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The Battle Against Counterfeit Goods image

The Battle Against Counterfeit Goods

By Mark Seavy

As sales of counterfeit goods flourish with the significant expansion of eCommerce shops like Shein, Temu, TikTok Shop, and others, brand owners need to be aggressive in stemming access to products, industry executives said.

It is a task that requires brand owners and eCommerce sites to continuously monitor the flow of products, said Jay Kennedy, Global Lead for Anti-Counterfeiting at Amazon, during Licensing International’s The Future of Anti-Counterfeiting webinar.

“There is no way we will ever get to 100% [in eliminating counterfeit goods] but we can drive that number far down and make it very difficult for counterfeit goods to be available and when a website is created, it is flagged quickly and taken down,” Kennedy said. “I see a future in which continuous monitoring will lead to industry-wide benefits not only for eCommerce retail but also social media platforms and the work that brands do themselves.”

The challenge, however, has been getting many sites to respond quickly to takedown notices, especially among eCommerce retailers that lack staff to monitor for counterfeit products.

Amazon has gone from solely relying on staffers to visually identify counterfeits to also deploying artificial intelligence (AI) to help with the task. Amazon’s Counterfeit Crimes Unit, which was established in 2020, blocked 700,000 attempts in 2023 to create fake seller accounts—down from 800,000 the year before and from six million in 2020. The result has been that the majority of potentially infringing listings blocked by Amazon are addressed without brand owners having to file complaints. The total number of infringement notices submitted by brands to Amazon has decreased more than 30% since 2020.

At the same time, the likes of Temu and Shein have gained popularity with young shoppers by delivering products, much of them counterfeit goods, at deep discount prices. In fact, many Millennial and Gen Z consumers view dupes (less expensive replicas of more expensive products) as a source of pride.

Shein, for example, faces more than 100 lawsuits filed by designers and companies accusing it of trademark and copyright infringement. Retailers like H&M and Uniqlo, which have also been accused of selling counterfeit goods, have both sued Shein, with the latter accusing the eCommerce platform of copying its viral shoulder bag. Shein, which has been poised for an IPO, has denied the allegations and maintained that it has invested heavily in anti-counterfeiting measures.

“There are so many sites out there and these companies have set up platforms that, to a certain extent, they can’t control,” said Jed Ferdinand, a partner at the law firm Meister, Seelig & Fein. “Many of these [platforms] take product, photoshop out the brand, add a slightly changed name, and otherwise keep the collateral the same. We have had to spend our days sending in takedown notices and there is no way for many of these sites to self-police.”

The future of combatting counterfeits could well lie in the further development of AI, according to Kennedy. An expansion of the technology’s use could generate more targeted data that would enable companies to stop counterfeit goods more quickly as well as predict where the bad actors might go next, Kennedy said.

“The future of AI is to be written and there are a lot of concerns around it and the perspective at Amazon is that this is a tool,” Kennedy said. “We do not anticipate a point where we fully turn off the human element [for monitoring for counterfeits]. But AI can be used to be more efficient and effective in reducing the amount of time we spend searching the [online] stores to find infringing listings. This would enable us to better recognize when someone’s trademark is being infringed.”

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