SGS Informs on Worldwide Issues of Counterfeit Goods Retail and Regulations

Released on: January 06, 2015, 1:21 pm (EST)
Industry: Apparel & Fashion

Hong Kong, January 06, 2015 -- /EPR NETWORK/ -- Counterfeit goods are fakes deliberately made to look like the genuine article. Counterfeiting is nothing new, but fake goods are becoming increasingly available and are becoming even harder to spot.

The Booming of Counterfeit Retail

Sadly, the public’s attitude to counterfeit goods seems to be changing. Many people are now prepared to knowingly buy a counterfeit handbag. A brief search on the internet will demonstrate how easy it is to access web sites openly advertising counterfeit. It gives the impression that this is a legal or even complementary practice.

Main Victims of Counterfeiting

Counterfeiting goods is not a victimless crime. Apart from companies losing money and reputation and governments losing tax revenue, ordinary people lose their jobs, ordinary people suffer violent abuse, the consumers’ and often their children’s health and wellbeing are put at risk while criminals make millions.

A UK/EU Perspective – Counterfeit Goods and Organized Crime

The market for counterfeit goods in the UK is worth £1.3billion of which £900million funds organized crime (Damian Green, Immigration Minister (UK Government)).

Apart from not lasting as long, or not performing as well as the genuine article, counterfeit goods can be dangerous.

- Rogue washing powders that cause skin damage.
- Unsafe toys with small parts, sharp points and edges, toxic contents.
- Children’s clothes may contain harmful restricted chemicals.

Counterfeit Goods Regulations

EU Regulation 1383/2003 authorizes EU member states’ customs authorities, such as HMRC, to detain goods thought to be counterfeit.

The Regulation was implemented into UK law by The Goods Infringing Intellectual Property Rights (Customs) Regulations 2004 and worked well for many years with a procedure that was generally regarded as helpful to rights holders. HMRC would detain suspected counterfeit goods, contact the likely rights holder and the detention continued pending the rights holder’s response.

Actions to Hinder Counterfeit Goods Online

Online sales of counterfeit jewelry, watches and other luxury goods over certain websites will be blocked by Britain’s largest internet service providers, following a High Court victory by a luxury brand company.

The decision is the first time that a block has been ordered in the UK based on trademark infringement, rather than copyright infringement and the first time such a ruling has been given in Europe. The High Court ordered that the major Internet Service Providers (“ISPs”) – which collectively provide 95% of all UK broadband -- must block a handful of websites that sell fake versions of products made by the luxury brands.

UK Police Speaking at Vietnam Conference on IP Fraud

The International Law Enforcement IP Crime Conference in Vietnam, co-hosted by INTERPOL and the Vietnam National Police, had more than 500 public and private delegates from nearly 70 countries. During his speech, City of London Police Commander Steve Head called for greater global co-operation and a worldwide day of action to tackle organized criminal networks who are making millions of pounds through IP crime. A clear and positive trend has been seen, with a reduction in advertising from major household brands.

- During the pilot, advertisements from well-known brands decreased by 12%;
- Advertising that lead the user to sites with explicit adult content or exposed them to malware increased by 39% during the pilot, indicating that site owners may be struggling to maintain their revenue streams when advertisements from established brands are removed;
- Almost half of total advertisements on the sites were for unknown or unidentified brands which invited users to click through, often to fraudulent scams.

Actions against Counterfeiting

The U.S. Customs and Border Protection agency supports a supplemental registration of trademarks through their Intellectual Property Rights e-Recordation program. These registrations may be supported by brand manuals prepared by, or on behalf of, brand owners. The brand manuals can be used to facilitate the identification of counterfeit goods, including being used as evidence given by trade mark owners to obtain court orders for the seizure of infringing merchandise. Anti-counterfeiting technologies that can be used with packaging include:

- Taggant fingerprinting
- Encrypted micro-particles
- Holograms
- Micro-printing
- Serialized barcodes
- UV printing
- Track and trace systems
- Water indicators
- DNA tracking
- Color shifting ink or film
- Tamper evident seals and tapes
- 2d barcodes

For further information on the SGS inspection services for softlines and accessories (, please contact the SGS experts.

SGS is the world’s leading inspection, verification, testing and certification company. SGS is recognized as the global benchmark for quality and integrity. With more than 80,000 employees, SGS operates a network of over 1,650 offices and laboratories around the world.

Contact-Details: SGS Consumer Testing Services
Kris Wan
Senior Manager, Global Softlines Development Office
SGS Hong Kong

t: +852 2765 3695

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