The Value of Integrated IP Protections and Enforcement Strategies to Stem the Importation of Counterfeit Goods (Part 1)
In today’s world of rapidly changing products, as well as what seems to be an ever increasing number of ways to produce counterfeit and/or infringing products, manufacturers need to be proactive in preventing and stopping counterfeits and infringements. While some counterfeit or infringing products are produced in the U.S., it is more likely that they originate overseas. In fact, in Fiscal Year 2014, Customs and Border Protection (CBP) reported over $1.2 billion in seizures (measured by Manufacturers Suggested Retail Price (MSRP)), which exceeded Fiscal Year 2013[i] by more than $500 million. Over 91% of the seizures were accounted for by just 6 categories of goods: watches and jewelry at 31% ($375.4B), handbags and wallets at 28% ($342.0B), consumer electronics[ii] and parts at 13% ($162.2B), wearing apparel and accessories at 9% ($113.7B), pharmaceuticals and personal care items at 6% ($72.9B) and footwear at 4% ($49.5B). As a result, it is vitally important that manufacturers take proactive steps to stem the tide of counterfeits of their products being imported into the U.S.
One way for manufacturers to be proactive is to develop an integrated approach to obtain multiple IP protections for each of their products and/or product lines and then integrate the strengths of each type of protection. For example, utility patents protect a product’s functionality and structure; design patents protect the aesthetic, non-functional elements of the product; trademarks protect not only the product name(s) and logo(s), but also the non-functional appearance of the product and its packaging; and copyrights can also protect certain aesthetic, non-functional design features of the product as well as any related printed user instructions included with or on the product packaging. As seen in the timeline below, it can take three (3) years or longer to obtain a utility patent, which expires 20 years after it was filed; a design patent can issue in about one (1) year, and expires 15 years after it issues; a trademark can issue in about one (1) year, and can last forever so long as a manufacturer continues to use the mark in association with the product(s) for which it was registered and maintains the mark as required; and a copyright can issue in about one (1) year[iii], which for a corporate owner in the above scenario lasts 95 years from publication. Each form of protection has distinct benefits and weaknesses. Clearly, it is extremely important to develop and implement a cohesive and layered IP protection and enforcement strategy to best take advantage of the individual and combined benefits of each type of protection.
Timeline of Overlapping Intellectual Property Protections (click below):
Opinions and conclusions in this post are solely those of the author unless otherwise indicated. The information contained in this blog is general in nature and is not offered and cannot be considered as legal advice for any particular situation. The author has provided the links referenced above for information purposes only and by doing so, does not adopt or incorporate the contents. Any federal tax advice provided in this communication is not intended or written by the author to be used, and cannot be used by the recipient, for the purpose of avoiding penalties which may be imposed on the recipient by the IRS. Please contact the author if you would like to receive written advice in a format which complies with IRS rules and may be relied upon to avoid penalties.
[i] Source, U.S. Customs and Border Protection (CBP) and U.S. Immigration and Customs Enforcement’s Homeland Security Investigations (HSI), Intellectual Property Rights Seizure Statistics Fiscal Year 2014 Report, April 2, 2015.
[ii] This does not include computers and computer accessories, which is at 2% ($26.6B).
[iii] This can be significantly shortened to as little as 5 working days in special cases with a request for and the payment of an expedited processing fee of an online application if there is pending litigation, customs matters, and/or contract or publishing deadlines that necessitate the expedited issuance of a certificate (see, Copyright Office Circular 10, Special Handling).