By Helen Sloan
June 21 2012
Enforcement of trademarks rights was a major talking point at a recent conference organized by Hong Kong University, focusing on IP protection for luxury brands. While a number of brand owners provided valuable insights into their successful anti-counterfeiting strategies - both on a regional and global scale - an alternative view was provided by some of the other speakers, who argued that some brand owners are guilty of over-enforcing their marks.
The stance that luxury goods brands are going too far in enforcing their trademarks rights was taken by a number of speakers at the event. Kal Raustiala from UCLA argued that counterfeit products can actually have a positive advertising effect, acting as a gateway for consumers who later go on to purchase the genuine product. Meanwhile Leah Chan Grinvald from Saint Louis University suggested that over-enforcement of trademark rights can harm trademark owners - she cited the example of Coach, which has been accused of being overzealous in sending cease-and-desist letters to eBay sellers before ascertaining whether the products were authentic. Such actions can damage the brand owner, she argued, not just through negative publicity and wasted resources, but also by stifling competition from smaller businesses.
However, trademark representatives presented a very different perspective. Earlier in the day the audience heard from brand owners including Louis Vuitton and Pernod Ricard, both of which are stringent in their enforcement of IP rights.
Valerie Sonnier, global IP director at Louis Vuitton, explained that she and her team have to adapt their strategy on a daily basis in order to deal with the fast evolution and increasing sophistication of counterfeiters. She had good news to report, however, of a new strategy which has paid off. In a move to tackle infringement closer to the source, the company made use of the International Trade Commission (ITC) to shut down a number of shell companies that were selling counterfeits that originally came from China. “We are the first in the luxury world to use this process,” Sonnier said, and their success could provide a model approach for other luxury brands. “I do recommend trademark owners to use it more often,” she said, “it is very fast and efficient.” (Louis Vuitton’s use of the ITC will be examined in detail in the upcoming issue of WTR.)
The drinks industry faces some different challenges to fashion, because consumers are more likely to be unaware that they are purchasing a fake product, and due to the risk to public health. However, in common with Louis Vuitton, Pernod Ricard makes full use of the legal means available to get results. “If we can’t go out the door, we use the window,” said Cyril Sayag, vice president, public and legal affairs at Pernod Ricard Asia. In China, for example, the company have made use of shoddy goods legislation, and when they have successfully pursued a criminal action they also launch a civil suit to retrieve damages. Pernod Ricard has found that banding together with industry partners is helpful - the International Federation of Spirits Producers, for example, runs raids for its members in common. This not only saves resources, but also means that because the quantities of seized goods tend to be larger, they are more likely to reach the threshold that allows for criminal proceedings in China.
The event concluded with a thought-provoking talk by David Llewelyn from Singapore Management University. While he remains a believer in the IP system, he is concerned at how complicated this area of the law has become in recent years: his worries including the “hyperbole” that he believes infects many discussions about the levels of counterfeiting, and the ability of powerful and wealthy companies to purchase IP rights from the actual innovators and creators. However, Llewelyn also pointed to recent judicial decisions in Singapore to show that common sense can prevail, and that IP law can still do what it is intended to do, which is to encourage creativity and to avoid confusion.
While all speakers supported intellectual property, what was most striking over the day was the difference in perspective between representative of the academic community and those proactively fighting illicit trade on a daily basis.
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