The jewelry industry knows all too well the devastating impacts of counterfeit goods, which can result not only in lost sales but also in damage to a company’s brand and hard-won goodwill.

Jewelry and watches took the number one spot in the total value of counterfeit products seized by the United States Custom and Border Protection (CBP) in both 2019 and 2020.  For example, in 2019, CBP reported that jewelry and watches led the list of products seized in terms of total manufacturer’s suggested retail price (MSRP) value with a value of over $687 million representing 44% of the total value of products seized by CBP.  In 2020, CBP reported that the total MSRP value of jewelry and watches was to $435 million, representing 33% of the total value of products seized, both a staggering amount of lost sales.

And while it is promising that the efforts of the government and industry groups appear to be paying off both in terms of a reduction in total MSRP value and percent of total goods seized, a jewelry professional’s brand can be severely damaged when customers receive a counterfeit good instead of a real good, and, disappointed in the quality that they received, leave a negative review or no longer trust the brand.

Governments and industry groups globally are taking steps to reduce avenues for the import and sale of counterfeit goods, but there are five easy – but critical – steps that jewelry professionals can take to protect themselves and their companies.

What is a counterfeit good?

A counterfeit good is an imitation of a real good carrying a real trademark that has been manufactured without the approval from the owner of the brand, generally with a much lower quality product.   Counterfeit goods can take many forms, such as knock-offs sold by street vendors, but are increasingly sold through e-commerce sites to customers who are not aware that they are buying a counterfeit good.

Where do counterfeit goods originate?

According to the CBP report above, these goods overwhelmingly originate from mainland China (44%) and Hong Kong (35%).  Similarly, the EU reports that more than 80% of the seizures of counterfeit and pirated goods by EU customs authorities originate from China and Hong Kong.   Although businesses in these countries can often be a legitimate business partner on a brand-owner’s supply chain, others can be counterfeiters.

What are the Risks?

Counterfeits can lead to lost sales and reputational harm as noted above, but if a company does not protect its brand against counterfeiters or even companies in its supply chains, these risks are exponentially increased.   And for companies who are actively advertising and marketing their products to build a strong brand image, negative reviews from unhappy and deceived customers can mean a real hit to the brand’s bottom line.

Five Steps to Protect Your Brand in the United States

  1. Register your trademark, logo, design and packaging with the United States Patent and Trademark Office (USPTO).
  2. Register your copyrights with the United States Copyright Office (USCRO).
  3. Record your mark with CBP. CBP can seize merchandise seeking entry into the United States if the merchandise bears an infringing trademark or copyright as long as (1) the trademark or copyright has been registered with the USPTO and/or the USCRO, and (2) the mark or copyright has subsequently been recorded with CBP.
  4. Register your trademarks and copyrights where you sell and manufacture your products.
  5. Monitor your marks:
    • Create search service for the name of your goods on the internet, including domain names, influencers, and on online marketplaces and social media sites.
    • Monitor your product’s supply chain and point of sale, including brick and mortar retail sellers as well as e-commerce retail sellers.
  6. Engage experienced counsel to help quarterback your company through the creation of a strong brand protection strategy to reduce the risks of counterfeit products.

Global trademark attorneys like those at Practus can help small businesses protect their brand through the creation of a strong brand protection strategy and policing of the brand and can help small companies to have access to legal counsel at an affordable and predictable cost.

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