October 15, 2015
The Counterfeit Epidemic
An ever-growing number of U.S. companies are seeing their products being ripped off online or in the various trade channels. One major contributor has been China. The counterfeiting industry there isn’t new. In fact, it’s been rampant there for many years. It’s has been admittedly difficult to police every product that comes out of China, but that doesn’t mean it’s impossible. With good intellectual property protection, and by following a few steps, it’s possible to reduce the flow of counterfeit goods coming out of China.
Steps to Protect Yourself
1) One of the most important steps toward protecting valuable intellectual property is to seek patents and trademark registrations in the U.S. and China. If every right of protection was an arrow, you want a quiver full of potential rights. The idea is to gain as many potential advantages you can. There have been some ingrained skepticism regarding the value of intellectual property protection in China. However, recently there have been some real changes in the way China looks to enforce intellectual property. China has made steady improvement in the enforcement of patent and trademark rights in recent years and in many ways, intellectual property rights in China are one of the strongest chances you may have to curtail counterfeiting.
In regards to trademarks specifically, a two-fold approach is recommended. We suggest that after you obtain a federal registration, you look to formally register the trademark with the respective national customs agency (China Customs – General Administration of Customs or GAC for short). The same strategy goes for the United States (US Customs – may register both Trademarks and Copyrights). Statistics show that of all the goods confiscated by Chinese Customs, most all of them involved trademarks registered in China and registered with Chinese Customs. It is important to register your marks with Chinese Customs to prevent the export of counterfeits.
Below is a simple timeline to go by for Chinese Customs registration. It can take around 14 months for a Chinese trademark to become registered. You need a registered mark prior to registering with Chinese Customs. Chinese customs may take anywhere from 3-4 months to complete the registration process. This means it can take at least 18 months to get full trademark protection in China. It is best not to wait.
Keep in mind that the Chinese trademark system operates on a first-to-file doctrine. This means that registration must occur prior to any enforcement. In the end, the U.S. and China customs will monitor incoming and outgoing shipments for counterfeit goods. The owner of the trademark registration is informed whenever counterfeit goods are found, providing an opportunity for the owner to cease the transportation of any counterfeit goods.
2) It’s also advisable for American companies to be very careful about who they are doing business with in China. Frequently, the perpetrator of counterfeit goods is in some way related to the legitimate product or business you are working with in China. Be it a distributor, manufacturer, retailer or someone who used to be connected to one of those business partners. These are most often the parties behind knock offs. Accordingly, it pays to not only develop a close relationship with these organizations, but also to keep a good handle on some portions of intellectual property. If you don’t provide business partners with all of the secrets to your success, then they will have a much more difficult time duplicating your product.
3) Monitoring the Internet for counterfeits is another essential component. Some companies ask employees to periodically check certain e-commerce websites to see if knock offs are being sold. When the task becomes too onerous to do in house, some organizations turn to an intellectual property attorney who can perform a monitoring service for them. This is frequently a smart move since the attorney probably has access to helpful tools that make monitoring the market much more efficient.
4) Of course, when that monitoring uncovers someone who is actually counterfeiting goods, it’s time to contact them with a cease and desist letter. This is sometimes all that is required to get the counterfeiting to stop. A U.S. intellectual property attorney may work in conjunction with an attorney in China to send the letter, backing it up with proof of patents and trademarks both in the U.S. and in China. Cease and desist letters sometimes result in a genuine apology and a promise to stop. However, the need to threaten legal action, like a lawsuit, may also be necessary if the counterfeiter is resistant.
It may never be possible to completely stem the flow of counterfeit goods coming out of China, but if U.S. owners and manufacturers do their part, it is possible to reduce that flow to a trickle. If you a need intellectual property litigation expert contact the Law Offices of Jeff Williams for a free consultation.