Business-to-consumer ecommerce is expected to reach $1.2 trillion worldwide this year. Business-to-business ecommerce is predicted to top $12 trillion. The fact that many industry experts and observers estimate that 22 percent of consumer goods sold online are counterfeit punctuates the economic impact that counterfeiting has on the world economy. Accordingly, it is increasingly important that companies employ sophisticated means to protect their brands from the proliferation of knockoffs and grey market sales. Many companies use a variety of means to detect counterfeit goods and to address their unauthorized sale, such as monitoring retail Web sites and business-to-business trading platforms, sending cease and desist letters, and submitting take-down notifications to a variety of online auction and retail Web sites. Nonetheless, equally important is utilizing available governmental and law enforcement resources to aid in the counterfeit war.

U.S. Customs & Border Protection (“CBP”), a bureau of the U.S. Department of Homeland Security, maintains a trademark recordation system for marks registered with the United States Patent and Trademark Office and a copyright recordation system for copyrights registered with the United States Copyright Office. Parties that record their registered trademarks and copyrights with CBP assist CBP in its efforts to prevent the importation of goods that infringe registered trademarks and copyrights. The recordation database tracks detailed information regarding recorded trademarks and copyrights, including images of the protected work or trademark. CBP officers are able to monitor imports at each of the 317 United States ports of entry and utilize the recordation database to prevent the importation of counterfeit, grey market, or pirated goods. 

CBP has made the recordation process easy for intellectual property rights holders through its electronic recordation system. This system permits right holders to electronically file intellectual property recordation applications, which significantly reduces the typical process time required for paper applications; allows rights holders to upload images of the protected work or trademark; and obviates the need to send physical samples to CBP. A new function of CBP’s Intellectual Property Rights Internal Search System (“IPRIS”) is the ability to upload a Product Identification Guide to IPRIS. Submission of a Product Identification Guide allows CBP to provide quicker response for authentication, thereby efficiently protecting producers and consumers from the risks associated with counterfeit and pirated products entering supply chains. The use of a Product Identification Guide has proved successful for our clients in their fights against counterfeit merchandise, and it is not atypical for CBP officers to contact intellectual property owners and their counsel to discuss the nuances of seized products, which underscores the effectiveness of Product Identification Guides. 

Beyond enabling rights holders to record their trademarks and copyrights with the CBP and the Department of Homeland Security, the federal government has taken notice of the need for additional resources and regulation. As a result, legislators have drafted several newly proposed bills designed to protect rights holders. Of particular note is the Stop Online Privacy Act, “SOPA,” which was recently introduced in the House of Representatives. SOPA is designed to combat anti-piracy and would provide a wide variety of mechanisms to rights holders to combat the sale of counterfeit goods. These mechanisms would include the ability to obtain expansive court orders against various third parties contributing to the infringement, such as payment processors of infringing Web sites and search engines that link to those sites. In addition, the Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property Act, “PROTECT-IP Act,” is a corresponding Senate Bill, which similarly provides the government and rights holders additional means of shutting down various online sellers of counterfeit goods. As you may have become aware, these bills have become the subject of a heated debate and have encountered strong opposition in recent weeks. Accordingly, the future of SOPA and the PROTECT-IP Act is unclear.