Counterfeit is on the Rise - Are you prepared?
With the advancements of technology including the speed at which sophisticated scanners and 3D printers are now able to reproduce or imitate an original product, infringers are finding new ways to copy, imitate and stand under the coat tails of successful brand owners and their products. As a result, cases of infringement of intellectual property rights through counterfeit goods are at a high.
Should litigation be the first option?
Only in rare circumstances should litigation be the first line of attack when dealing with counterfeit goods. However, when ‘jaw jaw’ (in the words of W. Churchill) gets you nowhere, litigation has the potential to seriously disrupt the counterfeiter's activities, bring the entire operation and network to a standstill and prohibit the counterfeit goods from spreading further into the marketplace.
The courts have a wide range of powers to assist in the fight against counterfeit goods, including injunctions, freezing orders and search orders. They can also order the infringing party to deliver up all the infringing products at their cost; seek disclosure of customer or supplier’s information; pay damages or a proportion of unlawful profits made by the counterfeiters; and pay legal costs.
The Judiciary has recognised that intellectual property infringement claims are not straight-forward and can often be complex in nature and high in value. The Patents Court is a specialist intellectual property court within the High Court in London and is a perfect venue for complex or high-value cases as there are no caps on final awards for damages or costs. The Intellectual Property Enterprise Court (“IPEC”) is also in London but is a more cost-effective venue with a full time specialist IP judge. It does however impose a cap on costs recovery (£50,000) and damages (£500,000). The IPEC also has a specialist small claims track which has been designed to deal with claims that are £10,000 or less in value. Both courts are well suited to tackling urgent matters.
How to fight counterfeiting
Being prepared and responding rapidly to any incident of infringement of your rights is the most effective anti-counterfeiting measure available to you. What do you need to do in order to be ready should you discover that your goods are being copied?
STEP 1: Preparation is key - ensure that you have the appropriate protection. Apply to register (1) all trade names, brands, logos as trade marks; (2) all unique and novel shapes and designs as registered designs; and (3) any inventions as patents. Once secured, ensure that all certificates of ownership and details of the protection are located centrally and accessible.
STEP 2: Seek professional advice regarding obtaining legal expenses insurance, which can provide you with a war chest for policing and protecting your intellectual property rights.
STEP 3: Record all relevant trade mark, patent and design registrations with UK Customs officials who can stop, search, monitor and examine consignments for goods arriving into the UK which may be counterfeit.
STEP 4: Consider broadening protection in countries well known for manufacturing counterfeit goods (such as the Far East). These are often called ‘choke points’ and if you are able to mirror your IP rights in such countries, you will have more options for border protection to prevent goods leaving those countries destined for the UK or EU.
STEP 5: Implement product ID such as holograms, markings, tracers and microchips to help you, border control and your customers identify counterfeits.
Finally, sending a cease and desist letter can be a relatively cheap way of stopping the infringing acts. However, should this fail, consider contacting administrative authorities (such as HMRC and Trading Standards) to detain or seize the infringing goods. If this is not successful, then litigation is your next option. Do not forget that an infringer can also be found guilty of a criminal act under various legislations, so it is worth waving this under the nose of the infringer before resorting to civil litigation.
For more information regarding intellectual property protection and enforcement contact Riyaz Jariwalla on 01242 248426 or riyaz.jariwalla@bpe.co.uk.
These notes have been prepared for the purpose of an article only. They should not be regarded as a substitute for taking legal advice.
