Duped: Fakes, Frauds and IP Battles

Okay, so you’ve found a gap in the market, you’ve invented a new product, and it’s a massive success. End of story, right? But what happens when your product gets so successful that people start to copy it when companies pop up online pretending to be you? The internet has led to an absolute explosion in the fakes and frauds market. So how can you best safeguard your IP from being duped? And what should you be looking out for? Hello, I’m Lisa Leong, and this is season three of From Idea to Intellectual Property.

It’s a podcast about today’s big ideas and the IP considerations behind them. Kristen Carden is the director of FernMark at New Zealand Story, the government agency responsible for the whole New Zealand brand. You know that little silver fern logo? It turns out that it’s really hard to get on your products unless you fulfil some strict criteria.

So Kristen, take me back and tell me the story of New Zealand fern. So the silver fern is native to New Zealand and has a very long and rich history. And it goes right back to the way it was used by our indigenous people, Māori.

They used it when they were hunting and the warriors used it. But the underside of the fern is reflective and silvery, so they would bend the fronds to help them find their way through the native bush. Then, I guess in the late 1800s, it kind of took off, I guess, and became used more as a symbol of national pride for our sports teams, for our military, and also, I guess, now to represent our country all over the world.

And how did this beautiful silver fern become the official logo for New Zealand? Our trademark design, the New Zealand fern mark, that was designed in the 1990s as a kind of single visual identity for the country. And it was quickly adopted by our government agencies that are international facing as that symbol of New Zealand government. And then in 2015, when we launched the fern mark license program, that’s when we made it available for qualifying exporters to carry that overseas with their products and services.

And so if I put the fern mark on my products, what am I representing then, Kristen? For exporters, it really is that country of origin accreditation and it’s government backed. So it says that you are an authentic New Zealand business and that your products can be trusted and are authentic. And what we want it to be is not just a symbol of a physical place, but a symbol of what it is to be from New Zealand.

And we want it to represent our culture, our values, and the way we do things. And it turns out getting this fern mark certification is actually a big process. Kristen explains what brands looking to get certified need to do.

Really what we’re looking at is the New Zealandness of the business and the New Zealandness of the product or service. So we have kind of a weighted model that looks at both of those things. And we look at, in terms of the entity, we look at ownership and governance and workforce and kind of the connection to New Zealandness in that area.

And then we also look at products and services and they need to qualify in one of our categories, which either has to be made in New Zealand or grown in New Zealand or designed in New Zealand. I would imagine that the idea of being associated as coming from New Zealand and being associated with the New Zealand fern, in people’s minds, they’re thinking about nature, purity, and all those good things that you’ve developed over time. So when it comes to people misusing your fern mark, how do you go about tracking down those companies who might be using the logo wrongfully? We invest a lot in this.

We do a lot of ongoing monitoring of product listings of online platforms. And also we have worldwide watching searches for products and services. And we also have watching searches for trademark applications.

So this kind of misuse pops up in different ways. It’ll pop up in relation to products, and it could be digital or physical misuse. That does go to show, I guess, how iconic and valuable that logo is.

But it does also show that not everyone understands that it’s also valuable trademark and IP for New Zealand. Have you ever been surprised by where the fern mark has tried to be used? We had someone from one of our offices in Germany send us a screenshot of some ice cream that had been bought in the Ukraine that had a green fern mark on it. And they said, we don’t think this should be happening.

We’re like, oh, wow, thanks for letting us know. So yeah, it was great because then we could take steps to contact the ice cream company and let them know, actually, this is our IP. So could you please replace it with another fern? So how widespread is this, Kristen? How many fakes are you dealing with? There’s a whole range of misuse that we’re seeing.

You know, we’re seeing kind of the honest mistake use domestically in New Zealand where people have that feeling of ownership and identification with the fern mark and they don’t realise that they shouldn’t be using it. So it’s kind of a full range from that right up to people who are intentionally putting it on their range of products because they’ve seen its value. And then also when it pops up in terms of trademark applications as well, that’s really important for us to follow up on because as you know, we don’t want to water down the value of the fern mark.

And if it’s going to be incorporated into other people’s trademarks, then it’s becoming less unique. So we probably have about half a dozen to 10 of those kinds of applications a year. And then we have the other type of cease and desist activity that we get involved in as well.

And a lot of that is international, which is where we use outside counsel, I think, really effectively. Does it ever go to litigation? And do you need to work with external counsel then? Yes, we do. So AJ Park, our external counsel, and we’ve had a really long relationship with them.

They’re really deeply involved with us and we work closely. And we do bring cases internationally to litigation. In fact, we had an opposition that was unsuccessful as it went through the trademark opposition process, but then we took it to litigation in China and we were successful in validating that.

Obviously, litigation is expensive, but working with a firm that has international connections and international agents everywhere, it becomes much more seamless for us because we just deal with our New Zealand team. So it’s fantastic. So Kristen knocked on the door of AJ Park looking for legal help and it was there that she met Thomas.

My name is Thomas Huthwaite. I’m a principal and I’m the practice group lead of the litigation and commercial group at AJ Park. Sorry, that’s a mouthful.

And Thomas has been in the business of IP law for a pretty long time. So I’m an intellectual property dispute resolution specialist. I’ve been doing this for about 15 years and yeah, just absolutely fell in love with IP from day one.

I realised this was the law for me and I’ve stuck around. So Thomas, as a brand and trademark litigator, when do you actually get called in? It really depends. And look, some clients want us in from day one.

They want to know right at the beginning, even when they’re looking to protect something for the first time, what should we be doing to make sure when it comes to enforce this, we’ve got exactly what we need. That’s the best way to approach it. Others, we’re the ambulance at the bottom of the cliff, right? So we’re just waiting for the big problem to land on our desk and then we jump in to help.

And we’ve just heard from Kristen, who, because of the internet, is having to deal with the FernMark popping up on everything from baby products to Ukrainian ice creams. So how exactly do you go about policing something like the FernMark online? Everything is online now. All of the major commerce platforms are online.

So really it’s a question of where do we start? What markets are important to us? What goods are important to us? What consumers are important to us? And from there, that’s almost like the secret sauce to what we do is trying to work out what markets are we going to target? What goods are we going to target? How do we triage? Because sometimes there’s a lot out there and how do you get through everything you need to get through? So the secret to how we work is really knowing what to look for, knowing where to go, knowing what to target, knowing what to report and what not to report. Because you also don’t want to be wasting a client’s time with a lot of positive reports. Oh, that’s actually genuine good.

We’re not worried about that. Those people are licensed. We don’t need to check in on them.

You want to go after the real counterfeits. When I was a junior IP lawyer, so I ended up being an IP lawyer for seven years, I started off in IP litigation and I used to be involved as the person who would go and make trap purchases. Do you want to explain what trap purchases are and what they seek to achieve? That’s so funny.

I think we must have had a similar origin. I remember when I first started out, it wasn’t online marketplaces. It wasn’t e-commerce marketplaces.

We were down at the markets. We’re looking at stalls. We had pre-prepared John Doe letters in some cases that we could just run out there and serve on whoever it was that was selling counterfeit goods.

But the purpose of a trap purchase is really to set the scene and gather the evidence that we need to show not only is something being advertised as out there for sale, but actually it’s being sold. It’s available to consumers. It’s being sold.

It is infringing. And it’s one of the key pieces of evidence that we’d use in a case of counterfeiting. Well, let’s talk about things from a business person’s point of view.

So if somebody is listening and thinking, gosh, this sounds like it’s quite hard to do and it could cost quite a bit of money. What’s the main reason for going through something like this and protecting your trademarks and brands and making sure that they’re not being used on counterfeits, on fakes, et cetera? There are lots of good reasons, I think, to go after someone and not to let someone keep using your brand when they shouldn’t be. One of the obvious ones is that your consumers are going to be misled.

Another issue is that it’s going to be devaluing your brand because if someone’s not doing your brand the way that it’s supposed to be done, they’re not doing it under license or with proper controls, with the right level of quality, they’re going to be producing a product that’s inferior. They’re going to be doing it worse than you. One of the biggest pieces of advice I’d give businesses these days is, look, everyone’s got a social media marketing person.

They’ve got a social media manager. They’ve got people out there who are capturing, creating content, but then they forget. They forget to go and look at what other people are doing.

Are people copying? Are there dupes? Is this an area in which people are promoting fake goods? That’s the missing part in a lot of businesses’ strategy to online is the enforcement piece. They’re really good at creating. They’re really good at engaging with their audiences, but they’re not good at finding where things are going wrong.

So if someone is trying to navigate and they’ve noticed that their products now have some fakes and fraud issues, what’s your advice with going down the enforcement avenue? A lot of people go, oh, well, I can’t afford legal proceedings, and a lot of people can’t, but there are so many options. That’s worth keeping in mind is, look, we don’t have to go and file proceedings here. We could send someone a letter.

You could send someone a letter and explain to them why it is that they can’t do what they’re doing with your brand. There are other ways of engaging online with your consumers or your audiences. There are also ways of engaging with the e-commerce platforms and the social media platforms themselves.

Almost all of them have online takedown procedures these days, and that’s one of the main areas that we have had to keep up with and engage with and work with these platforms to find a low-cost way of actually dealing with the problem. Is there some sort of rule of thumb or threshold that you would know when you need to seek legal advice? I don’t want to sound like a lawyer, but I’m going to have to sound like a lawyer and say you should always take advice as soon as you feel you need to. It’s always better to take advice sooner rather than later because it’s often much cheaper.

It’s much easier if you come to us and we can give you a steer or a direction. It might even be that the direction is you don’t need us right now. You’re doing a great job.

But on the flip side of that, it might be actually, look, if you are going to want to protect your brand, if you are going to want to take action down the line, you really need to be doing these things now. And what’s the rule then for knowing how much of your brand or trademark has been copied to warrant that next step? I thought you’re going to use the word percentage there, and I was going to say, please, let’s do away with the percentage rule altogether. Let’s make sure people know there is no magic 5%, 10%, 50% rule.

It really comes down to the legal test. So if we’re looking at copyright, for example, we’re going to say, is there substantial similarity between these two things? If we’re looking at trademarks, we’re going to be saying, is it an identical mark or is it a confusingly or deceptively similar mark? If I’m a small business, I wouldn’t have a lot of spare money to pursue a lot of things. Do you have any advice for small business owners in how you’ve seen it be done in an efficient way, which also ensures that their business prospers for the future as well? Yes.

No, we do have a lot of experience with that. I’ve got artist clients that I act for. So individual artists who’ve, you know, they’ve designed the most incredible pieces of artwork and someone will go and they’ll start putting it on t-shirts, putting it on caps, putting it on calendars, putting it on everything.

And so don’t need to be a huge business. We can work with individuals to go, what is your budget? What are you concerned with? And work out low cost, efficient ways of dealing with the problem. Sometimes that means putting things back onto the rights holder.

So for example, with the artist, it might mean that we help draft a letter, something friendly that you can send out and say, hey, actually, did you know that’s my artwork? You’re not allowed to do that. And we can just check in from time to time to make sure that the direction is what we agreed to. So we’re talking about art and we’re talking about the internet.

Fast fashion is upon us. What sort of things are you seeing in that area, Thomas? Oh gosh, the, I think, and this is really where the dupes trend, I think has been a perfect storm of online marketplace, influencer culture and fast fashion. And really those things have just come together and exploded in a way that we couldn’t predict, in a way that’s led to this dupe culture.

Dupe culture really just, and dupes just simply refers to duplicates. And I think its origins really weren’t sinister origins. I think it was really the budget conscious influencers who were going, look, I want to make a platform based on fashion and based on cosmetics, but I can’t afford the really luxury stuff.

So what I’m going to do is I’m going to appeal to my younger audience. I’m going to create something here’s the dupe, here’s the duplicate. And so I don’t think there was anything sinister about that in the early days.

But what happened, I think, is fast fashion got involved and big business got involved and people saw the money and the appeal in selling not the high-end fashion goods, not the genuine high-end goods, but actually the duplicate goods en masse. And as a result of that, I think we just saw this explosion of dupe culture where it wasn’t just your bargain hunters anymore. Now you’re into your commercialisation of fast moving goods.

And I think that really took off last year when I first started tracking dupes online, I was tracking dupes on TikTok. And I think it was March last year, hashtag dupe had been viewed about three billion times. And by the end of the year, it was six, seven billion times.

And so where does this law stand practically speaking, when it comes to a trend that is exploding like dupes? I think what it is, is a new technology and wherever those things meet, often the law is lagging behind a little bit. We’re trying to catch up. We’re trying to work out where to go with this.

People still don’t know what’s good and what’s not. People don’t know what’s right and what’s wrong. And so part of it is education.

Part of it is trying to reel back in that culture. Actually, yes, bargain hunting is great, but where dupes overstep the line to replicas or counterfeit goods, that’s not OK. And so trying to reel people in back from that standpoint, trying to educate the market.

And of course, also trying to actually use the legal tools that we have to stop these goods, because we have legal tools to prevent counterfeits. And if a dupe falls into that category of counterfeit, we should be using the tools we have available to us to stop it. Is it hard, though, to pinpoint the company that’s actually behind some of these things like dupes? The companies these days and a lot of the dupe peddlers and the infringers, they are getting fairly sophisticated.

And so it can be more difficult than it used to to track people down. But it’s usually not impossible. And the reason it’s not impossible is these people are still trying to sell their goods, right? And so there’s always a way that we can try and work out who you are, where you’re selling from, what it is you’re selling.

Sometimes we’ll have investigators not only do trap purchases, but do trap purchase and returns so that they can find out the source of the goods. And just looking forward then, as you said, it’s fast paced, ever changing. Where do you see this all going? And what are the trends to look out for? In terms of seeing where it goes, I mean, I think that’s part of the excitement of this area is we don’t know where it’s going.

And AI has come into the picture and AI is such a big part of the future of this and such a big unknown factor. We just don’t know where it’s going. Like with any other emerging technology or emerging trend, the key is really just staying up to date.

It’s keeping on top of these things. It’s making sure that we know where things are going. Because as soon as you fall behind, as soon as you turn a blind eye or go, look, actually, that’s just too difficult for my practice.

I don’t know. I don’t understand how that works. I don’t understand TikTok.

I don’t know what I’m doing. As soon as you start to fall into that pattern, you start to become left behind. And I think that’s what we don’t want lawyers doing.

And that’s what we don’t want brand owners doing. We want everyone keeping up with the trends, acknowledging that technology is moving on and we need to try and keep up with it as well. That was Thomas Huthwaite, Principal and Practice Group Lead of the Litigation and Commercial Group at AJ Park.

And earlier, you heard from Kristin Carden, Director of FernMark New Zealand Story. Thanks to our producer Cara Jensen-McKinnon. This podcast is brought to you by IPH, helping you turn your big ideas into big business.

I’m your host, Lisa Leong. Bye for now.