anti-counterfeiting, trademark protection, brand protection, intellectual property infringement, ebay, violating ebay policy

Investigating the Counterfeit Problem on eBay

The challenges that brands face to protect their intellectual property on eBay is significant. It’s commonplace for individuals and organized crime groups to use online marketplaces, such as eBay, to sell replicas of brand name items from Prada bags to Ugg boots.

To highlight this problem, Lollipuff did an eBay search for “Herve Leger” listings during a period of one week. The search brought up 147 items, of which 90 items (or 60 per cent) of Herve Leger were replicas.

An example of another testament to the problem with counterfeiting on eBay, Tiffany did market research to determine the extent to which their jewellery was being counterfeited and sold on eBay.

Tiffany hired a third party to purchase 136 random samples which were inspected for authenticity. Of these items, only 5 per cent were deemed to be authentic and 73 per cent were identifiable counterfeits. The remaining 22 per cent of the items were unverifiable.

There are numerous red flags which indicate that an eBay member may be selling replicas. Many counterfeiters do not use their own photos. Some use photos taken from the brand owner’s website.

Even more telling, sellers may use photos that are specific to known counterfeit websites whose IP addresses are based in China.

The sellers are also more inclined to use mannequins and neglect to use their own descriptions.

Another indication of counterfeiting is that the listing is filled with spelling and grammatical errors or simply does not make sense because of the seller’s lack of familiarity with English and, in some cases, because item descriptions have gone through translator programs.

Fakes are not permitted to be sold on eBay and sellers that don’t use their own photos or descriptions are violating eBay policy; however, given the fast-paced nature of the online marketplace and the large volume of items, it’s tremendously difficult for eBay to effectively police the marketplace.

eBay states that they “cannot be an expert in… intellectual property rights in over 25,000 categories, and cannot verify that sellers have the right to sell the millions of items they post on eBay each day.”

The company does some work behind the scenes by using a “fraud engine” that automatically searches for and identifies listings that violate eBay policy.

The fraud engine uses various software rules and complex models. For example, the search engine may bring up listings that overtly claim to offer replicas, include explicit disclaimers of authenticity, and/or state that the seller can’t guarantee the authenticity of items sold.

Issues related to the seller’s IP address can also be detected, as are issues associated with the account and feedback that’s received from buyers.

The problem is that most buyers are unaware that they have been sold counterfeit items. This translates into long-time sellers, who are notorious counterfeiters,  being awarded “Top-rated Seller” status and near-perfect positive feedback.

Also, many counterfeiters are skilled at duping the fraud engine, and even at its best, it’s not an effective method offering total brand protection, which is evident by the sheer number of counterfeits on eBay.

That’s where the brands, and online investigators, need to work together to help protect their brand online. On Friday, we will publish a post on what brands can do to protect their trademark on eBay.

Photo Source: Flickr

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