It is a good idea to develop a strategy for how to avoid buying and reselling counterfeit and pirated products. It can be either entire products or product elements that are used in your final product and which you have purchased from a subcontractor (e.g. a screw). Today, almost all product types can be copied. Here are some of the considerations that a strategy can entail.
Basically, it is a good idea to have a strategy for avoiding buying and reselling counterfeit and pirated products (or fake parts being used in a final product).
The strategy should also include answers to how your business will handle situations or cases where you have inadvertently imported or sold goods (including elements inserted into the finished product) that are later discovered to be fake. The strategy should name who does what and when, from various departments in you firm, to limit the damage. Knowing in advance how to handle such a situation can save valuable time if the situation occurs.
Working with a strategy can include considerations on e.g.:
It can be a good idea to involve a private advisor in the process of developing a strategy.
Incorporate the strategy into your overall business strategy. For example, plans for moving the production and other development activities should involve plans for avoiding counterfeiting and piracy. A business should identify points of risk in its production and implement precautionary measures to address these risks. The strategy could benefit from competencies within all departments, gaining support of the strategy throughout the entire business.
If you have a strategy to avoid buying and reselling fake products, it is important to enforce it; otherwise it will not have value for you. This means that management must be willing to allocate the necessary resources, both hours and money, to the task.
It is important to consider how to meet the press and the consumers, if your products turn out to be counterfeited or pirated. You can for example determine in advance who should speak to the press, clarify the messages you want to communicate and agree on how open you will be. If you are in a media crisis on social media, clear messages and clear arguments are important.
Get ideas for a number of preventive measures here.
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When you buy parts, to be inserted into your products, from subcontractors, or if you buy finished products for resale, there are a number of actions you can implement to avoid buying fake products. Here are some examples.
Check suppliers thoroughly before the cooperation begins
Obtain as much information as possible about prospective suppliers before entering into an agreement. That way, you can minimize the risk of buying and reselling fake products. You can for example check if the supplier has previously been involved in infringement cases. You can also ask other businesses about their experience with the particular supplier.
Cooperation agreements with suppliers
When you enter into a cooperation agreement with a subcontractor, it is a good idea to address the issue of counterfeiting and piracy expressly in the agreement. Insert demands into agreements with suppliers and/ or manufacturers for coverage of losses should the products turn out to be fake. Even though the sale of counterfeit and pirated goods is illegal, a specific demand for compensation in the agreement will emphasize the importance of genuine products.
Demand proof of genuineness
This is especially important if your business buys products – or parts to be inserted into your own products - from someone other than the original manufacturer. The demand emphasizes that it is important to your business that the products are genuine. In case of genuine products, it should not be difficult for the seller to obtain such proof. The proof could be documentation that the goods have been sold from to the supplier.
Develop a strategy
Read more here.
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What can you do if your business, without knowing it, have bought and resold fake products? Here are some ideas.
Follow the strategy
If you developed a strategy, it should normally be followed. It is best if your entire business knows the strategy and follows it. A known strategy makes it easier to react swiftly. However, you may also benefit from the guidance below.
Contact your adviser
It can be difficult to determine the right approach in a specific situation. Your adviser can help you choose the right solution. If your supplier/manufacturer is not willing to cover your losses, is may be necessary to file a lawsuit.
Contact ‘Hotline on Enforcement and Counterfeiting’
The Hotline (in Danish) is operated by the Danish Patent and Trademark Office and offers initial guidance on enforcement and counterfeiting. The Hotline can be contacted by phone (+45 22 60 56 87) on weekdays between 9.30 am and 11.30 am. The hotline can also be contacted by e-mail to firstname.lastname@example.org.
Contact relevant authorities
In case of fake medicines, you should contact the Danish Medicines Agency. In case of dangerous products, you should contact the Danish Safety Technology Agency. You can also obtain guidance from the Danish Embassy in the country where the fakes have been found or produced.
Contact the original manufacturer
It is important for the original manufacturer to be notified of the IPR crime. Sharing such information makes it easier for the original manufacturer to prevent future cases of counterfeiting and piracy.
In relation to registered trademarks and designs in Denmark, you can find information about the original manufacturer (or its representative) in the online register of the Danish Patent and Trademark Office.
Remove fake products from the market immediately
By quickly removing the fakes from the market, you may limit the damages. You should also recall fake products from stores and any retail network.
Inform the public
When a business discovers that it has resold counterfeit or pirated items in good faith, consumers should be notified in order to prevent harmful effects.
Did you copy others?
Has another business (or its lawyer), producing the genuine product, contacted you? If yes, here are a couple of things you can do:
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Counterfeiting and piracy used to mainly occur in relation to luxury goods. Today, almost all product types can be copied illegally - for example also cosmetics, electronics, medicine, toys, perfume, tools and food. At the same time, the producers of counterfeit and pirated products have become better at copying the appearance of the products. This can have serious consequences for consumers.
In addition to sanctions from right holders and/or the police, it can also be dangerous for the consumers!
It can be difficult to distinguish counterfeit and pirated products from the original products. The producers of counterfeit and pirated products have become better at imitating the appearance of the products. At the same time, it is no longer only luxury goods that are counterfeited. Today, almost all product types are at risk of being counterfeited.
There are many requirements for manufacturers of various goods, e.g. manufacturers of food, medicine, toys and spare parts for cars or aircrafts. The requirements shall, among other things, ensure that all parts of the products comply with both safety and health standards so consumers will not become ill or exposed to other dangers by purchasing the products.
Counterfeit and pirated will typically not meet the requirements. In addition, they will often contain substances that are not approved. As a result, physical contact with the products may lead to allergic reactions for consumers - for example, if clothing or toys contain illegal dye, or if hygiene products contain illegal chemical substances.
In relation to electronics, machinery, motors, cars, etc., there is a risk that counterfeit and pirated products do not comply with technical specifications in the relevant regulation. This can result in product breakage, explosions, fire, electric shock etc.
Falsified medicine is dangerous. It is outside control from the authorities and in many cases contains no active ingredients - or incorrect doses and composition. In addition, falsified medicine is rarely manufactured and stored under proper and hygienic conditions. Fortunately, the legal distribution network for medicines in Denmark is very safe. Falsified medicines typically enter Denmark upon online purchases from foreign web shops that are not authorized to sell medicines.
There are also examples of CE labelling being counterfeited. A CE mark on a product means that the product meets the European minimum health and safety requirements. Many product types may not be marketed, sold and used within the EU / EEA unless they are CE-labeled. In order to deceive the buyers, CE labels are sometimes falsified in parallel with the fake products. This means that a CE mark on a product will not always guarantee that the product is genuine and complies with the European minimum standards.
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