Developing Anti-Counterfeiting Strategies for a Global Environment
Peggy ChaudhryAssistant Professor of International Business
Villanova University – College of Commerce and Finance
Victor CordellProfessor & Director of International Business Planning Program
Fisher Graduate School of International Business – Monterey Institute of International Studies
Alan ZimmermanAssociate Professor of International Business
City University of New York – College of Staten Island
IPR Commodities Seized
Commodity2003
% TotalValue
Commodity2002
% Total Value
Cigarettes 44% Cigarettes 38%
Wearing Apparel 15% Media 29%
Handbags/Backpacks 12% Wearing Apparel 9%
Media 8% Consumer Electronics 5%
Consumer Electronics 4% Watches/Parts 4%
Watches/Parts 4% Handbags/Wallets/Backpacks
3%
Footwear 3% Toys/Electronic Games 2%
Toys/Electronic Games 2% Cigarette Rolling Papers 1%
Sunglasses/Parts 1% Sunglasses/Parts 1%
Headwear 1% Headwear 1%
All other commodities 6% All other commodities 8%
Source: International Anti-Counterfeiting Coalition, 2002 and 2003
U.S. Customs Service IPR Seizures by Country of Origin
Country2003
% TotalIPR Seizures
Country2002
% TotalIPR Seizures
China 66% China 49%
Hong Kong 9% Taiwan 27%
Korea 3% Hong Kong 4%
Pakistan 2% Pakistan 2%
Mexico 2% Korea 2%
Malaysia 1% Indonesia 1%
Philippines 1% Switzerland 1%
Canada 1% France < 1%
Switzerland 1% Malaysia < 1%
Thailand <1% Kazakhstan <1%
All other countries
12% All other countries
11%
Source: International Anti-Counterfeiting Coalition, 2002 and 2003
Key Research Questions
How do managers conceptualize the intellectual property environment?How does the intellectual property right environment affect the market entry decision?What anti-counterfeiting strategies are most frequently used?How effective is each anti-counterfeiting tactic?
Consumers
DistributionChannels
Host Governments
International Organizations
IPR Actions
Mode of Entry
IPR Environment
Level of Consume
r Complicit
y
Level of Host
Country Enforcemen
t
Conceptual Framework
Level of Market
Commitment
Level of Pirate
Activity
Pirates
Summary of Anti-Counterfeiting Strategies
Targeted at Consumers Targeted at Host Country Governments
-Use special packaging and/or labeling-Emphasize benefits of genuine product-Provide lists of legitimate channel members-Emphasize warranties and after-sale service-Offer site licenses
-Register trademarks and patents-Educate local law enforcement-Lobby for more stringent laws/enforcement-Seek assistance from tax authorities
Targeted at Distribution Channels Targeted at International Organizations
-Educate channel members about copycats-Provide warnings to distributors/retailers-Give financial incentives to reject counterfeits-Solicit dealer suggestions to develop tactics-Use RFID Technology-Monitor and investigate retailers and
distributors
-Monitor policy of UN/ECE Advisory Group-Participate in IACC actions-Use the TRIPS of WTO-Monitor the actions of WIPO-Participate in multilateral organizations-Lobby for stronger global IPR protection
Summary of Anti-Counterfeiting Strategies
Targeted at Pirates
-Establish internal enforcement team-Use surveillance program in retail outlets-Pursue injunctions against counterfeit goods-Warn counterfeiters of possible legal action-Use acquisition and/or joint venture strategy-Use covert actions -Obtain local police support
Based on your experience in many countries, overall how would you rate the effectiveness in reducing counterfeiting of any of the following actions you may have taken?
Most effective anti-counterfeiting strategies directed at channel were:
Educate channel members about counterfeit productsEncourage distributors to notify manufacturers that counterfeit goods are in the market Provide warnings to distributors/retailers of possible damages from selling counterfeitMonitor and investigate retailers and distributors
Most effective anti-counterfeiting strategies directed at:
Home/Host Country Governments:Encourage enforcement of existing lawsLobby for stronger global intellectual property protection
International Organizations:Participate in International Anti-Counterfeiting Coalition actions
Most effective anti-counterfeiting strategies directed at pirates are:
Establish enforcement team within the companyMonitor information sources for general anti-counterfeiting developments Pursue injunctions against counterfeit goodsObtain local police support
Conclusion
Need to evaluate why some strategies did not appear to be effective? For example, why did the respondents not give tactics targeted at consumers an effective rating?Further data collection is required to provide better insight into managerial perceptions.