Intellectual Property Attorney

Infringement And Counterfeiting In China Will Remain A Hot Topic In 2013

Grimes has blogged extensively about the importance of effective and cost-conscious anti-counterfeiting strategies.Recently, several of our posts have focused on the gargantuan battles trademark owners face enforcing their rights in China. In particular, we blogged about China’s intent to eradicate “malicious” trademark registrations and a unique joint operation by
China and the U.S. to crackdown on counterfeit luxury bags. These steps are significant indicators that the rights of trademarks owners in China are finally receiving long-overdue attention from Chinese authorities. Hopefully these steps will, indeed, actually help trademark owners secure and enforce their valuable rights in China.

China is often viewed as a hostile environment for intellectual property owners because of the substantial differences between trademark laws and enforcement procedures in China. While there are established and developed laws, systems and policies in other countries, especially the U.S., such is not the case in China. Which is one of the main reasons why a multi-billion dollar counterfeiting industry has proliferated in China. Chinese infringers have unabashedly exported counterfeit products all over the world, including into the U.S., in staggering numbers. The European Unionreported that almost three quarters of the counterfeit goods confiscated by European customs in 2011 originated from China. In the U.S., various reports claim that China accounts for approximately over 60% of all counterfeit goods intercepted by U.S. Customs and Border Protection. The International Anti-Counterfeiting Coalition (IACC) estimates that the market value of counterfeit goods in China ranges from $19 billion to $24 billion.

Counterfeit goods in China run the gamut, from pharmaceutical drugs, to auto parts, toys and many other consumer products. Counterfeiters will do almost anything to evade detection outside of China. One media report described an instance where counterfeit toys were manufactured in South China, then shipped to Hong Kong and later to Guatemala. After arriving in Guatemala, the counterfeit toys where shipped to U.S. where they ended up in Los Angeles department stores and other segments of the U.S. marketplace. Given the high risks involved and the steep monetary rewards available to counterfeiters, they often organize into crime networks with the sophistication and reach that other forms of organized crime exhibit. Indeed, the Organization for Economic Cooperation and Development (OECD)
estimates that counterfeiting results in $250 billion each and every year in criminal revenue.

China’s purported attempt to eradicate “malicious” trademarks , if implemented, could present a valuable tool in the trademark owner’s arsenal to combat infringement and counterfeiting in China. However, the sophistication, reach and value of the counterfeiters’ organizations and networks likely means that merely focusing on strategies in China will not be adequate. Effective anti-counterfeiting strategies will require a blend of enforcement proceedings in China as well as aggressive protection in other countries where the counterfeit goods may be shipped or transported. Our attorneys develop anti-counterfeiting strategies that are unique and appropriate to the individual client, the product and the industry. We work with federal, state and international authorities to detect, monitor and prosecute counterfeiters – both civilly and criminally. The idea is not simply to “slow down” counterfeiters — but to “shut down” counterfeiters.

We will continue to monitor and report in the blog developments in China as well as new tools and trends to protect and enforce intellectual property rights in China and around the world.

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