For the past year, Russia offers a favorable legal framework for counterfeiters. As a logical consequence, the number of counterfeit cases on Russian e-commerce sites has exploded . While China used to be the main supplier of counterfeit goods, the situation has changed and Russia could well become the new leader in online counterfeiting..
Humind, a company specializing in data intelligence, has been monitoring brand misuse on e-commerce sites and online marketplaces since 2015. According to Alexandre Sonnet, Director of Humind, “China accounted for almost 80% of counterfeit cases detected up to 2022”. But an important change has taken place in recent months: the major e-commerce platforms have virtually eliminated most fake products.
China: towards respect for intellectual property rights?
The change came in February 2022, following accusations by the Office of the United States Trade Representative (USTR) that sites like Alibaba and Tencent were letting sellers sell counterfeit goods. At the time, the United States and China were in the midst of diplomatic negotiations, and intellectual property was a major issue. China seems to have responded effectively, as the major platforms quickly eliminated most of the counterfeit cases previously detected.
The war in Ukraine has changed the situation
For its part, in response to Western sanctions following the invasion of Ukraine, Russia has amended its legislation on intellectual property. This reform, adopted in March 2022, legalizes the import, export and sale of counterfeit products. This situation enables China to position itself as a player that respects international law, leaving Russia in the role of counterfeiter. Alexandre Sonnet notes that for the first time, “Russia has overtaken China” in terms of number of cases.
A more complex network of counterfeiters
Yet in France, French customs announced in February 2023 that “data relating to seizures of counterfeit goods from Russia” had not been the subject of any particular alert. It has become more difficult for Customs to detect counterfeiters. The products don’t come directly from Russia, or even from China: goods transit through other countries before being sold.
The good news is that China has made significant progress in respecting intellectual property rights, with a real commitment to ensuring that these rights are recognized. But don’t be fooled: the Chinese continue to produce the bulk of counterfeit goods, but now hidden behind the Russian Bear.
Illegal and costly for businesses
The “counterfeit market” affects many sectors, including pharmaceuticals, chemicals and cosmetics, perfumes and clothing brands. These illegal copies present direct risks for consumers, who may unknowingly purchase poor-quality or even dangerous products. Companies, for their part, suffer loss of sales and damage to their image, which can be long-lasting.
How to combat brand counterfeiting?
Brand monitoring on the web and marketplaces appears to be an effective solution. Solutions are available to detect suspicious cases based on various parameters, such as the level of visibility of usurped brands and the similarity of products sold. Humind uses various artificial intelligence algorithms for detection, as well as analysts who validate the cases identified. Once the main counterfeiters have been identified, online reporting actions can be carried out, as well as the sending of letters of formal notice to stop the use of protected trademarks. This process enables a company to defend its brand portfolio and better manage risks.
By Alexandre SONNET
President of Humind
To find out more about trademark counterfeiting, please contact us.
