Counterfeits and the sale of feelings Quarter 2 2022

By HANS MUHLBERG, Published in Intellectual Property

MUHLBERG'S BRIEF

When you buy a brand, you're investing in the dream... being part of a group.

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Counterfeiting

…is a word that comes up a lot in IP. Usually in the context of cheap knock-offs that have been manufactured somewhere in 'the east'. There are endless news reports about police officials raiding warehouses and seizing counterfeit goods, and customs officials intercepting counterfeit goods at borders. Actions that often lead to criminal proceedings, where fines are issued or prison terms are handed down. The IP rights involved are generally trade marks (brands), although copyright can play a role too. The fight against counterfeits is clearly an important one. But sexy, it's not!

So give us sexy

Well there was a rather cool article about counterfeits in The Guardian on May 10. Written by Alice Sherwood, the article is based on her book, 'Authenticity: Reclaiming Reality in a Counterfeit Culture'. Not only does she gives us a fascinating insight into the world of counterfeiting, but she also does a pretty good job of reminding us what brands are all about.

But first some dull numbers

Trade in counterfeit goods is worth some US$600 billion per year; 10% of all branded goods are counterfeit; 80% of us have handled counterfeits (often unwittingly); and sales of counterfeits have increased by 10 000% in two decades. Trade in counterfeit goods is very much on the up, notwithstanding the huge improvement in authentication measures.

A reminder that 'Fools and Horses' is a very old TV series**

Sherwood says that 'brand knockoffs that used to be sold in market stalls are now just a couple of clicks away on the internet.' Today it's all about the masstige market.

Masstige? It's a portmanteau word, mass market combined with prestige, so basically 'goods that are premium, but still affordable'. With masstige, the focus is very much on aspiration. Sherwood makes the point that with some contemporary counterfeits, not a single design element is the same, yet the overall effect is unmistakably the same.

Counterfeiting has become meg

There's an anti-counterfeiting body in Amsterdam called React. When they started 25 years ago, they took pride in the fact that they intercepted 1000 counterfeit products per year. Today it's 25 million!

React no longer bothers with markets and shops, rather focusing on container ports like Rotterdam and Antwerp. As a spokesman says: 'One shipping container can hold a thousand times more than a smuggler's suitcase.' And 180 million shipping containers travel around the world every year.

The outsourcing of manufacture has made counterfeiting easier

Most counterfeits do now come from the very country where the genuine goods are manufactured – China. Sherwood says this: 'As the world's manufacturers become concentrated into a few crowded industrial zones, techniques and technology are easily imitated or stolen.'

It's all about the intangibles, the brands

Sherwood says that 'when people would rather buy a more expensive genuine article than a cheaper fake – even if the two items look almost identical – it's because they are buying not just the product's tangible qualities, but also its intangible ones. We buy into the reputation of the brand and the reassurances that gives us.' Some call it goodwill, others call it brand equity.

And just why are the intangibles so important? Because we humans are 'storytelling animals'.

Feelings, it's nothing more than feelings

The 'P's' of branding – product, place, packaging and promotion – have been joined by promise, personality and purpose. Purpose, the most recent addition, refers to 'societal credentials'. Sherwood says that 'we increasingly buy brands for the lifestyle they encapsulate and the values they represent… to put it simply, the trajectory of brands over the past century or so has been to sell you more and more feelings.'

An arms race

But the more companies spend on brand building around feelings, 'the more they fuel the rise in fakery' and this is 'potentially calamitous for brands as a whole'. But no major brand is going to stop selling feelings, because it has no guarantee that the

competitors will follow suit. It's a little like the nuclear arms race!

Let's end with some history Counterfeiting is so big that there's even a counterfeiting museum, the Musée de la Contrefaçon in Paris.

Sherwood suggests that the museum staff are 'quite proud of the fact that the oldest fake was made on French territory'. No, it's not a poor copy of a Louboutin shoe, it goes back a little further than that – it's a Gaulish fake of a Roman amphora.

** For the benefit of those who never saw this TV classic, it was about two market traders who sold some seriously dodgy stuff.

Muhlberg, is a SA, UK and EU qualified IP lawyer. He presently finds himself in the UK, offering consulting and content writing services to various law firms: muhlbergip@gmail.com.