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Retailers want to ensure that Christmas is
a profitable month, leading many to look for discounted goods with a
good margin. The danger comes when judging whether that bargain is
genuine or whether it could be a counterfeit product. So what
exactly is the law on selling ‘dodgy’ goods?
Joanne Shelley,
intellectual property law specialist and Partner at North West
solicitors, Taylors, explains the dangers of counterfeit goods and
outlines the responsibilities of, and repercussions to, retailers
and brand owners.
“Designer label clothes/bags, watches, perfumes and cosmetics
are the most common counterfeit goods available in the marketplace,
closely followed by alcohol, CDs and DVDs, computer software and
toys – it is a list that continues to grow each year. Retailers are
usually attracted by the low cost of the products in order to
increase their own profit and may fail to acknowledge the shockingly
poor quality of these goods, which are often discovered to be
dangerous or unfit for purpose by EU safety bodies. A retailer
stocking counterfeit goods may have purchased the items without
sight of the actual products but believe them to be the genuine
branded article, or are misled by the supplier who shows an original
branded sample or image but when the retailer receives the delivery
of goods they are copies.
Accountable
“Retailers are often caught up in the counterfeit chain, and
regardless of their intentions, may be held accountable. Counterfeit
goods, and / or the profits made from their sales, can be taken by
authorities and /or the genuine brand owner without reimbursement.
Retailers are advised to do their homework, especially if they are
dealing with suppliers to provide extra goods for the Christmas
season. In addition to building a relationship with the supplier and
having agreed appropriate trading terms, ask for a sample of all
goods and check what is actually received, if possible, before
payment. It is also important that your suppliers can show an
invoice or a licensing / distribution agreement, which verifies the
authenticity of any branded products to be sold.
“If a retailer does have suspicions regarding the goods that are
being supplied, it is vital that the issue is addressed at the
earliest opportunity. Seeking advice immediately will position the
retailer in a positive light, reduce the negative financial loss to
the retailer’s profits and will be viewed favourably when the brand
owners become involved.”
Joanne highlights that it is the brand owner who ultimately pays the
price for counterfeit goods as a product can loose its valuable
market reputation and status through any publicity surrounding
faulty / poor quality merchandise, and the increased high
availability and low cost of the counterfeit products will devalue
the brand.
Complaints
As a result, brand owners have become increasingly responsive to
claims of counterfeit goods being sold and will swiftly aim to take
action against any retailers involved. “Brand owners are advised to
be alert at all times to what retailers are selling, but
particularly over the Christmas period. An unexpected drop-off in
sales, or an unusually large number of complaints to the brand’s
customer services department, can often highlight that the
distribution chain has become corrupted,” highlights Joanne.
Joanne concludes: “Counterfeit goods within the marketplace result
in consumers buying shoddy, often unusable or dangerous products,
retailers being left out of pocket and brand owners loosing sales
and damaging their goodwill and reputation while having to rectify
the situation.
More importantly, however, it is a simple fact that the supply
chains bringing these ‘fake’ products to market are illegal, and the
profits made are often used to support serious criminal and
terrorist activity both within the UK and abroad. This means the
purchase and selling of counterfeit goods has wide reaching and
dangerous consequences that go far beyond a brand or retailer
loosing money.”
Copyright 2006 - 2010 Taylors Solicitors
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Counterfeit
Christmas Gifts – Understanding The
Law