The International Organization for Standardization (ISO) released a report earlier this year detailing the continual rise in counterfeiting, which has become a big business that can be detrimental to small businesses and consumers.
Counterfeiting reaches a diverse array of industries including, but not limited to, food, drinks, currency, apparel, pharmaceuticals, electronics, automobile parts, cigarettes, toys, toiletries, and building materials. Counterfeiters work by copying a design and sell a cheaper version of the product, or simply put another brand’s logo or name onto their goods.
Not only is nearly every area of industry adversely affected by counterfeiting, but the illegal trade is projected to cost legitimate companies worldwide $500-700 billion every year.
The International Chamber of Commerce (ICC) predicts that by 2015, counterfeit goods will be valued over $1.7 trillion internationally, which is more than 2% of the world’s economic output now. These numbers indicate the exorbitant threat counterfeiting poses to the shelf life of a company, let alone a small business. Low turnover, stolen intellectual property, expensive lawsuits and increased prices are just a few examples of the impact knock-offs have on businesses.
Because small businesses typically lack the same pool of resources that larger companies have to battle counterfeiting, their success is open to more damage, especially in the long run. What small businesses can do is to invest in and utilize their intellectual property rights. A recent article in Forbes listed “not getting a patent, copyright or trademark” as one of the top ten legal mistakes small businesses make. However, small businesses that obtain the types intellectual property pertinent to their product take a significant step in protecting and expanding their profitability.
Small businesses can also maintain the security afforded by intellectual property rights by keeping an eye out for counterfeits and reporting infringements. For example, business owners can browse for knock-offs in online marketplaces and auctions, and report counterfeits directly to them or to law enforcement authorities. STOPfakes.gov is a federal website that provides a wide range of intellectual property tools and information. Intellectual property owners can record their marks and copyrights using an online tool by the U.S. Customs and Border Protection in order to help the agency prevent infringements from crossing into U.S. borders. The help of a quality legal team can serve in protecting, and should the occasion arise, enforcing valuable patents, trademarks, and copyrights.