Posts Tagged: "counterfeit"

Not all trademarks are created equal. While every state allows you to obtain a trademark registration, a federal trademark registration provides the greatest rights. This is because when you obtain a United States federal trademark your rights will exist throughout the country, and not just in one particular geographic locality. With a state trademark you obtain rights to your immediate geographical area only, not the entire state, which is an important consideration… This does not, however, mean that state trademarks are useless. It does mean that you should not only obtain a state trademark.

At issue in the trademark infringement suit is Amazon’s sale of counterfeit wheel center caps bearing distinctive Mercedes-Benz trademarks… Daimler argues that Amazon “facilitates the sale of an exorbitant number of counterfeit and infringing goods” through its platform, counterfeit activity which has increased since 2015 when the company began inducing Chinese manufacturers to list on its U.S. and European e-commerce platforms. Daimler notes that lawsuits over counterfeit products have been filed against Amazon by well-known consumer brands including a February 2017 suit filed by French luxury goods brand Chanel against the American e-commerce giant.

Branded apparel companies face many challenges in protecting their IP assets, including the unavailability of copyright protection for fashion designs, the length of time necessary to secure a design patent, the challenge of securing secondary meaning required for a trade dress claim before the market is flooded with knock-offs, and the geographic and practical impediments to pursuing counterfeiters, who are often foreign-based and/or judgment proof.  Perhaps mindful of the limited statutory protections for IP assets and the significant damages being incurred at the hands of infringers, various courts, particularly in the Second and Ninth Circuits, have in recent years taken steps to enhance the alternatives available to apparel companies confronted by the scourge of knockoffs.  Specifically, such court decisions have (1) expanded the scope of potential contributorily liable actors, and (2) broadened the means of freezing and attaching assets of foreign counterfeiters.

Many states have statutes that make counterfeiting a state crime, but often only if the trademark is registered in that state. According to Lo Cicero, state registrations give local prosecutors and law enforcement officers jurisdiction – and they may be more able and willing to tackle local counterfeiters than are busy federal prosecutors. Thus, where budgets will allow and brand owners have significant counterfeit concerns obtaining state trademark registrations in at least several states, including California and New York, could be a worthwhile investment.

I will host a free webinar on Monday, July 10, 2017 at 12pm ET. The title of our discussion is Combating Repeat Infringers, but we will address the issue of counterfeits from top to bottom. Joining me for this webinar will be Maysa Razavi, heading of Anti-Counterfeiting for INTA, Anthony Lo Cicero, a litigator with 40 years of experience relating to trademark enforcement and brand protection, and Joan Porta the Brand Protection Manager for Red Points. We will explore the magnitude of the problem, solutions for dealing with infringers in an online environment, and how if necessary to escalate enforcement to take the fight to Customs and into the courtroom if necessary.

Securing IP rights in China has been a priority for companies selling or manufacturing in China due to the country’s singular attitude to intellectual property, which has been much abused. Today 84.5% of counterfeits originate in either China or Hong Kong, and as the world becomes progressively more connected alongside the rise of e-commerce and cross-border exportation capabilities, increasingly there is a need for IP protection strategies of all companies to be adapted to Chinese policies.

Mark Lopreiato, the inventor of the Forearm Forklift, recorded sales of $4 million in 2008 but since then has seen a 30% drop, which he attributes to cheap replicas available on eBay and Amazon. In point of fact, there have been a number of examples of innovative companies suffering from the sale of replicas on Amazon and other e-commerce sites. In extreme cases, global brands like Birkenstock have stopped business with Amazon and other e-commerce retailers altogether. Sustained pressure on e-commerce sites from both professional and governmental bodies have yielded some results in recent years, with almost every major site now offering some level of IP protection tool or process. This also serves the interest of bigger sites as Amazon, eBay and their Chinese counterpart Alibaba are shielded from legal liability, provided they can offer a timely takedown service for IP owners.

At the top of Amin’s prepared remarks delivered to the Senate judiciary committee, he noted the fact that the importance of protecting IP was made explicit by Article I, Section 8, Clause 8 of the U.S. Constitution, often referred to as “the IP clause.” Amin said that his first responsibility as IPEC, if confirmed, would be to work with the White House as well as senior leadership at relevant agencies and departments to ensure well-coordinated efforts as well as the effective and efficient use of resources. “We need to ask ourselves three important questions — What are we doing well? What isn’t working? And what should we be doing?” Amin’s remarks read. Second, Amin would use existing law enforcement tools in order to ensure IP laws are enforced and prevent counterfeit and infringing goods from entering the U.S. market by engaging with stakeholders and trading partners on those issues. Third, he would focus on developing an IP enforcement policy which addresses all sectors of intellectual property including patents, copyright, trademark and trade secrets.

The most recent notorious markets report from the USTR seems to have further galvanized Alibaba into taking action to reduce the number of counterfeit products sold on its e-commerce platforms. In early January, Alibaba filed its first pair of lawsuits targeting retailers selling fake Swarovski watches on the company’s e-commerce platforms. Then in late February, Alibaba released an official corporate statement in which it blamed China’s ambiguous counterfeiting laws for contributing to the problem… Alibaba’s statement goes so far as to equate counterfeiting to drunk driving in terms of how strongly such actions should be criminalized.

Misspellings, $20 for a $200 jersey, encouraging use of Western Union wire transfers, and no visible mention of being officially licensed NFL merchandise should raise at least some suspicions… Chinese production of counterfeit NFL jerseys and other sports apparel has also attracted the attention of domestic crime rings looking to make money from unsuspecting consumers, many of whom are purchasing a low-quality product compared to the officially licensed version.

Joseph and Adriana Shayota were recently found guilty of manufacturing and selling millions of counterfeit bottles 5-hour ENERGY. They were kingpins in a criminal ring of 11 people charged with the counterfeiting. Eight of the conspirators have already plead guilty and one is a fugitive. Their clandestine factory was located in San Diego, and employed more than 50 workers working two shifts per day. They manufactured about 4.3 million counterfeits, all of which were either consumed or seized by 2012.

Given the devastating impact of counterfeit medicines on patients and the importance of intellectual property protection in combating pharmaceutical counterfeiting, it is troubling that the UN High Level Panel seems poised to prevent a series of recommendations that will undermine public health under the guise of enhancing access. Without the assurance of quality medicines, access is meaningless. Moreover, while falsely presenting intellectual property rights as the primary obstacle to global health care, the High Level Panel downplays a host of other factors that prevent developing country patients from getting the drugs they need: inadequate medical infrastructure, insufficient political will, a shortage of clinical trials in nations where neglected diseases are endemic, poverty, and insufficient market incentives.

Protecting intellectual property today is more challenging than ever, and the stakes are high. An open and rapid-fire exchange of information has become the norm in our digital age. Add the global nature of the market and persistent technological advancements, and it should come as no surprise that imitators stand ready to capitalize on the latest breakthroughs. As their low-cost, low-quality products flood a market, not only do they claim valuable market share, but they have potential to erode the credibility of an entire category and its leaders. Any company that produces a product must consider the prospect of knockoffs, and the potential impact imitations will have on market share and brand perceptions. Obtaining IP protection directed at mitigating knockoffs can be highly beneficial, particularly for start-ups that may have limited resources and brand awareness.

With leading-edge, tech-savvy companies in the internet, social networking, and e-retailing space often dominating headlines nationwide, it is easy to overlook the myriad businesses competing in the Fast Moving Consumer Goods (“FMCG”) industry, and to dismiss them as somewhat out-of-touch with the modern consumer. However, FMCG companies have combined revenues nearly on par with those in the more highly-publicized technology-based sectors, and have been thriving in the retail space for decades. IP Rights are critically important in the FMCG industry because businesses operating in this sector rely heavily on brand awareness and brandy loyalty for their success. It makes sense then that IP Rights are pivotal in any FMCG company’s long-term strategy for success.

What follows is our wide ranging discussion, which start out with what Cohn is doing with INTA and then moves into an in depth discussion of issues surrounding counterfeiting, the newly formed Trademark Caucus in Congress, and the recent Federal Circuit decision on disparaging trademark registrations in the so-called Slants case. We ended with the familiar fun questions that give us an opportunity to get to know Cohn.