A recent Australian case involving counterfeit washing powder demonstrates the importance of brand owners putting in place an appropriate regime for detecting and preventing counterfeit products in Australia, at the border and in the marketplace.
Counterfeit OMO washing powder seized in Australia
In July 2012, approximately 33 tonnes of counterfeit OMO® washing powder were seized by Australian Federal Police from a warehouse in Western Sydney, following a tip-off to police on behalf of Unilever, plc (the owner of the OMO® brand) by Unilever's local trade mark investigators. In a follow-up investigation in October 2012, Australian Customs seized a further 40 tonnes of counterfeit washing powder which was being imported into Australia.
The washing powder, which had been manufactured in China, had been loaded into 9-kilogram buckets and labelled as OMO® products, and was being sold to local distributors at Sydney markets and shops.
Despite being labelled with the OMO mark, the washing powder was counterfeit product that had not been manufactured or authorised by the owner of the OMO trade mark, Unilever Plc. The counterfeit product was being sold in different-sized containers than that of genuine OMO® washing powder, and at a significantly lower price. Chemical analysis also revealed that the counterfeit washing powder was missing some of the active enzymes of the genuine OMO® product, which meant its stain removal performance was not the same as that of the genuine OMO® product.
Trade mark criminal offences
In April 2014, two men responsible for the importation of the counterfeit OMO products into Australia were each found guilty and fined in relation to 45 counts of criminal offences under the Trade Marks Act in the Bankstown Local Court.1 The value of the counterfeit goods seized during the raids was estimated to be at least $80,000.
Counterfeiting causes damage to brand reputation
In handing down her sentence, Magistrate Jennifer Giles referred to the likely damage to the reputation of the OMO® brand as a result of the release of the counterfeit (and ineffective) OMO washing powder into the Australian marketplace.2
Criminal prosecutions for other counterfeit goods
Criminal prosecutions for trade mark offences in Australia have extended to a wide range of goods other than just washing powder. In recent years Australian Customs and the Australian Federal Police have seized a wide range of goods including fashion items, footwear and mobile phone accessories at the border and from stores and market stalls across Australia, in a bid to crack down on the importation and sale of counterfeit goods in Australia.3
Lessons for brand owners: are you adequately protecting your brand?
The Unilever case demonstrates the importance of brand owners taking a two-step approach to brand protection:
- putting in place appropriate measures to improve detection and seizure of counterfeit goods at the Australian border; and
- monitoring the marketplace for any new counterfeit goods that may be entering the Australian market.
Protection at the border
As we have previously reported, changes to the Australian Customs seizure provisions in April 2013 benefit brand owners who have lodged a Customs Notice of Objection with Australian Customs, by reversing the onus in relation to Customs seizures. It is now incumbent upon the importer to identify themselves and explain to Customs why they say that the goods are genuine, before the goods will be released to the importer. (Most importers do not do this, which means that it is relatively rare for Customs to release any goods that it has seized under a Notice of Objection.) Previously, goods would be automatically returned to the importer after a specified time period if the brand owner did not commence infringement proceedings or convince the importer to forfeit the goods during that time.
Putting a Notice of Objection in place to enable the detection and seizure of counterfeit goods at the Australian border is a relatively simple and inexpensive measure which can have a long-lasting impact on importation and sale of counterfeit goods in Australia.
Brand protection in the Australian marketplace
Monitoring the Australian marketplace can be as simple or as wide-ranging as a brand owner would like it to be, but obviously the more wide-ranging the scope of the monitoring, the more likely that counterfeit goods will be identified as early as possible.
An effective monitoring regime should include regular reviews of the online marketplace (on a monthly, bi-monthly, 6-monthly or annual basis, depending on the type of product and how quickly it can be turned over in the marketplace), through general internet searches, and specific searches of online stores such as eBay, Amazon or Gumtree.
Reviews of the physical marketplace can be carried out by a local distributor, trade mark investigator or agent regularly visiting shopping centres and market stalls, and reviewing the catalogues of known infringers. Depending on the type of product, the scope of the physical monitoring can usually be targeted to specific types of stores where the counterfeit goods are most likely to be sold.
Enforcement of trade mark rights against counterfeit products
Once counterfeit goods have been identified in the marketplace, a trade mark owner has a number of options for enforcing its rights in order to have the goods removed from sale. These include:
- sending cease-and-desist letters;
- in the case of Customs seizures, following the appropriate procedures to have the goods forfeited to the Commonwealth and destroyed;
- notifying the Australian Federal Police of potential breaches of the criminal offence provisions of the Trade Marks Act; and
- commencing civil proceedings for trade mark infringement, seeking injunctions and monetary relief (in the form of damages or an account of profits).
A number of other options might also be appropriate depending on the circumstances of the case.