What Trademark Owners Can Learn from Counterfeit Wines
By: Suzan Hixon and Brittany Riley
We usually immediately think of designer purses, shoes, and electronics when talking about counterfeit goods. In the case of logos and brands, counterfeiting results in trademark infringement. However, the illegal imitation of products is expanding to food and drink. Recently, a renowned wine dealer, Rudy Kurniawan, was arrested for auctioning 84 bottles of counterfeit wine purporting to be from Domaine Ponsot in Burgundy, France, which were expected to sell for approximately $600,000. Prosecutors maintain that the wine was not authentic. Unfortunately for Mr. Kurniawan, the crime he is charged with is serious, as the bad-faith sale of any commodity that is known to be a counterfeit, fake or forgery is a felony.
Unfortunately, instances of “label fraud” are not new to the wine industry. Label fraud is where counterfeit labels from cult wines and other rare and expensive wines are affixed to bottles of less expensive wine and then resold. During the 1980s and 1990s, wine collector Hardy Rodenstock was infamous for selling fake “Jefferson bottles,” rare Bordeaux wines bottled for American President Thomas Jefferson.
At the surface, counterfeit wines seem to only hurt the buyer; nevertheless, label fraud can have serious repercussions for the wine market as a whole. For instance, the presence of counterfeit wines in the market has the greatest potential to impact the wine industry in the areas of financial loss, damage to brand reputation, and liability. The potential cost to vintners has caused them to look to new technologies—from security inks to micro-chipped corks to laser-coded bottles—in order to protect their brands from fraud. Other producers have worked with printers to develop graphics or micro-printed multicolored codes that are only visible with magnification. Some vintners even use holograms or unique etchings on their bottles.
The expansion of fraud within the wine industry can serve as a lesson to all trademark owners. Expanding technology will allow counterfeiters to copy almost any product, especially luxury and high-end products. Trademark owners who are worried that their product will be subject to counterfeit techniques can learn from the wine bottling and labeling industry by applying protective techniques to their own products. The use of micro-chips, microprinted multicolored codes, and holograms can be applied to various products depending on the material and cost. Although the methods used by vintners to protect their brands from fraud may seem expensive and excessive, it evidences how costly and damaging counterfeit products can be to the success of a brand and/or an entire industry.