We’ve all been there. Meeting that skinny, medium-height, cropped hair, boyish-faced person named “Chris” or “Pat” at a social gathering. Is it a man or a woman? How do you address that person? Thankfully, “Ms.” has entered the English language, but we’re still waiting for the third person equivalent of “it”.

Contrast this with a red-faced, pudgy, bald man with a bad attitude and a bad comb-over. Maybe he’s not as pulchritudinous or as eloquent as our hermaphroditic new acquaintance of the previous paragraph, but he sure is easier to address. We know, instantly, to call him “bud”, or “bro”, or even “dude”, but never “sister” or “girl” or “chica”.

Classes of counterfeits, like classes of people we meet at social events, include “addressable” or “unaddressable” as an attribute. The differences between addressable and unaddressable counterfeits make all the difference in terms of the strategy a brand owner must support for brand protection. In this blog, I hope to show the difference between these two broad types of counterfeiting, and argue why the strategies must differ. Like every complex issue in life, there will be shades of gray; since I argue for a multi-pronged strategy regardless, these shades of gray need not give you the blues.

In this blog, counterfeiting means any product presented as something other than what it really is. This is an important definition, as will be described in the following paragraphs.

Let’s pick two extremes first to define the Platonic “ideals” for addressable and unaddressable counterfeiting. Addressable counterfeiting is exemplified by a counterfeit parenteral (injectable) pharmaceutical needed to save or prolong the life of a cancer patient. The physician, physician’s aide, or nurse thinks, trusts and intends the pharmaceutical to be the right dose with the right strength at the right time with the right biological activity. If it is counterfeit, any of these “rights” can be wrong. The dose could be wrong, in which case ancillary effects such as pharmacokinetics can be altered. The dose could be the wrong strength, in which case patient non-response—underdose—or overdose—which can include mild responses up to anaphylaxis, shock, convulsions, and/or death—occurs. The active ingredients can be past expiry, which usually corresponds to underdose but is often also associated with contamination and concomitant sepsis or worse. Finally, the dose could have the wrong biological activity—often unintentionally—through the use of improper expedient. Any of these leads to complications for the patient—and since the patient is already weakened, well, this is usually quite serious.

On the other end of the spectrum, we have the Rolex with three “X”’s—the kind of watch sold to Olive the Other Reindeer by her friend Martini the Penguin. Olive, naïve soul that she is, expects the watch to work, but most of us would not. We’re willingly purchasing a Rolex for single or double digit dollars for the kitsch or bemusement or relief from ennui. We know, in other words, it’s a counterfeit. And this is unaddressable counterfeiting—even if faux-Rolex sellers do get jailed from time to time. Why? Because it is not substituting for the sale of a real Rolex—a guy buying a $9 Rolex isn’t likely to cough up $5000 for a real one, and —or if he is, he won’t be put off buying the $5000 real one through the disposal of $9.

Many other forms of counterfeiting are clearly addressable. Fake pharmaceutical tablets, fake automobile and airplane parts, and other fake items in which the person’s safety is at risk because of the necessary (for counterfeiter profit reasons) shortcuts the counterfeiters have taken. Given this perspective, it is clear that counterfeit consumables are addressable: food, mouthwash, toothpaste, nutraceuticals, hygiene items, and in the case of infants, the surface coatings of toys and bedding. Anything for which the loss of quality control increases the risk to the end user unbeknownst to the end user, is addressable counterfeiting.

On the other side, unaddressable counterfeiting includes any product that the purchaser understands is not the real thing, and in most cases certainly not “even better than the real thing”. A refilled ink cartridge selling for 50% the cost of an authentic ink cartridge is one example. If the price is too good to be true, you can bet the product is too bad to be true. In today’s world of cutthroat pricing—where differences of 1-2% are discovered, recognized, and acted upon by buyers both economical and extravagant—cost differences of 20% or higher are hallmarks of counterfeited products.

The approaches we take to counterfeiting depend on the relative mix of addressable and unaddressable counterfeiting occurring in our supply chains. If the counterfeiting is unaddressable, the brand must continue to message the unique qualities offered by their product. Sophisticated target customers may own both a “Rolex” and a “Rolexxx”. If the counterfeiting is addressable, however, then the brand owner must use a multifaceted ecosystem of tactics to prevent, detect and respond to counterfeiting. This includes education of the right people in the supply chain, from manufacturer to consumer. It includes authentication of the individual product, if needed. It includes the investigation plan—how data is collected, retained, analyzed and acted upon. And finally, it includes how that data is used as evidence to take action against the appropriate set of counterfeiters.

The next blog will address these important anti-counterfeiting tactics: education, authentication, investigation and prosecution. For now, thanks for reading.

-Steve