Preserving intellectual property rights: Managerial insight into the escalating counterfeit market quandary

doi:10.1016/j.bushor.2008.04.003

Business Horizons

Volume 52, Issue 1, January–February 2009, Pages 57-66

https://doi.org/10.1016/j.bushor.2008.04.003 Get rights and content

Abstract

The U.S. Customs and Border Protection reports that counterfeit goods seizures were up 83% in 2006. While a plethora of anti-counterfeiting strategies target distribution channels, international organizations, pirates, and company-based initiatives, few reports debate the effectiveness of these distinct anti-counterfeiting tactics to curb the problem. For this study we conducted in-depth interviews with United States managers to gauge the efficacy of various anti-counterfeiting tactics to preserve intellectual property rights. The results indicate that corporate managers find the practice of encouraging distributors to notify the manufacturer about counterfeits, as well as educating both employees and channel members about the counterfeit problem, to be some of the most effective ways to fight pirates. However, the managers report many other tactics are futile, including providing financial incentives for distributors to reject counterfeits and stressing the harmful effects of fake goods in advertising. We recommend a specific program that firms can employ to deter counterfeiting, including managing the registration of all trademarks and patents in key markets, establishing a company-based enforcement team, monitoring the growth of fakes through a central information repository, developing a muti-pronged action plan, and preparing to fight pirates through investigative work in conjunction with local law enforcement.

Section snippets

Counterfeit goods: An old, but growing, problem

Increased globalization has attracted more concern and attention for the problem of counterfeit goods. Over the last 2 decades, innumerable articles and books have emerged addressing this topic (including Chaudhry, Cordell, & Zimmerman, 2005, and Phillips, 2007a, Phillips, 2007b). Counterfeiting has been a problem for at least 300 years. In the 17th century Domingo Navarette, a Spanish priest, noted the Chinese ability to copy products. He complained that the Chinese had “imitated to perfection

The growth of counterfeit trade: Assessing lost sales, brand dilution, linkages to terrorism, and legal remedies

A distinction between knockoffs, gray goods, and counterfeit goods must be made. Knockoff products look the same as branded products, but they do not abuse the intellectual property, or patents and trademarks, of any manufacturer. In his book, Knockoff: The Deadly Trade in Counterfeit Goods, Tim Phillips (2007) describes, “If you have a market stall selling fake Gucci bags, that's OK - as long as you tell your customers that they are fakes” (p. 69). He also reports on the concept of blanks in

Government actions designed to curb the growth in fakes

Each year the U.S. Trade Representative is required by law to develop a report detailing the adequacy and effectiveness of intellectual property rights (IPR) protection in 87 countries. In 2006, the following countries have been placed on the Priority Watch List from the U.S. Trade Representative (USTR), Section 301 Report: China, Russia, Argentina, Belize, Brazil, Egypt, India, Indonesia, Israel, Lebanon, Turkey, Ukraine, and Venezuela. Such placement translates to warranting an increased

Combating counterfeiting: Advice from managers

According to the Journal of Commerce, intellectual property rights is a Western concept, and in China IPR infringement is not deemed a morally wrong practice. In India, counterfeit drug makers claim the government believes it is more important to save lives by providing counterfeit drugs at lower prices than to provide profits to the inventors of drugs (“The Intricacies,” 1999; McNeil, 2000). Consumers are willing to purchase counterfeit goods for a variety of reasons: perceiving the

Managerial implications: Taking responsibility

First, it is clear that the problem of counterfeiting will pervade global markets for some time. While governments and international organizations are focusing some additional attention on IPR, the owners of intellectual property must take responsibility to act on their own. Success comes from taking this problem seriously, regardless of whether you are CEO of a $50 billion corporation or president of a small startup. Based on our exploratory analysis of managerial perceptions of this global

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Preserving intellectual property rights: Managerial insight into the escalating counterfeit market quandary

Abstract

Section snippets

Counterfeit goods: An old, but growing, problem

The growth of counterfeit trade: Assessing lost sales, brand dilution, linkages to terrorism, and legal remedies

Government actions designed to curb the growth in fakes

Combating counterfeiting: Advice from managers

Managerial implications: Taking responsibility

Business Horizons

Business Horizons

Journal of Business Research

Journal of Business Research

Product counterfeiting in China: Managerial perceptions of supplier and buyer interest in counterfeit goods and the probable effectiveness of corporate anti-counterfeiting actions

An assessment of the impact of counterfeiting in international markets: The piracy paradox persists

Columbia Journal of World Business

Modeling anti-counterfeiting strategies in response to protecting intellectual property rights in a global environment

Marketing Review

Trade and transportation between the United States and Spanish America

Addressing international product piracy

Journal of International Business Studies

Executive insights: Countering brand counterfeiters

Journal of International Marketing

Industrial product counterfeiting: Problems and proposed solutions

The Journal of Business and Industrial Marketing

Counterfeiting exposed: Protecting your brand and customers