Monday, November 1, 2010

The Psychology behind Trademark Infringement and Counterfeiting

The Psychology behind Trademark Infringement and Counterfeiting

Judy L. Zaichkowsky
Lawrence Erlbaum Associates, Publishers
Mahwah, NJ
305 pp., Paperback Edition
ISBN 0-8058-4793-6

Keywords: Advertising, Brand, Consumer, Involvement, Market Research, Perception

Originally published in Journal of Product & Brand Management, Vol. 17, No. 4, 2008.

What can you do, and how will you do, when you find out your competitors or whoever imitated your product, and also that consumers, regardless knowing or not knowing these are counterfeit goods, are willing to purchase them for their own benefits? Do you really and fully understand the psychological factors behind stealing intellectual property in the marketplace? Do you have a clear vision on what is the consumer’s attitude or point of view regarding imitating brands and even counterfeiting practices? If you do not know or if you are not sure, the answers to these questions, I would strongly recommend you read Dr. Zaichkowsky’s new book The Psychology behind Trademark Infringement and Counterfeiting, published. “The book represents the first academic treatment of brand trademark infringement from a consumer behavior perspective, and there are a number of new and unique ideas presented in the book,” says Julie Ruth, School of Business-Camden, Rutgers University.

This book is, in fact, an extension and update of another book entitled Defending Your Brand Against Imitation: Consumer Behavior, Marketing Strategies and Legal Issues (1995, Quorum Books) by Dr. Zaichkowsky. According to the author, she had witnessed some “passing-off” or counterfeiting cases while functioning as an expert in trademark cases. It is this type of personal experience that motivates her to write a book to provide a background information about brand imitation trademark and other counterfeiting practices in the real business world from the consumer’s point of view. As a Professor of Marketing at the Faculty of Business Administration, Simon Fraser University, Burnaby, Canada, Dr. Zaichkowsky continues to consult on branding issues and to act as an expert witness in cases of trademark infringement. She is well known in the field of consumer research and marketing for her outstanding contributions to the involvement construct.

This book contains nine chapters covering those aspects of trademark infringement relating to the consumer. Chapter 1 serves as an introduction to the topic and outlines the different types of imitation and passing-off in the marketplace. The essence of branding and its role in society is discussed as well as how imitation erodes the equity of brands and the marketplace for consumers. Various legal terms are described to inform the reader of the different areas of trademark infringement. The author sharply indicates: “The equity of successful brands is routinely stolen because it is a cheap, effective way to make short-term economic gains” (p. 1). Chapter 2 focuses on consumer behaviors in the marketplace. The concepts of involvement, decision-making heuristics, and consumer intelligence levels are discussed. According to the author, the practical meaning of these concepts varies greatly among consumers, and the relevance to trademark issues is therefore different as well. “People of one social class rarely interact on a regular basis with members of another social class.” (p. 42)

Chapter 3 presents the major issues related to the topic in mainstream psychology. According to the author, the different psychological theories show how consumers perceive goods, services, and ideas in the marketplace. Consumer behavior is, in part, based on psychology, and biases in perception of goods and services can be predicted. “Because of fleeting attention and perceptual biases, individuals often make mistakes in their perception of similar, but not the same, brands in the marketplace.” (p. 73)

Chapter 4 discusses the history of passing-off in the marketplace. Different types of trademark infringement and cases are classified into competing products, related products, and unrelated goods. Cases are also reviewed according to the different cues that lead to consumer confusion, including color, symbols, shapes, and implied associations. “Literally tens of thousands of trademark infringement cases can be found in legal libraries. The number of cases has grown exponentially over the past 10 years because companies, and even famous people, are increasingly aware of the concept of brand equity.” (p. 77)

According to the author, Chapter 5 is perhaps the most relevant chapter for brand managers. It presents strategies to keep your own brand distinctive and unique in the marketplace. The author advises that “avoiding a competitor’s imitation is not an easy task. To keep ahead of brand imitators, leading brand need a distinct and sometimes changing identity” (p. 138). Chapter 6 is an overview of different research methods that could be used to test for perceived similarity among brands in the marketplace. Different legal cases are used as examples for discussion. “There are various techniques for evaluating brand imitation. The particular techniques chosen should correspond to the specific problems at hand. The research does not necessarily have to take place in a natural purchase environment” (p. 175).

Chapter 7 brings the reader into e-commerce, online arena. According to the author, online commerce is the present and future, which has created a unique setting for consumers conduct exchanges and which is requested to have a special treatment by business firms. Here, people do not have the benefit of examining the goods closely; instead they must rely more on brand names and the trust behind the name. Preventing trademark infringement is more difficult in cyberspace. Chapter 8 is designed to examine trademark infringement in China. According to the author, China is where most of the world’s goods are manufactured. A deep understanding of Chinese culture is useful to put the global problems of trademark infringement and counterfeiting into perspective. It is important to be aware of that “the traditionally accepted practice of copying or imitating the ‘good aspects’ of everything has a profound impact in the Chinese culture” (p. 232). “China is a profitable market with great potential. Despite the challenges marketers are currently facing, the rewards to be reaped after overcoming these obstacles are enormous” (p. 244).

Chapter 9, as the last chapter, is a reflection of the trademark infringement problem. It offers no ideas how to stop manufacturers from producing knock-off goods. But it does provide insight on how to prevent consumers from knowingly purchasing those goods that do not come from the true owner of a trademarked brand. “Marketers need to teach consumers what is real, and how that ownership reflects one’s self-worth and value system” (p. 257). Finally, in Appendix 1 the author provides the readers some important information related to trademarks in the United States, Canada, and the European Union, which can be a very useful reference for those who want to probe further on trademark issues in different countries.

In short, as the author indicates, preventing competitors and others from imitating successful brands is a difficult and costly task. This book serves to inform the reader concerning complexities of the issues of brand imitation, integrating the disciples of psychology, business, and law to the area of trademark infringement and counterfeiting. Principles and theories from psychology and how they are relevant to consumers’ perceptions in the marketplace are used to explain why competitors steal the intellectual property of another company or entity. According the author, the possibility of brand imitation or counterfeiting should be contemplated in designing new products or brand packaging, just as it is in the printing of currency.

I believe that Dr. Zaichkowsky did her best to provide those involved in commerce with some understanding, some ideas, and perhaps some strategies for building differentiated brands that are easy to protect. I fully agree with George Zinkhan, a business professor at University of Georgia, when he says, “I really like this book. It brings together, all in one place, important information this is not available anywhere else. I especially like the combination from different sources: consumer behavior, branding, the law, marketing strategy, and competitive strategy.” Clearly, all brand mangers, expert witnesses in trademark cases, intellectual property lawyers, as well as professors and students of consumer behavior and marketing, will find this book useful to understanding consumer motives processes of trademark infringement and counterfeiting.

Dr. Robert Guang Tian


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