As the global coronavirus (COVID-19) pandemic continues to spread and cause upheaval in consumer habits, there is a growing threat posed by counterfeiters. The Australian government has responded to the COVID-19 crisis by implementing widespread lockdown measures. As Australians are forced to spend more time indoors, there will inevitably be an increase in online transactions. Consumers are also engaging in panic buying, creating supply issues for consumables and certain pharmaceutical goods. This upheaval in the markets could result in an influx of counterfeit goods, potentially inflicting long-lasting damage to the reputation and business of brand owners.
The impact of COVID-19 on consumer habits
Despite a robust supply chain of goods in Australia, the COVID-19 crisis has resulted in excessive demand and the hoarding of consumables. This creates the appearance of a supply shortage and pushes consumers to unorthodox marketplaces, where counterfeit goods can be sold without repercussions.
As counterfeiters seek to take advantage of this panic, they are turning their attention away from luxury goods to low-value goods in high demand. Anxious consumers may be less concerned about quality and shop for these products online from less reputable sources. This will limit their ability to inspect and verify the authenticity of the goods. With the lockdown leading to an uptick in social media usage, counterfeiters could utilize these channels to market their fake products pretending to be the original brand owners.
As brand owners, the health and safety of your customers are paramount, particularly if your goods are of a medical nature. Panic buying has not solely been confined to foods, with medicines and personal protective equipment also in high demand. This has prompted the Therapeutic Goods Administration to impose limits on the dispensing of affected products such as sabultomal inhalers and paracetamol paediatric formulations.1
It was reported in the recent ‘Trade in Counterfeit Pharmaceutical Products’ publication by the European Intellectual Property Office and the Organisation for Economic Co-operation and Development, that international trade in counterfeit pharmaceuticals had reached USD $4.4 billion (approximately AUD $6.5 billion) in 2016.2 This illegal trade could continue to increase during the crisis, with counterfeiters preying on the vulnerability of consumers and their restricted access to certain medications due to stricter government controls.
What can I do as a brand owner to protect my trade mark?
It is important in today’s uncertain economic conditions for brand owners to fight the entry of illicit goods into the market. This not only protects your customers, but also safeguards the strength of your brand so that is best positioned to rebound back to normal operations following the COVID-19 crisis.
Brand owners should be proactive and invest in their online monitoring capabilities. For example, personnel could be re-directed to brand protection duties and tasked with identifying counterfeit goods in real time. Online tools or forums can be made available to the public, making it easier for them to self-report suspected counterfeit goods.
Additionally, if you believe your goods are at risk of being counterfeited and imported into Australia, you should be vigilant in policing your rights. This could be through registering your trade mark, or if you already have a registered trade mark, lodging a Notice of Objection with the Australian Border Force (the ABF).3 This is a notice to the ABF objecting to the importation of goods that infringe your trade mark and will be valid for four years. It gives the ABF authority to search and seize suspected counterfeit goods that infringe your intellectual property rights. If you do not lodge a Notice of Objection for your registered trade marks, the ABF may not be able to seize the counterfeited goods.
Our team are experienced in lodging notices with the ABF, as well as law enforcement agencies in other jurisdictions. If infringing goods are suspected by the ABF, we can guide you through the process of initiating legal action against the importer and ensuing forfeiture. We can help you minimise disruption to your business throughout the COVID-19 crisis, by protecting your registered trade mark from damages to your reputation and trade caused by counterfeit goods.
This article was written by Helen Kavadias, Partner.
1 Therapeutic Goods Administration, Limits on dispensing and sales of prescription and over-the-counter medicines, 19 March 2020, https://www.tga.gov.au/media-release/limits-dispensing-and-sales-prescription-and-over-counter-medicines.
2 OECD/EUIPO (2020), Trade in Counterfeit Pharmaceutical Products, Illicit Trade, OECD Publishing, Paris, https://doi.org/10.1787/a7c7e054-en.
3 Trade Marks Act 1995 (Cth), section 132.