Counterfeits are a year-round business, but the holiday shopping spike tends to draw the attention of customs enforcers and brands seeking to thwart imposters seeking a piece of the estimated more than $140 billion online holiday shopping pie in the U.S.
The problem isn’t so much necessarily whether counterfeiting itself increases around the shopping season, but more a matter of the volume of sales, especially through e-commerce, that raises the odds of knock-offs winding up under the Christmas tree, experts said.
According to Adobe’s holiday predictions for November and December, online holiday shopping in the U.S. will hit $143.7 billion, a roughly 14 percent increase from last year.
“As the year-end comes, and the holiday season begins, I don’t perceive an uptick in [counterfeit] activity,” said David Perry, who co-chairs Blank Rome LLP’s intellectual property and technology practice group. “But it’s natural that because online communications do increase…the holiday season does make the consumer more likely to make a mistake.”
U.S. Customs and Border Protection conducted some 33,810 seizures in fiscal year 2018 of products that involved safety or trade violations or counterfeits, according to the agency’s website. Apparel, accessories, watches, jewelry and footwear account for their top seizures, according to the agency.
But the agency’s focus may be narrower than that of brands, prioritizing the health and safety issues related to counterfeits, experts said. Around the Thanksgiving shopping weekend in late November, the agency issued a warning to that effect.
“For example, fake bicycle helmets can break upon impact, phony cosmetics can lead to skin reactions, and imitation seasonal holiday lights improperly made can result in fires,” the agency said at the time.
The CBP’s visibility is limited also because of the volume of shipments coming through the border, which can make it hard to spot fakes hidden among them, intellectual property attorneys said.
“The CBP is at the border, so there the purpose would be to understand how they’re going to be able to identify the goods coming through the border that are problematic,” said Olivera Medenica, a partner at Dunnington Bartholow & Miller LLP.
“They’re going to have to rely on information from shipping label, and [work] with local and foreign law enforcement and with brands,” she said. “But it’s kind of like finding a needle in a haystack.”
While working with local law enforcement may help brands tackle the sale of obvious fakes, they’re turning to technology to address the problem of dupes that may come from legitimate online platforms or other seemingly credible web sites.
Amazon, for one, updated its brand registry in 2017, and has drawn in companies seeking to guard against fakes in the marketplace. The registry allows companies with registered trademarks to inform Amazon, which in turn consults with the U.S. trademark office database and the attorneys of record on the trademark to verify it.
Once verified, companies can access a portal to conduct searches for trademarks and products, and report counterfeits or even potentially infringing items that aren’t direct knock-offs, attorneys said.
“It’s never going to be perfect, and for some brands, there seems to be an unending flow of difficulty,” Perry said of Blank Rome on the registry. “But companies are finding it useful.”
Brands have also turned to tracking technology, including blockchain and QR codes, that give consumers more ways to check if they’re purchasing genuine items, and learn more about their make and origins.
For instance, LVMH unveiled in May that it was launching the first blockchain solution to help consumers check if their designer goods are real.
“I wouldn’t say that just because Christmas rolls around, [brands] going to be more concerned,” Medenica said of Dunnington Bartholow. “But certainly, the problem becomes more pronounced if [they] waited until the end of the year to do something about it.”