May 21, 2019 • Paul Woolf
Product knockoffs, counterfeits and replicas have been and continue to be commonplace, an assault on legitimate brands. It’s a battle for authenticity where the losers can be brands as well as an unsuspecting (or complicit) public with dollars to spend.
It’s important to note the distinctions among knockoffs, counterfeits and replicas. Knockoff is often used interchangeably with counterfeit, but technically, knockoffs are products that are not quite identical to another brand. Typically sold online or by back-alley vendors, they’re usually cheaper than the original items but are normally not illegal. Brands have challenged knockoffs in court on the basis of design inspiration.
Counterfeits, on the other hand, are products that are identical to a branded product, invariably breaching trademark, patent and/or copyright. Counterfeit medicine, for example, is a growing threat that the FDA and major pharmaceutical companies are combating. According to Bayer and the World Health Organization, counterfeit drugs valued at 73 billion euros are traded each year, and in regions such as Africa and Asia account, they for 30% of all drugs in circulation.
A replica is a copy of an item. For example, a visitor to the Louvre might find a replica of a famous painting, a print that is clearly not the original. Some replicas of brands can be illegal if they’re identical to existing trademarks.
So, what can brands do about it? How can a brand that has built equity based on its authenticity deal with pretenders who, at best, are assimilating a few components of their brand assets, or at worst, counterfeiting? The degree of illegality, the location of the infringement and other external factors can influence the course of action. However, there are basically two options: legal recourse and marketing recourse. In both cases, authentic content and knowledge of/access to a brand’s heritage are vital.
Probably the most common response from brand marketers is to consult their legal counsel. This may result in a simple “cease and desist” letter, and ultimately a lawsuit for damages incurred. This is pretty much what one would expect in defending a brand that has spent millions of dollars and many years building its brand and gaining the trust of customers. When the authenticity of a brand is called into question by a counterfeit or knockoff, it can cause severe damage.
Most of these legal actions require access to details about the brand when it was originally registered: initial patent filings, trademark applications, designs and drawings, etc. This is one of the most common uses of an archives, so that lawyers can review applications and other intellectual property as they make their case. In the absence of a well-organized archives, it may be necessary to invest in research by a historian familiar with what is needed to support civil or criminal actions in defense of a brand.
Companies don’t often consider marketing recourse for dealing with knockoffs. However, because the role of marketing is to understand and build relationships with customers, and act as builders and guardians of the brand, then there’s a clear requirement to get involved. Doing this can be tricky and is highly dependent on the situation.
For example, back in the 1990s I worked on a campaign promoting Timotei shampoo in the UK, a top selling Unilever-owned brand. The brand was built through advertising with the famous “Timotei girl,” who had amazing hair that she was able to wash every day, thanks to the natural ingredients in Timotei shampoo. My task was to work out why sales were declining despite substantial advertising.
Investigation at the retail level revealed that virtually every major UK grocer was stocking store-brand shampoo that mimicked the Timotei package design, pushing the line on copyright and brand design infringement. At a glance, it was easy to see how a consumer could mistake the two brands—the cheaper imitation of the higher-priced brand could be easily put in the shopping cart by mistake. Unilever could do relatively little to hinder the practice. Losing one grocery chain could amount to a calamitous 15% to 20% drop in sales overnight. These were knockoffs, not counterfeits, that were not a slam dunk for legal recourse. Had Unilever chosen legal action, it could have had huge negative implications for Timotei and other Unilever brands sold through grocers.
The solution from our creative team was a simple one. Create on-pack promotions that literally bring the Timotei girl to the point of sale, with offers like a free Timotei hair towel advertised prominently alongside the Timotei girl. The strategy worked. Sales increased as consumers opted for the authentic Timotei over the retailer’s pretender, and without offending sensitive retailer relationships.
This situation illustrates how using aspects of a brand that resonate with customers can help remind buyers that they’re getting the real product. It also allows the brand to navigate tricky situations, such as the Timotei distribution challenge, without legal action.
Products that mimic or outright duplicate authentic brands are a huge cost to industry. According to a report by the International Trademark Association, “the negative impacts of counterfeiting and piracy are projected to drain US $4.2 trillion from the global economy and put 5.4 million worth of legitimate jobs at risk by 2022.” It’s a serious problem that has an impact on all of us, not just the brand owners. A brand’s heritage has a hugely valuable role to play in both legal enforcement and tactical marketing.