Brand impersonation, also known as “parasite marketing” and “brand squatting,” is a type of identity theft on the internet. Business owners often purchase domains with their company name thinking it would be great for business, only to find out that someone else has taken up this domain and is using it to advertise their products or services.
This leaves the business owner without a website and looking for an alternative way to reach customers, which will cost them money in new marketing materials such as advertisements and flyers.
A legitimate reason to purchase domains such as these include:
- The business previously operated under another name (i.e., before rebranding), and they want to keep the old domain.
- The business is expanding, and it will soon be under a different name (i.e., before the launch).
- The business wanted to use this domain as an advertising tool, but now they cannot because someone took it up.
While the reasons above may seem like good ones for purchasing alternative domains, there are serious consequences of doing so, namely negative impacts on your online business reputation. Consumer trust is essential if you wish to generate sales leads.
When potential customers do not know who you are, they cannot trust what you’re selling or whether or not it is legitimate. You have removed their ability to form an opinion about your brand based on prior experiences with your products/services/businesses/website.
It is essential to understand that a website with a domain name similar to yours can affect your business in several ways. When someone attempts to visit the site, they will not find what they are looking for and will most likely think it is “broken” or nonexistent.
The other option would be for them to stumble onto another page (such as an About Us page) and form their own opinion about who you are, which could potentially drive traffic away from your business rather than towards it.
Yet another consequence could include these customers leaving negative reviews on third-party review sites such as Yelp, discouraging others from making purchases via your website.
What is Brand Impersonation?
Brand impersonation is the act of using someone else’s brand or trademark without their consent to make money under that name. It may include any step, from developing a replica product that resembles the original to advertising it as if it were an authorized item made by the business owner.
The imitation version of your real product will be sold at much lower prices because they are produced without proper licensing, causing a financial loss for you or even gaining customers who believe your brand is selling low-quality products.
Once somebody finds out about the fake products being sold, they might think your company is unethical and stop buying from you.
How Brand Impersonation Negatively Impacts Your Business?
What happens when somebody impersonates your brand? It affects your customers’ purchasing decisions by creating confusion for them as to whether they are buying a genuine product or a counterfeit one, as well as tarnishing the image of your business.
Here are some ways that it can affect your business:
Counterfeit Products Under Your Brand Name: Customers will believe the imitation products are produced by you and might purchase them without realizing they’re fake. Such purchases would cause financial loss to you even if the imitation products were cheap to make.
Low-Quality Reputation: If customers find counterfeited versions of your authentic products being sold and bought in your name, they will think you either charge too much for them or release low-quality products. Your business’ reputation and image might be damaged if the imitators keep selling fake products under your brand name.
Bad Customer Service: Customers who purchase imitation products might complain to you about their disappointing experiences. The reason is that such products are probably of poor quality (low manufacturing standards) and thus may not function well when used, i.e., the imitation product breaks quickly or doesn’t perform tasks as expected, etc.
You will then have to deal with customer complaints that you know nothing about, waste time trying to resolve issues, and take care of administrative work (filing complaints against counterfeiting companies).
Brand Impersonation Analysis to Be Taken to Protect Your Business
We’ve given you some examples of how impersonation negatively impacts your business. With this understanding, here are the main points that you should follow to protect your brand against name infringement:
Be Aware: Since they know your product is popular and likely to give them profits, there’s a high chance somebody will attempt to imitate it. So stay alert for any suspicious activity with your brand name.
Know-How To Identify A Fake Product: Look for tell-tale signs of counterfeiting, such as spelling mistakes or wrong descriptions that show up on comparison shopping sites.
You can also submit a suspected fake product if you find one online, which will help the site’s community in tracing where the product is being sold and determine whether it’s a fake or not.
Get The USPTO To File A Takedown Notice: Filing a complaint with the USPTO will make them aware of your problem and help you address your concerns quickly without searching for a lawyer to take action.
Consider Conducting Surveillance Or Hiring Private Investigators: This way, you can use trademark monitoring services to gather evidence against those selling counterfeit versions of your products under your brand name.
Legal Remedies for Brand Impersonation
Your business can also take legal actions against those who mimic your trademark as the following:
Trademark Infringement Claim: You must have a valid registered trademark with the USPTO. As a registered owner, you have exclusive rights to your mark and can take legal action or seek damages against those who try to copy it. This type of claim will be complicated, though, as there are elements that need to be proven for you to succeed.
Copyright Infringement Claim: If somebody copies your product designs without your authorization, this is an act of copyright infringement that you can sue them for through the DMCA if their actions affect commerce that the U.S. has jurisdiction over (i.e., they took place online).
You can also file a lawsuit if their copying affects how well your business operates. Their imitation products confuse customers, lower customer confidence in purchasing from you, etc.
Negligence Claim: If you can show their actions caused harm to your business, then having them held liable for losses could be possible. This is where evidence will serve as proof that they committed fraud and deceived the public into buying imitation products by imitating your good name.
You could sue them for damages resulting from loss of sales due to customers being unable to tell who sells the actual product, damage due to unsatisfactory products sold under your brand name, etc.
Brand impersonation has become a big issue online because it quickly impacts how consumers perceive brands and affect businesses’ bottom line. To protect or defend yourself against such infringement of intellectual or property rights provided by trademarks or copyrights.
You can report counterfeits to the U.S. Patent and Trademark Office (USPTO), so they can take action upon receiving your complaint, analyze how this issue affects your business if possible, or consult a lawyer for legal remedies you can pursue once you have evidence to support that someone is imitating your brand name online.
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