Worldwide Counterfeiting Epidemic

Over the course of the last couple of decades, the counterfeiting of almost every conceivable product has become endemic worldwide.  While thought of as harmless by many, the massive amount of trade currently occurring in counterfeit products can often lead to disastrous consequences for both individuals and businesses.

As the World Health Organization (WHO) now estimates that approximately 8-10% of the global medicine supply chain is counterfeit, it is not difficult to imagine the harm that may be caused to the millions of unsuspecting persons that ingest or inject useless and often dangerous knock-off drugs.  Even the highly regulated aviation industry is seeing counterfeit components make their way into aircraft systems and have been blamed for multiple commercial aviation accidents that have resulted in numerous fatalities.

Though not as readily apparent as the life-threatening consequences highlighted above, businesses are also feeling the pain from counterfeiting as their revenues shrink as a result of being in direct competition with knock-offs of their own products.  It is estimated that the counterfeiters annually reap approximately $640 billion in sales from counterfeited goods worldwide.  Although some industries have been traditionally harder hit by counterfeiters than others, it is essential that every business investigate the extent to which counterfeiting may be affecting its bottom line and formulate an effective anti-counterfeiting strategy.

Combating Counterfeiters

One available means by which a business can take action against counterfeiters is to work in cooperation with the U.S. Customs and Border Protection (Customs) agency in their efforts to seize counterfeit goods as they enter the United States at our nation’s many points of entry (shipping ports, border crossings, international airports, etc.).  Customs has implemented a program which primarily relies on businesses to notify it of the existence of intellectual property rights they seek to protect through Customs’ power to seize counterfeit goods upon entry into theUnited States.

In order to facilitate this process, Customs has provided participants with an online system that allows a participant to notify Customs of the existence of particular trademarks and copyrights owned by the participant.  Customs then monitors imports for counterfeited goods bearing such trademarks, or bearing or embodying such copyrighted works.  When found, the goods are seized by Customs.

To record a trademark or copyright, a participating business or its representative is required to enter specific information concerning the trademark or copyright, such as the registration number, the name of the owner, an identification of the trademark or copyright, etc.  The participant must also identify the names of entities that are permitted to use the particular intellectual property being recorded and the country in which genuine goods are manufactured.

Active Involvement with Customs is a Necessity

With the high volume of recordations filed with Customs and the sheer number of goods flowing into the United States on a daily basis, it is not enough to merely record your intellectual property rights and expect CBP to seize all counterfeit goods associated with those rights.  Active involvement with CBP personnel at the key port(s) in which you anticipate the importation of counterfeited goods is essential to effectively preventing shipments of counterfeit goods from entering the country.

Once a trademark or copyright has been recorded with the CBP and key ports of importation are identified, the CBP personnel at those ports should periodically be sent a packet of information specifically pertaining to the IP rights you seek to have protected.  The packet should include items such as photographs of both your trademark or copyrighted work and any known counterfeited goods, a list of likely unauthorized importers of counterfeited goods, and the names of countries you anticipate may be origins of shipments of targeted counterfeited goods.

In general, the more effective you are at educating the CBP personnel at key ports as to the rights you seek to protect, the more likely it is that the counterfeited goods you are targeting will be seized upon entry into the country.  Therefore, we recommend that you or your representative(s) regularly travel to key ports of entry and build a rapport with the CBP personnel, giving them periodic presentations that remind them of what they should be looking for in trying to prevent the targeted counterfeited goods from successfully entering the country.  Not surprisingly, the primary key to working with CBP personnel in implementing an anti-counterfeiting strategy is persistence.

Zach Hilton is an associate at Carstens, Allen & Gourley, LLP. His primary areas of practice include patent and trademark prosecution, litigation and licensing.

This blog is maintained by Carstens, Allen & Gourley, LLP to inform readers of recent developments in intellectual property. Solely informational in nature, this blog is not intended to create an attorney-client relationship or to be used as a substitute for legal advice or opinions. For more information, please visit www.caglaw.com. 

By Zach W. Hilton