By Aaron Jennings, Business Development Manager at Pointer Brand Protection
In recent years, higher education institutions around the world have dramatically increased their commercial presence. The competition to attract new students has demanded that institutions show continuous improvement in teaching, research, and the provision of facilities, the cost of which has been met partly by increased marketization. One of the biggest growth areas for universities needing to generate extra revenue to meet these costs has been the exploitation of intellectual property (IP) rights through licensing programs. In 2017, the US-based Collegiate Licensing Company reported annual merchandise sales of university-branded products totalling $4.62 billion. By developing their brand identities on a wide range of products, universities have created important streams of income that sit alongside government funding and tuition fees.
As with many other industries, however, the ability to create value through the use of crests, names, and other IP rights has been eroded by IP infringement and counterfeiting. This article on counterfeits in higher education for 2020 examines the damage currently being done to the higher education sector by the production and sale of unofficial university-branded products.
On global marketplaces, social media accounts, and websites, there are thousands of listings for fake products which use the names and trademarks of universities. Counterfeiting costs the global economy an estimated $461 billion a year, but the higher education sector does not receive any special attention for its losses. We think it’s time this issue was addressed.
- the importance of commercial income to universities
- how fake goods directly damage revenues through intellectual property infringement
- how universities and other higher education institutions can protect themselves, their commercial partners, and their consumers
Collegiate Licensing and Income Generation
In the US, collegiate licensing is more developed than in other countries, with college sports teams feeding the $4.62 billion earned from sales of official merchandise. The product ranges rival those of professional sports teams, and the money earned would be enviable in most sporting leagues. From bowties to USB chargers, branded products are such big business that colleges even have extremely lucrative tie-ins with major sportswear and apparel manufacturers. Approval was also granted in late 2019 for US college athletes to sign endorsement deals and accept sponsorships from brands. This will likely serve to further increase the profile of individuals but also the university colors they wear.
While the sports brands and clothing manufacturers who already have brand protection strategies may protect certain elements of the revenue generated by higher education merchandise, the application of IP goes far beyond just their products. This means that as the names and trademarks of universities spread further afield, their IP is likely to be infringed on a much wider scale than can be protected through partnerships with sportswear brands.
Why is this important? Since the global financial crisis of 2008, governments in many countries have deprioritized education spending and not compensated institutions who simultaneously face growing student enrolment. As a result, universities now rely more heavily on funding streams from tuition fees and commercial opportunities. If we take the example of the US licensing program, this is not an insubstantial sum. The $4.62 billion in revenue, split across the 32 colleges who participate, would average out to $144 million per college, per year – could any business afford to not protect this much potential revenue?
How Counterfeits Damage Higher Education Financially
A problem for universities occurs when online sellers create their own products using the logos, names, and characters associated with the college. This detracts from the sale of genuine goods, undermines the commercial value of licensing agreements, and can damage reputation.
The spread of counterfeit goods appears to be proportionate to the international profile of a university, with institutions such as Harvard or the University of Oxford being most frequently copied. However, the emergence of country-specific branches on all the major online marketplaces has also led to the appearance of illegitimate goods for many more than the elite few. In Italy, for example, there are unofficial products branded with the crest of the University of Bologna.
In Canada, on the other hand, the local branch of Amazon.com features more than 400 listings for clothing items attached to the keyword for McGill University.
It’s clear that from Amsterdam to Zurich, the local demand for merchandise is currently being fed by counterfeiters as well as official suppliers. This is unsurprising when you know that Amazon has 13 country-specific platforms, eBay has 23, and there are hundreds of other eCommerce sites such as Lazada, Allegro, and Mercado Libre, all geared specifically towards local markets and local language speakers.
Accounting for Fakes in Home Markets
According to the Forbes 2019 ranking for US colleges, the University of Florida is the country’s 70th most prestigious institution. It has over 50,000 students and an estimated expenditure of $12.7 billion annually. While the University of Florida, along with its “Gators” sports brand, is a significant institution domestically, it still has a bigger presence in the US market than overseas. As a result, Gators-branded counterfeits are more prevalent on US marketplaces such as Etsy, Redbubble, and Wish.
Our survey of Etsy.com found that relevant keywords returned 3,913 listings for the University of Florida. We estimate, based on the first page of “handmade,” “homemade,” “unofficial,” “customized,” and “personalized” listings alone, that 54 out of the 72 available products were potentially unofficial uses of University of Florida IP. Multiplying this initial rate of 75% potential fakes by the total number of listings available means 2,934 adverts.
Each listing has an order quantity between 1 and 100, and the prices vary widely. Assuming each advert has a possible quantity of 50 at an average price of $10, this could result in sales of $1.4 million dollars from this one platform alone. Should that figure be spent on genuine merchandise it would be a big contributor to the overall expenditure of the college.
Colleges, China, and Clicks
Local online platforms may target domestic institutions with small batches of handmade goods, but for those universities whose names have become internationally known, the global threat is even greater. On Asian wholesale websites such as China’s Alibaba and Indonesia’s Bukalapak there are hundreds of listings for household names such as Harvard and the University of Oxford, with advertised quantities running into the thousands.
Although these adverts may appear unlikely to yield huge sales, they are important for two reasons. First, because they indicate that the production capacity in these countries is vast and that factories are already geared up to produce many thousands of units. On Alibaba, for example, buyers can find factories able to supply them with thousands of units at cut-rate prices.
Secondly, the thousands of individual orders made by individual buyers on Etsy or Redbubble can be surpassed in seconds by one wholesale order from an importer. It’s this mass importation that results in stores in tourist neighborhoods such as Camden Town in London being deluged with fake products. For traders who wish to supply tourists with souvenirs from the world-famous University of Oxford, these sellers on Tokopedia offer a wide range of counterfeits they can ship rapidly from Indonesia.
The fakes are already out there, online and in physical stores. If higher education institutions wish to use their IP as an investment in their own futures then, as with any other brand or business, they must opt for effective brand protection strategies.
How Universities can Defend Themselves from IP Abuse – Practical Steps
- Work with a partner who is expert at defending your IP rights in the markets where you need it most. This may vary from online enforcement to investigations, but having a conversation with brand protection experts like our analysts at Pointer will provide you with a pathway to stopping counterfeits
- Understand what existing relationships and resources you have available. If you already work with licensees who have brand protection capacity, asking them for their experiences may be a good way to work collaboratively
- Strategize and concentrate your brand protection efforts on crucial areas. If you are at the start of seasonal enrolment or have a new product launch, this may create more infringing listings online. Pointer are specialists in finding ways to analyze the hard data to support these activities
- Focus on the reception of your brand abroad. Many sales of counterfeits will never even touch the shores of your own country, but out of sight shouldn’t mean out of mind. Searching for foreign keywords and having knowledge of multiple foreign markets is indispensable
For a conversation around how you can defend yourself against IP theft, please contact Pointer today at email@example.com