Are Counterfeits Good for Brands?

Sean Flynn
September 1, 2010

One of the frequent complaints about ACTA and other elements of the enforcement agenda is that it is not based on evidence. This issue becomes a legal one in the implementation of the Special 301 program, which requires that USTR base its list on empirical judgments about what practices most affect U.S. commerce. But what if counterfeiting actually helps U.S. consumers and even the brands they copy?

According to a new EU funded report, that may be just the case.

 A news article in the UK Telegraph explains:

"The study, co-written by a Home Office adviser, says consumers benefit from the market for knock-off designer clothes at knock-down prices.

"It also rejects the complaints of designer companies, claiming that losses to the industry as a result of counterfeiting are vastly exaggerated – because most of those who buy fakes would never pay for the real thing – and finding that the rip-off goods can actually promote their brands.

"The report adds that the police should not waste their time trying to stop the bootleggers.

"It disputes claims that the counterfeiting of luxury brands is funding terrorism and organised crime, and argues there is little public appetite for tough law enforcement measures as consumers enjoy the bargains offered by the illegal trade, which has been estimated to be worth £1.3 billion in the UK."

 

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