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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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?

  1. Piercing privatized domain registrations via established methods and resources.
  2. Undercover buy and trace.
  3. Search of historical domain name ownership records.
  4. Discreet calls and emails to the infringer
  5. Advanced database research (commercial databases that only investigators have access to)
  6. PIERS (import/export records) searches

 

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