Louis Vuitton — StopTheFakes.io

Counterfeit detection campaign cost calculation and efficacy evaluation

We can state with assurance that StopTheFakes.io system enables to boost effectiveness and significantly reduce counterfeit detection-associated costs. Тo substantiate our point, we offer you an approximate comparative calculation of really massive anti-counterfeit campaign costs.

Our case study will consider the report on anti-counterfeit measures taken by Louis Vuitton brand in 2012. That campaign made quite a splash at the time and was covered widely in mass media.

The results of Louis Vuitton anti-counterfeit campaign

The company’s Intellectual Property Department manages more than 12 000 subjects of the right (brands, original designs, copyright, etc).

The Department workers are the team of professional lawyers and agents, mainly former law enforcement officials.

The Department’s head office is in Paris, its subsidiaries are all over the world. There are regional offices in Tokyo, Hong Kong, Shanghai, Beijing, Seoul, Singapore, Milan, Istanbul, Athens, Dubai, New York and Buenos Aires.

The Department workers initiated and performed 13 800 spot-checks and subsequently launched 33 258 anti-counterfeit procedures worldwide in 2012.

The Department has created a Division for counterfeit control on the Internet.

In 2012, Division’s work resulted in blocking over 2000 websites and stopping more than 100 000 auctions.

Estimation of the Department’s work efficiency

On average, one agent performs 55,2 spot-checks a year. This means one enforcement effort is taken every 6,61 days. If it is considered that officials went on the spot-checks not alone but in groups, they can be complimented for their workability. Approximately 1 spot-check a week is a good result.

Especially if we consider the number of the started infringement control procedures. It turns out that each spot-check revealed 2,41 trespasses. On average, an agent conducts 133 procedures a year. To simplify the following calculations we’ll count every procedure as one detected fact of copyright violation.

Approximate calculation of the campaign cost

Workers’ salary as well as other items of expenses are the commercial classified information. But we can calculate how much taking such measures would cost. We are interested only in primary actions — detecting instances of infringement and writing a complaint letter. These actions can be automized with StopTheFakes.io service.

The brand formed the global team of agents from the former law enforcement officials. Of course the salary level differs from one country to another but we’ll take the average mean for the USA. Even though the numbers for this developed economy are larger than in the European Union and far more so compared to the developing countries, but we don’t take into account payment of premiums, bonuses, traveling expenses, compensations, transport and other expenses. By using American salary level as a benchmark we’ll be able to accurately calculate the expenses needed for creating and sustaining the global network of agents performing regular spot-checks.

According to the United States Bureau of Labour Statistics statistics, the annual average salary of а private detective in 2016 was $53 530. However, we’ll use even a smaller number in our calculations, the annual salary of $51 490, approximately what a document auditor gets working for a legal company.

Upon calculating the numbers we’ll get:

Salary of 250 agents — $12 872 500

Cost of one spot-check — $932,79

Cost of detecting one infringement — $387,04

Cost of global infringement detection campaign on StopTheFakes.io

Calculation of Service Price

On pre-ICO and ICO we set the rate of STF coin at 1/520 Ethereum. According to investing.com Ethereum is sold at the rate of ETH/USD = 311,46 on Bitfinex at the time of writing this article (November 13, 2017). STF coin to American dollar hypothetical exchange rate equals approximately $0,59 to 1 STF.

Doer’s remuneration can’t be less than 15 STF (about $8,85 given the current hypothetical rate) or more than 100 STF (around $59 at the current hypothetical rate). On average, the amount of remuneration is approximately $33.92.

The system commission is fluctuating between 15 and 25% depending on the type of Alert or task. $73,75 would be the highest cost for one infringement detection considering the amount of the highest remuneration and commission fee.

Only the most highly rated Doers will be involved in the process of tracking down and reporting violations. They will provide photo and video proofs with exact coordinates and detailed description of every revealed case. The service moderators will analyze received information and provide the customer with reliable data, having excluded all inaccurate and incomplete signals.

Further steps on StopTheFakes.io service

In each case the offender will receive a well-founded complaint. The appeals to trade associations and other non-government organizations will follow. Finally, other copyright protection measures will be taken.

Every signal will receive a digital signature encrypted in blockchain. It would be impossible to delete or change information. The data will be stored forever. Apart from collecting the information the system allows you to process it using state-of-the-art BigData analysis. This information can help understand pirated content distribution patterns and subsequently trace and expose criminal groups and schemes. The offenders will get to a unified registry of copyright violations which would undermine their reputation.

Comparison

LV — StopTheFakes.io

Calculating the cost of an online anti-counterfeit campaign

Unfortunately in Louis Vuitton report there is no data about the number of workers in the Department’s Division working on detecting copyright violations on the Internet. Only the results of their work have been shown, i.e., blocking 200 sites and 100 000 online-auctions. Using this data we can calculate the approximal cost of an analogous campaign on StopTheFakes.io service.

The amount of remuneration for detecting infringements online is minimal, as is the system’s commission for it. Quite not much is needed from the user. He doesn’t need to walk the streets looking for retail outlets breaking the law. It is enough to install a browser extension and start searching on the net.

For our calculation, we take the minimal price of 15 STF for completing one task and 15% system commission. Considering the hypothetical rate and system’s commission one Alert would then cost about $10,17 on average.

We get:

The cost of detecting 102 000 infringements is $1 038 105:

· Taking into account agents’ salary this sum is equivalent to annual earnings of 20 workers

· So, in fact, our service’s rate is an annual average of 5 100 page detections per one potential worker

· There are 250 working days in the USA in the current year. To achieve our service’s efficacy rate every worker must detect about 20 pages with infringements per day, prepare claims on each of them and send them to the sites’ owners and other addressees. One person is unlikely to manage such work volume.

The main difference

As you can see from the given comparison, the service really helps to cut the costs of anti-counterfeit measures both in real world and online. But its main advantage is decentralization.

Louis Vuitton Department’s and Division’s agents showed great commitment to their work, but it took them a year to reveal and remedy the violations. While they were doing spot-checks in Milan, for instance, the counterfeit sellers just kept on working in neighboring Venice. One the criminals who was caught in December had been selling fakes for eleven months, all the while causing financial losses to the brand.

Doers working оn StopTheFakes.io service can work on several tasks simultaneously. We can engage not 250 or even 1000 but 33 258 people in detecting the very same 33 258 violations. And they will work simultaneously independently of each other. According to our calculations they will get similar results not in one year but in less than one week. They don’t need a paid vacation, provision of pensions and two days-off a week. They can work during the day or night. You don’t need to pay travel allowance and compensate transport expenses. This way it’s easier to find a Doer in every town.

At any given stage the data is processed and the reports are formed automatically, the same goes for sending primary claims. The company’s lawyers who tried out our service have first-hand experienced a tangible result. They would now have to deal only with the hardest cases when appealing to law-enforcement authorities is really necessary. The company gets an opportunity to significantly reduce the staff and increase copyright protection efficiency.

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