5 Steps That Businesses Can Take To Avoid Losing Money From Counterfeit Goods

Co-authored by Corey Weinstein

Counterfeit goods are imitations -- products that are made or sold under someone else's name and without that company's permission. Counterfeit goods can include a wide range of industries, from apparel to medication to car parts to electronics. Particularly hot items include: computers, shoes, personal care products, clothes and accessories, jewelry, handbags and wallets.

Counterfeit goods are a huge business throughout the world. According to the International AntiCounterfeiting Coalition, during fiscal year 2013, the Department of Homeland Security seized over $1.7 billion of counterfeit goods at U.S. borders. Internationally, the Organization for Economic Co-operation and Development (OECD) has estimated that counterfeit goods may cost the global economy up to $250 billion a year.

But there are steps that businesses can take to avoid losing money to counterfeit goods.

Register Your Trademarks

Registration of trademarks is an important step in protecting your brands. Federal registration allows you to enforce your trademarks anywhere in the United States and provides constructive notice to the public of your claim of ownership of the marks. Federal registration also gives you access to federal courts.

But don't forget to register your trademarks in all countries in which you do business -- both manufacturing and sales. Foreign registration provides additional rights and can help prevent the exportation of counterfeit goods that include your trademarks.

Register Your Trademarks With Customs Agencies

Another critical -- but sometimes overlooked step -- is to register your trademarks with the customs agencies in the United States and other countries in which you do business. So, for example, the U.S. Department of Customs and Border Protection (CBP) provides an Intellectual Property Rights (IPR) Enforcement program that helps stop the flow of counterfeit goods into the United States. The CBP will actively monitor shipments and prevent the importation/exportation of counterfeit goods based upon the information provided in the registration.

Police Your Products And Pursue Counterfeiters

Just protecting your intellectual property rights is not sufficient. You then have to take all of the necessary steps to enforce your rights.

Periodically monitor the sales of goods -- both online and by retailers -- to verify that the products being sold are, in fact, genuine products. Three simple factors to examine include the price, the packaging, and the location where the product is being sold.

If you find counterfeit goods, take the appropriate legal steps to stop the counterfeiters. This could be as simple as sending a cease and desist letter or could require you to pursue civil litigation. An important part of enforcement is taking immediate action. Delaying litigation could hurt your ability to seek injunctive relief and, if unreasonable, could prevent you from filing a lawsuit.

Use Technology

Technology is becoming an important tool in protecting your goods from being counterfeited.

Technology can be used within the product itself. In clothing, for example, you could add a partially invisible thread that creates a brand-specific pattern that is visible only under certain lighting. You could similarly use a hologram security image or a company-specific color in plastic.

A German company, Bagjack, is using RFID tags to protect its messenger bags. These tags are then scanned as they leave the manufacturing site in an effort to track the bags downstream.

Modifying the goods themselves may be too expensive for you. Nevertheless, you can still use technology to fight counterfeiting. There are apps that you can use to share and track counterfeit goods (uFaker) or provide location information for potential counterfeit goods (Black Market Billions).

Educate Consumers

In order to prevent consumers from buying counterfeit goods, you must provide them with the information necessary to make educated purchases. Provide information through websites, such as The Counterfeit Report, to identify places that sell counterfeit goods and to provide a list of authorized dealers. Tell consumers how to identify and report counterfeit goods.

Counterfeit goods can cost your company both money and its reputation. Take a few simple steps to protect your brand and to prevent your customers from purchasing fake products.