Three Ways Distributors Can Protect Themselves from Counterfeits
Have you heard of a General Exclusion Order (GEO)? If not, a GEO is a rare, but powerful solution granted by the U.S. International Trade Commission to prevent counterfeit importations. The order allows the U.S. Customs and Border Protection Agency to seize products that violate intellectual property rights and patents at the border, which has resulted in more than 34,000 seized product orders since 2017. In 2013, after repeated importations of counterfeit ink cartridges and toner, Canon Inc. was granted a GEO. PopSockets LLC was recently granted a GEO in June to protect the popular phone grip’s patent. With less than 1 percent of companies receiving this protection, this a big win for the Boulder-based company and will help minimize future knock-off imports.
Distributors, however, still need to practice caution when working with overseas suppliers or suppliers they’re unfamiliar with. Even with a GEO in place, it’s possible that knock-off products like PopSockets Grips may, unfortunately, make their way across the border. Remember, if you source counterfeits, you are just as responsible for violating the patent and your client may end up with nothing if the product is seized and confiscated, plus you’ll be stuck holding the bill.
Read below for three tips on how you can protect you and your customer from counterfeits.
Only work with a small group of suppliers.
There’s a saying: “Keep your circle small and your mind at peace.” In the world of promotional products, this couldn’t be more applicable. When you work with a small group of suppliers, you create partnerships built on trust. When something goes awry, you and your supplier are more inclined to collaborate and address issues head on. This minimizes the number of factories you're getting products from, allowing you to keep better track of patents and factory procedures. iClick, for instance, has exclusive rights to supply PopSockets to the promotional industry, so if you are working with another supplier that is offering PopSockets at a steep discount, they’re committing fraud and most likely attempting to sell you knock-offs.
Build long-term relationships with your supplier to build accountability, trust and transparency.
Not only is it important to work with a small group of suppliers, but fostering strong, long-term relationships built on accountability, trust and transparency will protect you and your clients. It’s less likely that a supplier will try to sell you a counterfeit product when you both have vested interests in the growth of the relationship. An unknown supplier that is offering patented products, such as PopSockets Grips, at below market value is not interested in building a long-term relationship. They’re only interested in making a one-time sale.
When you come across a product that you suspect is counterfeit, be sure to have a standard operating procedure in place.
- Verify that the supplier is willing to share market or financial data history representing their business.
- Ask to visit the factory. And, if they decline, rethink your partnership with this supplier.
- Request documentation that verifies their authorization to sell the patented product.