Technology has taken counterfeit ing from a back-alley business to a $500 billion-a-year enterprise. While counterfeiting has existed for thousands of years, the Internet, ease of global shipping, and online payments have brought counterfeiting into every consumer’s living room. Indeed, unfettered counterfeit sales are among the most powerful detrimental market forces to a manufacturer. Counterfeits hamper profit, force rapid price erosion, and tarnish the brand’s image. What makes a counterfeit seller so dangerous to a manufacturer is the fact that a counterfeiter can sell the manufacturer’s product at a price below that manufacturer’s cost and still be profitable. With a competitor this strong and disruptive in the marketplace, no longer are counterfeits a localized nuisance; they are the ultimate competitor to today’s brand owner.
The foreign or judgment-proof defendant has long been the bane of counterfeit litigation. Companies have exhausted entire legal budgets chasing defendants in mainland China with little or no chance of recovery. While foreign strategies are not without merit, they are expensive and transform the enforcement/legal department into an expensive cost center within a company.
