Counterfeiting is a hugely successful industry, especially nowadays where luxury seems almost absurdly unattainable for most mere mortals. And, even if this is a phenomenon that we can find in every sector, some of the most counterfeited industries are fashion and cosmetics.

It is believed that counterfeit fashion goods cost European brands the value of 9.7% of their total sales every year. This percentage has definitely been boosted by the arrival of the Internet and e-commerce owing to the anonymity it gives to fraudsters. However the phenomenon of counterfeiting is as old as couture itself.  In the early 1900s, fashion forgers often sketched designs they saw in Paris shows and sold reproductions in France and overseas. By 1914, more than two million fake couture labels had been sewn into garments.

But, what does fashion have that makes it so attractive for counterfeiters? Well, firstly the fact that the fashion industry is dictated by ever changing trends; something that’s hot may be old fashioned tomorrow. As a result, fashion brands have to constantly reinvent themselves throwing different product out there trying to stay relevant. If we combine this with the image-based, shopping-savvy society that we live on, obsessed with trends but also with saving, where customers hunt for the perfect balance between trend and price we get the ideal breeding ground for counterfeiting.

What is the real impact of counterfeiting in fashion?

For some people, the fact that your designs are being imitated is seen as the ultimate sign of flattery, a way of determining the success of a fashion brand. What is more, there have been studies which conclude that counterfeits might actually be a good thing for the fashion industry, forcing brands to improve their products in order to set themselves apart from the copycats.

However, the majority of the industry is of the opinion that counterfeiting is theft and those who buy counterfeit product are responsible for fueling criminal activity. For Ashlee Froese, partner at Gilbert’s LLP, “Counterfeiting is stealing the greatest asset a designer has and that is creativity. That is their main asset, their main product.”

And stepping back from the intangible assets now, counterfeiting has an alarming economical impact in the fashion industry. According to a report published some months ago by Europe’s Office for Harmonization in the Internal Market (OHIM), the counterfeit of apparel and accessories cost European brands €26.3 billion yearly (that is, the 9.7% of their total sales). And, if we translate this into jobs, we learn that approximately 363.000 jobs have been lost across the retail, manufacturing and wholesale sectors of Europe’s fashion industries.

How to fight back?

Luxury brands have developed ways, often through the court systems, to fight against the development and retailing of counterfeit goods.  

As we said at the beginning of the article, e-commerce has opened the doors to many new forms for the sale and distribution counterfeit goods which make it very easy for these fake products to reach the consumer. Mirror websites might be the most immediate danger for a brand because they principally attract “deceived consumers”, who believe they are buying a real product and expect the brand’s promise. In turn this can damage the brand’s reputation and decrease the number of loyal consumers the brand possesses. However, the proliferation of fake products in worldwide online marketplaces such as eBay, Amazon or Etsy or the Social Media Channels, is also the cause of many headaches for industry executives.

The proliferation of distribution channels makes the protection against this phenomenon difficult because it involves a continuous effort of brand monitorization. And this is why a strong brand reputation monitoring strategy implemented by experts is nowadays imperative in the fashion industry. We have already seen the economic impact fake goods can have on the profits of a brand, but we cannot forget that a trademark and brand’s reputation are what differentiates a fashion company from the rest. They are its greatest assets and should be protected at all costs.

Did you know that typically 7 to 10% of pharma products sold are affected by counterfeiting? This means that approximately $1.5 to $1.7 trillion of the money made from the sale of medicines goes to illegal distributors.

Prescription and over-the-counter drugs recently came third in a list of the 10 most counterfeited products and, according to the World Health Organization, over half of drugs purchased online are counterfeited. All these figures may seem shocking but, according to experts in the subject, depending on certain brand’s demographics, geographies of sales, and the type of drug, they can be even larger.

There’s no doubt that the internet, with the anonymity that it provides, has become a very popular channel for the distribution of fake prescription drugs and active pharmaceutical ingredients (APIs). We cannot forget that the new technologies make it easier than ever for fraudsters to duplicate a company’s product or to alter serial numbers. This not only endangers the health and safety of the consumers, but it could also be a huge threat for the legitimate distributor:

  1. It harms the brand reputation of the legal pharmaceuticals. This is because the counterfeited drugs tend to be ineffective and of poor quality.
  2. The risk of legal lawsuits: unauthorized pharma goods can be, as we have already said, very harmful for the consumers. This could mean a lot of trouble for the pharmaceutical companies because of the company liability.
  3. The arrival of the new gTLDs can multiply the cases of Cybersquating. Fraudulent online pharmacies can view them as a great opportunity to buy similar domain names to the legal ones, driving loads of traffic to them.
  4. Loss of corporate profits. Also in relation with the previous point. According to research carried out by the World Health Organization, unauthorized drug distribution costs the pharmaceutical industry over $400 billion each year.
  5. Copyright and Trademark infringements. This not only harms the reputation of the brands but can also result in significant profit losses and undo years of branding efforts.

According to former FBI agent turned pharmaceutical brand protection consultant, Keith Cutri: “If a pharma company does nothing to mitigate risk, it is conceivable counterfeiters will pursue the slippery slope of being able to go replicate the API, the product, or even steal the formulation from overseas factories,” and “if that goes unmitigated, that problem will continue to rise for that brand because there is no incentive for counterfeiters to move on to another brand that ‘has an easier go at the product,’”

However, given all the threats that the pharma companies face, very few of them have some form of them have some form of internet monitoring in place that would allow them to detect trademark and copyright abuse, counterfeiting of their products, impersonation, and other kinds of online piracy. These companies should take proactive action against grey online pharmacies, not only in order to reclaim the profits lost but also to fight against the serious worldwide health risk represented by the consumption of illegal prescription drugs.

dotNice – experts in digital brand protection

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Domain names are invaluable digital assets in todays world. Over the last few months, dotNice have been following the epic saga between Lucasfilm (now owned by Disney) and an established online retailer of fancy dress attire, Abscissa. The story begins over a decade ago when Abscissa registered various domain names including to attract online consumers searching for star wars paraphernalia and product goods to it’s webpage. Over the course of ten years, the online retailer used the domain to sell Star Wars related fancy dress attire. The common term given to such behaviour is domain-squatting or cyber-squatting which describes the act of registering or trafficking in a web address with bad faith intent to profit from another party’s trademark. Over the course of July this year, Lucasfilm (Disney) litigators pursued Abscissa to enforce their IP rights and were successful in their endeavours. Following the ruling of Nominet (the UK’s domain name registry) six different domain names, originally registered by the third party, were recovered by Disney and added to their existing portfolio of digital assets. Domain disputes like the debacle are in no way a recent phenomenon.

Following countless cases of online ip infringement, WIPO (World Intellectual Property Organisation) established an arbitration system in 1999 allowing trademark owners to file cases against alleged cybersquatters and thus, enforce their IP rights online.

So what actually constitutes domain infringement?

Although a domain name can easily be registered at a relatively minimal cost today, the terms of what constitutes infringement or intellectual property violation can be a little more complicated.
In order to successfully recover a domain name from a third party, the following conditions must clearly proven:

1. the complainant must have a trademark registered (related to the domain in question).

2. the defendant’s registration must be deemed as ‘abusive’ of the complainants rights or infringe on it’s proven intellectual property. In other words, it must be proven that the defendant registered the domain in bad faith for the purpose of leveraging another trademark owners brand equity.

What can brands do to prevent such cases of cyber-squatting?

– ensure you have your marks registered in all countries you operate in internationally

– Invest in building your domain name portfolio to avoid opportunistic domain squatters registering domains similar to your brand

– monitor keywords related to your brand and domain names to ensure you are aware of any dubious domain registrations

– Take swift action once infringement or ip violation has been identified.

Disney’s determined enforcement of their intellectual property rights should be emulated by all brands with an online presence. Failing to establish an effect digital brand protection strategy will ultimately negatively impact on a businesses bottom line.

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Brand hi-jacking appears to be on the rise in the US political sphere of late. Over the past year, many political candidates have used domain names as ammunition in their PR campaigns. Carly Fiorina’s (former CEO of HP) recent campaign in the US presidency race was thwarted by failing to register relevant domain names for her presidential campaign. The result? Another party purchased and registered the domain name to deliberately post disparaging comments about her past history, in particular her role in laying off approximately 30,000 Hewlitt Packard employees.

In the most recent of attacks on personal brands, US legislator for the state of Louisiana Steve Carter, has been the most recent victim. Following a failure to renew the domain before it’s expiration date, Carter’s opponent , Robert Cipriano purchased the domain and subsequently transferred the rights to an un-named party.

As it stands right now, online visitors to the website might be a little shocked by the content currently posted which essentially criticises every policy, action and legislative decision made by Carter during his time in office. The wholly unflattering content accuses him of increasing taxes, reckless spending of public finances and playing a major part in the demise of Louisiana’s state school system. In essence, the website represent an unwavering attack on Carter’s personal ‘brand’. The cases of Carly Fiorina and Steve Carter are not unique. Increasingly digital assets (domain names, social media profiles, etc…) are being harnessed as tools to damage and defame the digital presence of political opponents. Indeed, Donald Trump registered three thousand new domains this week alone, adding to his mammoth existing portfolio.

What can brand’s at large learn from these digital oversights?

Both cases listed above further reinforce the significance of domain names as valuable and powerful digital real estate in today’s online world. Brands, whether of a business or personal nature, are increasingly becoming more aware of the far reaching potentiality of digital assets like domain names and indeed intangible assets like online reputation.Such assets hold immense positive or negative potential depending on how they are used. Preparing your digital brand protection strategy has never been more important.

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Choosing and registering a domain name is an essential part of designing your website as it is the stepping point from which you create your brand. In regard to choosing a memorable and catchy domain name, choosing an effective keyword is crucial as keyword optimisation effects your brand’s online presence. It is critical that you choose a striking domain name that’s both related to your brand and likely to be ranked in the first page of search engine results.

Over the last two years, ICANN have been slowly releasing new domain extensions into the DNS (Domain Name System) to allow greater flexibility in choosing domain names. The new suffixes bring a wealth of opportunities for brand owners and brand managers alike. Below we have listed a few ways in which new gTLD’s can be harnessed and help build your online brand presence.

Foreign language Domains (IDN’s)

If your business is scaling into the global marketplace and entering into new markets, a non latin character script can be used in the targeted market. These domain names offer a great opportunity to reach new consumers using native script. For instance, Chinese or arabic users no longer need to switch from changing their keyboard functions. Registering new non-Latin gTLD script will greatly increase your global reach and online presence.

Geographical domains

The newest trends in marketing today involve localisation. Increasingly, search engines like Google are giving greater weight to to geographical closeness to the user and give greater preference to search results based on geographical nearness. Adopting new ccTLD’s (country code top level domains) into your domain portfolio will assist in SEO. New ccTLD’s now available include .PARIS , .London , .Tokyo. These ccTLD’s will greatly enhance your SEO ranking and also your international web presence.

Customer Care Capability

Smart brands are harnessing the potentiality of new gTLD’s and integrating it with their customer care practice. New gTLD extensions allow a targeted approach to create online communities based on similar or shared interests. for example . Pizza , .Wine , .Vin , .Irish , .Swiss were created to further assist in target customer segment.

Enhanced security for brands and consumers.

Many new gTLD’s have been released that will lend greater security on the web for consumers and protect against the selling of counterfeit goods and products. For instance, .Pharmacy is a particular new gTLD that only accredited, legitimate pharmacist with proven credentials can register. This process of proving your legitimacy will bring about safer ways for consumers to shop online and indeed protect online pharmaceutical brands in the digital space.

Building brand value and protecting brand equity

Protecting your trademark is essential to the success of your brand. Furthermore, protecting your brand equity is key to protecting your brand in the digital space. Brand owners and brand managers need to think long-term when it comes to brand positioning. For example, as part of business development strategy brand managers should consider new markets that they may want to enter into in the future. It is important to have this in mind when optimising your domain portfolio, new gTLD, ccTLD’s and IDN’s all have to considered in a holistic approach to protecting your digital assets.

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Search engine giant, Google has dominated newspapers around the world this week with it’s striking revelation that it has created a new parent holding company – Alphabet. As a well established brand, Google will continue to use it’s world renowned name for it’s search and other search related subsidiaries. Speculators suggest the reasoning behind this sudden restructuring is to minimise risk to each individual company that will housed under the Alphabet umbrella. For many years the worlds most famous search engine has been investing in new ventures and R&D, drone development, medical care and automated car transport.

So why is all this relevant to brand management, marketing and business development? CEO and co-founder Larry page, has made a bold move in choosing an unusual name, and indeed distinct domain name for the new parent company – This curious choice of domain extension .xyz has left many confused and bewildered. Following convention, surely would have been a safer, more preferred choice. New theories are emerging on this bizarre and mysterious decision.

Speculators suggest Google is revolutionising the nature of branding. Stepping away from traditional modes of in-your-face branding where logos, trademarks and all associated brand imagery would be plastered over goods, unmissable to the eye, new trends amongst some of the worlds leading brands suggest a change in previous practice. A paper recently released, ‘The Rise of Inconspicuous Consumption’ by professors Belk, Eckhardt and Wilson illustrates a stark change in the relationship between consumer and branded products. In contrast to the blatant branding of the 1980’s and 1990’s where consumers wanted to overtly show-off high end luxury goods as a symbol of status and accomplishment, new trends have been developing in todays market.

Emerging consumer trends suggest a preference for unobtrusively and subtly marked products. Luxury brands are aware of this behavioural change in todays consumer. Essentially, less is more. Apple’s iconic logo is instantly recognisable even without it’s name. It’s products are characterised by simplicity and sharpness of design. Tiffany has stripped it’s brand right down to a simple “T”.

Google are somewhat contributing to this trend. They could choose any number of new gTLD’s .global, .tech, .business or alternatively purchased from BMW. It’s not as if capital is lacking. Instead they have opted for a different and somewhat vague, understated extension. Since the news exploded a few days ago, the .xyz registry has seen an exponential rise in domain registrations. Fears are spreading that Alphabet’s strategic move may encourage and increase in cyber-squatting and phishing.

Whatever the outcome of this unexpected branding endeavour, the move marks a significant step away from the dominance of the days. The jury is out on the success of the new gTLD rollout initiated by ICANN since the end of 2013. Nonetheless, Google’s bold move somewhat endorses the positive potentiality of new gTLD’s in future brand management, marketing and business development.

dotNice – experts in digital brand protection

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ICANN, the regulatory body of the internet’s domain name system (DNS), recently issued a warning to the public revealing that it’s systems were allegedly hacked by an opportunistic cyber-criminal. Having issued a public warning stating that usernames and passwords were retrieved by an unauthorised person, ICANN urged the online community to stay vigilant and immediately change any saved passwords as a pre-emptive security measure.

The following statement was issued by the organisation on the 5th of August,

‘ICANN has reason to believe that within the last week, usernames/email addresses and encrypted passwords for profile accounts created on website were obtained by an unauthorised person’

Whilst investigations continue, it is strongly recommended that all subscribers to ICANN’s website reset their password. They further emphasised that using the same username and password on other online accounts increases security risks. In essence, It is highly recommended to avoid using the same password and usernames for different online accounts. This security approach applies to both professional and personal accounts.

As part of any organisation’s digital brand protection strategy, dotNice further reiterate the importance of using unique encrypted usernames and passwords for all company accounts. As enterprises become more and more aware of cyber-security and potential threats, starting off with basic security measures should be enforced throughout any business, whether large or small.

The security breach comes at a crucial time for ICANN as plans are underway for the US government to relinquish it’s oversight of the DNS and relegate the responsibility to ICANN. This handover is expected to happen in March 2016 when Fadi Chehadé, President and CEO of ICANN, plans to step down from his position.

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Many brand managers and marketeers have raised questions with Google on how the release of new gTLD’s will impact upon search. To put your minds at ease, the dotNice team have compiled a list of points to better clarify any unanswered questions.

What impact will new gTLD’s have on a web user’s search?

In essence, new gTLD’s will be subject to the same conditions as any other .COM , .NET or .ORG as before. In terms of SEO, keywords contained within a TLD will not be of any greater benefit in relation to googles system and search.

What impact will ccTLD’s have on search for web users searching from a particular location? Will ccTLD’s like .PARIS or .SYDNEY be prioritised on google search for users located in those particular countries?

Google uses a specific geographical targeting mechanism to search for optimised results. Therefore, it will yield results considered most relevant to the initial search query in regard to the specific country. By this token, ccTLD’s will impact on search (with some exceptions).

Does investing in a .BRAND TLD priortise this domain name over that of a .COM?

No. As with the new gTLD’s, a .BRAND TLD will be subject to the same conditions like all gTLD’s in the past. Google are committed to ensuring that the search engine system works on relevancy therefore they will not hold any greater influence on search results.

Although, new gTLD’s will not effectively impact on search, it is recommended that all brand owners, marketers and heads of legal revise and optimise their brand’s domain portfolio. Domain names are essential digital real estate in todays digitised world. As they constitute important digital assets, they have to be considered worth protecting as an integral part of a business brand protection strategy. Reinforcing your brand’s digital footprint will ultimately strengthen your brand’s digital presence.

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The web has become a notorious channel for fraudsters to sell counterfeit and often dangerous drugs to unsuspecting consumers. Over the past number of years, newspaper headlines had been dominated with genuinely frightening tales of the dangers of purchasing unregulated drugs online. Many consumers are often attracted by cheap, inexpensive deals advertised for such products. But at what cost?

Following on from the precedent set in the US by the National Association of Boards of Pharmacy (NAPB), The European Commission recently proposed a new policy to further strengthen the regulation of online sales of pharmaceutical products. To effectively police the sale of online drugs, they issued a directive stating that a universally accredited hallmark must be clearly visible on all online drug sites. The hallmark itself allows consumers to identify whether the site is certified and legitimate. Only authorised online pharmacies who have proven lawful licenses will be granted this essential ‘seal of approval’.

The European Commission’s decision comes a few months after a similar initiative was promoted by the National Association of Pharmacists of the USA. The association submitted an application on ‘behalf of international pharmacy coalitions and national pharmacy associations to ensure that the .PHARMACY gTLD shall serve as a trusted, hierarchical, and intuitive namespace for legitimate Internet pharmacies’.

Investigations by the association uncovered some startling statistics. After analysing numerous websites selling pharmaceutical products since 2008, they found that more than 96% of the 11,000 sites assessed were non-compliant with United State’s federal law for the sale of drugs. At present, 62% of these sites did not present an official mailing address. In addition, 91% of the sites did not appear to be linked to online networks authorised to sell drugs on the web.

It goes without saying that rogue websites selling unregulated drugs online present great dangers to the health of consumers on a global level. Thankfully, the proposal presented by the European Commission marks a progressive step forward in consumer protection.

This directive will also be of enormous benefit to pharmaceutical distributors in terms of protecting their brand equity, online reputation and digital assets. The decision of the European Commission is ultimately a victory for legitimate online drugs stores in protecting their brand. Ridding the web of rogue sites selling counterfeit drugs ensures that consumers can purchase safe products from genuine and lawful distributors. Trust between consumers and digital brands will be further cemented.

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Over the past few weeks ICANN has caused quite a stir to businesses and trademark owners alike after announcing it was considering a proposal to force commercial registrants’ to display their identity when registering new domains.
This new proposal would see an end to commercial domain registrants’ ability to shield and hide their identity and rendering their registration details accessible on WHOIS platforms. It comes as no surprise that privacy campaigners are angered by the proposal.

ICANN released the ‘Initial Report on the Privacy & Proxy Services Accreditation Issues Policy Development Process’ on the 5th May, to allow for public comment on some of the points addressed. Some of the key questions raised in the report asked whether or not commercial entities registering domain names for economic and financial purposes should be exempt from privacy rights. Further questions examined what measures and policies would be required to enforce the contactability of the registrants. Furthermore, the report also asked to what extent should full WHOIS reference details be disclosed? The time frame for public comment ended on the 7th of July and at present we are waiting for press release on the report’s findings.

It comes as no surprise that many trademark owners are perturbed by ICANN controversial proposal. The digital landscape is fraught with potential threats to both personal and professional security. Many businesses enforce a policy of proxy registrations as an integral part of their brand protection strategy. The Online Abuse Prevention Initiative, a collective of activists for civil rights and internet anonymity, contend that the proposal would benefit and encourage cyber-criminals, online harassers and internet stalkers allowing them access to the personal details of women and LGTBQ campaigners. They argue it would deprive domain owners of their privacy and security. This type of activity, known as doxing allows confidential data of internet users to be exposed on the web.

Not all enterprises are put off by ICANN’s proposal. Naturally enough, the US entertainment industry is a strong supporter of the proposal as access to registration data will allow them to pursue copyright and trademark infringers with greater efficiency and cost-effectiveness. It would save the industry millions in legal enforcement. For the moment we will have to wait and see what decision ICANN will reach on this matter. Stay tuned for more updates.

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