More Help Needed Tackling IP Infringement in Other Countries, Hearing Told
As the U.S. government presses China to better protect U.S. intellectual property, Congress and the executive branch should do more to stop counterfeiters from common misleading practices such as changing the first letter of a company name on a label, executives told the Senate Finance Committee. Belkin General Counsel Tom Triggs held up a Belkin product and counterfeit labeled as “Melkin” during Wednesday's hearing. “It’s a little bit crazy,” he said. “Under Chinese law, if you change the first letter of a trademark, then it’s not trademark infringement against the rights owner of that trademark. So we’ve struggled to obtain relief in China to stop this company from infringing our company IP. I think all of us would agree under U.S. trademark laws, this ‘Melkin’ infringing Belkin is the classic law school example of infringement.”
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The U.S. Embassy in China, the Patent and Trademark Office and State Department are “working hard” to fight counterfeit culture in that country, but Belkin tracked the “Melkin” knockoff through 20 total countries, while spending millions of dollars to protect its intellectual property rights (IPR) in 30 countries, Triggs said. Representatives of Alibaba, which is facing scrutiny from the Office of the U.S. Trade Representative for the large amount of counterfeits peddled through the e-commerce company, have met several times with Belkin employees about IPR infringement, he said. “But our efforts are not as effective in China as they are, say, here at home.”
While the fight against e-commerce counterfeits is akin to “Whack-a-Mole,” Bruce Foucart, director of Immigration and Customs Enforcement's National Intellectual Property Rights Coordination Center, said it's attacking the problem through top-level domains. There's now a vetting process whereby eligible applicants in the pharmaceutical industry, for example, can get a “.pharmacy” domain name, which functions as a “badge of approval” among industry and consumers, he said. The IPR Center also continues to partner with the Trustworthy Accountability Group, which targets advertisement fraud and malware, in running a verification program that yields something “similar to … the ‘good housekeeping’ seal” for approved applicants to put on a website, Foucart said. The Trade Facilitation and Trade Enforcement Act signed into law in February targets IPR enforcement through codifying Foucart’s IPR Center and by new measures to encourage Customs and Border Protection to work with U.S. rights holders on identifying potential counterfeits at the border. Foucart said Congress could still provide the IPR Center with additional tools.
UPS Vice President-Global Customs Policy and Public Affairs Norm Schenk recommended the U.S. require advance electronic data to accompany all private and public shipments, because it allows CBP to act against counterfeits more quickly. Electronic data has been required to accompany private shipments since 2002, he said. “UPS provides advance data to CBP on our packages before they enter the United States.”
Over the past decade, CBP counterfeit seizures have risen from about 15,000 in 2006 to over 28,000 in 2015, with the 2015 seizures accounting for about $1.4 billion of goods, Senate Finance Committee Chairman Orrin Hatch, R-Utah, said in prepared remarks. E-commerce in trade is a “double-edged sword” because the internet’s simplifying effects on transactions also have produced a surge in counterfeits, he said. The growing volumes are seen as a considerable challenge for CBP.