Counterfeiting has become a global crisis, impacting industries from luxury fashion to pharmaceuticals. It is estimated that counterfeit goods will exceed $4.2 trillion by 2025, according to the OECD. Beyond financial losses, counterfeiting erodes brand trust, endangers consumers, and weakens innovation. As companies look for solutions, two primary approaches emerge: technology-driven brand protection software and legal action against counterfeiters.
Both strategies have their merits and drawbacks. While brand protection software offers real-time monitoring and enforcement, legal action provides a way to hold counterfeiters accountable. But which is truly more effective in safeguarding brands?
The Growing Threat of Counterfeiting
Counterfeiters are evolving rapidly, leveraging sophisticated methods to replicate packaging, create deceptive websites, and infiltrate legitimate supply chains. The rise of e-commerce has further complicated the battle, as fake products are sold through online marketplaces, social media ads, and even cloned brand websites.
To combat this, brands must implement solutions that:
Detect counterfeit listings and fraudulent websites before they reach consumers.
Take proactive steps to prevent unauthorised sales.
Enforce intellectual property rights effectively across global jurisdictions.
Many companies struggle with choosing between deploying brand protection software or relying on legal action. A deeper look at both strategies can help determine the best course of action.
Brand Protection Software: Proactive Defence
Brand protection software uses AI, machine learning, and blockchain to detect, analyze, and remove counterfeits before they spread. By automating counterfeit detection and enforcement, it allows brands to respond swiftly to emerging threats. Here’s how it works:
1. AI-Powered Monitoring
Artificial intelligence enables software to scan e-commerce platforms, social media, and the dark web for counterfeit listings. These systems use image recognition, keyword analysis, and behavioural tracking to detect fraudulent products before they gain traction.
2. Automated Takedowns
Once a counterfeit listing is identified, the software automatically files takedown requests with marketplaces and social media platforms. This ensures that unauthorised sellers are removed within hours rather than weeks, significantly reducing consumer exposure to fake goods.
3. Website and Domain Protection
Counterfeiters often create cloned websites to impersonate brands and mislead customers. Brand protection software monitors domain registrations and flags fraudulent websites, initiating domain disputes to shut them down before significant damage is done.
4. Track & Trace Technology
Blockchain and QR-based authentication provide an additional layer of security by enabling consumers to verify product authenticity. By integrating these technologies into packaging, brands can offer customers a seamless way to confirm legitimacy, reducing the success of counterfeit operations.
Case Study: How Sony Stopped Fake Websites from Scamming Consumers
Sony discovered fake websites impersonating its brand to sell non-existent gaming consoles and accessories, leading to consumer fraud and brand damage. By implementing AI-driven website protection, the company:
Detected and shut down 300+ fraudulent websites within three months.
Filed automated takedown requests, reducing scam attempts by 90%.
Educated customers on verifying legitimate sellers through QR authentication.
This showcases how technology-driven protection offers real-time defence against fraud.
Legal Action Against Counterfeiters: A Costly Battle
Legal enforcement is often seen as a strong deterrent against counterfeiters. However, lawsuits can be time-consuming, costly, and limited in reach. Many counterfeiters operate in jurisdictions where intellectual property laws are weak or poorly enforced, making litigation an uphill battle.
Challenges of Legal Action
Time-Consuming: Lawsuits can take months or even years to resolve. By the time a court ruling is issued, counterfeiters may have already moved their operations elsewhere.
High Costs: Legal expenses can reach hundreds of thousands of dollars, with no guarantee of recovering losses.
Limited Jurisdiction: Many counterfeit networks operate across multiple countries, making enforcement difficult and often requiring cooperation from international agencies.
When Legal Action is Effective
Despite these challenges, legal action remains necessary in certain cases:
When counterfeiters are located in countries with strong intellectual property enforcement.
When dealing with high-value or repeat offenders who can be identified and held accountable.
When a strong public legal stance is needed to deter future counterfeit activity.
Chanel’s Legal Battle Against Counterfeiters
In 2021, Chanel pursued a $200 million lawsuit against counterfeiters selling fake handbags and accessories through online platforms. The legal victory resulted in the shutdown of several fraudulent sellers. However, many counterfeiters quickly reappeared under different identities, highlighting the limitations of litigation as a long-term solution.
The Best Strategy: A Hybrid Approach
Rather than choosing between brand protection software and legal enforcement, the most effective strategy is a combination of both. Here’s how brands can integrate these approaches:
Leverage AI-powered software for real-time counterfeit detection and takedown. This minimizes the reach of fraudulent sellers before they cause widespread harm.
Implement blockchain and QR authentication to empower consumers to verify product authenticity. Acviss's Origin solution enables brands to combine non-cloneable label technology to verify products and track them across the supply chain. This makes it harder for counterfeiters to pass off fake products as genuine.
Use legal action strategically against high-stakes counterfeiters. Lawsuits should be reserved for major offenders where enforcement is likely to succeed.
Success Story: How Pfizer Cut Counterfeiting by 85%
Pfizer, struggling with counterfeit versions of its prescription drugs, used brand protection software to scan online marketplaces and social media. The company:
Flagged over 10,000 fake product listings in six months.
Filed legal notices against key counterfeiters, forcing compliance.
Saw an 85% drop in fake product circulation.
Which Works Best?
Factor | Brand Protection Software | Legal Action |
|---|---|---|
Speed | Instant detection & removal | Slow litigation |
Cost | Subscription-based, cost-effective | Expensive legal fees |
Scalability | Global Monitoring | Limited to legal jurisdictions |
Effectiveness | Prevents fraud before impact | Punishes, but doesn’t prevent |
For brands seeking comprehensive protection, a hybrid approach is the most effective solution. By combining technology with legal enforcement, businesses can stay ahead of counterfeiters while safeguarding their reputation, revenue, and customers.
To learn how brand protection software can help your business, Schedule a demo today!
