Intellectual Property

Anti-Counterfeit Tag Team #2

Securing the cooperation of the online platforms on which the counterfeiting activity takes place is a must.

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(Image via Getty)

A few months ago, I wrote about an interesting anti-counterfeiting collaboration between Amazon and Ferragamo, aimed at stopping sales of fake Ferragamo belts on the world’s largest retail online platform. Calling that joint effort “turbocharged,” my column pointed out how dealing with counterfeit activity was no longer the sole responsibility of the brand owner, but nowadays also includes the “major online retail platforms like Amazon.” We can now expand the list of motivated anti-counterfeiters to include leading social media sites like Facebook and its daughter company Instagram, as they have given us yet another example of luxury brand-online platform legal collaboration to discuss.

In news last week that was picked up by a wide swath of media outlets — with each servicing a varied readership from finance and fashion — a joint anti-counterfeiting effort was announced involving Facebook and Italian-luxury goods stalwart Gucci. Modeled at least in part on the Amazon-Ferragamo approach, Facebook and Gucci jointly filed a lawsuit in California against a serial Russia-based counterfeiter, who had been circumventing both Facebook and Instagram’s technological barriers by continuously opening accounts driving social media users on those platforms to websites selling counterfeit Gucci products. Importantly, it was announced that actually filing a joint lawsuit was a first-of-its-kind step for both Gucci and Facebook, even as the lawsuit built on each company’s robust efforts to stop counterfeiting activity online.

For a company like Gucci, of course, public adoption of a multistrategy anti-counterfeiting approach is a must, if only to protect the company’s brand equity as a luxury purveyor. To that end, Gucci took pains in conjunction with the announcement of the joint lawsuit with Facebook to demonstrate just how robust its anti-counterfeiting efforts are. As reported by CNBC “in 2020 alone the actions of Gucci’s in-house intellectual property team had resulted in four million on-line counterfeit product listings being taken down, the seizure of 4.1 million counterfeit products, and 45,000 websites, including social media accounts, being disabled.” While those impressive numbers are a testament to Gucci’s dogged determination in protecting its brand and customers online, those very same numbers also illustrate just how big a problem online counterfeiting activity already is. Take the counterfeiter that is the target of Gucci’s joining filing; even based in Russia, she was able to target consumers worldwide via Facebook and Instagram. That reach highlights that the threat to luxury brands from online counterfeits exceeds that of traditional counterfeit bastions like Chinatown’s leather goods-purveying storefronts.

Because the threat posed by online counterfeiting is a more robust one for brand owners to deal with, securing the cooperation of the online platforms on which the counterfeiting activity takes place is a must. At the same time, dealing with counterfeits on different platforms requires different approaches, tailored to the activity found on a particular platform. On Amazon, for example, that may mean looking for new listings advertising counterfeit goods for sale. In contrast, because Facebook and Instagram are not really used for direct purchases — especially from strangers — the challenge for brand owners is to distinguish between innocent (and welcome) showcasing of products by consumers to their followers from more nefarious activity, such as trying to direct unsuspecting users to purchase counterfeits from shady websites. Put another way, a brand like Gucci wants a legitimate customer to show off their new pair of loafers or their handbag to prospectively jealous — and thus likely to purchase Gucci themselves — family and former classmates. But Gucci doesn’t want those same viewers to buy counterfeits of what the customer is showcasing off buy-gucci-online.ru or some other unauthorized website linked in a posting.

There is a fair question we can ask about Facebook-Gucci adopting the anti-counterfeiting tag team approach first espoused by Amazon-Ferragamo. Namely, what does shutting down one counterfeiter — no matter how prolific or evasive — really accomplish? The easy answer of course is that there is great benefit to making an example out of someone, especially when you are trying to deter others from being attracted to criminal activity. But the benefit of the joint effort, even if directed against a single target, goes deeper. First, acting jointly increases the media attention on the maneuver, if only by encouraging a broad group of outlets to position the story for their respective readers. Second, joint action sends a clear message to counterfeiters that there is no space between the online platforms and brand owners when it comes to shutting down counterfeit activity. Which helps force counterfeiters off the legitimate internet toward the nefarious Dark Web, a place where enlightened and responsible people do not dare to venture. Thereby reducing the reach of the counterfeiters, at a minimum.

Ultimately, both the online platforms — whether they are e-commerce or social media-oriented doesn’t really matter — and brand owners like Gucci benefit from taking high-profile steps like filing federal lawsuits against counterfeiters. Joint actions of this sort send the message that counterfeiting on online platforms will not be tolerated — and that there are two sets of motivated eyes on any counterfeit activity currently being attempted. Moreover, whenever a legal collaboration is announced involving two well-known companies, the public is reminded just how broad a reach counterfeiting activity has, as well as why it must be stopped to the extent possible. So we can expect to see more anti-counterfeit tag teams being formed going forward.

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Please feel free to send comments or questions to me at gkroub@kskiplaw.com or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

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 gkroub@kskiplaw.com or follow him on Twitter: @gkroub.

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