The Threat of Brand Imitation and Counterfeiting: A Growing Problem for Businesses

Brand imitation is an act of copying or counterfeiting other brand illegally without authority or right from the brand owners or corporations. Theft is the simplest word that describes what brand imitators are doing. They are enemy of creativity, of all the hard-working creators and of all brand owners. This type of imitations and counterfeiting are now increasing at an alarming rate. The World Customs Organization reported that $450 billion was lost annually from counterfeiting.

And this has been growing at 10 to 15 percent per year due to the existence of economic globalization, overseas production, outsourcing, high financial incentives for counterfeiters and the active participation by organized crime and terrorist organizations in the world of commerce. Companies which use branding as their marketing strategy suffers a huge amount of lost considering that counterfeiters are increasingly sophisticated, and will target anything if there is money to be made - no products are immune from attack.

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Counterfeiters choose to engage in this illegal act because they do not need to buy the products from the company and pay taxes to the government, they just make it. Introducing the counterfeit product to the public is not a problem considering that the imitated brand is already popular to the consumers. The price of counterfeit product is much lower than the original one which makes it affordable and attractable to the consumers. Today, companies are fighting back to regain control of their brands and making sure a continued survival in the business world.

However, counterfeiters are so resourceful and serious problems require serious tools to insure success. Getting rid of counterfeiters would require more resources and cooperation between the branding companies, the government and the consumers or buyers. Types of Brand Imitations There are six different types of brand imitations; these are counterfeits or product pirates, knockoff or clones, design copies or trade dress, creative adoption, technological leapfrogging and adaptation to another industry (Wong. 2005). Counterfeits or Products Pirates

In counterfeits or products pirates, the original artwork is reproduced, as well as trademarks and logos in some cases, and IS likely to mislead the consumer into believing that they are buying a genuine legitimate product (ifpi). It is usually used to describe the intentional violation of copyright on a commercial scale. Music and movie piracy is one of the examples; it is an act of unauthorized copying or publishing with compensation without a proper or legal permission from the music or movie company. This has become a worldwide problem in entertainment business today. Knockoff or Clones

Knockoff or clones, is a copy or an imitation which closely resemble to the original product. Common targets are bags, clothes and other personal items. These illegal knockoffs pose a significant problem to the industry and the same time to the consumers. Most cases the counterfeiters’ goal is to confuse the consumer into thinking that they are actually purchasing the original product. Design copies or “Trade Dress” Design copies or “Trade Dress” is a trademark concept. “Trade dress” consists not of words or symbols, but of a product’s packaging or image (Yarbrough. 2001).

It is a distinctive, nonfunctional feature, which distinguishes a merchant’s or manufacturer's goods or services from those of another. The trade dress of a product involves the "total image" and can include the color of the packaging, the configuration of goods, etc. (Spiegel ; Utrera. 2005). Examples include the packaging for a cereal, theme of a restaurant, and the color scheme of a fast food. Such a broad and ambiguous definition makes trade dress very easy to manipulate. Help from a professional is very imperative to protect against trade dress infringements to the survival of a business.

Technological Leapfrogging Technological leapfrogging is a theory of development in which developing countries skip inferior, less efficient, more expensive or more polluting technologies and industries and move directly to more advanced ones. The main aim is to promote greater access of computer and other technologies, to those people who would normally have no way of accessing it on their own. A frequent example is countries which move directly from having no telephones to having cellular phones, skipping the stage of landline telephones altogether (Wikipedia. 13 March 2007) Effects to the Branding Companies

There are many possible effects of companies face when their brands, trademarks or copyrights are illegally imitated or counterfeited. The following includes: Loss of revenue and profit Due to unfair competition between original and counterfeit products, the loss of revenue and profit of branding owners is the most obvious and direct consequence of counterfeiting. Most of the consumers tend to buy counterfeit items for the reason that it is cheaper and affordable than the original one. In effect the brand owners will experience loss of revenue and profit. Damage to brand equity

By far this area carries the greatest potential damage to shareholder value—the utility and perception of the brand in the eyes of the consumer. This is especially true when trying to establish new brands or entering new geographic markets (Hart. 2006). Product liability Brand owners are always held liable for the performance of their product. Once the product is brought into the market, its defects or failure of performance will be blame to the brand owners. Even if the product is an imitation, knockoffs or original, brand owners are held liable to the consumers unless proven otherwise.

Bad publicity Bad publicity is one of the possible effects if consumers complain on the bad performance of the counterfeit products. In result consumers tend to avoid the product including the original. Product recall People often think of product recalls as quality problems. However, if a manufactured product is a component or a product uses sourced components, the brand owner may still be subjected to a product recall due to component counterfeiting. Such is the case with Kyocera cell phone batteries, wherein a supplier introduced counterfeit components into the product.

This led to safety problems for Kyocera and a total recall of all batteries associated with the particular supplier (Hart. 2006). Bankruptcy This is the worst thing happen to a branding company which becomes a target of counterfeiters. Many corporations or business companies got closed due to the massive competition of counterfeiters. Possible Solutions for Brand Imitation Successful brands today are increasingly being undermined around the world by counterfeiting, diversion, piracy and other illegal endeavors.

Protecting the integrity of a company's brand is increasingly complex. No single strategy or tactic will effectively address brand protection issues. Branding companies should provide a protection strategy to protect their product against counterfeiters. Investigation Most of the counterfeiters are using the same procedure or process in imitating a product. It is important for the company to know how the product is counterfeited or imitated. So the company needs to investigate a counterfeit product to know the manner and ways it is done.

In this way the brand owners will know how to counter the counterfeiters. Registration Registering the product or brand to the proper authority is important for the protection of the brand owners. An unregistered product cannot guaranty a protection from the law because the enforcement against counterfeiters only operates when a product recognize by the law as original is illegally counterfeited without the permission from the owners. Enforcement Coordination with the proper authority is essential considering that only the brand owners know how to spot their imitators.

Although it is the job of customs and law enforcement personnel to prosecute the criminals who counterfeits, brand owners must ensure that these personnel are doing that right thing in spotting the fake products. Education Public education is also vital to influence the consumers in buying counterfeit products. Some people consider counterfeiting is harmless and not a crime. Consumers choose to buy these counterfeits because it is cheap and affordable. Not knowing that the quality of the counterfeit may provide a damage which is more expensive than the price of the counterfeit.

Lobbying Having a positive influence to the government is also one of the possible solutions to stop or minimize brand imitation. Brand owner should make a consultation with government authorities to ensure that the government creates a law to protect the brand owners and punish the counterfeiters. Security features There are security features that can be place in the brand item to avoid imitation or to identify genuine from fake. These are the holographic labels, serial numbers, security papers, security print and layered solutions (ACL).

These security features are difficult to imitate, but due to the fact that counterfeiters are getting sophisticated some counterfeited items also bares same security feature to avoid detection from the consumers. In the United States, Dr. Hayward’s talk, entitled “Signature DNA Embedment and Authentication for Secure Documents,” addressed this disturbing trend and presented the use of DNA embedment to combat counterfeiting in secure documents. DNA embedment offers a broadly applicable, convenient and inexpensive way to help protect currency, passports, driver’s licenses, credit cards and other documents from counterfeiting (Counterfeit.

2007). Consumers also have significant role in the solution for brand imitations. Buyers should be more vigilance in buying products. Counterfeiters now a day are using the online shops to sale and use all possible resources to avoid detection. So in order to counter the counterfeiters the consumers should be very more vigilance and observe the following tips in shopping: Be careful where you buy. To find a trusted reseller online or at a brick-and-mortar location near you, visit the product manufacturer's Web site. There, in many cases, you can find a complete list of authorized, legitimate dealers. Avoid too-good-to-be-true pricing

Before you buy, find out the price that major sellers or the manufacturer charges for the product. Pricing can be competitive online, but there are limits. For example, PC World bought the counterfeit Nokia battery for less than half what the real one cost at authorized dealers. Such deep discounts are unlikely to be legitimate. Also, some dealers do a bait and switch: You think you're purchasing one set of parts--say, Micron memory--but the dealer sends you an obscure or less-costly (to the retailer) brand instead. Pay attention to performance problems Counterfeit computer memory can lead to PC system freezes or crashes.

Fake inkjet cartridges may produce substandard printouts, have a shorter-than-expected life p, and leak all over the inside of your printer. A bogus cell phone battery may overheat, yield reduced airtime, or even explode. Make sure the product meets your PC's required specs before you buy, and keep track of your device's performance before and after the new purchase; if it isn't performing properly, demand your money back. Check with vendors Visit the vendor's Web site to see if it has an authentication program through which you can check serial numbers and the like to verify your product's legitimacy.

For example, Nokia batteries have a holographic logo and a hidden serial number that customers can uncover and then look up online or via text message; Kingston offers a similar online verification method, where you type in the serial number of a suspect memory module to investigate it. Beware of auctions Many auction sites offer very competitive prices, but some may sell fake merchandise. Check seller ratings carefully, and consult with the Better Business Bureau to research sellers that operate storefronts at auction sites like eBay (Spring. 2006). Beware of Goods that Lack Proper Markings

Most legitimate goods and packaging contain manufacturers' codes, trademarks, copyrights, toll free phone numbers, etc. Many also contain bar codes, recycling signs or holograms. The more familiar you are with the brand, the easier it is to note whether there is missing information. Beware of Goods Where Country of Origin Identification is Missing Many high end designer products are manufactured exclusively in the United States . Others are made in France , Great Britain , Italy , Brazil and other countries. Many of the counterfeit products come from China , Korea , Taiwan and other Asian countries.

Since counterfeiters realize that many consumers would become suspicious of a $200 designer handbag or a $100 pair of designer sunglasses if a "Made in China " tag was affixed to the item, they remove the tags showing the country of origin (icponline). Counterfeiters will only stop producing counterfeit products if consumers stop buying it. No matter how committed the branding companies and government authorities in fighting or stopping these illegal acts the most effective solution is to stop patronizing these illegal products. No buyers, no sellers. References ACL Security, Inline Printing Solution.

http://www. aclsecurity. com/ Counterfeit (23 April 2007). New "DNA" to Protect Secure Documents. http://www. counterfeit. com/main/news/detail/969. html Hart, Stanley G. (2006, September 18). Vigilance Necessary to Prevent ‘Brand Pirating’. http://www. naturalproductsinsider. com/articles/06sep18feat3a. html IFPI. http://www. ifpi. org/content/section_views/what_is_piracy. html LP online (1998). Tips for avoiding Counterfeit Product. Avoiding Counterfeit Product. http://www. lpconline. com/counterfeittips1. html Spiegel & Utrera (2005). Trade dress. http://www. amerilawyer. com/trademark/tm_tradedress.

htm Spring, Tom (3 January 2006). Fakes. PC World. http://msn. pcworld. com/printable/article/id,123792/printable. html Sylvia. Music Pirating. Cybercimes and Ethics http://www. seedwiki. com/wiki/cybercimes_and_ethics/music_pirating. cfm Wikipedia (13 March 2007). http://en. wikipedia. org/wiki/Leapfrogging Wong, Dr. John (2005). Imitation Strategies. IOWA State University . http://www. public. iastate. edu/~sjwong/pdf540/imitation_strategies. pdf Yarbrough, Robert J. (2001). Recent Developments in Trade Dress. http://www. yarbroughlaw. com/Patent%20Articles/Tradedress2. htm

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