Counterfeits in the Digital Marketplace; Lexology, November 7, 2018

Goulston & Storrs PC - Andrew J. Ferren and Jessica Carballo, 

Lexology; Counterfeits in the Digital Marketplace

[Kip Currier: Timely article, on this Cyber Monday, and in light of my IP course's lecture last week on IP Piracy and the Dark Web. 

Anybody else noticing how so many goods fall apart or break really quickly these days?! Glazed gardening pots that crack and disintegrate in one season. Designer metal shower hooks that break off in one year. Ear and nose trimmers that conk out after one use. Clothes that fray--sometimes even after just one wash cycle in cold water. And on and on and on...

As this article makes clear, too, it's annoying when some goods aren't what they claim to be and have a built-in obsolescence of about zero. It's downright dangerous when they explode or catch fire, and when they contain arsenic, lead, and other harmful substances that kids and adults are breathing in and coming into contact with. And let's not forget impacts of counterfeit items on animals, whether farm ones or animal companions, in the form of contaminated feed.

The Trump administration and some federal agencies have made some good steps in the past couple of years in better enforcing IP rights and cracking down on counterfeit goods. The U.S. Congress also needs to take more aggressive action, with civil and criminal consequences, to rein in and hold bad actors and entities accountable and ensure public safety and health are paramount. "Caveat emptor" should not and must not exculpate disreputable sellers from facing the ramifications of their amoral actions.]

"Counterfeiting has moved beyond high-priced luxury goods to low-cost everyday items. Many of these fake products pose real dangers: face masks with arsenic; phone adapters that can electrocute you; computer chargers that fry your hardware; batteries that blow up. These counterfeits infiltrate online marketplaces, where they co-mingle with authentic products in warehouses and ship to unsuspecting consumers. With millions of goods leaving fulfillment centers every day, brand owners and consumers must wrestle with a billion dollar problem: how do you police the largest marketplace in the world?

In January of this year, the U.S. Government Accountability Office filed a report detailing the results of a federal investigation in which 47 products were purchased from five online retailers, including Amazon and Walmart.com. All of the products were advertised as new, shipped from the United States, and sold by third-party sellers with customer ratings above 90%. Nearly half were counterfeit.

How does this happen? The five websites investigated have sizable “marketplaces,” virtual storefronts that let people other than the hosting company sell merchandise. For perspective, more than half of the goods sold on Amazon are from these third-party sellers. Anyone with an ID and a credit card can open a virtual storefront; few identifying details are required to set one up, and these details are regularly falsified. Since 2014, manufacturers from China (the world’s largest maker of counterfeit goods) have been able to sell directly to consumers in the Amazon Marketplace. In fulfillment centers, where products are picked up for packaging and shipment, goods from third-party sellers and goods direct from brand owners co-mingle. The resulting product pool is a mix of authentic and counterfeit goods, all sold as the same product and often for the same price."
 

American Bar Association (ABA) Webinar: "Modernizing NAFTA into a 21st Century Trade Agreement: The New USMCA & IP; Thursday, November 29, 2018 12 Noon - 1 PM CT; 1 PM - 2 PM ET

[Kip Currier: In yesterday's lecture on International Intellectual Property, I was just talking a bit about the new IP developments contained within the U.S., Mexico and Canada Agreement (USMCA) that resulted from this year's Trump administration-led North American Free Trade Agreement (NAFTA) changes. So it was very timely to get notice today of this upcoming (free to ABA members) American Bar Association (ABA) webinar on Thursday, November 29, 2018.

Note that the webinar's scheduled time provided is for Central Time, so make adjustments accordingly depending on which timezone you are in.]


"Modernizing NAFTA into a 21st Century Trade Agreement:
The New USMCA & IP
Thursday, November 29, 12:00 - 1:00 PM CT
1.0 Hours CLE Credit

On September 30, 2018, United States, Mexico, and Canada reached an agreement to modernize the 24-year-old NAFTA into a 21st century, high-standard trade agreement. The new USMCA supports mutually beneficial trade leading to freer markets, fairer trade, and robust economic growth in North America. The Intellectual Property (IP) chapter of the agreement provides strong and effective protection and enforcement of IP rights critical to driving innovation, creating economic growth, and supporting American jobs.

Kira Alvarez, Section Legistlative Consultant, American Bar Association, Washington, DC 

Ron Wheeler (Moderator), SVP, Content Protection and Technology Strategy, Twentieth Century Fox, Beverly Hills, CA"

The U.S. must take action to stop Chinese industrial espionage; The Washington Post, November 4, 2018

Editorial Board, The Washington Post; The U.S. must take action to stop Chinese industrial espionage

"In fact, China’s industrial espionage is not a passing fancy but the pillar of a long-term drive to become a global economic, military and political power, with ambitions to rival the United States. Sadly, the hopes of the past two decades, that Beijing would become a fair competitor playing by international rules, have been dashed.

It is a good first response to indict the perpetrators in the Micron case, and for Mr. Sessions to bolster resources and attention to the threat. Beyond that, however, the United States must see the Chinese espionage for what it truly represents: the pursuit of superpower might by stealing the labor and investment of others. The economies of the United States and China are inexorably entwined, which will make confronting the espionage threat even harder. But it must be done. In the end, China will respond only to compulsion."

U.S. charges Chinese spies and their recruited hackers in conspiracy to steal trade secrets; The Washington Post, October 30, 2018

Ellen Nakashima, The Washington Post; U.S. charges Chinese spies and their recruited hackers in conspiracy to steal trade secrets

[Kip Currier: Just lectured on Trade Secrets in my IP course yesterday. So it was timely to see this recent development after class.

The U.S. and E.U. have both beefed up trade secret protection and prosecution mechanisms in just the past two years: the U.S., with the Defend Trade Secrets Act of 2016, and the E.U., via its E.U. Trade Secrets Directive (EUTSD).]

"The Justice Department on Tuesday unsealed charges against 10 Chinese spies, hackers and others accused of conspiring to steal sensitive commercial airline and other secrets from U.S. and European companies.

The indictment marks the third time since September that the United States has brought charges against Chinese intelligence officers and their recruits for stealing American intellectual property.

“This is just the beginning,” Assistant Attorney General John Demers said. “Together with our federal partners, we will redouble our efforts to safeguard America’s ingenuity and investment.”"

U.S. and Europe Regulators Make Some Waves Towards Copyright Protection; Forbes, September 19, 2018

Nelson Granados, Forbes; U.S. and Europe Regulators Make Some Waves Towards Copyright Protection

"It seems regulators are starting to make waves towards more effective regulations for media and entertainment professionals and creatives to be fairly rewarded. There will be opposition and hurdles to overcome. For example, the EU's Copyright Directive still has to be reviewed and endorsed by the EU Commission and EU member states. Nevertheless, some of the top tech companies like Google, which can play a key role in copyright enforcement, appear to be open to ride the wave with copyright holders. Suddenly, there is light at the end of the tunnel."

Relax About Trump's China Trademarks; Bloomberg, March 9, 2017

Adam Minter, Bloomberg; 

Relax About Trump's China Trademarks

"China also knows that Trump's recent trademark applications (including one for escort businesses) likely aren't intended to precede new products. Rather, as Trump's lawyer explained to the Washington Post, they're defensive in nature, and designed to keep someone else from trademarking, and launching, Trump Escorts. That may sound convoluted, but it's actually a common strategy for foreign companies hoping to protect their brands in China.  

Moreover, China's interest in protecting intellectual property is at least as strong as Trump's in this case. In the coming months, the Trump administration is likely to roll out aggressive new policies in opposition to China's trade practices, including its lax IP enforcement. The last thing China wants is fake but licensed Trump products in Chinese stores making Trump's case for him.

For now, at least, giving Trump his trademarks probably won't put money into the president's pocket. But it's a crucial step for Chinese officials hoping to manage their relationship with an unpredictable new marketer-in-chief.

(Corrects headline to indicate trademarks instead of patents.)"