Can IP protect originators and consumers in the fight against fake cosmetics?

Fake products in the cosmetics industry threaten more than a brand’s income and reputation. They can be harmful to the individuals who use them, often without any awareness of the potential risks to their health. Here, we explain how businesses can use their intellectual property (IP) to fight back.

For cash-strapped consumers, finding a luxury brand of moisturiser on social media for almost a third of its usual retail price can seem too good to resist. Fake (counterfeit) products are becoming an increasingly serious problem for the beauty sector, amounting to an estimated €3bn in lost sales annually across the European Union, according to the EU Intellectual Property Office (EUIPO).

What are counterfeits?

Unlike dupes, which use branding and designs that are similar to, but not identical with, another brand, counterfeits are designed to trick the consumer into believing they are buying a genuine product from their chosen brand. Counterfeits are items that look identical to a genuine product, in some cases even carrying the product’s official branding or logo, but they are not made by the brand and may be of lower quality or even harmful.

Globally, the counterfeit industry is a big one. The Organisation for Economic Co-operation and Development (OECD) and the EUIPO valued international trade in counterfeit goods at $464bn in 2019. Luxury items such as watches, jewellery and handbags, as well as consumer electronics, make up a large part of this trade; however, cosmetics, toiletries, and perfumes also share a significant percentage, driven by the cost-of-living crisis, their availability and prevalence on social media and third-party retail platforms, and their exposure via complicit influencers.

Why are counterfeits dangerous?

Consumers can knowingly buy counterfeit products, but generally they do so with the assumption that they are buying a product with the same benefits as the real thing, at a fraction of the cost. However, counterfeits come with significant risks to the consumer.

A genuine product is likely to be the result of a lengthy, and often costly, research and development process, with stringent attention given to the suitability and safety of each individual ingredient for its intended use, such as application to a person’s skin or hair, for example. Many innovator companies devote significant resources to devising new and improved products that will provide a range of benefits to the consumer. In addition, manufacture of a genuine product will be highly controlled and hygienic.

In contrast, fake cosmetics can be prepared in unsanitary conditions with a high risk of contamination. In a press release publicising its ‘Choose Safe not Fake’ campaign, the UK Intellectual Property Office (UKIPO), highlighted some of the dangers of fake products as follows: “Testing carried out on a selection of seized counterfeit beauty and hygiene products showed them to contain carcinogenic ingredients such as beryllium oxide and harmful heavy metals (arsenic, lead and mercury)”. It also stated that “samples were also found to contain rodent urine and equine faeces”.

Nonetheless, there is a growing community of what the UKIPO calls “knowing buyers” – that is, people who deliberately buy counterfeits because of the cheaper price tag, regardless of the risks. According to a UKIPO report published in 2024, 35% of male consumers aged 16 to 60 are knowing buyers of counterfeit products, with 7% identifying themselves as “counterfeit hunters”. This essentially means that a significant proportion of consumers are willingly diverted away from a brand’s legitimate products towards cheap, fake ones.

For the brands counterfeits purport to be, the risks are both reputational and financial. For example, reputational damage may follow when those who unknowingly buy a counterfeit product, and then subsequently experience an adverse reaction to it, post about their experiences on social media and warn others away from the genuine product that they believe they have used.

The loss of genuine product sales through purchases of fake products (and potentially also as a consequence of damage to product reputation) will also lead to financial damage.

What can an originator company do to protect its products?

Valid intellectual property rights can be enforced to stop a third party from exploiting or copying an originator company’s proprietary products, branding, product design and product literature, through patent, trade mark, design, and copyright protection.

Patent protection

In the case of an innovative product or process that has resulted from a research and development programme (for example, a new formulation for a moisturiser or a new process for making a particular formulation), the originator may wish to seek patent protection. A valid patent protects the innovation and may be enforced to prevent a third party from exploiting it by, for example, making, using, selling or offering to sell, importing, or storing a product.

Regardless of whether a counterfeiter has used the technology behind a genuine product, fake products actively exploit a product’s own branding and design, as well as its associated goodwill and positive reputation, to encourage people to buy them.

Trade marks

Brand protection is available through trade mark registration of, for example, a product name and/ or logo. Use of a registered trade mark on products that are not associated with the trade mark owner’s business or products amounts to trade mark infringement and as such, the owner can target the manufacturers – and even sellers – of a counterfeit product that uses its registered trade mark.

Registered designs

Registered designs protect the appearance, shape, or decoration of a product and the packaging for a product as well as any bottle or jar that contains the product, and can also be a useful tool in the battle against counterfeit products. The owner of a registered design can take action against a third party exploiting its designs by way of a counterfeit product, for example by making, importing or exporting, selling or offering to sell, or stocking the counterfeit product.

Copyright

In some cases, copyright protection may play a part. In the UK, copyright protection is automatic and a copyright owner may take action, for example to prevent reproduction of an original illustration, photographs or advertisements used in association with a genuine product.

Identifying the producers of counterfeits is not always straightforward, but businesses can also act against a retailer or platform that is hosting and selling the counterfeit products.

Under The Consumer Protection from Unfair Trading Regulations 2008, a retailer can be liable for selling counterfeit goods, even if they were not aware that the goods were fake. Indeed, many third-party online retailers, including social media platforms, now have takedown procedures in place that allow a business to identify counterfeit goods and request their removal from the site’s listings, as well as ways to identify a business’s nominated and approved resellers.

How can brand owners protect themselves over the long term?

The strongest protection lies in registered IP rights – that is, patents, registered trade marks, and registered designs, as noted above. In the UK, patents have a lifetime of 20 years from the date of the patent application (subject to the payment of annual renewal fees post-grant). Trade mark registrations are renewable indefinitely, with renewal due every 10 years, and registered designs have a maximum lifetime of 25 years, provided renewal is effected every five years.

Active management of IP is important to ensure appropriate protection is in place for a company’s products both in the UK and key international markets. Not only will this make it possible to bring a claim for infringement against a copier or counterfeit manufacturer, but having a strong intellectual property portfolio can also act as a useful deterrent for many would-be copiers and counterfeiters.

Day-to-day, it is important to have a team in place that can monitor third-party sellers to ensure that any counterfeit listings are spotted and removed as quickly as possible.

Aside from enforceable IP rights, education can play an important role. Brands can support this through their own channels by highlighting the risks of purchasing counterfeits and the benefits of buying the real thing, and by promoting their ownership of IP rights such as those mentioned above.

Protecting the results of innovation, and maintaining the integrity, goodwill, and positive reputation of a brand are ongoing processes. Having the right IP protection in place, however, can help make these processes a lot smoother.