Artificial Intelligence—A Powerful Tool Against Counterfeiters

The counterfeit industry is big business. It is estimated that more than $3 trillion of counterfeit merchandise is sold annually. In merchandising, most counterfeiters focus on fashion and luxury products, such as clothing, shoes, leather items, electronic products, and watches, many of which carry well-known trademarks and properties. The cost to property owners is in the billions of dollars annually.

The economic impact of counterfeiting on brand owners extends far beyond the loss of direct sales. It can also affect consumer trust, brand reputation, market competition, and tax revenues.

Since counterfeiting and infringement activities are often difficult to track, a significant portion goes unreported. Sadly, brand owners have been hard-pressed to make a significant dent in this illicit global trade. 

Technology, particularly artificial intelligence (“AI”), now offers real hope for IP owners to find and identify counterfeiters and infringers and permits them to shut them down before they can have a severe impact. The following uses of AI are the most prominent applications, many of which are already in use.

1. Detecting Infringements. Property owners have, for years, regularly monitored the Internet and its assortment of websites, marketplaces, and platforms that may carry potentially infringing products. This has been a tedious and time-consuming process until now. AI algorithms can analyze online data at literally break-neck speed to identify possible infringements and counterfeits sold on e-commerce platforms or pirated content on digital channels. Using Natural Language Processing (“NLP”), AI can scan and interpret text across various online platforms, flagging instances where copyrighted or trademarked content is used without authorization. Since AI technologies can recognize images and videos, making it easier to spot unauthorized use of visual content, they are valuable tools in identifying instances of trademark misuse or alterations. AI is now effectively used to monitor social media platforms for any potential mention or discussion of selected properties and trademarks. This allows property owners to find potential infringements or misuse of their property and act in real time. These tools can quickly identify unauthorized use of trademarks, counterfeit products, and brand impersonation. AI can also use historical data on prior infringement cases to predict future trends and anticipate potential threats. This proactive approach can help businesses stay ahead of infringers.
2. Prioritizing Infringement Actions. While all property owners experience some counterfeiting and infringement activity, successful property owners are forced to deal with a wide range of infringers worldwide. Every property owner’s limited litigation budget forces them to prioritize which actions to take and where AI changes that. Since AI can process vast amounts of data from different sources to identify patterns and trends related to trademarks, it allows property owners to focus on infringers or counterfeiters that pose the greatest threat to the owner or property. Since AI can monitor trademarks globally, it can assist in determining the international nature of the threat, which allows businesses to identify cross-border infringement more effectively.
3. Property Management. AI can also assist a property owner in managing extensive trademark portfolios by providing insights into which marks require more attention based on infringement risks and emerging trends. It can also assist the property owner’s legal department identify past cases and relevant precedents related to trademark infringement, streamlining the legal process.

As AI technology advances, creative minds will find more and more applications to aid property owners. More to follow.