Product piracy in online retail: these are the latest tricks

Product piracy is also flourishing with the growth in online trade. A major problem for brand owners, but also a challenge for online marketplaces and legislators.

What are the current methods used by counterfeiters and how can brand owners react?

How online platforms operate

Pursuing product pirates online is difficult. One of the biggest hurdles is the increasing number of pushbacks by online platforms of takedown requests from brand owners and their service providers, even in the case of obvious trademark infringements. This is currently making it increasingly difficult for companies to enforce their rights and take action against counterfeiting. Online platforms often seem to want to strike a “fair” balance between the interests of sellers and the rights of trademark owners. In practice, however, this is increasingly to the detriment of trademark owners.

Product pirates disguise the brand

Even the detection of counterfeits is becoming increasingly difficult: counterfeiters are circumventing automated detection systems by blurring or retouching trademarks. In addition, counterfeiters are increasingly using creative variations of brands or describing products with phrases such as “…similar to…”. In this way, they exploit the familiarity of a brand without causing direct brand confusion. These subtle methods pose a considerable challenge for law enforcement.

Social media offer counterfeiters a relatively safe environment

The shift of counterfeit sales to social media and private groups is another worrying trend. Social media platforms and groups provide a relatively safe environment for counterfeiters, as traditional monitoring methods often reach their limits. Cross-platform fraud networks that use multiple marketplaces and social media channels simultaneously make it even more difficult to track and enforce trademark rights.

Some counterfeiters deceive consumers by using the brand name in the store name. In doing so, they want to give the impression that the products come from the original manufacturer. Many consumers are misled by this, which ultimately damages the brand’s reputation considerably.

Enforcement against online platforms is becoming increasingly difficult

What makes the enforcement of trademark rights even more difficult is that the acceptance of international IR trademarks from the World Intellectual Property Organization (WIPO) by online platforms is declining. They are increasingly refusing to delete counterfeits despite the submission of trademark register extracts. In some cases, counterfeiters also deceive online marketplaces by submitting fake invoices or authorizations claiming to be authorized sellers. This makes it difficult for online marketplaces to distinguish between genuine and counterfeit offers.

The Digital Services Act gives hope

However, there is also a tailwind in the fight against product piracy – from the legislator. The EU’s Digital Services Act (DSA) and similar laws worldwide are increasing the responsibility of online platforms, making them more accountable and increasingly forcing them to take action against trademark infringements. These stricter regulations are an important step in the right direction and offer brand owners new opportunities to enforce their rights.

However, the DSA in particular also leads to regional differences in the treatment of counterfeit products. Platforms that focus on the Asian market, for example, apply different standards to counterfeit products than those that also operate in the EU. These differences can make it difficult to enforce trademark rights in different markets. Brand owners need a differentiated strategy.

How brand owners can still take action against product piracy

Brand owners should work closely with online platforms. This often enables them to better develop joint protective measures. This includes faster response times for deletions and closer coordination in identifying counterfeiters. This cooperation is crucial in order to further increase the effectiveness of measures to combat product piracy.

Some platforms offer brand protection programs; Chinese platforms are now also among them. The platforms provide brand owners with tools that block counterfeits more efficiently. The programs show that platforms are increasingly willing to take responsibility and actively take action against trademark infringements. Brand owners should make use of this opportunity.
In China, companies can also protect product presentations (“trade dress protection”). This is a more effective means of taking action against product offerings with blurred or fuzzy trademarks. Alternative IP rights can be a valuable addition to traditional trademark protection. By protecting product presentations, trademark owners can enforce their rights even if direct trademark use is difficult or impossible to prove.

Conclusion

Counterfeiters are developing ever more sophisticated methods, but legislators and online platforms are also beginning to adapt their strategies. Companies should closely monitor these developments and change their strategies if necessary in order to effectively protect their rights.
Close cooperation with platforms and the use of new protection mechanisms currently promise the most success in the fight against product piracy in the online sector. Brand owners should be proactive and take innovative approaches to meet the challenges of the digital world. Only through a combination of legal, technological and collaborative measures can brand owners effectively protect their rights and preserve the integrity of their brands in the digital world.

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