23 Apr
2020

Protecting electronics and consumables across the globe

Venable LLP

As companies and products continue to reach consumers across the globe, protecting, strengthening and maintaining a robust IP enforcement programme is a must for any brand. While vastly different products are marketed under each brand, if electronics or consumables are involved, companies should be aware of the basic steps that they can take to ensure that their rights are protected, and that they are in the best position to enforce those rights against infringers or other bad actors.

Among other steps, brand owners should ensure that they:

  • have a robust global support network of professionals;
  • engage in a multifaceted approach to curb infringement; and
  • engage with IP-based industry associations, professional organisations and other brand owners.

A robust global network is a brand owner’s best friend

Where a company markets, manufactures or sells a product internationally, it is subject to a complex global supply chain that is regulated by local, national and international jurisdictions. Accordingly, it has become increasingly important to keep a robust international network of lawyers and investigators to navigate the process of securing IP rights and enforcing them.

First, a network of lawyers with knowledge of the legal framework in key international jurisdictions is necessary to secure trademark, trade dress and other IP rights involving a company’s products. Merely registering your trademark with the USPTO provides US domestic rights, created by domestic statues, and will not aid in protecting your trademark in other key markets such as China or Europe. Therefore, it is necessary for a brand owner to register its trademark in foreign countries to enforce its IP rights in those countries. Registering trademarks is particularly important in countries where brand owners have manufacturing or distribution partners, so that said partners cannot later claim rights to any of the intellectual property appearing in connection with the products that they manufacture or distribute.

Once a company obtains international trademark rights, an enforcement strategy is critical to protecting the global supply chain and preventing counterfeit goods from reaching consumers. In addition to registering trademarks, a network of lawyers is also important once trademark rights are obtained, as it can assist with registering any trademarks with applicable customs authorities and registering any authorised licensees of the trademarks. Timely registration with customs authorities can later assist with enforcement efforts, as it can prevent counterfeit electronics or consumables from being distributed internationally. Attorneys can coordinate with customs authorities in foreign jurisdictions to assist with training officers to recognise indicators of counterfeit products, and they can coordinate with customs authorities to attend to the destruction of any counterfeit seized goods before they reach consumers. Registration with domestic and foreign customs authorities is also a powerful tool to prevent trademark infringement and stop the movement of unauthorised goods.

Moreover, a network of international attorneys can assist with finding competent and experienced investigative resources. Having investigators on hand to monitor and examine the supply chain for infringers is key for companies to recognise, monitor and target sources of potential counterfeit goods. Global investigators will often collaborate with domestic and foreign law enforcement agencies to find counterfeits and support seizure efforts. Therefore, hiring investigators broadens a brand’s global network to help protect its trademarks and supply chain. It is important for brands to engage investigators who understand and adapt to changing business trends as counterfeiters find new ways of utilising online commerce platforms and social media. Investigators who are familiar with emerging technologies can initiate investigations and controlled buys of possible counterfeit products online. In addition to investigators familiar with emerging technologies, engaging experienced investigators with knowledge of the local landscape will also be vital to brand owners. Due to the often wilful nature of counterfeiting, and the possible penalties that counterfeiters can face for their infringing activities, sales of counterfeit goods can occur without formal documentation, and among tight-knit communities of merchants where protectionism is often very prevalent. Thus, investigators who have the resources and ability to investigate these tight-knit organisations and communities are particularly valuable in cases where counterfeiters are intent on hiding their counterfeiting efforts.

Monitor, monitor, monitor!

As new technology constantly changes how counterfeiters interact with consumers – and each other – the global nature of the crime has made it especially challenging for brand owners to track distribution channels. Accordingly, brand owners must continuously take steps to keep up with and monitor new tools that counterfeiters use to distribute infringing products globally. The rapid speed at which counterfeiters find new ways of reaching consumers is alarming. There is no doubt that counterfeiters will seek innovative methods to communicate with consumers to sell fake goods on e-commerce websites. Therefore, it is critical for brand owners to use the most progressive forms of monitoring to enforce their IP rights.

Use new technology

Security technologies and monitoring software that can detect counterfeits on online sites should be implemented if brand owners are aware of counterfeit versions of their products appearing on e-commerce marketplaces. Using a monitoring programme or service can allow brand owners to conduct frequent sweeps of entire e-commerce platforms and implement takedown procedures on those various platforms quickly, efficiently and relatively cost-effectively.

Engage in takedown procedures and controlled buys

Along with security technology, brand owners can monitor online platforms through controlled buys and takedown notices. Controlled buys are useful in identifying counterfeiters and initiating removal of the fake goods from e-commerce platforms. They also allow brand owners to obtain physical evidence, generate accurate product identification guides and prepare for possible litigation. When conducting controlled buys, brand owners should be able to rely on competent investigators in applicable jurisdictions to collect evidence of the transactions, catalogue any communications with sellers and secure physical products purchased.

Monitor unconventional platforms

Brands should take steps to monitor unconventional platforms. Recently, sales of counterfeit goods have expanded onto social media platforms. This rising trend is not surprising given the increased scrutiny of products available on popular e-commerce websites. As popular marketplace websites have ramped up their anti-counterfeiting efforts and policies to help brand owners protect their trademarks, counterfeiters have used other means to engage in distribution of fakes. Social media messaging applications allow counterfeiters to advertise their products, use links to direct commerce to other websites, and communicate easily with consumers internationally. Therefore, it is critical for brand owners to be aware of both the predominant social media applications and the emerging applications domestically and abroad.

Engage with professional organisations and other brand owners

There are significant benefits to working with IP-focused professional organisations and other brand owners to further anti-counterfeiting efforts. While there are a number of rights-holder organisations that enforce IP rights, there are two professional organisations that represent companies from a wide range of industries worth noting in this space: the International Anti-counterfeiting Coalition (IACC) and INTA. Further, working with brand owners in your industry can lead to synergies and enhance enforcement efforts against counterfeiters.

IACC

The IACC provides member organisations with opportunities to learn and connect in this area. It has more than 250 member companies spanning more than 40 countries. The IACC facilitates the development of cross-industry voluntary agreements, including RogueBlock and MarketSafe. The IACC created RogueBlock in 2012 as an online threat mitigation initiative, using partnerships with credit card and financial service companies to terminate counterfeiters’ merchant accounts. MarketSafe is a partnership with Taobao Marketplace designed to take down listings of counterfeits. In September 2019 the IACC, along with the National Intellectual Property Coordination Centre, launched the IACC Intellectual Property Advisory Board. The board includes brands representing 19 industry sectors to encourage broad collaboration in combating counterfeit sales. The IACC also regularly offers training events for federal, state and local law enforcement.

INTA

INTA has its own anti-counterfeiting committee and partnerships with governments and other associations. Its membership includes more than 7,200 trademark owners, professionals and academics from 187 countries. The INTA website contains a collection of public and member-only educational and practical resources, such as a report on the economic impact of counterfeiting and a set of best practices for addressing the sale of counterfeits over the Internet. For trademark owners, this includes placing more emphasis on education for online platforms, other intermediaries and the public.

Working with other brand owners

One of the most effective steps that a company can take to address the effects of global counterfeiting of electronics and consumables is to collaborate with other brand owners – specifically, teaming up to share information and intelligence about serial infringers and counterfeiting organisations and then collectively taking legal action. By sharing resources and investigative results, brands can mount successful and systematic legal action against infringers that:

  • reduces the visibility and prevalence of counterfeits on various channels; and
  • reduces the profit (and increases the cost) for counterfeiters, as proceeds in e-commerce merchant accounts are frozen or seized.

Further, sharing resources and information in actions against illegal counterfeits reduces the cost of litigation against the entities counterfeiting your company’s brand. Counterfeiters rarely copy just one company’s brand. Significant reductions in the availability of counterfeits often occur only when companies in a particular industry band together in their IP enforcement, lobbying and educational efforts. Government enforcement agencies often give higher priority and more attention to the complaints of a group of companies in comparison to the complaint of just one.

Katherine C Dearing (associate), Katherine Y Kim (associate) and Maria R Sinatra (associate) assisted in the preparation of this chapter.

Venable LLP

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Marcella Ballard

Partner

[email protected]

Marci Ballard is a seasoned first-chair Lanham Act and copyright litigator who represents clients before the USPTO and the TTAB, and in bench and jury trials. Ms Ballard also represents clients in arbitration hearings throughout the United States and in the United Kingdom. Several well-known global brands rely on her sophisticated litigation skills and sage counsel in global trademark matters and brand management functions. She also manages global IP portfolios and counsels clients on brand protection, trademarks, copyright, trade secrets, privacy rights, licensing, unfair competition, contracts and business tort claims.

Justin E Pierce

Partner

[email protected]

Justin Pierce is co-chair of Venable’s IP division. Mr Pierce has significant experience advising companies and their executives on how best to acquire, develop and apply their intellectual property to achieve their business objectives. He has guided clients through a wide range of matters involving patent litigation, trademark and brand protection, anti-counterfeiting initiatives, copyright, design rights, trade secrets and licensing. Mr Pierce is also well versed in strategies for handling rights of publicity, domain name and social media disputes, and he routinely engages in international government affairs work involving intellectual property.