A company introducing a newly created, distinct product to the marketplace may not initially consider the real threat of a counterfeiter. This was the mindset of our company when we first started in 1998 — we created a unique product and we were solely focused on its highly-anticipated introduction to a variety of industries. However, it is exactly at these initial stages of product introduction that the destructive danger of counterfeiting should be addressed.
Many manufacturers, retailers and consumers alike might naively believe that counterfeiting is a problem that only companies like Louis Vuitton or Coach suffer from. After all, who could guess that functional packaging material could produce the same response as the latest Alma bag?
Our product is one that we were proud of, as it effectively protects shipped merchandise from damage caused by mold and moisture. We make continual efforts to produce in a sustainable and environmentally-friendly manner, and Micro-Pak products have recently been registered by the U. S. Environmental Protection Agency. Products like ours could be hard to copy in functionality, but easy to copy in appearance. For us, we found that counterfeiters simply replicated pieces of plastic with our name on them and passed them off as the real product.
In response, we hired a security firm, which came up with basic technical features and tools for customers to detect genuine Micro-Pak items versus the fake ones. Then the counterfeiters caught up with these features, and surpassed our customers’ abilities to quickly distinguish the true product from the knock-off. Now, we work with a sophisticated U.S. firm that has helped us to employ a combination of overt and covert security features, some that can only be confirmed by a laser pen or ultraviolet light, which we provide. As a result, it’s become even more difficult for the counterfeiters to copy these features.
That said, the problem with any anti-counterfeiting technology is that the product itself is usually confusingly similar — the counterfeiters do not need to copy the product 100 percent, but rather just close enough. After all, how many people would know the difference between a Louis Vuitton original sold from the store, and a black market version, especially if they had no reason to believe that one might be counterfeit?
Yet, obviously, the products don’t work the same. For some who use the counterfeit version of our product, their shipments arrive speckled with mold, despite the safeguard they thought they purchased. For others, the issue may be less apparent, but no less insidious — some companies are committed to sustainability and environmental issues, and may have chosen our company to partner with specifically because of our commitment to those same issues. Instead, through the efforts of the counterfeiters, they end up purchasing, and using, a product that may have been manufactured with restricted and/or toxic materials.
One strategic approach that we have used in dealing with counterfeiters is to work on the issue from both the production side and the retailer side. On the production side, we have implemented a five-step checking process, which involves UV light, laser pen, dark room test, hologram and embedded film. We also provide education and support on preventing mold with a technical team that visits factories directly and provides on-site analysis.
Working with the retailers directly is something many companies overlook, but can be crucial to diminishing the effect of the counterfeiters. We encourage retailers to send a sampling of our stickers directly back to us to confirm that they have a genuine product. For some retailers, it’s easy to overlook the severity of the ongoing issue. A few retailers have even gone so far as to implement heavy fines on any manufacturers found using counterfeit products. Not surprisingly, the high fines tend to result in better compliance.
Also by working directly with the retailers, we make it easier for the factories to stay compliant, while also maintaining the integrity of our trademark. Factories can order products direct from Hong Kong, or can go to our website and find 20 authorized distributors around the world. Still it can be confusing for them, especially when one counterfeiting operation actually set up a similar website to ours. (We currently have a warning that pops up immediately when visitors come to our website, so that they won’t be confused on future visits.)
Overall, retailers have been extremely supportive of these initiatives. After all, a non-functioning or non-compliant product reflects poorly on them as well. When manufacturers are fined, it is not uncommon for the owner or senior management to investigate and find out who is making the purchases for the company, and to determine if the counterfeit product was purchased intentionally, or if the person is simply being careless, which is more often the case.
Working with retailers is not at all common, but has proven to be extremely effective. While government enforcement of anti-counterfeit measures is also critical, we cannot rely on government regulators solely to deter counterfeiting. For instance, in China, where product yield is immense, this type of counterfeiting is rampant, specifically on items like Louis Vuitton and Coach products, as well as low-end items, pharmaceuticals and components. There simply are not enough government resources currently being utilized to police such a large market.
We collaborate with retailers to help them stay one step ahead of counterfeiters by identifying the problem, communicating solutions, training how to detect fakes and assisting with legal action when necessary. By doing this, we not only enhance our own client relations, but also ensure the integrity of our products, our reputation and our company.
Counterfeiting of products continues to create a host of problematic outcomes, including lost revenue for the company that manufactures the true product, as well as damage to the company’s brand reputation. Consumers of the counterfeited product can also be adversely affected, due to the possibility of the fake product being made with inferior technology or lower quality standards, or even made from toxic substances. Being aware of the problem and tackling it from different directions — including production and retail — can augment manufacturers’ ability to combat the counterfeit.
Martin Berman is the Managing Director at Micro-Pak Ltd (www.micropakltd.com), a global company with offices in Hong Kong, Oregon, New York and the Netherlands, and a leading supplier of packaging material for the shoe, apparel, bag and accessories industries.