businesses can be irreparably damaged, while crime, injury and, in the worst cases death, are social impacts.<br>To combat this threat, brand owners use an array of authentication technologies to protect their products as part of anti-counterfeiting strategies. This includes overt devices visible to the naked eye such as a hologram or colour changing ink. Hidden devices – ultraviolet inks or scrambled images – are also used. These are often revealed to the human eye through handheld inspection devices to increase the level of security.<br>More sophisticated covert devices such as chemical tags in packaging or electronic and embedded codes are also popular, while some forensic devices requiring laboratory analysis are used. A combination of these components is often incorporated into a single device for greater effect.<br>David said: “Authentication technologies are on the front line of the war against counterfeiting every day. Research clearly shows that they can make real impact as part of an anti-counterfeiting strategy.<br> “There are a multitude of technologies that can help examiners quickly and easily identify and protect products in ways that are not obvious to counterfeiters. Unfortunately the role that they play and the impact that they have is not fully appreciated.<br>“One of the key aims of the IAA will be to change this and build a better appreciation of the value of authentication in an anti-counterfeiting and brand protection strategy.”<br>With this goal in mind, the IAA is in the process of developing a new Authentication Framework that will help to develop a common understanding of authentication, its value and, most significantly, assist brand owners in making the case for authenticating and how they should go about it. It is expected to be completed later in 2009.<br><br>The EU has a European Counterfeiting and Piracy Observatory: <br><br>Frequently Asked Questions<br><br>Why do we need an Observatory?<br><br>Over the past ten years the global explosion in counterfeiting and piracy has become one of the most devastating problems facing world business. Twenty years ago, counterfeiting might have been regarded as a problem chiefly for the manufacturers of expensive handbags. But nowadays, counterfeiters have broadened their manufacture to include not only fake electrical appliances, car parts and toys, but also medicines – a development which could have potentially disastrous results (see MEMO/08/299).<br><br>International trade in counterfeit and pirated goods is estimated to have reached USD 200 billion in 2005. Clearly, action is required.<br><br>On 25 September 2008, the Competitiveness Council adopted a Resolution on a comprehensive EU anti-counterfeiting and anti-piracy plan (see IP/08/1416). This Resolution endorsed the need to step up the fight against Counterfeiting and Piracy and called for the creation of a European Counterfeiting and Piracy Observatory.<br><br>The European Commission is pleased to announce the launch of the Observatory on April 2 at a conference on Counterfeiting and Piracy. The overall goal of the Observatory is to produce continuous, objective assessments and up-to-date research that lead to exchange of best practice and knowledge gathering among policymakers, industry experts and enforcement bodies.<br><br>What do we mean by an "Observatory"?<br><br>The structure of the Observatory will be light and flexible. Each Member State of the EU will have a delegate alongside key private sector representatives. The day-to-day operation of the Observatory will be run by the Commission services. The work of the Observatory will be shaped on the basis of a series of regular meetings where the representatives will jointly discuss the work and output of the Observatory and how to best tackle the problems at hand.<br><br>The Observatory will provide a forum for discussions between Members of the European Parliament, Member States, businesses, experts on intellectual property rights, researchers, enforcement bodies to analyse problems and shape best practice improvements. As a result it aims to become a recognised source of knowledge on counterfeiting and piracy and a central resource for enforcers.

Consumers are often not aware that when they buy a fake product there is a good chance that at least part of the money will go to organised crime or child labour. In many cases, fake goods are made under slavish conditions, often by children under ten years of age. Not to mention the widely reported stories from countries where fake cough medicines, life-saving drugs or even contaminated milk have killed hundreds of people and sickened thousands more. Therefore, it is essential that consumers are duly informed about the risks and dangers of buying counterfeit and pirated goods as well as the effect on society as a whole.

The Observatory will aim to identify successful public awareness campaigns, strategies and initiatives within Member States and to communicate successful approaches.

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