Essential Steps Every Brand Owner Should Take to Combat Counterfeiting

Now, more than ever, the critical role that trademarks play in signifying source and quality of products is of utmost importance.  The dangers of counterfeit products in the marketplace are even more grievous when it comes to healthcare and pharmaceutical products.  Products that are not genuine can present serious health and safety risks.  It can literally be a matter of life and death when it comes to protective gear, sanitizing products, pharmaceuticals, and medical products — and this stark reality is on display around the world right now in the face of the COVID-19 pandemic.  The panic in the marketplace to purchase everything from hand sanitizer and face masks to COVID-19 test kits and ventilators has inevitably led to the very dangerous rise of opportunistic and fraudulent misuse of trademarks on counterfeit goods.  These conditions in the marketplace — and the trust that consumers put in brands to ensure products are of a certain quality and will function as expected in view of long-established goodwill in the marketplace — have resulted in a hotbed of activity by counterfeiters.  The uptick in counterfeit activity and the grave risks created by counterfeit products related to protecting against, testing for, and treating COVID-19 are so great right now that warnings have been issued by various federal agencies, and even the FBI recently issued a press release warning the healthcare industry to beware of counterfeit products and providing some guidance on how to identify such products.

Many companies whose brands have long-standing goodwill in the marketplace now are finding themselves in the crosshairs of this increased counterfeiting activity because they make sanitizing products or manufacture critical products used in the detection and treatment of COVID-19.  But the increased counterfeiting activity is not limited to just those types of products, and — particularly with the increase in online purchasing of products — all brand owners should be taking the following important steps to protect their valuable trademarks against counterfeiting.

1. Register trademarks with the United States Patent & Trademark Office (USPTO). A federal trademark registration is prima facie evidence of nationwide ownership of a mark, it enables the use of the ® symbol, and it is also a prerequisite to pursuing an action for counterfeiting.  For an action pursued under the Lanham Act, 15 U.S.C. §1114, et seq, the remedies include the ability to pursue and obtain an award of treble damages or to obtain relief in the form of substantial statutory damages of up to $200,000 per type of goods/services involved and which can be increased to $2,000,000 if the use is willful.  Federal registration is also a prerequisite for the government to pursue an action for trafficking in counterfeit goods under 18 U.S.C. §2320, the penalties for which are even stiffer.
2. Register trademarks with U.S. Customs & Border Patrol (CBP). Once your trademarks have been registered with the USPTO, they can also be registered with U.S. Customs & Border Patrol, which will assist CBP officials in monitoring and seizing infringing goods.  Brand owners can also provide CBP officials with information and training to help them identify infringing products.
3. Provide information to consumers about how to identify genuine products, and incorporate features or tracing tools to help distinguish counterfeit products from genuine goods. One very useful thing brand owners can do to help combat counterfeiting is to engage in public awareness campaigns to provide consumers with information about how to detect counterfeit products.  Public awareness efforts such as press releases identifying tell-tale signs a product is not genuine (e.g., if it arrives without packaging or has missing parts, if it is not sold with model-specific user instructions, or if there are misspelled words on the packaging or website/listing from which the product is offered for sale) and publishing guides on how to identify genuine products can be very effective.  These efforts, when coupled with setting up a hotline for consumers to identify counterfeit products, can provide companies with useful information in the effort to combat counterfeiting.  Incorporating specific features or technology into your products or product packaging (e.g., holograms, serial numbers, or other marking or technology-based tools) can also be very effective in enabling consumers to verify genuine products.
4. Monitor the marketplace and sign up for trademark and domain name watch services. It is important to diligently monitor the marketplace and take action when unauthorized use of your trademarks is identified.  Important monitoring efforts include enlisting the services of vendors who can assist with the effort of identifying potentially infringing trademark and domain name filings and uses.
5. Monitor e-commerce sites and file take-down requests. Given the substantial business that is now conducted through e-commerce platforms — and that these platforms are widely used by counterfeiters — it is essential to implement a practice of regularly monitoring e-commerce sites and filing take-down requests when unauthorized uses of your trademarks are identified.
6. Monitor your supply chain. If you are engaged in manufacturing your products or parts of your products in different locations around the world, it is important to have good systems in place to monitor production and shipments by your suppliers to ensure that products/parts are not being diverted as part of counterfeiting schemes.
7. Seek relief in the courts by pursuing actions against counterfeiters. In the event brand owners come across significant/persistent counterfeiting issues, both the federal courts and the International Trade Commission ("ITC") can be used to obtain relief against counterfeiting.  An action in the federal court system can be very effective and will enable brand owners to obtain an injunction as well as monetary relief (including substantial statutory damages as noted above), and seeking a general exclusion order from the ITC can be a smart strategic move by companies that are trying to stem the tide of counterfeit products coming into the United States from various sources.

In addition to these steps, brand owners can also benefit from connecting and collaborating with other companies in their industries to join forces against counterfeiters.  Organizations like the International Anti-Counterfeiting Coalition, Inc. can help with these efforts and can be a great resource for brand owners in the effort to combat counterfeiting.

Author: Cynthia Walden