The UK Intellectual Property Office (“UKIPO”) has identified that influencers are becoming an important and effective vehicle for the sale and marketing of counterfeit goods. Brands ought to be alert to the promotion of these goods, the sale of which could dilute or devalue their reputation, particularly if they are of sub-standard quality.
Influencer promotion of Counterfeit goods
In November 2021, the UKIPO published its research findings into the impact of complicit social media influencers on the consumption of counterfeit goods (UKIPO Report). The report found that 10% of those participating in the research project were encouraged to purchase counterfeit goods through social media endorsements. The opinions and views of influencers are trusted by their followers. So if an influencer promotes a product, whether counterfeit or not, their followers are more likely to purchase it.
Counterfeit goods are close imitations of genuine products. They may use the official branding or logo of the genuine product or be so similarly designed and packaged that they allude to it. This often results in infringement of the intellectual property rights belonging to the brand that is being imitated, either by infringing their registered trademark contrary to section 10 of the Trade Marks Act 1994 (the “TMA”) or by passing off, which misleads the consumer into thinking that the goods are connected with the genuine brand when they are not.
If consumers are misled into thinking that a website, blog post or social media page is that of a brand owner or is authorised or endorsed by them due to the use by the third party of a similar or the same brand. In that case, the brand owner may suffer reputational damage as a result. This is particularly the case if counterfeit products are of inferior quality.
The UKIPO’s report identified that change is required to mitigate the impact of influencer promotion on the sale of counterfeit goods. They made several recommendations aiming to tackle the root of this problem. These include educating consumers on the safety risks of purchasing counterfeit goods, particularly in the beauty and electronics market, and potentially using influencers to communicate this message.
How should brands respond?
The UKIPO’s recommendations seek to mitigate the impact of this problem. However, brands will still need to react to individual instances of promotion and sale of counterfeit goods which infringe their IP rights and pose a risk to their reputation. A brand’s response is likely to depend on the risk posed by the post or goods and the brand’s attitude to risk and brand protection.
Brands could pursue individual influencers for promoting counterfeit goods that infringe their trademark under s92(1)(b) of the TMA. The provision makes it a criminal offence for an individual to sell, or expose for sale, goods which bear a registered trade mark without the consent of the owner of that trademark, with a view to incurring a gain themselves or intentionally causing loss to another. This offence captures influencers who knowingly promote counterfeit goods for sale to their followers. As well as being criminally liable, influencers who commit this offence may be found liable for any financial loss incurred by the brand. As this is a criminal offence, the brand can report this behaviour to the Police – something which can be done at a very low cost. However, in doing so, the brand loses control of the process, and the Police don’t always have sufficient resources to pursue all instances of infringement.
Another option for brands is to call on the platform that the infringing post is featured on to remove the post. Most social media platforms, such as Instagram, prohibit users from making posts which infringe on another’s intellectual property rights. Doing so will be a breach of the platform’s terms of use. In this case, the brand could report this breach to the platform, following which the platform might decide to remove the post and possibly impose consequences on the user’s account, such as a ban or suspension from posting. Although there is no guarantee that the platform will take the action that the brand is seeking, if the brand has registered rights and the infringing post is counterfeit, the takedown process is generally swift and effective at a minimal cost. It is also possible to be proactive and instruct third-party providers that offer monitoring services to detect and remove harmful fakes and infringements.
Comment
Brands must be aware of the rise in the promotion of counterfeit goods online, which may infringe on their IP rights. If an instance of infringement does occur, brands should take action to mitigate any harm or loss they may suffer, either by seeking the removal of the post through mechanisms provided by the online platform, pursuing a judicial remedy or a combination of the two.
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