By globaleyez GmbH
The September 2020 edition of Technology Review is on the shelves and guess who’s featured in it? globaleyez!
When you leaf through this prestigious German tech magazine, you’ll discover an article called “Chasing down Product Pirates” by Mr. Tim Schröder. Based on that title, you could imagine an action movie packed with investigators looking at high-tech equipment, undercover agents getting close to criminals, and speedy car chases that end in bad guys being led away in handcuffs.
If you imagined that, you’re not far from the truth. Who said the life of brand protection experts wasn’t exciting?
Here’s how it happened.
Audi is no stranger to us: we’ve been working together for several years now on various brand protection issues. Our unique, 360° approach has long convinced Audi that globaleyez is the best choice for all their brand protection needs. So when the people at Audi’s brand protection department discovered that fake radiator grilles were popping up all over the internet, they approached us immediately.
While it’s no question that fakes can cause a brand real damage, Audi had even more burning concerns: the safety of people. A fake radiator grill manufactured from cheap materials is a serious safety risk for drivers. In the event of an accident, it could disintegrate and hurt people. Or, even worse, it could cause accidents itself.
We knew we had to act fast, even faster than usual.
Brand protection requires an immense attention to detail. After all, the internet is practically endless and we have to go through it with a very fine comb to find out who’s responsible for flooding the market with counterfeits. Luckily, we don’t have to do it manually: our dedicated software tools are designed for exactly these kinds of tasks. For example, infrimage, our image monitoring tool searches for our clients’ copyrighted images (of products, or even their logo) all over the internet, quickly detecting counterfeiters and fraudsters.
In this case, we used traxster, our state-of-the-art software tool for marketplace sales. The results flooded in, but to narrow the search down, we had to cross-reference them with other data.
“Correlations such as a conspicuously low price in combination with the indication of origin China are often the first indication of a fake," said Oliver Guimaraes, our managing director. So we cross-referenced our image search with other data like price, volume, and location.
As the Technology Review article describes it, this process helped us pinpoint the origins of the fakes: a company from Guangzhou, southern China.
Less than 48 hours after receiving the request, we delivered our initial findings to Audi. Usually, this is where most brand protection companies stop. They run their software, produce their results, and as a last step, ask the marketplace to take down the listings of counterfeits.
But this is not enough for Audi, and it’s never enough for us. Because what happens next?
Marketplaces usually comply and take down the listings in question. But the counterfeiters remain completely unhindered in their activities, which means that new listings of fakes will pop up elsewhere within a very short time. This is a vicious cycle and the only way to break it is to go further and take real action against the counterfeiters themselves, not just their advertising.
Next, Audi tasked us with tracking down the seller. So we got to work, using traxster, our marketplace monitoring tool. This software lets us quickly sift through marketplaces, looking for detailed information about counterfeiters. We took screenshots of the listings, all time-stamped thanks to our unique tool we created to complete our 360° approach. This time stamp is more important than you’d initially think: it’s actually admissible in court. Because of this, they form the basis of our enforcement service, i.e. the takedown of fraudulent listings based on legal measures. As mentioned earlier, a simple takedown is not nearly enough in the fight against fraudsters. Our approach of basing the takedown on legal grounds, i.e. enforcing it is much more powerful and effective.
While some large brands are able to do their enforcement by themselves, smaller brands may lack the manpower and expertise to fight back against fraudulent listings on various marketplaces. Luckily, globaleyez’s enforcement services ensure your brands’ rights are protected while we enforce a proper takedown backed by legal measures.
In Audi’s case, time stamps were “crucial, because Audi's goal is to bring the counterfeiters to justice,” said Oliver Guimaraes.
Our search quickly led us to the name and address of the managing director, as well as other sales outlets where they sold the counterfeit radiator grilles. Thanks to Google Maps’ satellite images, we took photos of the locations. But before we could go to the authorities, there was one last step to take.
As mentioned earlier, alerting a marketplace about a listing selling counterfeits usually results in the listing being pulled from the site. This practice is called notice and take down. But, as Audi’s trademark department put it, “That's not enough for us. The products simply reappear a short time later in other marketplaces. Above all, you should catch counterfeiters and dealers in the act.”
That is exactly what we did next. Our test purchase practice allows us to catch the criminals in the act, giving us another crucial piece of tangible proof. By the way, globaleyez spends several hundred thousand euros annually on test purchases.
As Oliver Guimaraes put it, "We have employees in Germany and other countries who order the goods for us. The test purchases enable us to demonstrate conclusively that counterfeits are actually being traded."
And soon, the last piece of the puzzle was in place. We ordered the radiator grilles from the fraudulent seller for 190€ per piece (the genuine product costs 450€), and nobody was surprised when the products that showed up were very poor quality, and, indeed, fake.
This is when Audi handed our nice package of real, tangible evidence over to a Chinese agency. They went undercover; posing as potential clients who wanted to purchase large quantities, they persuaded the counterfeiters to show them their facilities. There, they encountered what we already suspected: neatly piled radiator grilles with the well-known Audi logo, along with machinery that could produce tens of thousands of fakes per year.
This was more than enough: Audi informed the Chinese police. Now, as a recent joint report issued by the OECD and the EU points out, the origin of the majority of counterfeited products is China. But this doesn’t mean that the Chinese authorities ignore it. In fact, they know very well what a serious issue this causes for brands all over the world. This is why, when armed with our tangible evidence, Audi contacted the Chinese police, they acted very quickly.
They seized all the machinery and the goods, prohibiting the counterfeiters from producing and advertising any more counterfeit goods. This gives brands hope against the neverending fight on counterfeiting: with tangible evidence, even the best organized, professional fraudsters can be stopped.
Audi was very happy with our results. Thanks to globaleyez, another set of fraudsters was disabled from hurting the brand, not to mention their own customers. But, as the Technology Review article points out, not only large brands like Audi are affected in this battle.
In fact, according to a recent study by the Association of German Machine and Anlagenbau VDMA, “71 percent of machine and plant manufacturers in Germany are affected by product or brand piracy. The estimated damage amounts to 7.3 billion euros per year.”
However, the real damage may be even larger. How? Unfortunately, in many ways. For example, when a customer unknowingly purchases a fake, they’d think your company’s products are cheaply made and bad quality. Your image suffers. Or, if they see your products offered in a shop with a bad reputation, along with less quality products, your image suffers.
These are just a few examples. There are many other ways counterfeiters, copyright infringers, grey marketers, and other malevolent people may hurt your brand, costing your business a lot more than a simple loss of revenue. If your image is compromised, your brand loses trust, customers, credibility, and over time, lots and lots of money.
Investing in brand protection is a smart move that ensures your brand’s future. Contact us today and let us help you protect your brand.