Counterfeit Goods and Protecting IP Rights

Counterfeit goods - Fake Designer Handbags on display

One of the most blatant and ongoing violations of intellectual property rights is the manufacturing and distribution of counterfeit goods. Frequently of high quality, and available at a fraction of the price of the original brand name, fake goods are a familiar sight in the markets of emerging and developed countries alike, and are often sole without the knowledge of the consumers who buy them.

Electronics and watches, as well as designer handbags and athletic shoes are especially susceptible to this kind of counterfeiting, in countries where patent and trademark enforcement is lax or non-existent. For those companies that hold those IP rights and produce the authentic goods, there is a tangible loss that occurs when their product is copied illegally. The issue is how patents, copyrights and trademarks can be enforced across international borders, preventing this kind IP rights infringement.

Border enforcement for counterfeit goods

Visitors to developing countries are often tempted to buy fake goods for either personal use, or re-sale at home. While this is not a high volume method of import, it does contribute to the problem. One way that some governments have chosen to address this is by surveying visitors arriving from countries with known counterfeiting practices, and asking about the kind of products that they purchased abroad.

In some European countries this can lead to seizure of any counterfeit goods at the border from arriving residents. However, a more common way of importing fake goods is through the postal system, which accounted for 70% of the goods seized in the European Union last year, with the majority originating in China and Hong Kong.

These kinds of border enforcement measures can also be made by border customs agencies for suspected large shipments of counterfeit goods, such as the US government’s STOPfakes program.  The US is also taking these measures online to stop the growing tactic of selling goods over the internet.

Domestic IP Courts and Treaties With Countries of Origin

Despite all of these protective measures, the real issue is a lack of enforcement of IP rights in the countries where these goods are produced. In an apparent attempt to stem international criticism, China recently announced the formation of a specialized court to handle IP cases. It is still unclear exactly how these new courts will function or adjudicate complaints of IP violations, but it is a step in the right direction. Much of the motivation may be to improve China’s image, as it has a deserved reputation for being the source for a wide variety of counterfeit products.

The World Intellectual Property Organization (WIPO) has been a proponent of treaties that define standards of IP protection, which in some cases allow for international registration rights and enforcement for some types of intellectual property.

These are the kinds of enforcement mechanisms that will be needed to stem the flow of counterfeit goods, and more importantly must include those countries where the goods originate.

Until that time, inventors and manufacturers of goods take a risk with their IP rights when they introduce their products in jurisdictions with poor IP rights protections in place. Important information to ascertain includes whether or not the country in question has a legal process for IP infringement complaints, and how effectively they enforce those laws. Also, evaluating the existence of any treaties that the country may be a member of could give some assurances relating to the legal protection available. is a global marketplace for innovation and intellectual property (IP) that makes access to legal, investment and other services easier for startups, inventors, small businesses, universities and companies. Need help or information for your business or intellectual property? Post a question to our legal and IP experts. See our IP Nexus explainer video here.
Your one-stop shop for innovation and intellectual property Join us today