Perimeter Defence: Regulatory Tools to Halt Counterfeits at US Borders

February 28, 2022

Exclusive for World Trademark Review
Written by Joshua A. Hartman and Kate S. Mayer

Global e-commerce was already on the rise and the pandemic has only accelerated this growth. Sellers are now able to access consumers anywhere at any time, while online marketplaces, such as Amazon and Alibaba, have flourished as avenues for cross-border trade. From 2019 to 2021, the percentage of Amazon sellers based in China rose from 28% to 63%, with 75% of new sellers in its top four core markets (the United States, the United Kingdom, Germany and Japan) based in China (see Marketplace Pulse, “75% of New Sellers on Amazon Are From China”). While the increase has yielded benefits such as greater choice and lower prices, it has also come with a cost: a wider customer base for infringers. As sales of counterfeits and knock-offs have moved from back alleys to living rooms at the expense of brand owners, rights holders and consumers. Indeed, as global trade has slowed, the trade in counterfeits has soared. According to a joint study released in March 2019 by the Organisation for Economic Cooperation and Development and the EUIPO, the global trade in counterfeit and pirated goods reached $509 billion in 2016, accounting for 3.3% of all trade in goods that year, up from 2.5% in 2013.

So how can legitimate vendors protect their brands from imported knock-offs and counterfeits flowing into their most important geographic markets? In the United States, brand owners have valuable regulatory solutions to the flow of infringing imports via two federal agencies – US Customs and Border Protection and the International Trade Commission (ITC). First, trademark owners registered with the US government can record their marks with Customs, which will enforce recorded marks at US ports of entry by inspecting, detaining and seizing infringing goods. Second, they can file complaints with the ITC to investigate ‘unfair imports’ suspected of infringing registered and unregistered trademarks and trade dresses. Through Section 337 investigations, the ITC can issue orders blocking infringing goods from entering the United States and prevent the marketing, sale and distribution of imported goods already in the country.

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