Trademark protection had long afforded American companies a competitive marketplace with a fair playing field. All that can change as you begin to operate your business internationally. To get the basics, visit the United States Patent and Trademark Office to orient yourself on what you need to know to get started on protecting your intellectual property.
In the United States, the most common reason to launch into a trademark in-use investigation is to determine if the mark is in fact being used in commerce, how it is being used and the date of first use. Further it is important to know when the mark was first used in commerce, how it was and is being used, the scope of the use, the goods or services it is being used on and if it is no longer in use (abandonment) when did the use cease.
Protecting IP in China
For those businesses venturing out to the rapidly growing economy of China, it is necessary to look at the role that in-use or nonuse trademark investigations are conducted in China. Trademark use investigations have been an important and necessary practice in the United States for quite some time, but that may change outside of our borders. The U.S. is a first to use, not first to file country, which means that “common law” uses of a mark need to be uncovered and investigated. In order to effectively conduct searches and investigations in China it is essential that your investigation partner has access to databases compiled via advanced web harvesting of unstructured data, which allows an investigative analyst to leapfrog from a single source dependency to run more cost effective searches with greater cost efficiency.
Abandoned Marks and Squatters
A mark is considered abandoned when it’s use has been discontinued with no intent to resume (See 15 U.S.C. § 1127). In China there are similar laws and the courts have provisions that indicate the breadth of the search that must be conducted to determine nonuse.
According to Anthony Tong of Robin Bridge & John Liu in Hong Kong, when faced with a refusal on relative grounds in China, it is prudent to search popular Web portals such as sina.com.cn and baidu.com.cn to look for references to the cited mark. Unless the searching turns up many references, a nonuse application is often recommended because it is an inexpensive approach. Indeed, Tong posits that investigations are not even particularly necessary because the burden of proof is on the trademark owner, exhaustive searching is near impossible given the size of China, and it is not uncommon to find trademark owners submitting dubious evidence of use even where investigation proves nonuse.
In the U.S. we have squatters that sit on domain names hoping to make money when the brand owner or mark owner wants the digital rights to their name. In the coming years in China, mark owners will have to prove use of their mark(s) if they want to prevent losing them due to nonuse. That said nonuse investigations in China will likely be more common in the future.
Help Protecting Your IP Abroad
It is vital that you evaluate the use of your intellectual property not only within your country of origin, but also protect your rights abroad. Start by selecting an investigator with worldwide to avoid issues that can escalate costs and increase the time required to provide verified information. James Tunkey, COO of I-OnAsia points out that, “Today’s brand protection spend in China is less expensive that in the US on an apples-to-apples basis.” Tunkey adds, “It is also important to note that Chinese targets are typically manufacturers and the weighted ROI on China spend is greater than it would be in the US.”
For those with an eye on China, our partner I-OnAsia gives us boots on the ground with relationships and information sources that are trusted and quick to respond. Start your IP protection plan by contacting us.
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Pursue a civil or criminal remedy depending on the nature of the product being counterfeited. Typically products that can put the public’s well-being in danger (pharmaceuticals, food, tobacco, medical devices, auto parts, airplane parts) grab the attention of the District Attorneys, U.S. Attorneys & Law Enforcement Agencies (FBI, DEA, ICE).
In most cases, law enforcement and the courts want as much information on the product being sold and people or company behind it. They want to know where counterfeited products are being sold, how test purchases were made and shipped, who was selling the product, the size and scope of the counterfeiter’s operation, all locations under the control of the counterfeiter, and general background information on the operation and the principals. The main culprits will be further examined to see if there were any prior run in’s with the law and arrests or cases where they were involved in the sale and or distribution of counterfeit goods.
4 Thing to Consider When Enforcing Your IP Rights against a Counterfeiter via Raid or Ex Parte Seizure Order.
1) What is the end goal? Shut down the operation? Obtain intelligence on how and where the subject is getting the counterfeit goods from? Obtain an injunction? Obtain a judgment and collect or seize assets?
2) What kind of information will be available at the time of the raid or seizure? Product, trucks, equipment, computers, servers, laptops, external storage devices, labels, printing materials, & shipping records are most typical.
3) What type of threat is the infringer to your team? Is there a chance for retaliation or harm? Do they possess drugs or weapons?
4) How will you seize and inventory all infringing products? The devil is in the details if you want to keep the court on your side and get what your client wants. Be prepared to provide any and all items included in the order. Document entry and exit on video to protect from liability. Complete a detailed inventory list to include product, documents, and digital evidence authorized for seizure. Also, be prepared for the unexpected and have your locksmith, digital forensic team and additional trucks ready on a moments notice.
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- From the US to China- Support on the ground for enforcement
- Santoni Worldwide Leads Investigation to Catch a Counterfeiting and Distribution Thief of Microsoft Software from China
- StopFakes.gov(U.S. government Website for tools and resources for intellectual property rights.)
All too often, a company uncovers the fact that their intellectual property is being misused and they make rash decisions. Their first call to us is, “Hey, someone is selling my products and they are clearly counterfeit. Can you contact law enforcement and get them arrested?”
Counterfeiting is an intent-based crime and in order for criminal prosecution to be an option, the counterfeiter must be aware and have knowledge that the products they are selling or distributing are in fact counterfeit.
The best course of action is to secure legal assistance and evidence before you play private investigator and potentially hurt your case. With expert counsel, you can collect the evidence that will standup in your court case against the infringer.
The 3 Steps to Proving Counterfeiting Intent
Step 1: Qualified Evidentiary Buy (undercover) – Your experienced, licensed, undercover investigator will purchase the counterfeited items and include all of the necessary documentation to withstand legal scrutiny (Buy Report / Chain of Custody). Additionally they will obtain photos/video and secure statements from the subject to support enforcement actions. Once the counterfeited item is secure, it can be inspected to verify if it counterfeit or genuine. It is important to have someone who is trained properly authenticate the product(s) as counterfeit.
Step 2: Cease & Desist Letter -A brand owner can put an individual or company on notice by sending them a Cease & Desist Notice. Once the C&D Notice is sent a follow-up investigation should be conducted to determine if the infringer is or is not in compliance.
Step 3: Follow-up discreet inspection to to determine if subject is in compliance following C&D. A second qualified evidentiary buy (undercover) from an alternate front company might be required.
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Many companies are in such a hurry to get to market with their company launch or latest new product that they overlook a very critical step. Protecting the intellectual property (IP) of the company and enforcing the use of it. Experts agree that if you don’t protect your IP it can fall prey to those who capitalize on all your hard work and investment. In addition, the courts may not support legal action if you delay in a response to someone using your IP.
The first step in enforcing your brand is to actively conduct searches for potential infringement of your mark. The common searches include federal and state trademark registrations, domain name registrations and common law uses (Corporate Filings/Fictitious Business Names/DBA’s) of your mark(s). Many use a commercial search provider like CT Corsearch or Thomson Compumark to handle these types of monitoring services.
How Can We Tell if We Have an Infringement Problem?
Often times, companies are tipped off about infringers or unauthorized resellers by their sales representatives, authorized distributors and/or Google alert-type notifications.
Once potential infringers are uncovered, a business owner will often contact their IP Counsel and discuss the situation. Your attorney will likely conduct some sort of an investigation prior to preparing and sending a Cease & Desist letter. Counsel will need to take diligent steps to verify that the product being sold by the alleged infringer is in fact counterfeit or grey market.
The best way to verify the infringement is to engage an investigation firm with experience in IP cases. Specifically, you want to work an experienced firm with front companies used to make purchases discreetly at the wholesale or retail level. This will also aid counsel in understanding where the counterfeiter is located and provide additional information (phone, fax, email, products, date of first use, sales, scope, distribution warehouses, etc.).
Avoid Pre-Date Landmines
Attorneys will also need to verify that their client’s use in commerce pre-dates the alleged infringer. In other words, don’t poke the bear until you have well-documented, stand-up-in-court evidence that you were the first to market.
One of the worst things that can happen is that an infringer receives a Cease & Desist letter from a major brand or large company which triggers them to pursue or counter-sue. The major brand or large company may be on the losing side of the argument on the basis that alleged infringer’s use pre-dates the use of the notifying party.
Diligence Pays Off in the End
If infringements are dealt with quickly and effectively a brand owner can restore faith with their resellers, distributors, consumers and brand representatives. Additionally, infringers that are approached and treated seriously are less likely to continue to infringe on those brands that are enforcing their IP rights.
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Once you determine that your products are being infringed upon (counterfeited), it is time to take action. Determine how far down the supply chain the products have made it (wholesale, retail, online, eBay, Amazon, Alibaba, etc.) and document all of those outlets.
Once the scope and scale of the issue is determined, it is time to plan your legal strategy with an investigator and legal counsel. The source of the infringing product, which could be a rogue company or just an individual in the supply chain, needs to be isolated and examined when we are talking about diverted/gray market goods.
The most common source of infringing goods is found on the Internet. Online resellers can quickly and cost-effectively set-up an online presence, market their products and transact business anywhere, any time. They can also take steps to privatize their domain registration (WHOIS), so as to not disclose the owners name and their office/warehouse location. They will even make up fake names and information in the ‘About ’ portions of their Websites to further mislead buyers and those trying to protect their IP.
6 ways to uncover the source?
- Piercing privatized domain registrations via established methods and resources.
- Undercover buy and trace.
- Search of historical domain name ownership records.
- Discreet calls and emails to the infringer
- Advanced database research (commercial databases that only investigators have access to)
- PIERS (import/export records) searches
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According to an article by Buffer, social media is changing and growing every second. “Every second 2 new members join LinkedIn…Social Media has overtaken porn as the #1 activity on the web.” The fact of the matter is that social media sites can be a treasure chest of useful information.
A savvy social media investigator can use a variety of tools to find out everything from where people work, to who their friends are, and what they do in their spare time. The digital footprint left by people on social media can also be useful in tracking their whereabouts, which is extremely useful for investigators that conduct surveillance, asset research and serve legal documents.
Not only is it important to know how to locate information on the web and social media sites, it is necessary that an investigator knows how to obtain all information contained in a profile and be able to preserve it.
Top Uses of Social Media:
Family Law- Preserving and documenting activities of a soon to be ex-spouse
Insurance Claims- Post accident/claim, pre-litigation, prior to surveillance (photographs & activities), & prior to settlement
Non-Profit Organization- Screening board members, donors, & volunteers
Asset Management Protection- Prior to investing in alternative finance offerings (hedge funds, angel investors, etc.)
Threat Assessment Teams- Threat response evaluation, threats to executives, prior to board meetings, prior to meeting with prospective partners (distributors, rep, supplier)
Brand Tarnishment & Threats- respond to and address concerns regarding problems with products including (defects, customer service, counterfeits)
Service of Legal Documents (Service of Process)– develop profile and photos to determine best method and time for service
University & School Threat Assessment Teams- students, faculty & visitors that could pose threats or harm reputation