The word “counterfeiting” conjures up images of furtive criminals printing phony twenty dollar bills. However, it also describes imitations which are marketed and sold as genuine goods by illegally using the name, logo or trade dress of the true maker or designer. Many people don’t realize that these “Knock-Offs” and counterfeit goods are a major funding source for terrorist networks as well as gangs and organized crime.
The low cost of manufacturing imitation goods in foreign countries with relatively low production costs enable unscrupulous vendors in U.S. cities to sell “Rolex” watches, DVDs of first run Hollywood blockbusters and “Louis Vuitton” purses at fractions of their usual retail prices. In addition to lost sales from such “knock-offs”, their typically inferior quality can cause inestimable damage to a legitimate owner’s reputation. Estimated annual losses in the fashion industry alone are in the tens of billions of dollars.
If your business and brand are threatened by cheap, fake imports, you’ll be pleased to know that despite the prevailing gridlock in Washington over the past few years, Congress and the President recently took a big step forward in the fight to keep counterfeit goods out of the country.
Many Americans think the Department of Homeland Security’s Customs and Border Protection (“CBP”) office only deals with illegal immigrants and smugglers. However, CBP also plays a crucial role in protecting companies against imported counterfeit goods. Indeed, the CBP has declared the protection of intellectual property rights (“IPR”) to be a “Priority Trade Issue”, that is, one which creates a risk of significant revenue loss and harms the U.S. economy, as well as being a source of funds for various criminal enterprises.
The Federal Trade Facilitation and Trade Enforcement Act of 2015 (“TFTEA”), signed into law in February 2016 gives the CBP additional tools with which to combat the importation of counterfeit goods.
More Good Reasons to Register Your Trademark
As our clients know, the benefit of a federal trademark registration is indisputable when your mark is the subject of infringement by a domestic competitor. For mark owners threatened by foreign counterfeits, however, the passage of TFTEA gives their United States Trademark Registrations even more value.
Under prior law, if the CBP suspected imported goods infringed upon a registered trademark, the CBP could share with the registrant images of the suspect merchandise. Often, however, these images were altered in order to conceal the suspected infringer’s own proprietary information. This, of course, often made it impossible for the registrant to identify the source of the goods. Thanks to TFTEA, CBP may no longer alter (or “redact”) photos of goods it shares with a registrant.
Additionally, TFTEA authorized the National Intellectual Property Rights Coordination Center. Using a framework similar to that of the Department of Homeland Security, the Center is a multi-agency task force. Its target, however, is intellectual property crime; i.e., the infringement of your registered patents, trademarks and copyrights!
On behalf of our clients, we at Sherman IP welcome this positive and long-overdue legislative action. As always, our professionals are available to discuss what TFTEA might mean for your business or to provide solid, practical advice concerning these and other trademark issues.