British Brands Group: intellectual property In this feature l substitute selling l disastrous effect l offering insight The imitation game Buying something online should ensure you receive the goods you ordered but all too often sellers are supplying poorer quality substitutes. John noble explains what brands are doing to tackle these intellectual property infringements W hen you buy something online, youve got a right to expect it to be the real thing, surely? After all, checking the description and pictures should guarantee that youre buying the product that you want. However, all too often unscrupulous sellers are providing substitute goods in place of the branded item that the customer expects, which can have a disastrous effect on the reputation of the brand and its profits. So what can be done about it? The British Brands Group is keen to see this issue addressed, and is working to discourage and significantly reduce online substitute selling in the interests of shoppers, its members and other companies damaged by the practice. The focus of the groups work is to: l Alert brand owners to the risks of substitute selling, helping them spot when their products are targeted and supplying the knowledge and tools to help them take action l Alert policymakers, regulators and public enforcers, and to offer insight and support for policy, regulatory and enforcement initiatives to be effective l Work with online platforms so they have the necessary information to act against infringers and that processes are effective in making sure shoppers receive the products they ordered The problem is that online sellers who range from one-man bands to large, international retailers and distributors use IP-protected images, logos and brand names to sell their imitation products. Some sellers may also commission online platforms such as Alibaba, Amazon, eBay and Play.com to redeem products to the shopper on their behalf to lower costs and speed up dispatch times. Online sellers are able to advertise products under a brand listing when they are not selling the brand, but their own or generic product. They piggyback on the popular brands higher listing. Meanwhile, manufacturers, often in the Far East, are too ready to provide competitors with products similar to that commissioned by the brand owner but at a lower price. The problem is that online sellers who range from one-man bands to large, international retailers and distributors use IP-protected images, logos and brand names to sell their imitation products A double whammy The fallout is two-fold. First, the shopper does not receive the products they ordered instead, they are sent products that may not be compliant with UK law, which are often dangerous and of poor quality. Second, the brand owner loses sales, distributors and control of their brand. Whats more, they suffer reputational damage when shoppers are disappointed in the product delivered and give negative feedback; and the brand is rendered uncompetitive, thus making the company less able to invest and innovate, which often leads to failure. Intellectual property rights such as trademark law and passing off, and the Consumer Protection Regulations provide a legal basis to address this form of switch-selling, and they have the potential to be effective. A recent claim brought by Bonnington Plastics (see below) against a group of prolific substitute sellers resulted in an agreement to refrain and a settlement of 80,000 in compensation and costs. To find a more permanent solution to the problem, the British Brands Group believes that a collaborative approach between brand owners, policy-makers and online platforms will be required. oNlINE SAlES The British Brands Group is staging a half-day conference on online sales at the National Motorcycle Museum, Solihull, on 10 November. To attend, or to learn more about the British Brands Group, contact John Noble at jn@ britishbrandsgroup. org or call 01730 821212. CAS E STuDy 1 CAS E STuDy 2 SToR AgE SoluTIoNS lTD, TR ADINg AS S puR BoNNINgToN pl ASTICS, TR ADINg AS KINgFIS HER CAS E STuDy 3 RH S mITH & SoNS, TR ADINg AS S mIFFyS, FEvER CollECTIoN AND TImE FoR FuN CAS E STuDy 4 S EATRIEvER INTERNATIoNAl HolDINgS Find out more: Trading standards officers who would like to learn more about the work of the British Brands Group and its efforts to tackle IP infringements can contact John Noble at jn@britishbrandsgroup.org.uk Credits John Noble is director of British To share this page, in the toolbar click on You might also like British Brands Group Brands Group Images: Evgeny Atamanenko / Shutterstock SToR AgE SoluTIoNS lTD, TR ADINg AS S puR At Storage Solutions our best known ceased their activities altogether; together with costs. We currently have brand is SPUR, which has been in others desisted for a while, only to a number of similar actions under way. use since the 1950s and covers a reappear months later; some simply wide range of products such as wall- refused to stop selling. These latter Next steps mounted shelving. categories became the main targets The investment made to date by of our efforts. Storage Solutions against substitute The problem selling is well over 100,000 a We became aware that a number of The solution substantial commitment for a relatively companies were selling cheap, light- We succeeded in taking legal action small company, but one we have little duty substitute products mainly online against substitute sellers. Our first choice but to make to protect our using our brand, artwork and images success was in 2013, when we issued a brand. to fool customers into thinking they claim against a small, but persistent, were buying genuine SPUR products. offender in the small claims division of standards and government agencies Initially, we focused on those who the Intellectual Property and Enterprise to tackle this huge problem, and want appeared high in the Google search Court (IPEC). We secured an injunction to see brand owners uniting to support ranking for the SPUR brand and those preventing further infringements, these organisations. using it in text and titles on platforms with the directors personally liable such as eBay and Amazon. After being for any breach. We also secured a peter sully, managing director, contacted, many substitute sellers compensation award of 10,000, storage solutions We want to work with trading BoNNINgToN pl ASTICS, TR ADINg AS KINgFIS HER We have been trading for just under from the pulling power and high on occasions. Weve also had 50 years and Bonnington Plastics is one ranking of a Bonnington Plastics successes in the High Court and IPEC, of the largest importers of value-for- online listing, while selling cheaper, where we have secured injunctions money gardening, DIY and houseware substitute goods. against companies and their directors engaged in substitute sales, products in Europe. The solution recovering well in excess of 100,000 The problem We have made a significant investment in compensation and costs. Substitute selling is a big problem for in IP protection, thanks to our in-house Bonnington Plastics. Because of the legal team, and we have a close Next steps tight profit margins associated with relationship with our external solicitors, The company is committed to raising our products, distributors often cancel Pannone Corporate. awareness of the problem through Bonnington has helped develop orders as they cannot compete with seminars, press activity and working substitute sellers offering rock-bottom specialist software to detect IP with others to eradicate the practice, prices. Substitute sellers often secure infringement by substitute sellers, and and we would like to work with online the buy box on Amazon, so that takes action against such infringement platforms to find a more permanent our customers struggle to sell across online platforms. solution to the problem. We have sent more than 100 the genuine Kingfisher products purchased from us. Substitute sellers unlawfully benefit letters of claim to substitute sellers, Jake Currier, legal counsel at and secured pre-action settlements Bonnington plastics RH S mITH & SoNS, TR ADINg AS S mIFFyS, FEvER CollECTIoN AND TImE FoR FuN Brand owners can only do so much RH Smith & Sons is a leading supplier of IP rights were being used without fancy dress and dress-up accessories, consent to sell cheaper, inferior, to tackle the problem. Input is needed serving around 5,000 stockists in 58 non-branded or competitor products. at a policy level and with cooperation from the online platforms, if a more territories worldwide. The solution permanent solution is to be found. The problem We send cease and desist letters to a The company is the proprietor of substantial number of infringers to deter sam lucas, legal counsel at a huge catalogue of high-quality, offenders and to send a clear message rh smith & sons copyright-protected images and a that RH Smith & Sons will not tolerate portfolio of trademarks, including those substitute selling. for its key brands Smiffys, Fever and Time for Fun. We became concerned that Next steps We and other brand owners are many sellers using our IP rights across investing significant resource in dealing online trading platforms were unlikely with this issue. However, taking action to be selling genuine RH Smith & against a substitute seller today Sons products. does not stop a new substitute seller Test purchases revealed that our cropping up tomorrow. S EATRIEvER INTERNATIoNAl HolDINgS Seatriever is a Cheshire-based firm that which it estimates have cost infringing Next steps designs, manufactures and distributes distributors more than 1m: When complaints are filed, cooperation is not always forthcoming, and action its own range of patented, fast-moving consumer goods products, including illuminated latex balloons called Illooms. Put together a Brand protection guide has not been taken even when we for customs authorities helping to show the product is banned in the EU. identify substitutes The problem Talks with Amazons US brand Used bespoke third-party protection team established there is an Because of the success of Illooms software that trawls more than 120 awareness of the issue, and that new balloons, a large number of substitute e-commerce platforms daily reporting tools are being developed for Worked with Amazons product complaints. At our request, a bar has integrity team to cut substitute sales now been put on Chinese users listing Used a global network of external Illooms without authority. products have appeared on the market. If they do not conform to relevant safety standards, they may be unsafe and should not be distributed lawyers to take legal action Safety issues are also being Prepared evidence bundles for investigated, and we hope to continue quality attract negative reviews, which trading standards authorities to working with the online platforms to damage our reputation and sales. support criminal prosecutions clear up substitute sales in the market. in the EU. Substitute products of poor Participated in programmes The solution such as BBC1s fake Britain to Andrew Vickerstaff, group legal Seatriever took the following steps inform consumers counsel, seatriever