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Application of Market Control Theory in Brand Protection

by:GenuinewaysPosted:2011-03-01

As previously discussed, we hold that the traditional anti-counterfeiting style no longer adapts to the current changes of market and the requirements of right holders; the Market Control Theory, as a new idea for brand protection, is worthy of in-depth discussion and promotion. In general, Market Control Theory is market-oriented, particularly: develop a brand protection strategy based on market investigations; make major efforts into in-depth investigations into and crackdowns upon important targets, expand the influence of anti-counterfeiting actions to deter the whole counterfeiting industry, and further, under cooperation with the sales department, to control the market share of counterfeits and promote the sales of genuine ones. Here, we will further discuss the specific application of the Market Control Theory.

ⅰ Market Investigations & Intelligence Analysis – Conduct a comprehensive and extensive investigation to collect intelligence about the whole counterfeiting network

Investigations play a vital role in anti-counterfeiting actions. The collection and analysis of information and clues are the cornerstones of brand protection.

Different products face different counterfeiting problems, which make it necessary to, before any successful anti-counterfeiting action, thoroughly investigate the market for understanding about the status and trends of the relevant counterfeits market (production, marketing and other aspects), find out the key link of counterfeiting chain upon the intelligence analysis. And in line with market investigations, conduct raid actions against some counterfeiters for in-depth understanding about their operation mode.

And finally, develop a brand protection strategy based on screen and analysis of the intelligence and clues.

ⅱ Crackdown upon Important Targets – Locate the important target/gang/network, conduct in-depth investigations and then take a series of raid actions against the targets

1. In-depth Investigation into Important Targets

To those important targets after screening, crackdowns may be conducted immediately or at a later appropriate time after monitoring, based on the brand protection strategy.

Locate influential manufacturer, gang and the backstage boss thereof. A thorough in-depth investigation shall be conducted with no efforts spared to collect information about the upstream & downstream counterfeiters and the whole network, mainly including 

● Influential Important Targets: Large manufactures, distributors and exporters of counterfeit products, etc.

● Counterfeiting Gang (with the same backstage boss): To avoid severe crackdowns (such as criminal action, etc.) and reduce losses, counterfeiters divide a whole counterfeiting operation into different parts, gang members often take in charge of different chains (production, packaging, transportation, etc.) under different names, even in different areas (i.e., the production site and warehouses divided; more warehouses rented to decentralize counterfeits), in which circumstance, the seizures are often calculated separately, which usually helps avoid criminal punishment. In fact, these counterfeiters have close relation, mostly relatives or staff. They have formed counterfeiting gang. The aim of such operation is to separate targets designedly, to reduce risk of being raided.  

Counterfeiting Network: includes the different chains of the counterfeiting, such as manufactures, packaging suppliers, distributors, wholesalers, retailers, etc. Presently the counterfeiting network tends to cover different regions, i.e., the products made in Region A are marketed in Region B.

2. Crackdowns on Important Targets - A series of severe raid actions

After obtaining sufficient clues and evidence through the in-depth investigation, conduct a series of severe raids (administrative and criminal) upon the influential important targets, gang and network, so that the counterfeiters will know the brand owners’ anti-counterfeiting stance, which will impose the highest cost and most severe psychological pressure on counterfeiters. After the crackdown, continuously monitor and where necessary, raid against the repeat offender, which may make him feel blacklisted and ultimately withdraw from counterfeiting industry to avoid risks and losses.

Concerning crackdowns upon counterfeiting gangs and networks, a series of actions against all parts are recommended. If necessary, criminal action would be taken, accompanying with administrative actions, to form all-around strength enforcement, to control the market to the fullest extent. On the one hand, this will bring a severe loss to the offenders, effectively deterring counterfeiting acts, and on the other hand, it takes more time for the gangs or networks to find new members or partners.

3. Follow-up Assessment & Continuous raid actions

The crackdowns shall, rather than a one-off matter, be followed up by re-check monitoring and the assessment of effects and influence of action to determine whether more action is required in the region or upon the target that may stop counterfeiting or just the opposite, continue the illegal business in a more secret way. Repeated actions will place a serious psychological pressure on repeat offenders as well as potential counterfeiters who may refrain from counterfeiting.

ⅲ Cooperation with Sales Department

The ultimate goal of anti-counterfeiting is to promote the sales of genuine products. The recognition and support from the sales department also play an important role in the assessment of brand protection, and hence timely communications and interaction between the IP Protection team and the sales team are necessary throughout the investigation and raid action. In the process of brand protection program, the investigation team may provide the sales team with information about sales / customers; raid action shall cooperate the plan of genuine sales, to create commerce chance for genuine products, that it,  raid can create a market gap of counterfeits, which the sales teams may fill the market with genuine ones by promotion, etc.

In addition, market sweep actions can be carefully planned to facilitate sales plans.

Note: The effect of the application of a brand protection strategy is affected by many factors. Successful crackdowns upon counterfeits depend on the close cooperation between the participants, especially smooth communications between the right holder and the agency, so as to adjust the plan according to actual situation in a timely manner. Investigators as the front-line staff are directly related to the effectiveness and legitimacy of any actions; intelligence from informants determine the success of cases to some extent, and good relations with local enforcement authorities is a guarantee to overcome local resistances, such as local protectionism.