Response’s Editorial Advisory Board and experts in the
international DR marketing field discuss how counterfeit products
are hurting the business. How can you help stop the bleeding?
BY THOMAS HAIRE
In recent months, the problem of counterfeit products in the direct response
marketing world has intensified. Certainly, many marketing executives have
heard one horror story after another of intellectual property theft. Many may
believe that it couldn’t possibly happen to them — they have trademarked
their products and have sought and received proper regulatory approvals, and
believe they are protected. Those believers couldn’t be more wrong.
According to a report in the December 2006 issue
of the housewares trade journal Appliance Magazine,
“The IACC (International Anti-Counterfeiting
Coalition, www.iacc.org), a watchdog over this area,
estimates that trademark counterfeiting robs the U.S.
of more than $200 billion annually in product sales,
distribution and lost jobs. In 2001, U.S. Customs
seized and destroyed more than $4 million worth of
counterfeit electrical equipment alone.”
The report continues, “The IACC reports the
majority of counterfeit products come from Asia, primarily China, and that Eastern Europe has also
become a significant source.”
With so many products manufactured in China,
the opportunities for counterfeiters to make their
mark on the DR business have long been available.
Within the past year, the Electronic Retailing
Association (ERA) and its board members have
pressed for more attention on counterfeiting and are
seeing success. Still, the problem remains a mystery to
many, including some of Response’s Editorial Advisory
Board members, who are — as yet — directly unaffected by it. However, other voices from the board
and chosen experts in the international DR business
have important ideas to combat the counterfeiters.
How negatively do you believe product counterfeiting is affecting the direct response business?
Stan Bruckheim, PanLatino TV, Laguna Hills, Calif.:
In Latin America, counterfeiting has become a
tremendous threat to the industry, to the degree there
is virtually a parallel industry of counterfeiters. In the
short term, counterfeiting can kill a product. In the
long term, the drain on resources used to fight counterfeiters can significantly damage a reputable distributor and product owner.
Brian Fays, MTV Networks, New York: At this point,
the damage is still in the early stages, but we at MTV
Networks realize clients are at risk and will endeavor
to partner with those in jeopardy to protect their
brands and core businesses.
Jeffrey D. Knowles, Venable LLP, Washington: The
economic impact alone is staggering. From 2001
through 2005, U.S. Customs made 31,156 seizures of
counterfeit goods at the border. These goods had an
estimated domestic value of more than $482 million.
Each sale a counterfeiter makes is a sale that the
counterfeit victim loses. It touches everyone in the
direct response business. Counterfeiters do not just
knock off watches and handbags. They have become
technologically sophisticated and can copy everything
from household appliances to formulations for dietary
Bill Quarless, Impact Products, Hong Kong:
Counterfeit and knockoff products are the single
greatest problem we face as DRTV manufacturers in
China. Not only do they steal business from the intellectual property owner, licensed distributor and
licensed manufacturer, but also the counterfeit goods
that make it to market are usually of inferior quality.
Gregory J. Sater, Rutter Hobbs & Davidoff, Los
Angeles: I file and prosecute counterfeiting lawsuits