South-East Asia IPR SME Helpdesk

Dealing with Counterfeiting

Unfortunately counterfeiting is a problem experienced by most SMEs and it is not an easy issue to resolve. If your company experiences counterfeit products, there is an array of options your company can choose to implement.

Overall factors to consider when choosing to fight counterfeit products

Taking action against a counterfeiting manufacturer and/or distributor is a complex matter, which in general contains three elements:

  • In depth knowledge of the SMEĀ“s product and the counterfeiting product
  • In depth knowledge of IP-legislation in the specific ASEAN nation, and which legislation to be considered in a given case and
  • An analysis of what effect the counterfeit product has on your business, both in the short term as well as the long term.

Gathering the facts

When dealing with counterfeiters, the first step is to identify the infringer and gather intelligence. Helpdesk team leader Simon Cheetham of ERINYES INTERNATIONAL, an expert in securing evidence and taking administrative actions in ASEAN explains:

"There are several issues to consider when securing evidence in ASEAN. We have found that counterfeit manufacturers close down and open up again if they find out that we are investigating them. It therefore becomes an issue of securing evidence the first time you have the chance, and making sure they are not aware of you being there, until you have the case ready."

In some cases, complaint(s) of counterfeiting comes from the local partner distributor. They may be motivated by self interest to make the problem more serious than it actually is. They might want to do this to justify lowering sales targets or reduced pricing. You should consider conducting a market survey through independent investigators to understand the extent of the problem and the result of this survey can then form the baseline to measure the effectiveness of future enforcement actions. It also can be used to counter the local partner's over-exaggeration of the piracy problem assuming the results of the survey give a different picture to that painted by the local partner.

In any enforcement action, expectation should be realistic. The focus should be to create maximum deterrent effect as soon as possible to regain your market share or prevent it from eroding further. It might not be cost effective to embark on a long drawn and expensive investigation to get to that elusive mastermind importer or manufacturer which might take a long time to uncover. If your distributor insists on finding this "big fish" target, this might be motivated by desire for vengeance or mistaken belief that this will bring an end to all counterfeiting of your brand/product. A big seizure does lend greater sensation in any news reporting but expectations should be realistic; and deterrence may be just as effective by tackling demand for counterfeits at the retail level coupled with publicity of such actions.

Resources are needed

Anti-counterfeiting is a task which takes up resources. A well prepared plan heightens your chances of a positive outcome for any given case. Often when no action is taken, the counterfeiting problem and the counterfeiting company grow.

Question whether you have the internal expertise

If you do not have an internal resource which is used to being engaged in anti-counterfeit preparations in ASEAN nations, it is an option to contact external IP consultants that can take care of the SMEs needs in any given case in South East Asia.

IP experts in the field getting acquainted with IP

For an SME it is important to consider the type of IP expert needed in order to take the next step. Here, can find a description of the IP services available in the market, and how to get in contact with the different experts.

If your company has experienced counterfeit products, and has no previous knowledge on anti-counterfeit actions in ASEAN, you should start by learning more about IP is about. Furthermore, the options you have when dealing with counterfeiting is very much dictated by the preventive measures that have already been implemented in your business model in ASEAN nations. To read more about pro-active measures to be considered please see the main sections which relate to different business set-ups in ASEAN: 'Sourcing', 'Manufacturing', 'Licensing', 'Business Promotion', 'Research & Development', 'Sales & Distribution' and 'Business Partners'.

Finding the right lawyer can often be difficult, and retaining a lawyer who really understands your case and has the relevant experience is crucial. Other than Malaysia, the Philippines and Singapore, English proficiency can be limited in the other ASEAN countries. In these countries, the local attorney's command of English in explaining complex legal or cultural issues may not go beyond the superficial level or may be restricted to "template" explanations of routine matters, not enough for you to truly appreciate the challenges/issues so as to make a fully informed decision in non-routine matters. You can read more about how to find the right lawyer here.