“Fighting the counterfeit industry has become an increasingly complex task”

Marc Frisanco, Deputy Intellectual Property Advisor: Regretfully, I have to say that the trade in counterfeit watches has taken on a new dimension. It has become more global, more active and its intermediaries have grown more powerful. And this applies at all levels, whether production, marketing or distribution. Fighting the counterfeit industry has become an increasingly complex task. The Internet has gone a long way towards stepping up this phenomenon because it allows anonymity, and because it gives counterfeiters the technological means to spread their illegal activities worldwide. Identifying and understanding these networks, which is essential to effectively combating fakes, is becoming an increasingly arduous task. And this is something we need to worry about.

I’m afraid so. Trade in counterfeits has exploded over the past few years, boosted by the Internet. Legal action and high-profile operations are on the rise and yet results haven’t followed through. Granted, politicians at the highest level are now aware of this problem. The French president Nicolas Sarkozy addressed this issue during his recent visit to China. But relatively ineffectively. Strangely enough, the more counterfeiting is discussed, the more trivial, even tolerated, it becomes.

Given that counterfeiting is a covert activity, it’s hard to quantify. Let’s take the concrete example of seizures by Customs, which are increasing at an alarming rate. One has to remember though that the authorities control just 1% to 2% of goods that enter a country. Inevitably, the remaining 98% includes an abundance of counterfeit products.

Certainly. One has to realise that the Internet casts a veil of secrecy over the people behind the websites and their responsibility with respect to acts of counterfeiting. You can open or shut down a website in a few clicks. The situation was much clearer before, when we were dealing with a known, bricks-and-mortar point of sale. It was a lot easier for us to take legal action then. Today we’re looking at screens and pseudonyms. We’re in a virtual world where finding who’s behind a network is proving to be a real headache.

Some countries are moving in the right direction but we still face a mammoth task. Take Greece, for example. There is still a plethora of shops that sell genuine watches alongside fakes. Of course we take legal action against their owners but they put up a defence. This takes up huge amounts of time. We’re up against the same obstacles in Turkey where counterfeiting isn’t high on the government agenda. The situation is improving in Italy. As an overall conclusion, we could say that repression is local when counterfeiting is global. Outside the abovementioned countries, the trade in counterfeit goods sends a chill down your spine. In Dubai there are 17, yes, 17, duty-free ports where controls are more than sporadic. Inexistent even. Imagine the millions of counterfeit products that transit through there, be they watches, pharmaceuticals or luxury goods. It makes your head spin. Not that Europe is spared. A hundred containers filled with fake goods were recently seized in Hamburg. This gives some idea of the extent of the disaster.

Not at all. I’m anything but discouraged. It will take time, a long time, but one day perhaps the law will be respected. Even the Internet will have to regulate itself. Look how concerned websites are about their own intellectual property. They’ll fight tooth and nail to defend it. Let’s hope that one day they’ll do unto others as they would have others do unto them. For the moment it’s like the Far West.

It’s a no-holds-barred, cut-throat world. A real free-for-all. But the sheriffs are on their way and slowly but surely the rule of law will prevail. One has to remember that, despite what the headlines say, the Internet accounts for just a tiny percentage of the real economy.

I’m not entirely comfortable with this type of figure. How can we estimate the damage? What repercussions does counterfeiting really have? Can we put a figure on the harm it does to a brand’s image? I’m not convinced.

Our country is supposed to set a good example. Of course we need to put our own house in order before giving others lessons. There are many countries where we can take legal action whereas in identical circumstances in Switzerland, we can’t. It makes you think…

Obviously the World Wide Web has and will continue to influence the business models of a good many economic activities. But not necessarily in a positive way. The Internet has morphed into a gigantic selling tool conveying notions of freedom and getting something for nothing. Yet concepts such as this are totally alien to the basic principles of doing business. One only need look at what’s happened in the recording industry to understand the irreversible damage this type of approach causes. We want to change business models without applying the existing laws which were voted to give the different economic players’ interests equal protection.

The risks are the same. It took years, centuries even, for brands to achieve the degree of rarity, exclusivity and quality they enjoy today. And that’s not all. They have also had to call on the most talented specialists and develop boutiques that convey the brand’s environment. And what about watchmakers’ exceptional expertise? Making a watch is a painstaking task which is why a watch commands a certain price. So what happens on the Internet? You’re dealing with a screen, with people who hide their faces, who haven’t created anything and who sell products to customers who have no way of knowing if they are genuine or fake, or even if the product they buy will ever be delivered. We’re confronted with an entirely virtual set-up. These people have come to the table with empty plates and expect to dine at other people’s expense. It’s aggravated theft.

Yes, to a large extent it is. Auction sites have become the fraudster’s accomplice. We were talking about the screens we come up against online. Well this type of site is the perfect example of that. From the seller to the buyer, everything can be hidden. You give yourself a new ID with a false address. These sites are now the focus of our activity. However, we are up against their commercial clout and a lack of cooperation. For example, we’ve asked them to install filters to weed out the fakes but they see only their financial interests, given that they take a commission on each product they sell, whether it’s genuine or not.

Fortunately no. We are winning victories here and there, all of which are taking us in the right direction. There have been several legal verdicts, in France, Brazil and Germany for example, that have severely condemned fakes. We’re eagerly awaiting the outcome of a lawsuit filed by Tiffany against ebay in the United States which could set a precedent. The courts are sending out a clear signal: counterfeiting cannot continue to thrive unpunished and more and more the courts have these intermediaries – veritable distribution platforms – in their sights in order to establish their responsibility.