I read with great interest Neal St. Anthony's March 19 Inside Track feature on Makin Bacon, the Minnesota cookware company that has been plagued by knockoffs sold on such e-commerce sites as Amazon and Alibaba.
In my work as an intellectual property attorney, I work with clients facing similar situations (or even worse) every day. The issue raises several key questions and in this article, I want to share ways for small to midsize companies to protect themselves from knockoff products and packaging without going into debt or losing their businesses to unscrupulous competitors.
1. Is the Makin Bacon experience with counterfeiting common?
It is all too common. Counterfeiting costs businesses billions of dollars each year, and the number is rising. If you have a good product and sell it online, someone will inevitably come out with a cheap knockoff. I've seen it time and again. The knockoffs show up and undercut the legitimate seller's price. Revenues start to fall, and the legitimate seller may eventually have to close.
2. How can small to midsize companies avoid these situations?
Fighting counterfeiters requires foresight and planning. On the front end, companies need to protect new products with intellectual property assets like copyrights, trademarks and design patents in the United States and abroad. Without those assets, there is little chance of stopping knockoff products once they start popping up. If a company's lucky, they might have a year or two of uninterrupted sales before the trickle of counterfeit products becomes a flood.
3. How much does it typically cost for intellectual property protection?
Copyrights and trademarks are relatively inexpensive to register. The application filing fees for registration are currently $35-$55 for U.S. copyrights and $275 for U.S. trademarks. Design patents cost $190-$760 to file with the Patent and Trademark Office, depending on the size of the applicant's company. I recommend enlisting the help of an intellectual property lawyer, which adds to the cost, but ensures it will be done right and that the strongest protection is obtained.