Businesses across a spectrum of industries are victims of counterfeiting, and the problem is only getting worse, stated Lisa Martens, a principal with Fish & Richardson and a speaker at the presentation. “Diligence is needed to ensure your rights as a trademark owner are protected.”
According to Bloomberg Business Week, the top counterfeited products are footwear; apparel, especially replica athletic wear; consumer electronics; handbags/wallets/backpacks; watches; pharmaceuticals; sunglasses; software; and athletic gear. According to Golf Magazine, the golf industry alone has fallen victim to over $6 billion annually in counterfeited products.
The problem has become so rampant that the federal government is expanding its efforts to combat counterfeiters. In June of this year, the United States unveiled a wide-ranging strategic plan for the protection of intellectual property and pledged to confront governments that fail to crack down on piracy. As John Morton, assistant secretary of U.S. Immigration and Customs Enforcement, stated as the program was unveiled, “Intellectual property theft steals…jobs, creativity, it funds organized crime and it’s a serious risk to public safety.”
According to Martens, while the government’s efforts are to be applauded, trademark owners must still take steps to protect their marks. During the presentation, Martens highlighted the following enforcement options available to owners.
Customs Enforcement. Working with the U.S. Customs and Border Protection will help stop goods from coming into the U.S. According to Martens, registering with the Customs Department is easy and inexpensive. Mark owners must complete an Intellectual Property Rights e-Recordation (IPRR) application online at https://apps.cbp.gov/e-recordations/. The form requires information such as locations where legitimate goods bearing a mark are manufactured and a certified status copy of the trademark. The registration cost is $190 for each trademark and each class of goods. Mike Rider, general counsel of Callaway Golf, also a speaker at the presentation, suggests that mark owners visit the U.S. agents at the ports where counterfeit items are likely to cross. By meeting with the Customs agents in person and showing them examples of legitimate products, counterfeit goods are more likely to be caught as they enter the U.S.
Internet Enforcement. The Internet has been a boon for those selling counterfeit goods. Websites and postings can easily be tailored to give the appearance of selling legitimate products at exceptional prices. The major auction sites will work with mark owners to have counterfeit items for sale removed. Owners, however, must diligently monitor these sites. eBay has created the Verified Rights Owner (VeRO) Program which includes proactive monitoring of sites as well as the ability for intellectual property owners to report listings that infringe their rights. To date, the program has assisted more than 5,000 owners. For more information about this free program, visit http://pages.ebay.com/help/policies/programs-vero-ov.html.
Cease and desist letters will often cause an independent sales website to remove counterfeit items or take down the website altogether. Unfortunately, the counterfeit items typically will quickly appear on a new website.
ITC Actions. The International Trade Commission has the power to issue an exclusion order that covers the importation of counterfeit goods or a cease and desist order against counterfeit goods made in the U.S. if unfair methods of competition are being used, including trademark infringement or false advertising. An ITC action is a quick and fairly simple alternative to federal litigation.
Federal Litigation. Filing a lawsuit to halt and seize counterfeit goods can net treble as well as statutory damages ranging from $500 to $100,000 per counterfeit mark per the type of goods or services being counterfeited. If the act is willful, up to $1,000,000 can be awarded. Attorney’s fees can also be collected. However, if federal litigation is pursued, the mark owner must cast a wide net and include as many parties as possible in hopes of being fully compensated as most counterfeiters default and many use fictitious names, making them harder to find. Insurance coverage may offer some opportunities for compensation as well as landlords, credit card processors, related entities and others that could have been involved in the counterfeiting operation.
“Fortunately, it does not take long for a trademark owner to earn a reputation in the industry for cracking down on counterfeiters” Martens said. “Taking just a few of the above-listed steps and then publicizing the favorable results is often all that is needed to deter future counterfeiters.”