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Research shows that most people have purchased a counterfeit product or an unauthorized copy of a music CD or a video DVD. What most people do not recognize is how big the problem of product counterfeiting and copyright piracy has become. Counterfeiting and piracy today impact virtually every product category. The days when only luxury goods were counterfeited, or when unauthorized music CDs and movies DVDs were sold only on street corners are long past. Today, counterfeiters are producing fake foods and beverages, pharmaceuticals, electronics and electrical supplies, auto and airplane parts, chemicals and pesticides and everyday household products. And, copyright pirates have created multi-million networks to produce, transport and sell their unauthorized copies of music, video and software.

Millions of fake products are being produced and shipped around the world to developing and developed markets at increasingly alarming rates. Millions of consumers are now at risk from unsafe and ineffective products, and governments, businesses and society are being robbed of hundreds of billions in tax revenues, business income and jobs.

The drain on the global economy is significant and the longer term implications of the continuing growth in this illicit trade are enormous. The Organization for Economic Cooperation and Development (OECD) has reported that "international trade in counterfeit and pirated products could be up to US$ 200 billion". Taken together with the value of domestically produced and consumed counterfeits, the significant volume of digital and fake products being distributed via the Internet, and the loss of economic development, harm to heath & safety, reduced technology transfer, and innovation, the total magnitude of counterfeiting and piracy worldwide is well over US$ 600 billion.

Corporate leaders cannot afford to ignore the problem, or hope it will go away on its own. Most multinational companies now devote significant resources to combat the counterfeiting of their brands by setting up Brand Protection units, hiring investigators and working with governments to implement enforcement actions against the criminals.

There is no simple solution to this problem, and there is not one set of best practices that will apply to every industry. However, there are valuable lessons that can be learned from businesses in various sectors. Here are some examples of what many companies have found to be basic, but critical elements to their brand protection programs:

1. Corporate policy.  Establish a corporate policy to conduct operations in compliance with intellectual property laws and related best practices. Implement specific policies, procedures and practices to promote compliance.
2. Lawful use.  Acquire, use and deal in only licensed copies of copyright protected material, and genuine articles of trademark protected products, in carrying out the company’s business.
3. Protection of company IP.  Take reasonable steps to identify and protect the company’s own intellectual property.
4. Compliance.  Designate a senior director or manager whose responsibility includes overseeing and enforcing the company’s IP policies.
5. Employee policies.  Implement policies to encourage all employees and subcontractors to comply with the laws and the company’s IP compliance policy.
6. Training and awareness.  Train relevant employees and subcontractors (where appropriate) on IP compliance and company policy.
7. Supplier and customer notification.  Notify relevant suppliers and customers that the company complies with IP laws and expects them to do the same.
8. Legitimate inputs. Where possible, obtain IP related inputs for the business from legitimate and auditable vendors.
9. Contractual provisions.  Document material IP related transactions, and supplier and customer relationships, accurately and in adequate detail.
10. Supplier and customer awareness.  Obtain reliable identification and background information on IP related suppliers and customers.
11. Required licences.  Obtain written proof of material IP rights and required licences, prior to manufacturing, shipping or offering IP based products or services.
12. Due diligence.  Inspect documentation and materials for warning signs that infringing material may have been supplied or ordered.  Make further enquiries as needed to determine the status of suspicious activity.
13. Asset management.  Implement asset identification, inventory and control processes sufficient to ensure that material IP related assets are manageable and traceable.
14. Trade-secret and confidential-information protections.  Use best efforts to protect the company’s and third parties’ trade secrets and other confidential material.
15. Technological anti-piracy measures.  Respect, not interfere with, and maintain the security of technological anti-piracy measures used by rights owners with their IP based products and processes.
16. Labelling.  Label completely and accurately all IP related products and packaging manufactured or supplied.
17. Monitoring.  Periodically review the company’s IP policies.
18. Exemplars.  Supply exemplars of IP based products produced on production lines used in the company’s operations to relevant rights owners, their industry anti-piracy bodies and law enforcement authorities on request.
19. Co-operation with IP owners and public authorities.  Provide reasonable assistance to rights owners, industry anti-piracy bodies and law-enforcement authorities in their investigations of possible IP infringements.

A good resource for more information is: www.iccwbo.org/bascap/id1127/index.html.  BASCAP is the International Chamber of Commerce coalition that Bill now consults with as a Senior Policy Advisor.

The author, Bill Dobson recently retired from P&G where he spent 29 years in Public Affairs and External Relations. In addition to his international expertise on the product counterfeiting issue, he has a broad range of expertise in corporate communications, media relations, brand PR and public affairs.

Can CCC help you?

Contact either Dick Bruder, President & CEO, CCC, Ltd. at dbruder@cincconsult.com or 513-233-0011, or Bill Dobson, Senior CCC Consultant at wdobson@cincconsult.com or 513-233-0011

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