IP Enforcement in the Age of Covid-19 (An Update)

Gibney Anthony & Flaherty, LLP

Over five months ago, we entered one of the darkest periods of recent memory.  The safety of family and friends became paramount as priorities changed and numerous activities simply stopped. Our online world became our reality as we were cut off from connections and activities.  Now may be a good time to take a quick peek at where enforcement against counterfeit products stands.

Looking at border actions, we continue to see a significant number of seizures and inquiries from U.S. Customs and Border Protection (CBP) as the work of protecting trademarks and the economy from the entry of counterfeits of all types and especially those that impact public health and safety continues. It is difficult to get a true sense of where we stand year to year due to the lag time between seizures and notices. The sense is that there has a been a dip but the scope will not be known for a few more months.

As to where the counterfeit goods are, we are seeing significant activity on the stand alone sites, mass merchandise platforms and close in/neighborhood sales sites. Amazingly enough, we have been kept busy with takedowns and buys throughout the last few months on the latter. While arrests depend on law enforcement availability, we are working with a dedicated group of local investigators who have the necessary contacts and resources.  Much more is taking place online than it was last year. Just as legitimate online retail commerce has increased, so too have the counterfeiters come to rely on web-based sales. When tourists and local buyers are missing, counterfeiters must find a way to sell or perish. This does not mean, however, that brick and mortar options have disappeared, rather they are evolving and still pose a threat to brands.  We have been able to take a few cases to arrest against retail vendors as well as those on Craigslist, OfferUp and LetGo.  While there are limitations, law enforcement’s interest in IP remains strong.

Speaking of law enforcement, we have been very fortunate that Homeland Security Investigations (HSI)  and CBP acted immediately to address the importation of counterfeit PPE and Covid related products. Under the code name Operation Stolen Promise, HSI is leading a coordinated effort to not only seize violative products and funds, but to make arrests and build cases for criminal prosecution. In that regard, anti-counterfeiting work has taken on new urgency and the federal law enforcement agencies have risen to meet the challenge.

One of the greatest impacts has been on the brand protection departments of trademark owners. Entire departments have been eliminated or culled as the severe economic ramifications from the closing of stores worldwide have impacted the brands’ ability to develop and fund anti-counterfeiting strategies. Those personnel and budget cuts are especially painful as we see friends and colleagues leave brands that they have dedicated years to protecting. With brands facing a multitude of counterfeiting issues, it is important to retain some form of enforcement strategy especially in the online space. The number of threats and sites seems to grow exponentially and has to be addressed to the extent possible. Success comes from dedicated specialists interacting with peers, collaborating to stretch resources and working with law enforcement contacts on meaningful actions.

How are we doing five months later? We are still sorting through this as Covid-19 convulses society and the economy. With resources stretched thin and counterfeiters persisting in their efforts, enforcement in the age of the pandemic requires doing more with less and maintaining brand value and integrity for a post-pandemic world of enforcement where the altered landscape will present unique challenges.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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