A Primer on Counterfeit Products: What Should A Company Consider?

Companies are acutely aware of their duties with respect to the safety of the products they manufacture, and most have intricate frameworks in place to ensure that their products are manufactured in a safe and consistent manner. Given the recent explosion of product safety issues tied to products manufactured in China, companies are under even more scrutiny to ensure the safety of their products. The intense media scrutiny surrounding the rash of recalls of Chinese-made products (e.g., pet food, toys, toothpaste) has only increased the pressure on companies to make their products safe for consumers. However, what do companies do when consumers are injured by counterfeits of popular, brand-name products? What duty, if any, do companies have to police the marketplace and protect consumers against dangers arising from counterfeits? These counterfeits, a number of which are manufactured in China, are generally of a much lower quality and are manufactured without appropriate QA/QC mechanisms that many large companies have in place. Outside of any legal duty ' whether in courts or regulatory directives ' what must a company do to protect its brand name? Even if companies escape legal liability arising out of injuries to consumers caused by counterfeit products, the effect on a company's reputation may be just as disastrous.