Intellectual Property Protection and Enforcement Manual - Ipr-policy.eu

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In 2006, the Stop Counterfeiting in Manufactured Goods Act (H.R. 32) modified the federal criminal law relating to the trafficking in counterfeit goods and services by prohibiting trafficking in labels, documents, or packaging that bear counterfeit marks intended for goods or services. The amendment closed a loophole created by a federal court decision which held that individuals who merely traffic in counterfeit marks themselves (for example, labels, patches, or medallions) not attached to any goods did not violate the federal anti-counterfeiting law. Additionally, the act provides for the mandatory destruction of the counterfeit goods and the forfeiture of any assets traceable to illegal counterfeiting activities and expands the definitions of “traffic” and “financial gain” under the federal anti-counterfeiting law to include any distribution of counterfeits (or possession with the intent to distribute counterfeit goods), with the expectation of gaining something of value. 28 Federal Civil Copyright Laws A federal court action for copyright infringement under the U.S. Copyright Act is the exclusive recourse for copyright owners seeking to enforce their copyrights in a civil action. The act protects against the unauthorized use or copying of a copyrighted work. In an infringement action, unauthorized use or copying would typically be established by demonstrating that the alleged infringer had access to the copyrighted work and that the alleged infringement is substantially similar to the infringing work. A copyright registration is a prerequisite for filing a copyright infringement action. 29 Under the Copyright Act, a successful plaintiff can receive (1) injunctive relief, (2) the plaintiff’s actual damages and any additional profits of the defendants or statutory damages, and (3) the costs of the action and its reasonable attorneys’ fees. Statutory damages can range between $750 and $30,000 for infringement of any one work and can be increased up to $150,000 for any one work if the infringement is shown to be willful. 30 Further, while a copyright infringement action is pending, the court may order the impounding of all copies or phonorecords claimed to have been made or used in violation of the copyright owner’s rights and of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies or phonorecords may be reproduced. Also, as part of any final judgment or decree, the court may order the destruction or other reasonable disposition of all copies or phonorecords found to have been made or used in violation of the copyright owner’s rights, and of all plates, molds, matrices, masters, tapes, film negatives, or other articles by means of which such copies or phonorecords may be reproduced. 31 Federal Criminal Copyright Laws Page 10 Copyright infringement is a felony punishable by up to three years’ imprisonment and a $250,000 fine when the defendant willfully reproduces or distributes at least one or more copies of phonorecords or one or more copyrighted works with a total retail value of more than $2,500 within a 180-day period. The maximum penalty is increased up to five years of imprisonment if the defendant acted for commercial advantage or for private financial gain. Misdemeanor copyright infringement with imprisonment less than one year can occur where the value of the copyrighted work exceeds $1,000 but is equal to or less than $2,500. 32
Brand Protection Manual An Anti-Counterfeiting and Piracy Strategy Making sure that your IP is properly registered and recorded is only one component of a successful anti-counterfeiting and, piracy strategy. You also need a formal anti-counterfeiting and, piracy plan. Although there are trade associations and government agencies involved in this fight, the ultimate responsibility for protecting your brands and trademarks is yours. Brands and trademarks are among your most valuable assets—a formal plan, as important as any business plan or new product specifications should be developed. The need for a plan is even more acute if there are significant health and safety risks associated with the products you manufacture. While it is bad to lose sales and market share, it is another thing entirely to have your brand name used in connection with a fire or loss of life. Unfortunately, there is no off-the-shelf solution to your company’s anti-counterfeiting strategy needs. Every company is unique, and each company’s anti-counterfeiting program must be specifically tailored to its own particular requirements. The following sections provide some suggestions for building such a strategy. Internal Monitoring A successful anti-counterfeiting strategy begins with self-analysis. Counterfeiters prey on companies with lax security measures and porous supply chains. Moreover, companies that turn a blind eye to the diversion of products into unauthorized markets or channels of trade are asking for trouble as this gray market provides perfect cover for counterfeiters to introduce their illegitimate goods. Counterfeiters have an uncanny ability to detect weaknesses in a brand owner’s supply chain and frequently point to those weaknesses when accused of counterfeiting. Although getting products to market would appear to be as simple as moving goods from point A to point B, it is never that easy. Instead, products typically pass through many hands, from the manufacturing process to distribution to retail. Each exchange provides an opportunity for counterfeiters to infiltrate the supply chain with counterfeits. Accordingly, brand owners should consider the following for protecting their supply chains. 33 Legitimate Inputs To ensure that raw materials and parts are authentic and meet company standards, brand owners should: • Purchase materials and equipment used in manufacturing from company-authorized suppliers only. Where possible, source from fully auditable vendors that source exclusively from original manufacturers, franchised distributors, or the first owners of the goods. Page 11
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