Happy 2022 to all our readers – and welcome to the first issue of our new monthly publication – Authentication & Brand News™, which is replacing Authentication News®.
Our decision to provide more of a focus on brand protection comes at a time when it is more important than ever for brand owners to safeguard their intellectual property and, on the flip side, easier than ever for counterfeiters and fraudsters to abuse that property.
Brand protection has always been an important part of our coverage of authentication technologies and strategies but why is brand protection more important now than ever before?
The effects of COVID-19 have a lot to do with it, of course, but trends such as the shift to online shopping have already been happening anyway – the pandemic just accelerated the process.
In his April 2020 article ‘COVID-19 and Counterfeiting: How the Pandemic is Reshaping Brand Protection’, Daniel Bennett, President, Brand Protection at Corsearch, had this to say:
‘It’s becoming clear that all industries and brands face a heightened risk from this crisis. Many household budgets have been reduced and people are shopping online more. The supply lines of counterfeit goods from China are opening again at a time when Europeans and North Americans, unable to leave home, are looking for the cheapest possible versions of branded goods. Physical stores stocked with genuine goods have closed and their capacity to drive revenue from official sales is reduced.
‘So, brands are competing for revenue and attention in this diminishing market with cheap counterfeits whose prices they cannot match. In this scenario, counterfeiters are already creating floods of new listings on online marketplaces, which do not have to close their doors. With physical anti-counterfeiting efforts from customs, police, and other authorities minimised, winning back control of the online space hijacked by counterfeits is becoming increasingly important.
‘The long-term impacts of the coronavirus pandemic are unforeseeable, but there are a number of possible consequences. Perhaps most importantly, the temporary surge in e-commerce looks to continue boosting online purchases and brand presence into the future’.
Mr Bennett goes on to identify other potential shifts in the global marketplace that could impact brand protection strategies:
If global supply chains move away from the current China-centric model and devolve back to more local production, the black market may do the same.
The shift towards more working from home and less in-person meetings means the tech and wearables sectors could grow massively. Therefore brands producing related technology – such as webcams, computer peripherals and mobile phones – would be wise to invest in early brand protection.
The current health scare also suggests that wearable tech, combining elements of health and communication, eg. ECG-monitor smartwatches, could see a surge in consumer interest and, with it, increased counterfeiting activity.
The shift to remote work means that the automotive sector is likely to shrink in real terms. If sales of car parts and related transport goods are dramatically reduced, the market will become even more competitive, and provide another fertile ground for fraudsters.
Another observation to add to this list could be:
There has been a shift in the way consumers view products and brands – and this time it’s got nothing to do with COVID-19, but rather to do with sustainability and corporate social responsibility.
While some consumers are only looking for bargains and are maybe not too worried about receiving knock-offs in the process, others are concerned about the provenance, authenticity and ethical sourcing and manufacturing of the products they are consuming, not to mention their carbon footprint and recyclability. This is adding an increasingly important dimension to the whole concept of brand loyalty and, with it, brand value.
So, how do brand protection strategies come into all this? Before answering that question, let’s look at what the term ‘brand protection’ actually covers – and what Authentication & Brand News (ABN) will consequently be focusing on going forward.
Brand protection refers to a process and set of actions undertaken by brand owners to prevent third parties from using their intellectual property (IP) without permission, since this may lead to loss of revenue and destroy brand equity, reputation and trust.
Brand protection seeks primarily to ensure that trademarks, patents, and copyrights are respected, though other IP rights such as trade dress can be involved. (Trade dress refers to the characteristics of the visual appearance of a product or its packaging that signify the source of the product to consumers).
One of the predominant forms of IP infringement is trademark infringement as a result of counterfeiting of physical goods. However, both copyright and patent infringement are possible without infringing a trademark. Eliminating diversion, grey market, or product theft and resale, are also considered part of a brand protection strategy, even though they may not involve IP infringement.
The registration and management of intellectual property is considered a prerequisite to launching a brand protection strategy. Thereafter, the brand protection (or ‘anti-counterfeit’) team within an organisation will develop processes for preventing, identifying, monitoring and reacting to IP infringements, as well as promote a culture of managing sensitive information carefully.
Brand protection measures at the technical level include the implementation of solutions for counterfeit detection, supply chain integrity, distribution channel monitoring, and consumer engagement.
Counterfeit detection measures are the ones that readers of this publication are most familiar with. These include overt and covert authentication features that are attached to either the packaging or product itself. But these features are being increasingly combined with digitally generated features, and serialised coding and data management systems, which allow individual items to be tracked and traced through legitimate supply chains in order to monitor and detect illicit activities and identify where a particular item originates from.
This is a continually evolving domain where traditional, physical security features are frequently paired with digital technologies to create a hybrid solution that addresses both counterfeit detection and supply chain integrity.
This area has been extensively covered in Authentication News over the past 27 years and now forms the core theme of Authentication & Brand News, which will provide regular reports on embryo and pipeline technologies that show potential in the authentication and traceability space, as well as solutions that have already proven themselves in real-life applications.
But another key area of brand protection, which will also be regularly covered in ABN, concerns market monitoring and enforcement measures, both at physical, ‘bricks and mortar’, level, as well as at e-commerce level. Such measures are as important as the anti-counterfeit/track and trace features themselves, which is why several suppliers of authentication and track and trace technologies are including online and point-of-sale investigative services in their offering, in order to be able to assist brand owners and government agencies in their enforcement efforts.
Another important area of brand protection relates to the consumers themselves and how they engage with the brand. Brand owners often try to ‘enlist’ consumers into a market monitoring ‘army’ by incentivising them to scan QR codes or NFC tags with their smartphones. One of the main intentions here is that the hundreds (or hopefully thousands) of scans garnered from the public will generate enough data for brand owners to monitor distribution channels for illicit activity, without hiring investigators to do the job for them.
Unfortunately, the reality is that most consumers would need a very strong incentive to carry out such scanning as most of them don’t really see the benefit of doing this. But, as the story from Taiwan demonstrates, if the reward is high enough, nothing is impossible.
The reason for consumers to scan a barcode or NFC tag is not, however, confined to that of verifying authenticity. It also has the effect of connecting the consumer with the brand, allowing them to obtain relevant information about the product and how it has been sourced and manufactured, and engaging them in loyalty programmes.
We at ABN believe that authentication and track and trace technologies used in brand protection programmes can go further, by expanding into the realm of brand equity and brand integrity. Not only can such technologies be used to differentiate between an illicit and legitimate product, but they can also serve as a seal of trust to enhance the value of a brand, as well as provide a communication channel between consumer and brand owner.
The capacity of authentication technologies to offer these additional benefits will only become stronger, as we advance further into the domain of smart packaging and artificial intelligence. And this is something we feel passionately about at ABN and that we look forward to sharing with you in the months to come.
Astrid Mitchell, Francis Tuffy, Nicola Sudan
Co-Editors, Authentication & Brand News
