A Step Forward in the Battle against Counterfeiters

Counterfeiting is the deliberate use of a false trade mark or imitation product which is identical with, or substantially indistinguishable from a registered trade mark or authentic product. The impact of counterfeit goods can be huge and counterfeiters are becoming increasingly proficient at copying packaging, labelling and products causing loss of revenue to businesses, damage to reputation, as well as loss of employment and a wider impact on the economy. The most recent figures issued by the European Commission in April 2013 indicate that counterfeiting causes €200 billion losses to the world economy each year.

However, a recent development in case law in the US may help pave the way for further protection in other jurisdictions. A group of luxury brand owners, Cartier, Chloé, Alfred Dunhill, MontBlanc, Panerai and A.Lange & Söhne were successful in securing a permanent injunction against Trade Key PVT Ltd and SISCOM (”Trade Key”) who collectively operated three websites: tradekey.com, saudicommerce.com and b2bfreezone.com which advertised counterfeit goods. Trade Key argued that the luxury brands needed to submit notice and takedown requests on each infringing item based on the well-known Tiffany v. eBay case.  However, the US District Court for the Central District of California granted summary judgment against Trade Key in early October 2013 for contributory counterfeiting and contributory trademark infringement, and stated that Trade Key had actively promoted and facilitated the sale of counterfeit goods.

This case will send a clear message to other online retailers to ensure that they put appropriate policies in place or risk legal proceedings being issued against them by businesses seeking to combat counterfeiting and protect their intellectual property rights.

This is a positive step forward for businesses in the UK, however  there are a number of practical steps that both retailers and suppliers can take in order to combat counterfeiters, these include:

• Creating and implementing an anti-counterfeiting strategy tailored to the product
• Informing customers of known counterfeit products and where they are being sold
• Monitoring the web to check for sales of the product through unofficial distributors
• Informing customers of any intellectual property rights in the home country of the business
• Routinely modifying packaging to make it more difficult for counterfeiters to keep up with changes
• Using hi-tech/complex packaging i.e. with holograms which is more difficult to copy and reproduce

For further information on the issues raised in this article please contact Tim Richards, Partner, at tim.richards@michelmores.com.