How to Identify, Disrupt and Dismantle Unauthorized Product Distribution Networks

Online counterfeit networks are on the rise as it becomes easier and less time-consuming for criminal organizations to hide online. Globally, many of these organizations make use of online networks to not only to distribute counterfeit products but also to hide from manufactures and distribute gray market products.

The Internet enables anonymity and many online activities are unregulated. For example, there are no checks in place to ensure website operators use their legal name, address or phone number. It is relatively quick and inexpensive to register multiple websites with different registrars worldwide. It has become common for many criminal networks who practice this technique to ensure there is a backup in case their main sites are shut down.

Counterfeit networks

Counterfeit networks might seem small initially, but they can be expansive once investigated. Brands need to watch for patterns when trying to determine if they are facing a network targeting their brand. They should watch for multiple seller names or websites using the same imagery or language to describe their products. They should search for sites registered to the same individual or company – comparing names, emails, phone numbers, or anything with a match. They should look for large quantities of product below wholesale price; this is an immediate red flag. Product that is not consistent with packaging or brand standards, as well as products for sale in regions not currently sold to, may be a tip that a counterfeit network is involved. Finally, listen to partners; often times partners provide brand owners with important intelligence, as they are familiar with products that disrupt their channel and conflict with the policies they are trying to abide by.

Best practices

Once an infringing network is identified, brands can develop an enforcement strategy that is systematic and targeted, placing higher priority on the largest platforms. Data from deeper investigations can be used for follow-up with law enforcement or litigation purposes. The investigation of international shipping patterns can shut down demand and ensure partner compliance.Brands should consider the risk or the damage, as well as the cost of enforcement. Once the facts are known, brands can make strategic protection decisions. Questions to consider include:

  • Is the threat as high as anticipated?
  • Are the threats enforceable?
  • Are there threats involving partners or affiliates that need to be addressed separately from enforcement?
  • If a decision to made to enforce on a counterfeit network, what are the costs of enforcement?
  • Is there an existing brand protection program in place that can take care of the threat?
  • Are further steps needed to address the threat, such as engaging a private investigator or law enforcement?

Once a potential network is discovered, brands need to investigate everything. Recommended actions include comparing seller names and website registrations, using open source intelligence and paying attention to patterns to make connections. MarkMonitor can provide investigative reports with a rich level of detail. These reports provide actionable intelligence to help brands make informed enforcement decisions and weigh the costs and benefits of the different types of enforcement.

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