Posts Tagged: "counterfeits"

Yesterday, the Counterfeit Goods Seizure Act of 2019 was introduced in the U.S. Senate to empower U.S. Customs and Border Protection to enforce U.S. design patents at the U.S. border. The bill is co-sponsored by Senators Thom Tillis (R-NC), Chris Coons (D-DE), Bill Cassidy (R-LA), and Mazie Hirono (D-HI). Currently, Section 1595a(c)(2)(C) of Title 19 of the U.S. Code empowers Customs to enforce copyrights and trademarks that have been previously recorded with Customs. The bill proposes amending 19 U.S.C. § 1595a(c)(2)(C) to give Customs similar discretionary power to seize and detain imported goods that infringe a recorded U.S. design patent. The bill is publicly supported by Nike Inc. and the 3M Company, as well as the Intellectual Property Owners Association (IPO) and the American Intellectual Property Owners Association (AIPLA).

E-commerce giant Amazon is “known for its disruption of well-established industries,” as the company’s Wikipedia entry will tell you. What started out as a humble online bookstore has become one of the world’s premier e-commerce sites. Along the way, it has expanded into cloud computing, consumer electronics, and film production, among other diverse ventures. It is responsible for the U.S. Post Office delivering packages on Sundays, and recently sent countless states and municipalities into a frenzy over a competition to host the company’s second headquarter site. Now, Amazon seems primed to disrupt the market for IP legal services with the launch of its IP Accelerator.

At a hearing of the House Judiciary Committee’s Subcommittee on Courts, Intellectual Property, and the Internet this morning, titled Counterfeits and Cluttering: Emerging Threats to the Integrity of the Trademark System and the Impact on American Consumers and Businesses, members of Congress expressed concern over the steep rise in trademark applications by Chinese filers, many of which have been found to be fraudulent. The problem has been exacerbated by poor enforcement on the part of platforms like Amazon, eBay, and Walmart; by the limited authority of the U.S. Patent and Trademark Office (USPTO) to revoke registrations once issued; and by incentives offered by the Chinese government in the form of subsidies to Chinese applicants for U.S. trademarks, said panelists.

Much has been made in the last week or two of the International Trademark Association’s (INTA’s) study, Gen Z Insights: Brands and Counterfeit Products, which surveyed more than 4,500 respondents between the ages of 18 and 23 in 10 countries: Argentina, China, India, Indonesia, Italy, Japan, Mexico, Nigeria, Russia, and the United States. The study found that Gen Z’s identity is defined by three characteristics: individuality, morality and flexibility: 85% believe that brands should aim to do good in the world, and 81% feel that the brand name is not as important as how the product fits their needs. While 85% have heard of IP rights and 93% have a lot of respect for people’s ideas and creations, 79% said they have purchased counterfeit products in the past year. The two most commonly purchased counterfeit products are apparel and shoes and accessories. The three most credible sources for learning about counterfeiting are brands’ creators or employees, media personalities and social media influencers.

Chairman of the Senate Judiciary Committeee’s Subcommittee on Intellectual Property, Senator Thom Tillis (R-NC), said last week that the subcommittee will  “explore increasing criminal penalties and opportunities for stepped up intellectual property enforcement to prevent counterfeiting and piracy during a hearing titled “World Intellectual Property Day 2019: The Role of Intellectual Property in Sports and Public Safety.” The hearing followed from the theme of this year’s World IP Day, “Reach for Gold: IP and Sports.” The sports industry witnesses and U.S. Senators in attendance emphasized that strong intellectual property frameworks, including enforcement, are critical to support successful global economies and provide health and safety protections for consumers of all ages, in addition to supporting wages for an effective work force.

On February 1, Amazon.com, Inc. filed a Form 10-K annual report with the U.S. Securities and Exchange Commission. Along with reporting its year-end earnings for the 2018 fiscal year, this particular SEC filing was notable because Amazon officially acknowledged to shareholders that the company’s online sales platforms face the risk of being found liable for fraudulent or unlawful activities of sellers on those platforms. This includes the company’s first-ever concession that Amazon may be unable to prevent sellers trafficking counterfeit and pirated goods. “The law relating to the liability of online service providers is currently unsettled,” Amazon’s Form 10-K filing reads. Along with the specter of counterfeit sales, Amazon noted that its seller programs may render the company unable to stop sellers from collecting payments when buyers never receive products they ordered or when products received by buyers are materially different than the sellers’ description of those products at the point of purchase. While information regarding a corporation’s potential risk of liability is a regular feature of SEC filings, news reports indicate that this is the first time that Amazon used the word “counterfeit” in an annual report.