Episode 3: ‘Finding a fake’ with Craig Douglas

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Raph Goldenberg: Hello and welcome to Legally Consumed, a consumer products podcast by a consumer products law firm in Australia. I’m Raph Goldenberg, and I’m joined by co-hosts Kaye Ho and Will McMinn who are members of the team here at CIE Legal.

00:00:13:07 – 00:00:26:07

Kaye Ho: We chat with executives of consumer products companies, their legal teams and industry experts who give us a peek into their journeys as people. We explore industry changing ideas and even share tips and tricks on how to navigate the consumer products space.

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Will McMinn: This season, we will feature guests from the automotive, retail, advertising & insights, food, beverage & primary production and franchising sectors.

-music interlude-

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Raph Goldenberg: Welcome everyone to Legally Consumed today. Our special guest is Craig Douglas. Craig is the owner and founder of Nationwide Research. Hosting today’s episode with me is Kaye Ho. Nationwide helps consumer product companies stop people ripping off their brands. And I’ve had the honor and pleasure of working with Craig for around 20 years. And I know from personal experience what a fascinating job he has and it’s a great privilege to have him with us today.

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Raph Goldenberg: So welcome, Craig.

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Craig Douglas: Thanks Raph. Good to be here.

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Raph Goldenberg: Craig, we’re going to start today by asking some getting to know you questions just to introduce yourself. I just want to get a sense of your career journey. How did you end up doing what you’re doing?

00:01:45:20 – 00:02:13:02

Craig Douglas: Well, my journey starts back in well, actually the Olympic Games in Melbourne, where my father was the head of security and I did that coming out of military intelligence and post that, I needed a job and started up as an investigator. He was the first investigator in Victoria, the first licensed investigator in Victoria. 1957 and he ran his business until the late 1970s, early 1980s when I joined him.

00:02:13:02 – 00:02:33:12

Craig Douglas: And it was something that I was going to do. I’d sort of led the trade as I grew up. You know, he used to take me out and we’d do some things in the field and I and I joined him and I hadn’t come out of school. And it was one of those things where I thought, Oh, this would be good for five years, and I’ll do this for a while and, and 40 something years later, I’m still here doing it.

00:02:33:12 – 00:02:52:03

Craig Douglas: So that’s where I came from, this and that. So that’s how I became an investigator. And in fact, it’s the only job I’ve ever had because I joined it as a school. So, you know, my wife makes a comment about how lucky I am, having never been to a job interview. But as I point out to her, every time I go and see a new client, it’s like a job interview.

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Craig Douglas: So yeah, so that’s it. And that’s my history.

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Raph Goldenberg: It must be hard to be incognito after 40 years doing it.

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Craig Douglas: Well, it used to be, obviously, when we were on the road all the time and you’d go and see people and they would remember you and if they could go “hang on,  you’re the guy that was here last week!”.

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Raph Goldenberg: Here he comes.

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Craig Douglas: But now, of course, with the telephones and the systems and you know what you can do and you know, on a good telephone call, you can be pretty much anybody as long as you can back it up with some facts and you sound like the right person and stuff. So, yeah, it’s and and I must admit that over the years when we first started, some of the first 10 to 15 years in my investigator’s life was insurance government.

00:03:37:09 – 00:03:54:09

Craig Douglas: A lot of that sort of work where you were on the road and then post that sort of in the mid-nineties things became more corporate and there was less on the road and more at the desk. So that’s pretty much now the bulk of which we do, we would do it from the desk.

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Raph Goldenberg: So the consumer products connection. We wouldn’t have you on this podcast unless there was a connection to consumer products. So I know we’re going to talk about some of this stuff in a bit more detail, but that’s a big part of what you do, isn’t it?

00:04:09:20 – 00:04:35:03

Craig Douglas: Well, the problem with consumer products is that something is good is always copied or somebody tries to earn a dollar off it through inappropriate signage or they try to connect to something that’s good or popular. And then of course, the brands take offense to that. So they would ask their lawyers and say “oh you know, we’ve heard this guy’s doing this or someone’s selling a product or someone’s got a sign up that says they’re connected or authorized.”

00:04:35:03 – 00:04:49:11

Craig Douglas: And of course, you know, you guys, the lawyers never leave your office. So you ring guys like me and then I go and we go and have a look and and we come back with what is the evidence? Because, you know, your response to the client is, if you can’t prove it, you can’t take action.

00:04:49:11 – 00:05:06:09

Craig Douglas: You need the evidence. So our job is to actually get the evidence to go out there. What is the sign? Say, what is it? You know, what are they saying? And sometimes it’s not just a sign on the front of the building. It’s when you go in and they hand you a business card and the logos on the business card say “we’re authorized to do this”.

00:05:06:19 – 00:05:21:09

Craig Douglas: You know, “we can fix your computer or fix your car” or, you know, we’ve got the authority to do all these things, which they don’t have. But it’s obviously concerning to the brand owner and it’s confusing to the consumer. So our role as the evidence gatherer was our role.

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Kaye Ho: Mm. And can you tell us a little bit about the types of problems that these companies need help with? So how do they usually approach you?

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Craig Douglas: Initially, it was always through their lawyers. They’d go to their lawyers and say, We’ve got a problem, and we would get contacted that way. But in a lot of cases now, they come directly to us. So we would, you know, we talk to them about their issues and we talk about what solutions we can bring to the table.

00:05:48:19 – 00:06:10:19

Craig Douglas: And sometimes we can certainly value add with a lot of the things we do. But, you know, we have to go out and find the evidence and find the problems and then work out what the solution is. And sometimes, you know, the problem that’s in the field, there isn’t a simple solution. And that’s a very good triangular relationship with us and the brand owners and the lawyers.

00:06:11:09 – 00:06:13:05

Craig Douglas: And that it works best for us.

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Kaye Ho: So there’s a strategy component to it as well.

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Craig Douglas: There’s always a strategy. And the strategy there’s the overriding part of the strategy is a budget. Sometimes it’s just like it’s no good spending, you know, $10,000 to cure a $5 problem. So they don’t come with an issue and they will talk about strategies and we talk about budgets and a plan to to solve their problem, but also to ensure the problem doesn’t come back because it’s not you know, you go there and you solve the problem or serve a document and everybody walks away and says, oh, great, it’s done, it’s finished.

00:06:46:03 – 00:06:59:20

Craig Douglas: And we take that box and move on. And then a couple of weeks later, they say, you know, we’re now missing out on income and, you know, why do we stop? And then they just well, he’s not around anymore and they start again. So sometimes the strategy is not just to find the problem and solve the problem.

00:06:59:20 – 00:07:20:12

Craig Douglas: We make sure the problem stays away. And the other issue, of course, is if someone sees somebody doing something, let’s take a market, selling fake handbags and there’d lots of guys selling lots of handbags and there’s a lot of traffic and a lot of money coming across the till. The guy next door says, well, you know, I’m selling things that are nondescript or without a brand or, you know, that doesn’t draw the traffic in.

00:07:20:13 – 00:07:38:13

Craig Douglas: They say “well why am I selling all these handbags which aren’t selling? I’m going to start [selling] that as well.” So if you don’t address the first issue, you end up with multiple issues because people see it as well. They’re not stopping that guy doing it. So I’ll start as well.

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Kaye Ho: So other people are doing it so why can’t I?

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Craig Douglas: That happens a lot.

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Kaye Ho: Yeah. So it seems like every product gets counterfeited. So what are some of the more memorable counterfeits that you’ve seen in your line of work?

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Craig Douglas: When you say every product? It’s interesting because you know, no one counterfeits something from, say, Target or Kmart or you know the cheap product because when you produce a counterfeit product and you it’s no good producing the same product at the same price because why would you buy from a dodgy place if you weren’t getting a deal?

00:08:09:18 – 00:08:30:06

Craig Douglas: So in a lot of cases the products that do get counterfeited are the more expensive versions. They’re the ones that you know, where they’re there, there’s financial room to get underneath it and sell a cheaper version. So different types of products were, you know, Raph and I have experience with automotive products and there’s a lot of automotive products out there that are concerning.

00:08:30:18 – 00:08:58:05

Craig Douglas: I have a client some years ago who was importing and selling fish sauce out of Asia and he was concerned that they had a brand name on the sauce and it was, you know, was very good and desirable and other people were branding their product using his name. So he actually had to address that issue. So it can be you know, everybody talks about counterfeit products as being, you know, heads, caps, jackets, handbags, all those things that we always see at the markets.

00:08:58:13 – 00:09:20:01

Craig Douglas: The counterfeit products can be anything. If you can make a dollar out of it, people will find a way to copy it and sell it. I had a client who used to sell GPS units for underwater. So that’s where they were salvaged. And they had to find a pinpoint, a spot underwater and a normal GPS doesn’t work.

00:09:20:09 – 00:09:46:17

Craig Douglas: So they had a special GPS unit for underwater salvage and, you know, for oil exploration and those sorts of things. And he kept getting all these ones back saying that this is terrible, it doesn’t work and it’s not accurate. And they couldn’t work out why until he pulled one apart and found out that it wasn’t his product, that it was in his casing and his box and his branding and everything was his until he actually got to the guts of the item and found out that it wasn’t actually his product.

00:09:46:17 – 00:10:08:13

Craig Douglas: And so somebody had copied the packaging but put a cheap version and that didn’t work properly. But the problem with that is that it has an impact on his part because it’s his brand. So that’s always the issue and that’s why the brand owners do something because it’s detrimental to the value, the brand value of their product.

00:10:08:13 – 00:10:11:16

Craig Douglas: When someone puts a, you know, a dodgy version in the marketplace.

00:10:12:00 – 00:10:35:24

Raph Goldenberg: Craig, I remember going out and doing some training about counterfeit products to [Australian] Customs with you, and one of the things that I always remember was the Corona. The Corona beer.  And the point that you made was, it was in the middle of the night in a nightclub, when you order a Corona, can you really notice the difference of the bottle or things like that?

00:10:35:24 – 00:10:57:23

Raph Goldenberg: And one of the funnier images that I think, concerning the image that you showed, was that there are all these bottles of Corona that had been seized and then come into the country. And one of them you took the bottle out of the box and it was close-sealed, but there was like a rotten lemon on the inside of the bottle.

00:10:58:10 – 00:11:25:15

Raph Goldenberg: So you know, so what’s happening is, this is a bottle that has been previously used with, you know, the lemon gets popped into the corona and then the bottles get sent back out of the cities. They get filled up with counterfeit beer and recapped and supplied that. And so, you know, unless you, I mean the lemon one is pretty obvious, but there are little things like some of them would you know if you had to fill levels with slightly different and as you say the order it.

00:11:25:22 – 00:11:45:08

Craig Douglas: You know what wasn’t and it wasn’t just that said what you were saying was was a genuine bottle with non-genuine beer and and because it’s a glass bottle and because the label is actually printed on the bottle as opposed to most beers where the label is a paper stick on and that the bottle can be reused.  So the empty bottle has a value.

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Craig Douglas: And what would happen is that I would collect a lot of these empty bottles and then I would go and get refilled with a beer that tastes like corona beer and recap it, put it in a six pack and send it down and and it would, you know, it would go into the pubs and clubs.

00:12:04:09 – 00:12:37:04

Craig Douglas: They said, again you know as you said it, that that’s a bit hard at 9:00 or 10:00 at night and in a pub and someone gives you a bottle and, and you know you drink it and they’re not realizing that you might have a genuine bottle but you not have genuine beer. And there was also a version called, Corona was the genuine, but there was Sorono beer which was in an identical trade dress bottle, all the same labeling and everything but the name had changed and it was a bit of their version of Chinese beer, and that was being sold as well.

00:12:37:08 – 00:13:02:01

Craig Douglas: But again, you wouldn’t know and half the time you get it if you’re at a you know, someone’s place, you put it in the stubby holder. So you cover all those things anyway. So yeah that was and again, that was great work by customs or Australian border forces, as they’re known as, to stop that. There were lots of containers of stuff that got stopped which was a  great result because that’s not the stuff you want in the marketplace.

00:13:02:02 – 00:13:05:16

Kaye Ho: No, I wouldn’t even have thought that that would be a possibility.

00:13:06:04 – 00:13:47:10

Raph Goldenberg: Well, some of the photos are pretty, pretty horrifying. So, Craig, one of the other things that you do, apart from being out in the market. So you know, you got your teams out in the markets identifying counterfeit products for clients, but you’re also at events. I remember I once was contracted into you as an investigator at an AC/DC concert where basically I was told to stand in a particular position and look at people selling, you know, as outside before the concert started in return for actually being able to get into the concert afterwards.

00:13:47:10 – 00:14:03:12

Raph Goldenberg: So, I didn’t see anyone, but I saw a whole bunch of people walking around with black t shirts and headsets looking very serious, which I think was your team. So can you shed a bit of light on what I mean, what are you guys doing in that space and what are you looking out for.

00:14:03:12 – 00:14:04:01

Craig Douglas: In that case?

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Raph Goldenberg: What do those engagements look like?

00:14:06:01 – 00:14:34:03

Craig Douglas: That was a band in that case, obviously, and we’ve done multiple bands over the years and a lot of them are normally the older of the bands who travel for and give concerts to sell back catalog or merchandise as soon as they know. I haven’t released new albums, so you know, they’re looking for that sort of income stream and yeah, a good concert you would expect to get somewhere between $15 and $20 per patron in merchandise sales.

00:14:34:03 – 00:14:42:09

Craig Douglas: So you know for everyone that spends nothing, someone spends $50 a T-shirt and, you know, a genuine AC DC T-shirt and this was $80, this was it.

00:14:43:03 – 00:14:45:06

Raph Goldenberg: Or whatever it’s called now. But this was at Etihad Stadiums.

00:14:45:09 – 00:15:20:08

Craig Douglas: Yeah, down there. And so they had 50, 60,000 people there. And they did three nights in a row, well, three nights over five nights down there. And so if you’re looking at an average of say 50,000 people and $20 per person, there’s $1,000,000 worth of income that comes from merchandise sales per concert. And now, out of that, the band get some of it the provider of the gear gets some the local concessions so they get some and there’s another party that gets a little bit as well so the band gets half of it, then that’s an income stream and they get every night they play,

00:15:20:18 – 00:15:40:11

Craig Douglas: which is one of the reasons why they come and do these tours. And so what we do in our role is to try and stop the bootleggers. The people that travel with the band or travel the same time the band travels and comes and brings their own version of the product and stands there before the concert and after the concert and says, here’s a T-shirt.

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Craig Douglas: You can buy it for $20.

00:15:41:21 – 00:15:46:10

Raph Goldenberg: So how will that happen? You deal with them on the night. So just talk me through what that looks like.

00:15:46:11 – 00:16:08:13

Craig Douglas: Well, it depends on where you’re working. And sometimes as an example, at Olympic Park in Sydney, they have special rules in that area, a bit like the Grand Prix has it to clear the area. And so there’s actually special rules that relate to that area. So Olympic Park in Sydney is a bit different. They’ve got their own security and we just work with them and point out with them when they come and take the action.

00:16:09:04 – 00:16:31:05

Craig Douglas: Someone like Etihad or Marvel, as it’s called now, is, we pretty much say you can’t stand here or there or there. We move them away from where the genuine selling outlets are and we try to keep them far enough away and we try to encourage them before the event to not sell merchandise. And in a lot of cases these sellers will sell tickets before.

00:16:31:05 – 00:16:46:17

Craig Douglas: So they actually do scalping of tickets. So. So yeah, they have a sign up saying tickets wanted and someone will come up and say “Raph was coming and they didn’t come in the end” and he said I’ll just sell my ticket, get what we want for it. So they’ll buy a ticket for $50 and then they run to the gate and I settle for $100.

00:16:46:17 – 00:17:08:05

Craig Douglas: So in a lot of cases it’s always under the ticket value, so they’re not breaking any rules. So in a lot of cases they do that before the event, but they will sell their merchandise after the event. And it’s not unusual for a guy to sell two or three hundred t-shirts post the event. And it’s all cash, straight in the pocket and we try to move them away from the area.

00:17:08:07 – 00:17:23:20

Craig Douglas: What you were doing was watching to see if anyone sets up. And you can always tell because it’s like, you know, there’s a sea of people moving and then all of a sudden you can see that something’s happened and there’s like they walk around a pole and you can see that there’s that reason why the crowd stopped.

00:17:23:20 – 00:17:39:08

Craig Douglas: And it’s normally because someone has thrown a bag on the ground and said “T-shirts, t shirts, t shirts, $20 each.” And people are grabbing them and buying them. And so we would go along and say, “hey, you can’t sell from here. Move up.” Now, we would expect the bottles officers to come along and say, You can’t do that.

00:17:39:08 – 00:18:03:03

Craig Douglas: But at 11:00 at night, not very often, they do. They come along. You take the MCG as an example. You know, we just did Man[chester] United’s tour when they were here in July trying to stop the bootleggers and the backpackers selling and they have big problems. In fact I remember doing it in 1999, this is how long I’ve been doing this stuff for.

00:18:03:03 – 00:18:22:17

Craig Douglas: And there was a guy there selling products at MCG and that was on Thursday night. On the Saturday night they were playing up at Homebush in Sydney. It was the opening event. It was the test event before the Sydney Olympics. And so Man[chester] United.  And that was back when David Beckham played for them and so we ended up going to Sydney and who should I meet in Sydney? The same guys we met in Melbourne.

00:18:22:17 – 00:18:39:23

Craig Douglas: And because of what had happened in Melbourne, the Melbourne City Council bottles officer came along, they were selling without a permit. So nothing to do with intellectual property, they just didn’t have a permit to sell. And they treated the guy with the trumpets the same way as they treated the guy with the t-shirts.

00:18:40:08 – 00:18:55:00

Craig Douglas: So they scooped up all their products and I took it to their office and the next day they all went to Melbourne City Council. They paid their fines, they got all their stock back and off to Sydney they went. And so we’re chasing all the same products around in Sydney as we were chasing around in Melbourne.

00:18:55:00 – 00:19:16:17

Craig Douglas: But in Sydney the new rules of that area up there were better for us. But the guy that I met on that tour in 1999 that was selling products, I met him again in 2009 same year when Man[chestee] United played in Perth and we went over to do the same thing and this guy turns around and I said, Are you still doing this?

00:19:17:15 – 00:19:36:00

Craig Douglas: And he said, Well, you’re still doing it. So he said, Of course I’m still doing it. So and his job was literally, he’s had the job and his job is to follow Man[chester] United. You know, wherever they went in the world, Manchester United played so many games with EPL and so many games with the Champions League, etcetera, wherever they played in the world.

00:19:36:00 – 00:19:54:02

Craig Douglas: He went there and he was selling products and putting money in his pocket and moving on. So that’s the sort of thing that those guys did. That’s what we were doing that night, was just watching the people coming and going and seeing who was there.  Now a very quick story. There was a guy up in Sydney where just before a concert finished, I think it might have been U2 who played there.

00:19:54:02 – 00:20:12:00

Craig Douglas: And this guy walked across just before the concert with a great big, you know, sort of colorful suitcase things that they, you know, the $2 bags. And this guy who lugged it across to the gates and he stood outside the gate and I thought, well, that’s all the t-shirts. They are ready for the out when they’re going to sell these t shirts.

00:20:12:00 – 00:20:25:24

Craig Douglas: So I walked over and said to this guy, You got my t-shirt. And he said, Yeah, yeah, it’s 50 bucks for me to deliver. So I gave this guy 50 bucks. He gave me the bag of t shirts. He walked away and I took the bag of t-shirts around the corner to the police compound and said, “here, you guys mind these.”

00:20:25:24 – 00:20:47:16

Craig Douglas: I went back to where there were these two blokes standing there looking at their watches and wondering where the hell the guy was with their t-shirts. But then you realise, of course, we’d already scooped them up and they were in the police compound. So that’s what we did at the events and it’s not just sports sporting events. It’s anything where merchandise assaults you know from Grand Prix to…

00:20:47:21 – 00:20:49:16

Raph Goldenberg: To the Wiggles!

00:20:49:24 – 00:20:52:15

Craig Douglas: To the Wiggles. Well, interestingly enough, the most the…

00:20:52:15 – 00:20:54:00

Raph Goldenberg: Do the Wiggles get counterfeited?

00:20:54:00 – 00:21:06:12

Craig Douglas: Well, I think they do but the highest sales per patron was when Hannah Montana came out. They told me that was the highest sales.

00:21:06:12 – 00:21:08:04

Raph Goldenberg: Because you got the kids yelling at the parents.

00:21:08:12 – 00:21:09:16

Craig Douglas: Yeah! “I want one, I want one!”

00:21:11:04 – 00:21:13:17

Craig Douglas: And the parents gave in and bought them.

00:21:14:04 – 00:21:16:09

Kaye Ho: So yeah, I’m not surprised about that.

00:21:16:17 – 00:21:33:06

Raph Goldenberg: So moving I guess to another side of the market and you mentioned before the more expensive a product is, the more potential it is for it to be counterfeited. So how do you, how do you spot a fake like.

00:21:34:02 – 00:21:34:11

Kaye Ho: I’d love know.

00:21:34:11 – 00:21:50:01

Raph Goldenberg: Can you look at what is that process and I guess a question following on from that is for these luxury brands, are these having a real impact on their sales, like the counterfeiting issue?

00:21:51:16 – 00:22:19:11

Craig Douglas: Let me answer the first question. Impact on sales is the result. There’s an impact, the greater impact on sort of the brand value, um, as to, you know, you’ve got one of those handbags. Is it genuine or is it not? So you might have spent a lot of money and then people think it’s fake anyway. But if you go to buy a $100 fake, you’re not going to get into the designer shop and buy a $2,000 genuine.

00:22:20:00 – 00:22:25:14

Craig Douglas: So actual impact on sales is lesser.

00:22:25:14 – 00:22:26:03

Raph Goldenberg: You weren’t going to buy it anyway.

00:22:26:17 – 00:22:49:10

Craig Douglas: You couldn’t afford to buy it so you’ve gone and bought the other one. So that answers that sort of question but if it’s not a $2,000 handbag but it might be $200. Yeah. They do have impacts so people think they’re getting about as long as it looks okay. They’re not suspicious in any way.

00:22:49:10 – 00:23:04:05

Craig Douglas: And you know, it comes with the story. It’s all stock. I didn’t use it. I mean, how many times do you look at Marketplace and you see stuff is being sold? You know, it’s got, you know, brand new with tags written beside it. So, you know, who buys a pair of shoes and keeps the shoes and keeps the tag on them.

00:23:04:18 – 00:23:29:06

Craig Douglas: So in a lot of cases, it’s not a genuine product. In a lot of cases. How do you tell? The three simple ways to tell are: price, appearance and location. So what’s its price? You know, can I really buy that brand of handbag or that brand of t-shirt for that price? That should tell you what it is straight away. Appearance. Does it look like it’s got all the right swing tags on it?

00:23:29:06 – 00:23:44:20

Craig Douglas: Is it in the right bag? Is it appearing, does it appear correctly? Does it look like the way you would buy it if you went to the shop and bought it? And location,  in a way, are you buying it from you know, if you’re getting it from a guy outside of an event at 11:00 at night, it’s a pretty good chance.

00:23:44:20 – 00:24:02:14

Craig Douglas: It’s not genuine. And we used to do a thing for a client, similar to what we did for you, where there was a contact number and people would ring us. And I remember this lady ringing one guy and saying that her husband had given her a handbag and she was a bit suspicious as to whether it was genuine or not.

00:24:02:14 – 00:24:17:04

Craig Douglas: She said do you want me to send it to you? I can send you some photos. And I said, Well, just before you do that, where did he buy it from and how much do you pay for it? She said, Oh, he got it from the Queen Victoria market or he paid $100.

00:24:17:04 – 00:24:24:04

Craig Douglas: And I said, It’s fake. She says, How do you know? You haven’t even seen it yet? I said it was because it would never be genuine because of where it came from.

00:24:24:04 – 00:24:29:05

Raph Goldenberg: In that case, you should just say it was. Just to keep peace in the marriage.

00:24:29:05 – 00:24:48:13

Craig Douglas: I think that sometimes people believe what they’re getting is genuine. It depends if it comes through separate hands. So you see, if we talk about automotive, you know, you as a consumer don’t go and buy parts for your car. Your mechanic does.

00:24:48:17 – 00:24:51:14

Raph Goldenberg: Yeah. And they put them in the car and you don’t see them.

00:24:51:19 – 00:25:02:02

Craig Douglas: You don’t see where they’re coming from. You don’t see the location they’re coming from. You don’t see their appearance in their boxes and you don’t see their prices. So sometimes the consumer is fooled if there’s a third party in the middle.

00:25:03:09 – 00:25:20:05

Raph Goldenberg: I remember seeing holograms on a can of fake products. So they have these holograms that are designed to make clear that they’re a genuine product. But then people start copying the holograms. Seems like these people will find a way to work around.

00:25:20:24 – 00:25:38:24

Craig Douglas: Oh, you want a genuine was because you knew what the hologram should have looked like. Yeah, but as long as someone goes, oh, it’s genuine because it’s got a hologram on it. Well it could be a fake version, you know unless you’ve got a comparison with the genuine. Yeah. Well you know what the genuine should look like.

00:25:39:17 – 00:25:50:10

Craig Douglas: You know it moves, it’s a hologram, it’s got colors and moves. It must be genuine. So a lot of people can convince themselves it is genuine. Yeah, because I want  to. I want this product to be genuine. So it’s got a hologram on it. I’m convinced.

00:25:51:04 – 00:26:13:02

Kaye Ho: So we’ve talked a lot about products and how they are often counterfeited. So I’d like to talk a little bit about website domains because there’s also a lot of value in that as well. Could you tell us a couple of stories of the lengths that brands have gone to protect their domains and get their domains back from cybersquatting?

00:26:13:23 – 00:26:36:15

Craig Douglas: One of the problems with domains is that there’s so many versions of them now and even just recently with the ‘.au’ being released, you know. So a brand says, “well, how wde do I go? Do I protect everything?”. I know that UGG boots as an example. They know that there’s probably a thousand domains pulled down every month that has the word ‘UGG’ in it.

00:26:36:15 – 00:26:57:08

Craig Douglas: You know, ‘specialuggsforsale.com’ or ‘discountuggsoverhere.com’ so they’re very proactive in doing that. But in a lot of cases, especially in Australia with the second level domains – the ‘.com.au’ that we use. One of the issues is that you’re supposed to have support for it when you register a domain name or a trademark.

00:26:57:15 – 00:27:16:16

Craig Douglas: An acronym of your name or you know, there’s a level of support you’re supposed to have, which is where you get a lot of business names registered and then the domain name gets registered after that and we chase one one guy and his domain name was ‘Ran Gerover.com.au’. But when you put it all together with rangerover.com.au.

00:27:16:18 – 00:27:38:06

Craig Douglas: But as far as he was concerned, it was Ran Gerover. And we did one. You [Raph] and I looked after one which was a prado.com.au for a particular automotive company and this guy had it he registered it he had the ‘.com.au’ that a year and a ‘.net.au’ and we went and took a letter out there and said you can’t do this and you don’t have the support and you will lose it.

00:27:38:19 – 00:27:56:13

Craig Douglas: If we do a, you know, a domain name dispute, you’ll ultimately lose it. And he only registered for money. So we knew what he wanted. We just had to work out a price. So we negotiated a price and we’re in the middle of doing that. He said to me, But I’ve got support for this. You know, I’m allowed to have this domain name.

00:27:56:13 – 00:28:18:03

Craig Douglas: And I said, Well, where’s your business name? What’s your support for it? “Oh, I set up a club and it’s going to be for the club.” And I said “well you know it’s ‘prado.com.au’ so what’s the club?” And he said, “pensioners roaming Australia driving outback.” And I said “you’re kidding me aren’t you?” and, and he said no, that’s the club I’m going to use.

00:28:18:03 – 00:28:35:23

Craig Douglas: I said I’ll tell you what I’ll do. We’ll make this purchase and I’ll get the domain name for my client on one condition. And he said, what’s that? And I said, one day you’ll let me use that in a podcast because that’s the best excuse for having a domain name that I’ve heard.

00:28:35:23 – 00:28:40:08

Craig Douglas: Yeah it was ‘Pensioners roaming Australia Driving Outback’ was the acronym, so Prado.

00:28:40:08 – 00:29:07:02

Raph Goldenberg: So I remember one matter we worked on together not that long ago where we had a brand and that will remain nameless that was coming into Australia, a global brand. And I think it was the company name or the business name and they wanted that name to operate under was taken and in that case it wasn’t someone doing the wrong thing.

00:29:07:11 – 00:29:19:02

Raph Goldenberg: It was. If you can imagine that we did a company search and the business name was a combination of the two directors surnames and just happened to be.

00:29:20:08 – 00:29:21:03

Craig Douglas: What your client wanted.

00:29:21:03 – 00:29:35:03

Raph Goldenberg: Yeah. And so then we sort of said to the client “well, how important is this?” And they said, “well it’s this much important to us.” And then out of the blue, this person who’s just got this business name went “oh, okay, yeah, sure, I’ll let you take this.”

00:29:35:17 – 00:29:52:03

Craig Douglas: And I worked with a client who wanted to change their rebrand and change their name, shorten their name. And it was two names and they wanted to shorten their name because it looked better on signage etc. and the guy that had that name was a company name.

00:29:52:03 – 00:30:10:16

Craig Douglas: It was a small operation that was running out of Renmark and happened to be his name. His surname. So I went but contacted him and said, you know, “I’ve got a deal. If you’re willing to change the company name, we’ll do the paperwork. So you know, we can scoop it up on the way through, I’ll pay you an amount of money.”

00:30:10:21 – 00:30:34:22

Craig Douglas: I had to fly to Adelaide to meet him at Adelaide Airport to hand the business the bank check over before he actually believed what I was telling him to do. So I met him at Adelaide Airport. He came there with his wife and his young children and we met there. I handed a rather large bank check over to him. We signed all the paperwork and he was thankful he was hugging me and his wife was crying and, you know, this is money for nothing!

00:30:34:22 – 00:30:48:01

Craig Douglas: And all he did was he just took the company name and added ‘& sons’ to the company. So he was able to keep his company name just by adding ‘& sons’ to the back of it. And that client got the name and they continue to trade out of that name today.

00:30:48:06 – 00:31:11:15

Raph Goldenberg: You know, the most famous example of that is Nissan. So ‘nissan.com’ is owned by a man in the US. His surname is Nissan. He’s of Israeli origin. And before, he had a business Nissan computers or something like that and so he legitimately registered that because that was his business name.

00:31:11:19 – 00:31:28:15

Raph Goldenberg: And this is early on in the domain cycle. And I think that Nissan came in and they tried to, you know, throw their legal weight around it. And in the end, they sued him and went all the way to the US Supreme Court because this guy wasn’t interested in being paid off. He’s like, this is my name.

00:31:28:15 – 00:31:40:08

Raph Goldenberg: I’m entitled to use that any he won in the Supreme Court and is still the holder of that domain name. If you go to that website, there’s this whole story on the website. So yeah, Anyway.

00:31:41:18 – 00:31:44:09

Kaye Ho: Is he still trading under that name or just holding out?

00:31:44:09 – 00:32:00:05

Raph Goldenberg: I can’t recall if he’s still trading. But, you know, I think he was offered or imagined he was offered a huge amount of money to give it up. But if you go to Nissan.com or something. I don’t know, because it’s not held by Nissan.

00:32:00:16 – 00:32:05:20

Craig Douglas: But I’ve paid more than a quarter of $1,000,000 to buy something from.

00:32:05:20 – 00:32:07:02

Raph Goldenberg: Yeah, for a client.

00:32:07:02 – 00:32:14:13

Craig Douglas: For a client. And it’s an out of the blue approach. Yeah. And people don’t believe you. They say  ‘Come on?’ And I say ‘Yes it’s true!’.

00:32:15:03 – 00:32:17:09

Kaye Ho: It’s such a big part of your brand now the website.

00:32:17:17 – 00:32:45:17

Craig Douglas: They don’t believe you and so there’s always that argument over branding and in fact there’s an argument ongoing now with ‘.au’ because when they released that they said, and that was back in 2008 when they said they were going to do it. And so anybody that had a ‘.com.au’ or ‘.net.au’ or ‘.org.au’ at the time, had an entitlement to ‘.au’ to the top level domain and in fact in my case with my company Nationwide Research, I automatically got the ‘.au’ because no one else had the other two.

00:32:46:09 – 00:33:14:08

Craig Douglas: But for other names, if you had more than one company with an entitlement, you’ve now got it a bit of a standoff until somebody pulls out. And so there’s some negotiations going on this and there’s some money flying around. You know, ‘I’ll pay you so much to withdraw your entitlements so I can get the ‘.au’’. Because the top level domain is not so much easier, but you get a much better result when people Google search you as opposed to a second level domain.

00:33:14:08 – 00:33:15:03

Craig Douglas: So it is worth.

00:33:15:12 – 00:33:16:00

Raph Goldenberg: It’s worth money.

00:33:16:00 – 00:33:17:18

Craig Douglas: Companies chasing them. So yeah.

00:33:19:08 – 00:33:45:21

Raph Goldenberg: Craig my next question is there are obviously some links between organised crime and counterfeiting, and I can imagine there might have been some scenarios where you were dealing with people who are slightly dodgy, slightly scary. So my question is, have you ever been scared in your work and do you have any interesting stories?

00:33:46:02 – 00:34:03:09

Craig Douglas: Most of the scary things I have to do is dealing with the lawyers, they’re the scariest people. So most people that do what they do in the marketplace do it for money. So, you know, they’re not doing it because they’re wedded to a brand. They do it because they can make money out of the brand. So in a lot of cases, no, it’s not.

00:34:03:09 – 00:34:25:08

Craig Douglas: And because keep in mind, in Australia, we’re not manufacturers, we’re sellers. So that’s just, you know, they pick product up out of Asia and they’re selling it here. And you know, today they’ll sell this brand watch and tomorrow they’ll sell that brand watch. And if you set up a stall in Collins Street and put forward different brands of sunglasses, damn at $20 each, you know, by the end of the last time you would’ve sold them all.

00:34:25:14 – 00:34:49:02

Craig Douglas: But if someone came along and said, oh stop selling that brand, they just replace it with another brand and they’ll sell it. They’re not wedded to a particular brand of any of that. I only had one incident of concern and we did an Anton Pillar raid. For a large soft drink company and because someone was producing a counterfeit version of soft drink you said before about weird products that get counterfeited.

00:34:49:02 – 00:35:09:03

Craig Douglas: Well they were counterfeiting soft drink. Well they were counterfeiting beer so why not soft drink? And we did this and Anton Pillar raid. And the guy was not happy about us entering his place of business, which was this sort of back of his home. And I was there standing there with the lawyer. And she was explaining the documentation and what he had to do.

00:35:09:03 – 00:35:25:08

Craig Douglas: And the guy said, just hang on a sec. And he went into the back room and he came back and had a rifle under his arm. And he said, I think it’s time for you to leave. And I turned to look at the lawyer to say, I think he’s right. And the lawyer had already gone. She’d already gone at the door and I decided maybe I should leave as well.

00:35:25:08 – 00:35:42:12

Craig Douglas: And I was wearing a microphone because we had guys outside, obviously listening to what’s going on. And I made a copy. Yeah, you should put that gun down. And within 5 minutes they’re on the phone to the local police. The police turned up and wanted to arrest him. They did a search of the property, found three or four guns and wanted to arrest this guy and take him away.

00:35:42:12 – 00:35:59:04

Craig Douglas: I was saying “you can’t take him. We need him here to be able to help us through this issue of the Anton Pillar raid. So they said “alright we will hang around with you.” So that’s the only time that anyone’s ever really challenged me. And there’s not a lot of danger to what we do.

00:35:59:15 – 00:36:02:16

Craig Douglas: And even less now that we’re doing it from the desk as opposed to face to face.

00:36:03:11 – 00:36:26:21

Raph Goldenberg: I do remember the former life and going to a place where there had been a customs seizure of a certain product and you and I went to get the importer to sign some sort of dean or letter, a forfeiture notice to forfeit is counterfeit goods. And there was a tall, foreboding gentleman sort of standing looking over us the whole time.

00:36:26:21 – 00:36:32:07

Raph Goldenberg: And yeah, I was sort of happy just to get out of there with a document.

00:36:32:07 – 00:36:53:14

Craig Douglas: Yeah. Look, I think a lot of people, when they invest money and then I think there was about 4000 products that time that we did that. So the guy had a serious investment and he was you’re asking him to sign a document that said, I will forfeit all these goods, which meant that it was goodbye to the 4000 products that A) he had spent money to get and shipping to Australia and B) he wasn’t going to be selling and making the money.

00:36:53:14 – 00:37:01:06

Craig Douglas: He thought he was going to sell from it. So I think that in that situation he felt that maybe he could scare us away and make us go away and rethink the situation.

00:37:01:06 – 00:37:07:12

Raph Goldenberg: But then he saw me and, you know, he just got so scared that he just caved in.

00:37:07:21 – 00:37:12:20

Craig Douglas: Absolutely. Yes.

Kaye Ho: That’s exactly what happened for sure!

00:37:12:24 – 00:37:14:06

Raph Goldenberg: I’m just hid behind Craig!

00:37:15:03 – 00:37:35:02

Craig Douglas: But I was smaller than the other guy. He was bigger than all of us. But I think from memory, the guy signed it. And that was interesting. You know, it was an importer that was a small little trader, it was automotive products. And he had some 4000 items which were dodgy and they were brake pads and I don’t know.

00:37:35:02 – 00:37:55:00

Craig Douglas: Yeah, connecting belts and all these things that you just didn’t want to put in cars and we knew he wasn’t selling them. There was no way he was ever going to sell those from that location. So he was the front man for someone else and he would never put the money up to buy it anyway. But his name was on the import, so he had to sign the forfeit notice.

00:37:55:00 – 00:38:10:19

Craig Douglas: And of course he had someone behind him leaning on him saying, ‘If you sign that, I lose all my money.” So it was an interesting situation. Yeah, it was a you know, it was one of those things where we can always walk away. It’s not worth dying over, you know, a dodgy brake pad.

00:38:10:19 – 00:38:24:09

Craig Douglas: I mean, and I say that to my people when they go out to do this sort of work. It’s, you know, it’s a hat or cap or a t-shirt, a handbag, you know, it’s not worth, you know, losing an eye over the fact that someone’s going to get all nasty. You just walk away. You can always come back tomorrow.

00:38:24:09 – 00:38:30:15

Craig Douglas: So, yeah, the lawyers don’t pay us enough money to put our life at risk.

00:38:30:15 – 00:38:53:03

Kaye Ho: So you mentioned earlier that businesses in Australia usually are the sellers. They get products from overseas that rarely the manufacturer. So what kind of role does Australia Border Force play in anti-counterfeiting measures for goods coming from overseas and how do brands work with Customs or Australian Border Force to protect their brand?

00:38:54:18 – 00:39:33:09

Craig Douglas: Well, ABF are very good at stopping products. You know, they only stop sort of two or three percent of the product that comes in. But when you factor in the stuff that’s coming in from known importers that will never be fake, down to that sort of last level of of product coming from dodgy places and maybe Mr. Scribed or maybe coming into or from a supplier they know of from previous shipments or to an importer that’s done it before and you got to remember too that the way Australian law is, we can’t ask the State police to help.

00:39:33:24 – 00:39:49:23

Craig Douglas: So it’s not a state issue, it’s a federal issue. So the only way you can remove a counterfeit product then only three ways you can remove a counterfeit product from the marketplace. So one is border force stops along the way through. Two is you get the federal police to come along and do something, and that doesn’t happen very often.

00:39:49:23 – 00:40:13:20

Craig Douglas: And the third way is that they’re willing to give it up on the basis of a document that Raph or someone else gives us. So we can go out there and say, look, you know, on the basis of all this potential legal action, you should forfeit the product. So they’re the only three ways. So if you can get Border Force to stop it on the way through, then that’s the best way to stop it because they’ve got some skills to find it.

00:40:13:20 – 00:40:33:24

Craig Douglas: They’ve got some law that supports them. And now with the laws since that change about ten years ago and the onus is moved from the brand owner to the importer. So I do a lot of work for a couple of sporting companies and I’m the contact point for the documentation that comes from Border Force.

00:40:34:06 – 00:40:52:08

Craig Douglas: So I get all the seizure notices and you know, we will get three or four a week and some of them will be two or three and you think, why would they stop two or three pairs of running shoes? And it’s because they’ve opened a box and there’s a hundred in there and 98 of that brand and two of this brand. So they seize everything.

00:40:52:08 – 00:41:14:08

Craig Douglas: They know they’re all fake. So the number of people, I think in all the work I’ve done for this brand, only one person has put in a request for release who said, ‘no, no, no, I wish for them to be released,’ which they can do. They have the right to put in a request at which point of time the brand has to commence some form of legal action and injunct border force from releasing the product.

00:41:14:16 – 00:41:33:21

Craig Douglas: They’ve got ten working days to do that, and that’s an expensive exercise to do. You’ve got to get to federal court and get that injunction. So in most cases, I would say in 80% of the cases after the product is seized, we hear nothing from the importer. They just, ten days goes by and it automatically gets forfeited. If I don’t do anything for ten days.

00:41:34:11 – 00:42:06:09

Craig Douglas: So the art here is to make certain that the Border Force stops all the products. So how do you do that? Well, they haven’t had it for a couple of years because of COVID reasons, but they do training. So we’ll set up a little roadshow and we’ll go out to the four locations and take the product and sing our song ten times as they all come past and and you’ll get 50, 60 agents from Melbourne, similar numbers in Sydney and maybe slightly less in Brisbane and in Cairns, but they’ll come past and now have a look and look at the product and go, Oh, we’ve seen that product come through but

00:42:06:09 – 00:42:29:15

Craig Douglas: we’re not quite sure how to tell genuine from non-genuine. So we’ll show them, but we’ll also put on their database the ABF database has an area where the brands can actually upload product images, details and then, and we can also lodge a document which says we’re concerned with this seller or this supplier. So they will watch for those people as importers or shippers.

00:42:30:05 – 00:43:06:16

Raph Goldenberg: And I remember when we worked on this sort of stuff at Toyota, it’s pretty clear that customs have limited resources. So if a brand puts in a big effort in training them, turning up, showing them the difference, they do become familiar. They’re probably more to look out for those products because, I mean I remember you know, showing them the packaging of the oil filter and the ‘g’ in genuine was different in the counterfeit versus the ‘g’ in genuine in the genuine product.

00:43:07:00 – 00:43:29:12

Raph Goldenberg: And so after a while, they start noticing these things. And I think the more effort you put in, the more likely they’re going to look out for your product. And that’s an anecdotal thing. But they certainly appreciate the brands turning up and putting in an effort because otherwise there’s just so much they’re opening so many things so they need some.

00:43:29:12 – 00:43:45:02

Craig Douglas: The biggest problem is getting the brands to register in the first place because someone has to own the program. Yeah, which is where we come in. We do that for a number of brands. We so they’ll get their lawyers to register and it’s free to register. Other than the lawyers fees, it’s free to register.

00:43:45:02 – 00:43:51:24

Craig Douglas: So that’s easy to do. It gets renewed every four years. So that’s not a big issue. So it can be run every 5 minutes.

00:43:52:22 – 00:44:01:15

Raph Goldenberg: You’ve got to sign a deed saying that if there’s a seizure amongst us about a certain amount, that you’ll cover the cost of holding it or whatever. Yeah.

00:44:01:15 – 00:44:20:24

Craig Douglas: Storage and/or destruction. But I think last year I think they only issued like three or four invoices last year and rarely is it a money making venture for them. And so we or you, the lawyers, will get the notification and then you work out whether you need to do anything about it but it’s a very good way of stopping product coming in.

00:44:21:06 – 00:44:45:23

Craig Douglas: It’s also a deterrent because on their website you can actually go in and search. “Okay, I want to bring in Raph’s shoes,” and you go in and you go “well, he hasn’t registered, so I can bring them in.” And, you know, I was told the other day that we had a local supplier, that sells in all these markets, had bought in two 44 shipping containers of a particular brand and he’d rang ABF and said, “is it registered?”

00:44:45:23 – 00:45:02:12

Craig Douglas: And they said, “No, but it might get registered tomorrow.” So they said “Can I get it registered now?” “Okay”. “So can I bring it in?” “So if you bring it in we can stop it.” And it was full of counterfeits. Yeah. Now, the brand knows they should register. There’s no, you know, impediment to registering.

00:45:02:12 – 00:45:21:10

Raph Goldenberg: Yeah. It’s not a very well known program, is my impression. Like he told you a lot of people that I realize that exists it’s sort of a bit similar to some of these online marketplace programs like Zero. You know, you can register your brand with eBay and if there’s a counterfeit product, they actually can help identify it.

00:45:21:10 – 00:45:22:16

Raph Goldenberg: Not many people know about that.

00:45:22:16 – 00:45:45:07

Craig Douglas: And so that’s where they come to us. And then also the lawyers, too. And, you know, there are lawyers who do intellectual property, but there are lawyers who do brand protection. And it is different. You know, trademark registration and brand protection are quite different. So they’ll come to us and we’ll say to them, “look, we can help you in the field, but the first thing you can do is help yourself. Watch this and get this running, because this is the best way to start.”

00:45:45:07 – 00:46:02:02

Craig Douglas: It’s a deterrent. It’s an online deterrent. Oh, I’m not bringing that in because I might lose it. So it’s a very good way of running it. And a lot of the brands do it. But it’s amazing every four years when they come up for renewal, they get about a 30% drop off. Well, for some reason they just don’t renew it.

00:46:02:02 – 00:46:24:06

Raph Goldenberg: So the other thing, the other element is, they’ve got the legal side and you have a success and you seize the product but then, make it known. Put out a press release or something of these things because then if it’s in the newspaper, I mean, some of these people who might be thinking about counterfeiting your brand go, okay, well, so-and-so’s looking out.

00:46:24:06 – 00:46:28:05

Raph Goldenberg: They’re having people come confiscate their product.

00:46:28:05 – 00:46:37:21

Craig Douglas: That then tells the public that there is a counterfeit version of that product and the consumers go, “how did you let that happen and did I buy counterfeit?”

00:46:37:21 – 00:46:39:11

Raph Goldenberg: It’s a fine balance.

00:46:39:11 – 00:46:46:01

Craig Douglas: There is a balance there. Some brands do it and they really advertise and market their successes.

00:46:46:01 – 00:46:46:09

Raph Goldenberg: Yeah.

00:46:46:14 – 00:46:51:09

Craig Douglas: And others just like to keep it quiet and for good reason too.

00:46:51:16 – 00:47:02:01

Kaye Ho: So that’s all about counterfeit products but it is pretty common as well for genuine products to make their way into Australia through unauthorised channels.

00:47:02:02 – 00:47:04:06

Craig Douglas: Parallel import of product. There’s plenty of it out there.

00:47:04:07 – 00:47:04:17

Kaye Ho: Yeah.

00:47:05:02 – 00:47:23:23

Craig Douglas: Yeah. And we are an affluent country, so we have a higher selling point than a lot of other places around the world. I have a couple of clients that produce products at different levels, so different quality products, and it’s built to a dollar figure for the regions. So we would get the top level here.

00:47:24:10 – 00:47:48:12

Craig Douglas: But other places around the world we get a lesser level, a genuine product, but it’s a lesser level, it’s a lesser quality product and they will get imported and you can’t stop them because it’s not for the Australian market, but it’s a genuine product. So they come in,  through Customs. And Customs look at it and say, well it’s coming from a genuine supplier, they’ll let it through and then they hit the marketplace.

00:47:48:23 – 00:48:05:04

Craig Douglas: But it gets down to consumers. Consumers got to look at the product and work out whether it is an Australian product or a product that’s been bought in for sales in Australia, a lot of parallel products sold in Australia, but a lot of retail outlets that survive.

00:48:05:04 – 00:48:15:24

Raph Goldenberg: Yeah, but a lot of legitimate businesses like that are based on that. Yeah. The business model is based on parallel imports of well-known brands.

00:48:16:13 – 00:48:39:02

Craig Douglas: And it gets back to the price that they sell locally.  One of the ones I see a lot of is you know, Finish dishwashing tablets, everybody’s selling them. But we have a different water quality here in Australia that they do in other places around the world. So the product performs differently because the water is not as hard as it is in some places.

00:48:39:02 – 00:48:54:17

Craig Douglas: And so, you know, but people will buy it and it’s a genuine product. Yeah. But it may not perform to the level that you expected. And then what happens is that they, they ring and say, “oh this is a terrible product.” And they’ll ask “well where did you buy it from?”

00:48:54:17 – 00:49:16:23

Craig Douglas: “Well, we bought it from this place down the road, so.” Well, it’s ours, but it isn’t ours. It’s not, it’s not an Australian product, it’s a genuine product but for overseas markets. Buyer beware! Consumers are going to realise that there are other products out there that sell in Australia that are genuine, but they’re not at the Australian level, then we expect that that would be so.

00:49:17:15 – 00:49:27:06

Kaye Ho: Is there anything that an Australian authorised seller of the product can do to help prevent parallel imports?

00:49:29:09 – 00:49:52:06

Craig Douglas: They can own the trademark. That would be a good start. But if you’re a wholly owned subsidiary of an overseas company. That overseas company is not going to transfer the ownership of the trademark to the Australian entity, even though they own the Australian entity, that would be a way. Because then they could register as the trademark owner. So the product is not being imported with the consent of the trademark owner.

00:49:52:06 – 00:50:00:02

Craig Douglas: So there are ways but there’s no magic bullet in that situation and you.

00:50:00:02 – 00:50:00:21

Raph Goldenberg: Pricing.

00:50:01:01 – 00:50:21:13

Craig Douglas: Pricing and then well, you don’t price it to the point where you let us talk before about, you know, the cheaper products don’t price it so that it can get in underneath. Now we don’t have a strong dollar at the moment and so our buying ability is not as strong as it has been in the past. So by the time you buy it, ship it, land it, pay duties, etc., get it into the marketplace.

00:50:22:02 – 00:50:36:08

Craig Douglas: If you’re still cheaper than the locally sourced product, well then there’s a problem that the local sellers. They’re letting the other product get in underneath them. So. So yeah, sometimes the dollar figure is the important thing.

00:50:36:12 – 00:50:38:13

Kaye Ho: It’s all about the competition.

00:50:38:13 – 00:50:58:02

Craig Douglas: Yeah. And it’s all about ensuring that the consumer, you know, buys a genuine product from the right people because that’s the product for Australia. Now, for certain things that has an impact. But you know, if it’s like golf clubs or sporting goods for something and you know, a T-shirt from an overseas marketplace to here is… so keep in mind we are six months behind.

00:50:58:02 – 00:51:15:13

Craig Douglas: So a lot of that, a lot of the stuff that comes out of the states or, you know, Europe comes here at the end of their season and then we get it here. And so it’s genuine and it’s new and it’s when we want t shirts as opposed to, you know, the jackets because we’re moving into our summer and they’re moving into their winter.

00:51:15:13 – 00:51:27:18

Craig Douglas: So it’s very hard to stop the product coming in a lot of Formula One and that merchandise, it’s overseas stuff where it’s available, cheaper.

00:51:27:18 – 00:51:51:18

Raph Goldenberg: Craig, before we wrap up. Are the rise of selling online and people buying online, which obviously in Australia really increased over COVID and I think people are still, you know, a lot of people buy their products online. Is this sort of a higher risk of getting a fake online? And what are the sort of things that a brand can do about it?

00:51:51:24 – 00:52:22:19

Craig Douglas: There is certainly a high risk. You know, eBay is a place where you can actually advertise a product that the photo of the product is, not the product you’re going to get. So if you’re selling something on, you know, say, Marketplace and you put the photo of the product here and when you sell it, that’s the product that you sold. But Ebay allows you to use a stock image and/or a photo. Let’s say you have a hundred lipsticks, you don’t have to photograph all of them. They let you photograph one and they let you distribute from there.

00:52:23:07 – 00:52:47:01

Craig Douglas: So that’s okay if the products are all the same. But sometimes they lift the image of clients’ websites and they use that or they take a photo in a particular way of a genuine product and then they ship out the non-genuine. Well you get it. You got the option of returning it but I got it cheap and if I had the offer, I’m not going to buy from him again. I got to get on the road and it’s twice as expensive and so people said, “oh I won’t bother.”

00:52:48:00 – 00:53:06:14

Craig Douglas: So buyer beware comes in with that sort of thing. What is the consumer doing. Online market is a difficult market at best. Yeah. It’s sometimes very hard to identify the seller. Follow the money trail is what we would say. Where does the money go to? Who actually ultimately gets the dollars in their pocket?

00:53:07:03 – 00:53:28:07

Craig Douglas: So you follow the money trail, but there’s a lot of sellers online that you can’t identify. Yeah, there’s sellers online running websites where the ownership of the website, well, the domain ownership is hidden, so you don’t even know who you’re dealing with. And that gets back to your question before with the question about organised crime. And, you know, we’ve hid the people behind it all.

00:53:28:09 – 00:53:30:03

Craig Douglas: Sometimes they’re hidden for a reason.

00:53:30:07 – 00:53:52:01

Raph Goldenberg: But to give you a bit of a plug, I mean, that’s the sort of thing that we see. We get to a particular point sometimes where we’ve looked at what seems available online about trying to identify who we’re dealing with so we can write a letter, but we can’t find out. That’s the sort of thing you guys have some special sauce or magic that you’re able to kind of.

00:53:52:02 – 00:54:12:24

Craig Douglas: There’s not just some sort of black magical special gane. This would be guided, but, you know, we’ve got the skills come from having done it before. So we go, “how do we work out who’s behind this?” I was doing something the other day for a client on an Instagram post that they couldn’t work out who it was and they were using or they’re using the client’s images but there was a phone number on there. It was a French phone number.

00:54:12:24 – 00:54:31:04

Craig Douglas: And so it’s like, well, okay, well, that’s one piece of information we can work on. So we Google the phone. Then it turns out it’s another business. Then we find out who the owner of business A is by looking at business B, who were less inclined to hide who they are so that, you know, there are ways of doing it.

00:54:31:04 – 00:54:46:12

Craig Douglas: But that’s just the skill of doing this for 40 years. And trying to work out, you know, who’s behind all these things. But it’s very hard, you know, you want to know not only you want to know who it is, but where are they? Because it’s no good producing a legal document if I don’t know where to go to servel the thing.

00:54:46:12 – 00:54:59:03

Craig Douglas: Yeah, you know, you get to answer via Facebook. You can try and service multiple ways. You can try the document posted to somebody. But in a lot of cases, if you’ve got a seller with a fake product, they’re hidden for a reason.

00:54:59:07 – 00:54:59:15

Raph Goldenberg: Yeah.

00:54:59:18 – 00:55:23:14

Craig Douglas: And you know, if you find a way to get to them, they very quickly close out that portal as well. Yeah. So the next person can’t get to them. So yeah, their job is to sell products and make money and not have any problems when, when a brand idea comes after them and says, “hey, you can’t sell or you’re using my imagery, or you’re confusing the consumer.”

00:55:23:14 – 00:55:27:12

Craig Douglas: So yeah.

00:55:28:05 – 00:55:39:24

Raph Goldenberg: Well Craig that has been very, very fascinating. I want to finish with one question that we ask all our guests. This is a legal podcast, so if you were the Prime Minister for the day, what law would you change?

00:55:41:23 – 00:56:02:12

Craig Douglas: Well, I think from what we do and the way we go about doing the work, we do. It’s a very simple answer. And that I would give the state police the same powers that the federal police have got, the same seizure powers and the same powers to be able to stop counterfeit products being sold, because at the moment the state police, there’s only two things they can do.

00:56:02:12 – 00:56:22:16

Craig Douglas: You know, we can ask them to assist us to proceed to crime. That’s a bit hard because sometimes they say you haven’t proven the crime. Yeah. The other thing is we take them along on the basis of breach of peace. We got to come with us. It’s got to be a rumble. And you know, you need to come along and stand behind us and they’ll say, well, we’ll just make sure that the peace is not broken.

00:56:22:16 – 00:56:37:23

Craig Douglas: But we can’t help you do any of your work. As long as you stand behind us, that’s good enough. You think we get this impression of being authorised? But that’s it. That’s what I would do. I would. I’d ask the Federal Police to give them. And they can do it. Give the state police the authority to take the action the federal police would normally take.

00:56:37:23 – 00:56:50:13

Craig Douglas: Not that the state police want to run around at 11:00 at night taking t shirts off, people selling out Manchester United contrabands. But yeah, that’s the sort of thing that would make our job so much easier. Yeah.

00:56:51:16 – 00:56:57:08

Raph Goldenberg: Excellent. Well, thank you Craig for coming on. Thank you Kaye for co-hosting with me, and it was terrific.

00:56:57:08 – 00:57:07:01

Craig Douglas: My pleasure. Thank you.