Scott Gilen (Director of IP Enforcement Global at Apple) spoke at the Luxury Law Summit about how his team stops Apple fakes (both digital and physical) around the world.
Understandably, their primary focus is on counterfeits that could be harmful to consumers such as fake iPhones, parts and accessories. Fake Apple stores remain a problem around the world (particularly in China). They have everything from the T-shirts to the tables!
The issues that Scott has to deal with go beyond physical products. For example, Apple TV Plus content is being pirated. They have people outside the US in 8 different cities in addition to Cupertino.
How has the pandemic affected IP enforcement?
Typically the workers in these underground factories head home around Chinese new year. Scott explained that Apple's IP enforcement team got the impression that the counterfeiters didn’t return for many weeks (and possibly months). This is because when things shut down in China the counterfeiters were on lockdown too. As a result the counterfeit levels dropped. Post pandemic, once China got back to normal, everything else did as well...
One major issue during the pandemic has been the reduced engagement from law enforcement and Customs (who have understandably had other priorities). However, things are coming out the other end now as well so things are picking up here too.
Going out to ports and doing direct hands on training is not possible so Apple has now moved their entire Customs training programme to virtual training. This has some issues – particularly as far as tactile products are concerned. But there have been some very positive developments, particularly in terms of the number of products
One major change has been in the levels of online counterfeits. They are now seeing more online counterfeits than ever before. In addition to the obvious counterfeits, the main problem concerns those that are sold as genuine products at slightly cheaper price points which lead consumers to think that they're getting a bargain rather than a counterfeit. These fake Apple products can be very dangerous for consumers. Scott warned that the vast majority of products on marketplaces that appear to be genuine are in fact fake.
Do you see online counterfeiting being the bulk of the work?
Yes – every year it becomes even more so and this is only going to increase with the pandemic. Even when things stabilise, these trends are going to continue. They have a target of 1 million takedowns from 75 marketplaces this year! Ambitious.
There are some major positives now. For example, there is more collaboration with the marketplaces, government and law enforcement to identify and reduce counterfeits online. There’s a lot more awareness of the dangers and the issues than ever before.
Counterfeiting and infringement is so lucrative that it’s never going to stop. If you stop one platform, the counterfeiters will move on to somewhere else. The key is to keep an eye on what’s most important for Apple and its customers. E.g. they could spend all of their time and money on stopping fake Apple cases but the product safety side of things is obviously more important because there’s a consumer protection angle as well. Like anything, it is a question of balancing budgets and assessing priorities.
The latest major challenge for brand protection comes from social media. Scott explained that they have seen a lot of social media influencers, including the Jenner sisters, selling fake AirPods. A major problem with counterfeit social campaigns is their sudden reach. They are seeing multiple campaigns in the UK and the USA on a regular basis.
How do you build a good anti-counterfeiting team?
They have lots of different skillsets working together. You can’t rely solely on law enforcement and customs. Everyone needs to work in tandem and identify areas where they can make the most impact.
How do you keep innovating?
A lot of the innovation happens on the counterfeiting side. They then have to innovate in order to keep up. There is an element of being reactive as far as Apple is concerned. Once a counterfeiter is caught, they change tactic. Apple needs to be thinking about how they will innovate and also keep up with them. For example, the social media influencer sales has taken up a lot of time.
Any new social media tools will be repurposed for negative ends. That said, there is now a lot more government awareness of the issues and serious conversations are happening with all major stakeholders.