Q: Counterfeiting is a widespread problem but brand owners can be quite reluctant to admit the extent that they suffer from it. Do you think that the stigma attached to brands that are counterfeited exacerbates the problem, and how does this affect your ability to conduct research in to the subject?

DY: Yes, obtaining systematic data on counterfeiting is very difficult. Brand owners do not readily divulge the information because it can lead to a negative impact on their image. This does make research into the problem difficult, and groups sometimes get criticized for their methodology because of a lack of rigorous data. We have found that the most systematic data is related to the software industry and software piracy. What is also interesting is the source of the data and motivation for its collection. For example, there is government data such as customs authority data, as well as data from organizations and to a lesser extent from companies. In all cases, there is no standard methodology for collecting the data or measuring the impact of counterfeiting, and often data sets are incomplete. This makes it much more difficult to draw sound conclusions. Interestingly, data about counterfeiting is also relatively systematic for music and film (that is other types of digital media), and it is the physical products such as fashion items that we have a lot less systematic information about. There we need to rely on case studies and extrapolate.

Q: In your work, you have highlighted a broad range of factors that drive groups to make counterfeit products. China is often cited as a major source of fakes, but many other countries contribute significantly to the problem too. What key cultural factors have you identified?

DY: Cultural factors play a major role in the problem of counterfeiting¹. Most interestingly, it is possible to look at this problem quantitatively. Geert Hofstede measured culture with the individualism-collectivism index in a study in the early 1970s. It has since been shown that countries like the United States with a high individualism index have low incidences of piracy and counterfeiting, whereas China with the lowest individualism index tolerate and participate in piracy to a much greater extent. Much of this comes from the way people measure their own success and the achievements of their peers, and how contributions by individuals or groups are perceived. For example, where a society has a tradition of sharing, counterfeiting and piracy is more acute.

Q: Prevention is often better than cure. Has your work uncovered examples where countries or brands have had success along these lines?

DY: Yes, there are many examples, and this has been detailed in an article I co-authored for the Long Range Planning journal². One good example is how Budweiser entered the Chinese market by selecting a very distinctive and special packaging that was very difficult to imitate and also very expensive. The result was a very successful protection of the brand. Other examples are where technology solutions have been adopted, such as digital serialization and hidden markings.

Q: Digital piracy (of software and other media) is a form of counterfeiting that can be performed easily by the individual. What do you think the outlook is for preventing this problem in the future, and do you think education or technology will play the greater role?

DY: I believe that both will work. The effectiveness of education is more difficult to measure however. Especially in the short term, but it definitely works. The key message to get across is that it is unethical to counterfeit items. Then technology also plays a key role. Not just in prevention, but in terms of raising the expectations of end users. For example, Microsoft’s entry into China was initially accompanied by a very fierce strategy of punishing counterfeiters. It has since changed its approach to educating users about the benefits of buying genuine products, such as customer support and upgrades. Generally speaking, as countries become more sophisticated with their ICT systems, so their expectation of services and quality increases. This seems to help to reduce piracy and counterfeiting.

Q: With China having become a key global player in recent years, and its growth and influence set to continue, what effect do you think the nation will have on the extent of global counterfeiting and also the types of policies that will be effective in thwarting it?

DY: China is a big country that is very dependent on trade and foreign direct investment. So China will certainly influence the extent of counterfeiting in the future. It needs to continue to evolve its intellectual property protection system to have a good environment for foreign businesses. We are already seeing some of the tensions in the 1990s between the US and China on this matter starting to ease.

Q: Finally, you began your work in this field in the late 1990s / early 2000s. What changes have you seen over the last decade in terms of the scale of the problem and the awareness of the problem?

DY: The awareness of the problem has definitely improved over the last decade³. So too has the level of sophistication of counterfeits. The scale of the problem is certainly growing. To the extent that companies need to continue to take action rather than just talking about it. One of the key issues is that there is no country free of the problem, but companies must work within a limited budget to tackle the problem where it is the most serious for them. One of my areas of research is to study the effectiveness of strategies. This comes back to the problem of measurements, but over the last decade, a better understanding of data collection has certainly been achieved.

Prof. Yang is Burr-Clarke Professor in International Business (IB) at Trinity University, Department of Business Administration, USA. She has a BSc in Economics, an MBA and MSc in IB, and a PhD of Management Science in International Management of Intellectual Property.

Since the 1990s, Prof. Yang has been researching Intellectual Property from the perspective of International Business and Strategic Management. She has published over 30 papers, two research monographs and two edited books in the research field. She also serves as an editorial board member for International Journal of Intellectual Property Management and a regular referee for a dozen leading journals in intellectual property and international business.

Prof. Yang is also a consultant for the World Intellectual Property Organisation, United Nations actively working on a project 'Benchmarking
Intellectual Property Systems'. She is a frequently invited speaker by UN, presenting on topics relating to IP and international business.

She has taught students from over 50 countries. Currently, she teaches Intellectual Property, Global Business Culture, International Branding and Research Methodology at Trinity University.

Prof. Deli Yang can be contacted at:
Department of Business Administration
Trinity University
One Trinity Place
San Antonio, Texas TX78212
Tel: +1-210-9997008
Email: deli.yang@trinity.edu