IPPro The Internet

With counterfeiting revenues estimated to be worth billions worldwide, ecommerce platforms must work with brands to bear the brunt of enforcement

The advent of the internet brought many great new ways to purchase goods that may not have been widely available before. Ecommerce platforms such as eBay, Alibaba and Amazon exploited the internet’s potential to form empires of online trading, which continue to challenge more conventional, physical markets to this day.

In those early days, what wasn’t anticipated was the potential for huge margins for criminals, largely in counterfeiting. Helen Saunders, head of intelligence and operations at INCOPRO, says the counterfeiting landscape has “changed in recent years”.

“While online marketplaces have been around for some time, and counterfeiters have taken advantage of the opportunity, ecommerce is expanding rapidly, making the problem worse. It’s easier than ever for criminals to market and sell their goods.”

While it hasn’t always been easy, ecommerce platforms have mostly risen to the challenge. Initiatives such as eBay’s Verified Rights Owner (VeRO) programme and Alibaba Group’s Operation Cloud Sword help brands, sellers and buyers alike. By combatting the counterfeit menace, they make these platforms safer to use for everyone, promoting global and convenient marketplaces.

Andrea Rota, senior director of global brand protection at eBay, says that being online and global is an advantage over a conventional physical marketplace when fighting counterfeiting.

“You can have global visibility,” Rota says. “You can partner with brands and rights owners worldwide.”

For eBay, as well as many others, this sort of cooperation can become the landmark in the fight against counterfeits. In eBay’s case, the VeRO programme fills this slot, and Rota describes it as the “cornerstone” of eBay’s anti-counterfeiting activities, something “hugely successful”.

“More than 40,000 rights owners now use it to identify items that they deem to be at risk of being counterfeit. This ranges from really large companies to say, artisans, or photographers. It is very open in nature.”

“VeRO supports brands that want to help us fight counterfeits. It is also the beginning of new relationships that go beyond VeRO and become much deeper,” he says.
These deeper relationships are key to eBay’s anti-counterfeiting strategy. Rota says that, through multiple memorandums of understanding, eBay has brought brands and other industry players together to establish a base of collaboration.

Rota says: “Out of that collaboration comes an even more advanced way of tackling counterfeits, which of course relies on brands and VeRO notices, but also implementing more proactive detection methods.”

He adds: “Nobody knows the products better than the brands, and they are most able to accurately gauge the authenticity of a product.”

Collaboration is key, clearly, but eBay’s anti-counterfeiting strategy goes deeper than that. In fact, Rota says, the majority of counterfeit items that are removed from the marketplace are taken down before brands even get a chance to flag them through VeRO.

On top of this, eBay is looking into other initiatives, aimed at making the platform itself better for both brands and users.

For example, eBay’s new Authenticate programme is designed to “generate the right level of confidence with users, buyers and sellers”. Authenticate will utilise sophisticated detection tools, enforcement and strong relationships with brand owners to provide an authentication service for items sold on its marketplace.

It will give sellers who sell certain types of high-end inventories, such as expensive handbags, the opportunity to opt in to the authentication service when listing a product.

The item will then carry a symbol to show a professional authenticator has reviewed it before delivery to the buyer.

“Often a brand will use VeRO to tell us something is counterfeit, when in fact it is real,” Rota says. “So, with authentication, we are also excited about testing lots of different ways of authentication, including for example, physical examination, which is not something we’ve done in the past.”

“Out of that, we think that maybe we will find ways to transfer that to online protection, these are areas where we have been very good at and pushed most of our efforts.”

Guardians of IP

The International AntiCounterfeiting Coalition (IACC), as its name suggests, fights counterfeiting with the support of its members. The group enjoys support from more than 250 companies and organisation around the world, including 21st Century Fox and Calvin Klein.

Always a proponent of cooperation and collaboration in this space, IACC president Bob Barchiesi says: “No company or industry can combat counterfeiting alone, and this is exactly why the IACC engages in and develops voluntary collaborative efforts to address this problem”.

Most recently, the IACC has upgraded its RogueBlock programme, aimed at tackling sources of income for illicit merchants. The operation recently expanded through a partnership with the City of London Police’s Intellectual Property Crime Unit (PIPCU).

The IACC has also partnered with big ecommerce platform operators such as Alibaba on its MarketSafe Expansion programme, and aims to continue developing initiatives to fight counterfeiting.

Barchiesi says that these enforcement actions are “ramping up in response to the dramatic increase of small shipments of counterfeit goods being trafficked by international mail and express consignments”.

“Rights holders, customs agencies, and express carriers are all looking at new ways to try to deal with this method of smuggling in a more efficient and effective way.”

Fighting counterfeits with a Cloud Sword

Alibaba’s enforcement can be categorised into three areas: detection, immediate action, and tackling the root cause. Like eBay and the IACC, Alibaba focuses a large part of its anti-counterfeiting initiatives on cooperation, especially in light of criticism leveled against the Chinese platform provider by brands.

Alibaba’s Big Data Anti-Counterfeiting Alliance, for example, has brought together big brand names, including Louis Vuitton, Swarovski, Sony and Samsung. It also has a working relationship with the Business Software Alliance, the Motion Picture Association of America and the Recording Industry Association of America, among others.

While the alliance is still in its early stages, an Alibaba spokesperson reveals that the group has had its first working meeting at Alibaba’s headquarters in Hangzhou, China.

The alliance had engaged in a day of “open and constructive dialogue” and “agreed on the critical prerequisites of a healthy environment for intellectual property rights protection and how all members can work together with Alibaba to enhance their effectiveness in this global fight against counterfeits”.

Speaking in February, Matthew Bassiur, vice president and head of global IP enforcement at Alibaba, stressed the importance of cooperation, particularly with brands. He said: “Brands know their IP best, so the closer they work with us, the better we get at helping them protect their IP on our platforms.”

But Alibaba also focuses on dealing with the root causes of counterfeiting. Operation Cloud Sword aims to chop the head off the snake, using big data to support Chinese authorities in raids on counterfeit communities and manufacturers. Recent raids have recovered $208 million worth of counterfeit goods, which infringed the rights of 131 brands.

A spokesperson for Alibaba says: “It’s one thing to bar listings and shut down stores, it’s a wholly different thing to give law enforcement the evidence and even exact locations of counterfeiting operations and then see these criminals arrested and prosecuted for their crimes. For the brands, they definitely see the power in such an effort and are increasingly interested in cooperation as well.”

Bassiur has said that IP enforcement is a “top priority for Alibaba”, and that it “cannot be a global leader in ecommerce without also being a leader in anti-counterfeiting”. Alibaba’s enforcement strategy seems to prove this, often going further than just removing counterfeit items from its platforms domestically, but going a step further to eliminate infringement at its source.

With the increasing availability and profitability of counterfeits, brands need to continue ramping up their enforcement actions to counter the threat. What’s clear is that teamwork in integral, as is the continued support of internet platforms where counterfeits are routinely sold. Only then can the criminals be fought, for the benefit of everyone concerned.

To view the full article in IPPro, The Internet, click here.