Terry Brady, President of Underwriters Laboratories and formerly Senior Vice President, Chief Commercial and Legal Officer at UL, testified before the U.S. Senate Committee on Finance on March 6, 2018, that the counterfeiting issues seen by UL in the traditional marketplace are “amplified in the borderless world of e-commerce.”

The proliferation of online merchants and its accompanying $453.5 billion in total e-commerce sales for 2017 has made it difficult to determine the exact volume and value of counterfeit goods. Selling counterfeit products is now as simple as shipping an individual package from a third-party seller directly to a consumer’s doorstep.

“As shippers go direct to consumers rather than risking an entire cargo container, stopping the sale of counterfeit products becomes very, very difficult.” Brady said. “This is a challenge that legitimate e-commerce platforms and IP rights holders have to work on together.”

Stopping the Shipment of Counterfeit Products

UL depends heavily on public-private partnerships to help continue the fight against counterfeiters. When asked by Senator Orrin Hatch of Utah what U.S. agencies can do to assist private efforts to stop the shipment of counterfeit products, Mr. Brady offered the following specific suggestions:

• Provide real-time, transparent intelligence as organizations like UL rely on civil and criminal enforcement procedures beyond seizure and destruction. Companies need current, actionable data to pursue civil and criminal cases against the counterfeiters. “Intelligence goes stale very quickly, and these criminals quickly change their websites, email addresses, methods of shipment, even their physical locations – they move fast and we, together with the government, need to move faster,” Brady said.
• Increase penalties for the sale of counterfeit products as the current penalties do not have a significant impact on counterfeiters. “We see evidence from, for example, the L.A. prosecutors that counterfeiters get out really quickly and go right back to business the same day,” explained Brady. “The prosecutors are actually trying civil suits against these people (the counterfeiters) because they don’t know how to manage the civil suit, but their jailhouse lawyers can get them out with a slap on the wrist the same day.”
• Work with the e-commerce platforms and search engines to prevent the shipment of counterfeit products in the first place. “It’s critical to work with the platforms and search engines to shut down these people offering fake goods, so the purchase never happened in the first place,” offered Brady. “Once the envelope leaves the seller and heads to the buyer, it’s very, very hard for the authorities to intercept it.”

The rise of e-commerce has contributed to an increase in the sale of counterfeit products, but with a strengthening of public-private partnerships, organizations, like UL, can help protect the safety of U.S. consumers.