success stories: brand and platforms … allowing employees to be brand ambassadors inform and...
TRANSCRIPT
SUCCESS STORIES: BRAND AND PLATFORMS FIGHTING ONLINE COUNTERFEIT SALES TOGETHER
Leo Longauer, Director Global IP Enforcement, Swarovski AG
Corporate Legal Intellectual PropertyPage 2
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ONLINE COUNTERFEIT: THE ISSUE IS GROWING
Rise of the Brand & Rise of China
Globalization & Rise of the Middle Class and cheap Manufacturing possibilities in Developing Markets
Rise of the Internet:
Internet reaches more and more countries and people: 40% of the population worldwide, 3 bn people in 2015 (75% in Europe, 65% in Americas, 32% in Asia, 20% in Africa)
Counterfeit economy growing 25% year on year (estimated $ 600 bn annually, $ 350 bn online)
Anonymity for counterfeiters and other bad guys
Huge amount of cheap internet “real estate” and expanding channels from which to host illegal businesses: websites, marketplaces, social media, apps, emails: Low cost sales, marketing, and distribution for counterfeiters
Internet Service Providers’ (ISPs) incentives are at best mixed (they make money from hosting counterfeiters & have limited liability)
Mail order counterfeits largely avoid border and Customs controls (2014: 95’000 shipments detained by EU Customs)
Scope is expanding: everything is sold via Internet: apparel, luxury, pharma, auto parts, aviation, electronics, food, toys, etc.
Increased professionalization: counterfeit is often linked to organized crime using advanced technology such as search engine optimization and marketing tactics
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IMPACT OF COUNTERFEITS
Negative impact of counterfeits:
Lost revenue (estimated 10% of manufacturing revenue worldwide)
Increased return, warranty and customer service costs
Brand damage (consumers often blame the brand owner)
Strained channel relationships
Diverted web traffic and increased SEO costs
Desirability of top brands, the existence of the brand premium,asymmetry of manufacturing costs, globalization, and the internet
all fuel the counterfeit business model
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COUNTERFEIT IMPACT IN THE JEWELLERY AND WATCH INDUSTRY IN THE
EUROPEAN UNION *
* The economic cost of IPR infringements in Jewellery and watches: EUIPO report 2/2016:
https://euipo.europa.eu/ohimportal/en/web/observatory/ipr_infringement_jewellery_and_watches
13.5% of sales lost by the sector due to Counterfeiting
€1.9 billion of revenue lost annually by the sector
Additional €1.6 billion of sales lost in related sectors
15 000 direct jobs lost
28 500 direct and indirect jobs lost
€600 million of government revenue lost (social contributions and taxes)
Italy is the largest producer of Jewellery in the EU with production of €5 billion each year, the Jewellery and watches manufacturing sector in Italy loses approx. €400 million every year due to counterfeiting
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FAKE WEBSITE: www.swarovskioutletaustria.com
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FAKE WEBSITE: www.swarovskifrance.com
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FAKE WEBSITE: www.swarovskis.co.uk
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MARKETPLACE INFRINGEMENTS
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SOCIAL MEDIA INFRINGEMENTS
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INTERNET MONITORING AS PART OF ENHANCED IP ENFORCEMENT
Raising IP awareness in
Swarovski, allowing
employees to be brand
ambassadors
Inform and educate
customers on how to use our IP: Proper use
Guidelines, warning letters,
etc.
Legal actions: Cease & Desist letters, seizures and raids, civil, administrative and criminal
actions, contract termination
Monitoring third party trademark
filings and domain names:
oppositions cancellations, trademark gap
fill filings
Regular business
updates and communication
about enforcement
cases and strategy
Internet monitoring and enforcement re illicit use of our IP on websites, marketplaces, social media
EDUCATION &COMMUNCIATION
LEGAL ACTION
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RISK OF IGNORING THE ISSUE
Lost revenues (estimated 10% of manufacturing revenue
worldwide)
Increased return, warranty and customer service costs
Brand damage (consumers often blame the brand owner)
Strained channel relationships
Diverted web traffic and increased SEO costs
Resource-intensive: both in-house capabilities and outsourced solutions
Retaliation/Back-fire: negative brand image if too aggressive approach to brand protection (social media
campaigns)
Loss of trust from ISPs and Marketplaces
Damaged to client/channel relationship
RISK OF OVER-ENFORCEMENT
IP ENFORCEMENT IS A BALANCING ACT
LEGAL BUSINESS
• By IP team, using agent• By staff send email to
[email protected]• By customer or general public
contact customer service or local KAM
Input/Detection Assessment
By IP team, according to agreed set of criteria and risk level, taking the client relationship and local situation into account.
Action
• Misuse or infringement by customer B2B solution is preferred (IP supports)
• Misuse or infringement by non-customer IP team to handle
Pre-enforcement warning
Known customers are whitelisted & informed about PuG, incl. deadline to correct their branding and to prevent enforcement actions
For marketplaces: whenever possible, active communication of PuGs to all sellers (incl. indirect customers) to correct their branding and to prevent enforcement actions
PuGinfo
INTERNET ENFORCEMENT: IMPLEMENTING THE “EDUCATE FIRST” APPROACH
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ONLINE COUNTERFEIT: MAIN CHALLENGES*
Anonymity of infringer whack-a-mole dilemma
Huge Volumes, short deadlines “Industrial” enforcement solution needed
Growing number of channels: Websites, social media, marketplaces, apps, sms, etc.
Civil, criminal, admin measures available, but not top priority of law enforcement authorities
Usually multi-national cases difficult enforcement of foreign judgments
No international arbitration mechanism
* WIPO/ACE/12/9 Rev. 2: Advisory Committee on Enforcement: Study on Approaches to Online Trademark
Infringements; Dr. Frederick Mostert.
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ONLINE COUNTERFEIT: TYPES OF ACTIONS
Voluntary measures of online intermediaries: Notice and take-down procedures
Notice and stay-down procedures
Notice and Disclosure procedures
Advertising code of conduct
Constructive collaboration
Limitations: Freedom of speech
Lawful competition
Privacy/Data Protection
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EXAMPLE OF GOOD COLLABORATION: ALIBABA
In addition to take down procedures, we collaborate in the following fields:
Test-buy project: Alibaba uses data mining techniques to determine best products for test-purchase.
Seller education: Fair-Use-Guidelines sent to all Swarovski-sellers.
Alibaba-education: Train Alibaba staff to enhance identification of counterfeit goods.
On-To-Offline cases (O2O): Using data mining techniques to select targets, collaboration with PSB for criminal actions.
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EXAMPLE OF GOOD COLLABORATION: ALIBABA
Test-buy project: We provide list of suspected counterfeits, Alibaba uses data mining techniquesto determine best products for test-purchases:
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EXAMPLE OF GOOD COLLABORATION: ALIBABA
Seller education: Fair-Use-Guidelines sent to all Swarovski-sellers & specific educational website.
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EXAMPLE OF GOOD COLLABORATION: ALIBABA
Alibaba-education: Train Alibaba staff to enhance identification of counterfeit goods.
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EXAMPLE OF GOOD COLLABORATION: ALIBABA
On-To-Offline cases (O2O): Collaboration to detect counterfeiters and file PSB actions.
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ENFORCEMENT WORKS!