Case study: Crushing the counterfeits

Whether it’s Armani, Adidas or Anchor, well-known brands are all subject to imitation. All exporters need to be wary of their trade marks being ripped off and protect their valuable IP

Whether it’s Armani, Adidas or Anchor, well-known brands are all subject to imitation. All exporters need to be wary of their trade marks being ripped off and protect their valuable IP.

Handbags, watches, sunglasses and electronics are among counterfeiters’ favourite products. But virtually anything can be faked and passed off as a recognised and respected brand.
Often these rip-offs are found to be small-scale opportunists. But internationally, the trend toward large-scale counterfeiting continues to grow. In late 2011, the world’s largest dairy products exporter, Fonterra, discovered and foiled a large-scale attempt to counterfeit one of its flagship products, Anchor milk powder.

The large shipment containing tens of thousands of tins of milk powder labelled ‘Anhor’ and bearing a very close likeness of Anchor’s famous red anchor logo, was intercepted by Fonterra’s representatives in the Middle East.

Carolyn Green, Fonterra’s Auckland-based trade mark manager, says the counterfeit products were on their way from the United Arab Emirates to Somalia but were found before they left their port of origin.

“We’ve had a few instances where we’ve been advised through Customs of infringing products, but this was a particularly big one,” says Green. “Anchor is one of our biggest brands and is very popular in that part of the world, so it’s a major target for counterfeiters.”

Intellectual property expert AJ Park has been advising Fonterra since the dairy co-operative formed in 2001. Partner Alan Potter and Senior Associate Emma McBride work closely with Green to help safeguard Fonterra’s valuable trade mark rights.

“Fonterra sends its products to more than 140 countries around the world,” says McBride. “Because of all the valuable brands Fonterra uses, it has a significant registered trade mark portfolio, which we help to manage.

“In this case, we were able to get a really clean outcome. We worked with Carolyn Green and Gavin Scott from Fonterra’s legal team to force the counterfeiter to agree to destruction of the fake products. We then arranged for Fonterra’s local agent to destroy all of the counterfeits – that was all done over a period of two days with the help of giant digger. The counterfeiters had actually filed for their own trade mark, but they accepted that they were infringing Fonterra’s marks and gave away their application.”

This case demonstrates how important it is to have your own trade mark protection in place and to enforce it, says Alan Potter. And he’s not just talking about big organisations. Exporters of any size with a system or product that risks being copied should protect their intellectual property.

“It’s about taking the time to work out where you think you may be at risk, and getting protection in places close to your markets, where people might want to counterfeit your products,” says Potter. “You may not always be able to register every mark in every country, but you need to at least think about it. Exporting branded goods without trade mark protection is a bit like running an uninsured business – it’s all fine until something goes wrong, then you wish you’d put adequate insurance in place.

Potter says that for smaller companies it’s always a risk assessment – how big a risk are you willing to take? All exporters need to turn their mind to the risk they’re taking.

“In this case Fonterra had its registered protection in place, which led to a good outcome that was both quick and very cost-effective. When you’re exporting, you need to have your trade mark registrations and customs notices in place. If you start off with weak rights because you haven’t done your homework, things always end up more complicated.”

Green is in daily contact with AJ Park to help protect Fonterra’s trade marks and to manage cases like this one. She says the input and advice she receives from both Alan and Emma is extremely valuable.

“AJ Park is the liaison between Fonterra and our lawyers in various countries, and maintains Fonterra's trade mark database. We couldn’t do what we do without them. Sometimes we’re in touch several times a day. We talk about IP protection strategies across our various markets; and when things like this counterfeiting situation happen, we work as a team to deal with it.”

Fonterra is the world’s largest diversified milk processing company and one of the world's top producers of dairy nutrition for export, including milk powders, cheese and butter. Fonterra sells its products to more than 100 countries.

Intellectual property expert AJ Park has been working with Fonterra since its formation in 2001 and recently helped the company with a large counterfeiting case of Anchor milk powder from the UAE.

To find out more, contact:
AJ Park
0800 257 275

Idealog has been covering the most interesting people, businesses and issues from the fields of innovation, design, technology and urban development for over 12 years. And we're asking for your support so we can keep telling those stories, inspire more entrepreneurs to start their own businesses and keep pushing New Zealand forward. Give over $5 a month and you will not only be supporting New Zealand innovation, but you’ll also receive a print subscription and a copy of the new book by David Downs and Dr. Michelle Dickinson, No. 8 Recharged (while stocks last).