Combating Counterfeiting
Jackie Chan
Silk Alley Market was one of Beijing’s top shopping spots. But besides being a must for bargains, its cramped aisles were also a haven for counterfeiters peddling copied watches, pirated DVDs or fake Gucci shoes by the case-full.
At the end of 2006, tired of pirates crippling their sales, a group of major international brands struck back under the banner of the ‘Quality Brand Protection Committee’. Putting aside market rivalries, leading names – such as Prada, LVMH and Walpole member Burberry – joined forces to switch their efforts away from tiny stallholders and shopkeepers to target the landlords instead. With government support, the group forced landlords to punish tenant counterfeiters. If they were found selling copies, they were suspended for 30 days, and if caught again, they lost their lease. By the time the government closed the market down for safety reasons, the landlord had already suspended over 50 shops.
Counterfeiting is big business. And, as anyone who’s done a double-take at desirable brands on street-stalls around the world knows, it’s a problem that’s not going away. “Counterfeiting has gone from being a local nuisance to a global threat,” DaimlerChrysler’s spokesperson on intellectual property, Hanns Glatz, told Business Week last year. And his comments echo fears felt across myriad industries, as the annual production of fake Figures from the European Commission for customs seizures at EU borders show a dramatic hike. Seizures of fakes have increased ten-fold in the past five years. In 2004, EU Customs seized 103 million counterfeits, including a worryingly large increase in goods such as foodstuffs and alcohol. It’s not just the more obvious consumer products that are being copied. In the European automobile market, an estimated ten per cent of all spare parts are counterfeit, while in Asia, that figure could be as high as 30 per cent. This has worrying implications for safety – seizures have revealed sub-standard manufacturing, including fake brake pads made of compressed grass and wood chip.
Advances and price drops in digital technology have opened up counterfeiting to anyone with a laptop and spare time. Convincing packaging and printing is no longer a barrier, with anyone able to ghost authentic labelling from their home computer. Marketing, too, is easy. Counterfeit goods can be advertised and sold via email spam, temporary websites or online auctioning sites. Setting up an untraceable fake company, which can distribute from warehouses remote from their virtual addresses, means tracking the counterfeiters is almost impossible. It makes the previously complicated process of arresting street counterfeiters' child’s play by comparison. With counterfeiters employing increasingly sophisticated methods, it’s no wonder international brands are putting more and more pressure on governments to act.
That’s why the Walpole Intellectual Property (IP) Working Group was set up to examine and represent Walpole members’ brand-related issues. The group is chaired by Frederick Mostert, Chief Intellectual Property Counsel at Richemont, and includes company representatives such as Burberry’s Stuart Lockyear, Hannah Merritt from Jimmy Choo, The Economist’s Oliver Comyn, Helen Newman from Kilpatrick Stockton solicitors and Simon Tracey from Davenport Lyons solicitors.
Despite the enormous challenge involved in tackling counterfeit crime, the Walpole IP Group has made impressive inroads in its first year. It has raised public awareness, as well as lobbying the EU presidency and UK government. In April last year, for instance, Group representatives met with EU President José Manuel Barroso to discuss issues surrounding the growing counterfeit market and ‘the real cost of fakes’. Frederick Mostert and Julia Carrick headed the delegation, alongside Leonardo Ferregamo and Santos Versace, representatives from the French and Italian equivalent bodies to Walpole, ‘Comité Colbert’ and ‘Altagamma’. President Barroso proved passionate and supportive about the cause, and indicated that famous brands in the luxury goods industry were not only part of the history and heritage of Europe but were also ingrained in its culture. The Group said the meeting stood out as one of the best and most constructive it has had with any government, while President Barroso confirmed his commitment to fighting counterfeiters at a follow-up meeting in July. A meeting in May 2005 with Vice President of the European Commission Franco Frattini, who is the European Commissioner for Justice, Freedom and Security, also proved encouraging. The Group discussed proposed EU legislation for establishing criminal sanctions for “violations of intellectual property rights” on a “commercial scale” and the harmonisation of criminal sanctions for IP crimes throughout the EU.
The Walpole Group also met UK government Minister for Science and Innovation, Lord Sainsbury. Frederick Mostert described this meeting as “positive and productive”. He said: “It’s very encouraging to know that the UK government is so supportive of the fight against counterfeit goods.” They also visited King Juan Carlos of Spain and the Spanish Minister of Trade, Jose Montilla, to raise awareness and seek support for a Europe-wide anti-counterfeiting campaign. But the Group’s effort wasn’t purely focused on governments. In June last year, martial arts superstar Jackie Chan spearheaded the highprofile Fakes Cost More campaign. The actor took part in a campaign-boosting martial arts display alongside Frederick Mostert. Jackie played a piracy-fighting hero, while Frederick was a counterfeit-goods villain dressed head-to-toe in fake clothes and accessories. Performed before hundreds of fans in Hong Kong, the display drew worldwide media interest, including coverage on CNN. The campaign continues in 2006, with more high-profile celebrity supporters set to come on board.
This year, the Group intends to step up its activities to put the squeeze on counterfeiters. Awareness drives and initiatives involving crossindustry anti-fake task forces are on the agenda. Counterfeiters might be improving their practises all the time, but so too is the trap being set to catch them. With unified efforts from alliances such as the Walpole IP Working Group, the pressure on counterfeiters is stepping up.
