Caution: Counterfeits on the Rise During Coronavirus Outbreak
Intellectual Property Alert 03/10/20 Lori S. Meddings, Li Zhu
The coronavirus outbreak has severely slowed the global economy. Reduced workforces and restricted movement of trade have left a country typically able to meet the highest demands in an unfamiliar state. The shortage of genuine products has created a unique opportunity for counterfeits. Across online marketplaces, counterfeits and knockoffs are targeting consumers who cannot wait for weeks or months for suppliers of genuine products to restock, creating a whole new customer base for counterfeit goods - the well-intentioned, yet impatient consumer.
Most Chinese suppliers of genuine products are still under stringent health and safety rules imposed by the central or local governments. On the other hand, counterfeiters do not play by the same rules. Most employees working for counterfeit operations are local residents, which means their movements and production activities within the same geographic location are not banned. Local law enforcement is busy fighting off the virus outbreak, resulting in little attention and effort against the production and sale of counterfeits.
No Pause for Counterfeiters
Brand owners focused on supply chain and consumer demands can easily lose sight of anti-counterfeiting. There is also an assumption that counterfeiters have halted production like the legitimate factories in China. Unfortunately, counterfeiters do not rest, especially when it comes to popular items such as health and medical supplies. On one Alibaba online marketplace, there are dozens of listings for suspicious N95 face masks that are apparently counterfeits of some reputable medical supply brands' products. Counterfeit hand sanitizers have also flooded online stores.
The rise of counterfeits is not unique to medical and health products. All companies with low or no inventory of popular items are extremely vulnerable. It requires brand owners to be extremely disciplined by continuing online monitoring and takedown efforts and enhancing their customs trainings in China and the U.S.
Quarles & Brady will monitor this surge in counterfeit activity closely and provide in-depth analysis and guidance as developments progress.
For additional information on brand protection and anti-counterfeiting, please contact your local Quarles & Brady attorney or