By Jack Ellis
May 08 2012
A lively session at the INTA conference today looked at new strategies for combatting counterfeiters. One of the alternative approaches discussed was International Trade Commission (ITC) litigation. While the speakers offered some compelling case studies, use of the ITC for trademark-related dispute remains low. Is that set to change?
Valérie Sonnier, global director of intellectual property at LVMH, was one of the speakers at the session. In April this year, LVMH received news that it had won a case that it had brought at the ITC against a number of Chinese and American companies whose products infringed the luxury brand’s renowned (and trademarked) toile monogram.
Though a specific remedy has not yet been decided upon in that litigation, the benefits of a favourable ITC ruling are clear. As Sonnier explained, the ability to sue all alleged infringers in a single case works around the issue of personal jurisdiction, while the possibility of foreign discovery is another advantage. “I encourage you to use the ITC for trademark infringement,” she said. “It can be a hugely powerful tool, particularly in the context of globalisation. Counterfeiting is a worldwide industry.”
There is no doubt that the ability to stop infringing products from entering the market is a powerful tool; but if the ITC really is a perfect solution to the counterfeiting problem, why do so few trademark infringement cases take place there?
At present, the ITC is more usually associated with patent litigation. Patent owners can quickly obtain an injunction that will exclude allegedly infringing products from the market. However, evidence needs to be collected and legal teams assembled rapidly to keep pace with the ITC ‘rocket docket’. Though that can work out at cheaper cost with quicker results than patent litigation in the judicial system, the process can prove to be prohibitively expensive in a trademark context.
One lawyer WTR spoke to at the session thought that the answer lay there. “Multinational corporations that have businesses built around patented technologies tend to have a lot of money to spend on litigation,” he said. “That’s why companies like Apple, Samsung and Motorola use the ITC. However, trademarks often don’t have the legal budgets assigned to them that patents do.”
Another private practitioner WTR spoke to offered this analogy: “ITC litigation is kind of like a nuclear weapon – though it can achieve your aims in an instant it is absolutely a last resort, since it is hugely expensive and could go massively wrong.” While thermonuclear warfare may seem a good option for some, most businesses will be wary of the risks.
Big-name brands like LVMH, with deep pockets and longstanding enforcement experience, may now view the ITC as another option for tackling counterfeiters. But its high costs leave it closed to most trademark owners. Moreover, while the ITC is effective at stopping large shipments of counterfeit goods at the border, it can do little to prevent fakes purchased over the Internet being sent directly to buyers by mail. In an age where the trade in counterfeits is mostly done online, it may be more cost effective to focus on domain recovery.
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