Love Conquers Counterfeits

// Counterfeiting remains a huge problem worldwide. And unlike in the past, when peddlers of counterfeit goods may have had to sweat to sell their untoward ersatz wares on a humid corner somewhere around Canal Street, the unlimited reach of e-commerce has made access to counterfeit products as easy as opening an app on your phone. As readers of this column know, because of the importance of this issue to the IP community I have discussed the impact of counterfeit products targeting American consumers from many different angles. From reporting on aggressive CBP protection of Apple’s Airpods from competing products to discussing the benefits of luxury brands cooperating with tech giants in counterfeit-deterring actions, the issue of counterfeit prevention as a hallmark of responsible modern commercial activity has long been part of our collective discussion.

In the context of that discussion, Amazon has always — and continues to — loom large. Both by virtue of its importance as the world’s leading global online retail marketplace, as well as by its vocal commitment to policing counterfeit activity on its store and beyond. From my interview of the head of Amazon’s Counterfeit Crimes Unit to my coverage of Amazon’s litigation collaboration with Ferragamo, there has been plenty of discussion on these pages of Amazon’s efforts in the anti-counterfeiting arena. And Amazon continues to make news.

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Before I get into the details of Amazon’s latest partnership with a leading luxury goods purveyor to snuff out counterfeiting activity, it makes sense to recall the scale of the company’s anti-counterfeiting operation. As business moved increasingly online in 2021 due to the global pandemic, Amazon increased its expenditures on deterring counterfeits to match. First, by increasing spending from $700 million to $900 million in support of its anti-counterfeiting efforts. Second, by continuing a commitment to  hiring employees focused on the anti-counterfeiting effort — with a robust army of 12,000 Amazon employees for whom stopping counterfeits is in their work brief. And those efforts are starting to pay off, with fewer attempts to set up Amazon accounts selling counterfeit goods in 2021, along with fewer brand identifications of suspicious products being confirmed as counterfeits.

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Add in a high-profile April 2022 raid — by Chinese authorities, no less — arising out of Amazon’s investigation of the sale of fake Ferragamo products, and Amazon’s global reach in terms of anti-counterfeiting is at least starting to rival that of the counterfeiters themselves. Of particular interest is the company’s ability to recruit assistance from the Chinese government, perhaps because of the fact that it is a private company with significant business interests of its own in China. In contrast, prior attempts by the U.S. government to get China to take counterfeiting seriously have not amounted to much. As with many things, we can say that the response is calibrated to who is asking.

Perhaps buoyed by the success it has had in its joint effort with Ferragamo, the latest major Amazon anti-counterfeiting news break also centers on a partnership with a major luxury brand. This time, the partner is Cartier, which jointly filed with Amazon a number of lawsuits earlier in June targeting a ring of counterfeiters selling fake Cartier jewelry, including the iconic Love bracelet. Unsurprisingly, the move garnered widespread media attention, in both the mainstream and fashion press, providing yet more confirmation that high-profile collaborations on anti-counterfeiting efforts are a great way to generate consumer interest in solutions to the counterfeit problem.

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At the same time, counterfeiters themselves continue to evolve their tactics, including by using social media to direct buyers to innocuous looking Amazon listings — before shipping them counterfeit items. To wit, in the Cartier situation “a social media influencer conspired with bad actors to attempt to circumvent Amazon’s anti-counterfeiting detection tools by promoting counterfeit luxury products — including fake Cartier bracelets, necklaces, and rings — on Instagram as well as their own websites.”

At a minimum, the complexity of such schemes suggests that but for the investment of time and resources — by both Amazon and the brand itself — much counterfeiting activity would be able to pass by undetected. But it is also true that for each one of these complicated avenues to counterfeiting that gets exposed and eventually shut down, the degree of difficulty involved in manufacturing a scheme of equal impact gets that much harder for the counterfeiters.

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Ultimately, for all the effort undertaken by Amazon and brands to stop counterfeiting, there is no denying that consumer demand for counterfeit products unfortunately remains high with respect to certain types of goods. While we can hope that customers continue to get educated about the dangers associated with counterfeiting — and incorporate that awareness into their buying decisions — the onus remains on brand owners and their retail partners, working together with law enforcement, to try to root out counterfeits at the source. Nowadays, that includes policing not only retail websites for listings of counterfeit goods, but also the social media accounts of influencers and others hoping to turn a quick buck by engaging in counterfeit schemes of the sort that Amazon and Cartier just exposed. In short, partnerships are critical to stopping counterfeits, especially as the counterfeiters themselves look to partner with social media influencers. As a counterbalance, love between brand owners and companies like Amazon can help conquer counterfeit activity. At least until customers themselves learn to resist the temptation of passing off fakes as the real thing.

Please feel free to send comments or questions to me at [email protected] or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

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Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at [email protected] or follow him on Twitter: @gkroub.

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Amazon Counterfeit Crimes Unit, Cartier, Gaston Kroub, Intellectual Property