September 2014

Andrew Muir writes “Maximizing Brand Protection Budget: Make Anti-counterfeiting Programs Work for You” for InsideCounsel


Anti-counterfeiting tools can provide the necessary foundation for any successful civil litigation or criminal referral.

Six months ago, a customer reported to you that she purchased your product online through one of the major web marketplaces from a seller named “BozoWidget,” but the product ignited like a sparkler when she pressed the power button. You suspect that BozoWidget sold the customer a counterfeit because your company’s products are rigorously tested to comply with quality and safety standards. So, you conducted a test buy from BozoWidget’s seller page using an online payment processor to complete the transaction. These products turned out to be counterfeit and you requested that the website remove BozoWidget’s listing from their site, which it did.

Two months later, you received a notice from Customs in San Francisco informing you that it seized a shipment of 30,000 counterfeit units manufactured and exported by “CheapWidget Manufacturing International, Ltd.” located in China. Customs identified “BozoTrading Co.” as the importer of record. You immediately recognized that BozoTrading’s address was the same as BozoWidget’s return address printed on the shipping label from your test buy. Next, you sent a cease and desist letter to BozoTrading at that address. Tracking information indicated that the letter was signed for upon delivery, though BozoTrading never responded. Shortly thereafter, counsel in China informed you that CheapWidget’s factory had been raided and authorities recovered a customer list detailing CheapWidget’s sales to BozoTrading.

The goal of this series has been to identify essential anti-counterfeiting tools and practices that are both customizable to the specific needs of your business today and scalable for future growth. The first article stressed the importance of a strategic anti-counterfeiting plan that addresses the unique challenges counterfeits pose to your business. The second addressed two core elements of that plan: federal trademark registration and commercial agreements, and supply chains crafted to protect your business. The third recommended recording your registered trademarks with Customs in order to stop counterfeits at the border and to obtain intelligence about counterfeit manufacturing, importing and exporting. The fourth article highlighted the benefits of tailoring an online monitoring program to your brand to eliminate counterfeit listings from the online marketplaces. The fifth described how web monitoring, Customs seizures, test buys and cease and desist letters can help you identify worthy targets for civil or criminal prosecution.

The hypothetical above depicts how some of these programs might work in practice. This sixth and final article shows how these tools are valuable not just as means to prevent counterfeits from reaching the marketplace — though they are highly effective for that purpose — but also because they provide the necessary foundation for any successful civil litigation or criminal referral.