Last month, the European Parliament passed legislation and the European Court of Justice (CJEU) handed down a ruling that expands trade-related intellectual property (IP) protections in the European Union (EU) and beyond. Particularly, the European Parliament passed laws granting EU customs officials the ability to detain trademark counterfeit transshipments transiting the EU, while the CJEU ruled that EU customs authorities can seize counterfeit goods in the EU that were purchased for personal use from sellers outside the EU. Although these are positive developments that provide IP rights holders the ability to stem the flow of infringing goods, and ultimately better enforce their IP rights across borders, they also have important requirements and limitations that need to be understood.
Counterfeit Transshipments. On February 25th, the European Parliament approved amendments to the EU’s main trademark act (Council Regulation (EC) 207/2009) that will permit EU customs authorities to seize suspected trademark counterfeit goods that are being transshipped through the EU. According to reports, these reforms follow previous limitations on customs seizures that were handed down in recent CJEU decisions. Particularly, a joint 2011 CJEU decision (Koninklijke Philips Electronics NV v. Lucheng Meijing Industrial Co. Ltd. (C-446/09) and Nokia Corporation v. HMRC (C-495/09)) held that copyright and trademark counterfeit goods could only be seized by EU customs officials if they were intended for sale in the EU, and not merely transiting through EU territory.
The new Directive (T7-0118/2014) is an attempt to reverse (in part) the 2011 joint CJEU ruling by granting EU trademark owners expanded rights to legal action. According to the legislative text, a EU trademark owner will have the right to prevent others from bringing non-circulated goods into the EU that bear the owner’s trademark without authorization. This includes the “right to request national customs authorities to take action in respect of goods which allegedly infringe the [IP rights holder’s] rights.”
Beyond giving IP rights holders valuable protection against the flow of counterfeit goods into the EU, the Directive also has IP protection implications beyond Europe. According to the latest statistics available from the World Shipping Council, eight of the 50 largest container ports in the world are located in the EU. The Directive thereby gives IP rights holders the ability to stop counterfeit goods leaving a substantial number of the world’s major transshipment points, thereby limiting the global dissemination of goods infringing their marks.
Although the reforms are a welcomed enhancement of cross-border protections for IP rights holders, there are a few considerations and limitations IP rights holders should be aware of:
Trademarks Only. The Directive only applies to trademarks. Although an IP rights holder can register their EU trademarks, copyright, patents and geographical indications for monitoring by EU customs officials, the Directive’s transshipment protections only apply to trademark counterfeit goods. Similar measures may be soon adopted to prevent transshipments of counterfeit copyright goods through the EU as the European Commission is currently evaluating copyright reforms. Yet, the Directive’s exclusion of copyright counterfeit goods is particularly problematic as copyright counterfeit goods constitute a substantial amount of counterfeit goods being transshipped through the EU and other major markets.
Community Trademark Registration Required. To qualify for transshipment counterfeit protections under the Directive, a trademark owner would likely need to register their mark on a community-wide (EU) level with the Office of Harmonization for the Internal Market (OHIM). Each EU member state maintains their own trademark offices, granting a registered mark exclusive protection in their state respectively. Yet, a trademark owner would likely need a community trademark registration to qualify for the Directive’s transshipment protections as the Directive’s text only identifies “European Union trademarks” as qualifying for such protections. Fortunately, qualifying foreign IP rights holders may be able to more easily (and cheaply) obtain community registration(s) through registering their trademark(s) through the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (Madrid Protocol). However, requiring a community trademark registration to qualify for the Directive’s new protections puts EU member state trademark owners at a disadvantage compared to community trademark owners.
Customs Recordation Required. A trademark owner or rights holder would need to record their community trademark registration with EU customs authorities to qualify for the Directive’s new transshipment protections. Although customs recordation is not a specific requirement under the Directive to qualify for the enhanced transshipment protections, it is required to ensure EU customs officials are made aware of a community mark owner’s or right holder’s registration.
Directive Has Yet to be Enacted. Lastly, it is important to note that the Directive has yet to be enacted in EU member states and it remains to be seen how it will be implemented. EU member states have 30 months to implement the new Directive into their national laws, and although they are obligated to adopt the laws effectively and in the spirit of the Directive, the member states’ implementing legislation may have specific divergences.
Counterfeits for Personal Use. On February 6, 2014, CJEU ruled in Blomqvist v. Rolex SA (C‑98/13) that EU customs officials could seize and destroy non-EU originating counterfeit goods in the EU that were purchased by EU citizens for personal use. In Blomqvist, a Danish citizen bought a fake Rolex watch from a Chinese online seller. When the watch entered Denmark, Danish customs reported the suspected counterfeit to Rolex’s IP rights holder, who in turn demanded the destruction of the counterfeit watch. Danish courts found that because the counterfeit watch was purchased from a non-EU seller who was not directly selling or advertising to EU consumers, and because the watch was purchased for personal use, such a purchase did not constitute trademark or copyright infringement by the purchaser under Danish law.
The CJEU in Blomqvist reversed and found that Rolex’s copyright and trademarks were infringed, and that a EU IP rights holder does not have to prove that a non-EU seller was directly trying to sell or advertise counterfeit goods for personal use in the EU in order for EU customs officials to seize imports of the counterfeit goods. Under the EU’s previous customs regulations (Council Regulation 1383/2003), a EU trademark or copyright owner would have to prove that the counterfeit seller was directly trying to market their counterfeit goods to EU consumers in order for the personal purchase to be subject to infringement and seizure. As reported by commentators, the Blomqvist Court differed from the Council Regulation by establishing that an IP rights holder is entitled to protection of their EU trademark or copyright whenever an infringement of the same occurs in EU territory, and that counterfeit goods can be seized whenever such infringing goods enter EU territory.
Although the Blomqvist ruling gives IP rights holders stronger protections against foreign counterfeit sellers, like the Directive, there are considerations and limitations IP rights holders should be aware of:
EU IP Protection and Customs Recordation Required. Like the Directive, a trademark or copyright owner would need to ensure that their IP qualifies for protection in the EU and that they have recorded such IP with EU customs authorities in order to qualify for protections under Blomqvist.
Additional Investigation Suggested. Qualifying IP rights owners will likely need to investigate and track suspected non-EU counterfeit sellers to determine when and to whom they are selling personal counterfeit goods to ensure effective protection under Blomqvist. Rolex was fortunate in Blomqvist that a single counterfeit of their watch was detected by EU customs authorities. Unfortunately, not all brands are as well known as Rolex. A similar counterfeit personal purchase shipment for a lesser known brand may not have been as easily identified by EU customs authorities. These circumstances mean that an IP rights holder may need to perform their own monitoring to effectively detect personal shipments of counterfeit goods entering the EU. Unfortunately, this can be an expensive service that many IP rights owners do not have the resources to obtain.
What’s The Takeaway? These recent EU counterfeit enforcement reforms show that the EU is serious about preventing the cross-border flow of counterfeit goods. IP rights owners who have had problems with IP enforcement in the EU or through transshipments originating in the EU, now (or will soon) have enhanced means to protect their IP against counterfeits. Despite these advancements, IP rights holders should work closely with their counsel to ensure they understand and comply with the requirements and limitations of these recent reforms.
Over the last week, the Office of the U.S. Trade Representative (USTR) and the International Intellectual Property Alliance (IIPA) released reports on the current state of intellectual property (IP) protections for U.S. businesses abroad. These reports provide updated insights on foreign countries and foreign retail markets (both physical and online) that have recently caused U.S. businesses the most IP protection difficulties.
Here is a summary of the reports:
IIPA 2014 Special 301 Report Submission
On February 8th, the IIPA submitted their 2014 Special 301 Report Submission to the USTR. As one of the largest U.S. lobbying groups for the copyright-based industries, the IIPA’s submission identifies the foreign countries the IIPA believes provides the most ineffective IP legal protections for U.S. businesses. The USTR’s final Special 301 Report (released annually April-May) provides reporting to the U.S. government and the general public on the countries that, according to the Omnibus Trade and Competitiveness Act (19 U.S.C. § 2242(a)), deny “adequate and effective protection of [IP] rights” or “fair and equitable market access to United States persons that rely upon [IP] protection.”
Although the U.S. government rarely imposes trade sanctions based on the Special 301 Report, a country’s listing in the final report often impacts the U.S.’ trade relations with that country and the degree to which the U.S. government initiates trade promotional activities with the same. From both a private sector and practical standpoint, the Report also represents a review of the markets that U.S. businesses have had the most IP protection challenges.
What countries did the IIPA recommend for inclusion in the 2014 Special 301 Report?
Priority Foreign Countries. For a second year in a row, the IIPA has identified Ukraine as being a “Priority Foreign Country.” This is the least favorable designation available under the Special 301 reporting system. Specifically, it identifies that country as one with the “most onerous or egregious acts, policies, or practices” that “have the greatest adverse impact (actual or potential) on the relevant [U.S.] products” without making efforts to ameliorate their status. 19 U.S.C. § 2242(b)(1)). Ukraine’s designation as a Priority Foreign Country was based on a number of factors, most notably the absence of effective online copyright enforcement, and unfair and non-transparent royalty society collections. Shockingly, the classification was also based on reports of widespread software pirating by Ukrainian government agencies.
Priority Watch List and Watch List Countries. The IIPA’s Special 301 Report Submission lists Argentina, Chile, China, Costa Rica, India, Indonesia, Russia, Thailand and Vietnam on the “Priority Watch List,” and Belarus, Brazil, Bulgaria, Canada, Ecuador, Greece, Israel, Kazakhstan, Kuwait, Mexico, Romania, Saudi Arabia, Switzerland, Taiwan, Tajikistan, Turkey, Turkmenistan, United Arab Emirates and Uzbekistan as “Watch List” countries. Although not as a severe rating as a Priority Foreign Country, being listed as a country on the Priority Watch List or simply Watch List means that a country has potential IP protection deficiencies that require varying levels of USTR monitoring.
Newly Non-Listed Countries. It is also important to note that the IIPA has recommended removing a number of countries from the final 2014 Special 301 Report due to their improvements in IP protection. These countries include Barbados, Bolivia, Colombia, Dominican Republic, Egypt, Finland, Guatemala, Jamaica, Lebanon, Pakistan, Paraguay, Peru, Trinidad and Tobago, and Venezuela.
Out-of-Cycle Review of Notorious Markets
Also, on Wednesday, the USTR released an Out-of-Cycle Review of Notorious Markets that identified physical and online markets reported by U.S. businesses and industry organizations as being engaged in substantial IP piracy and counterfeiting. The Review includes particular social media and file transferring sites hosted abroad, including sites hosted in Antigua and Barbuda, Bulgaria, Canada, China, Czech Republic, Finland (possibly), Netherlands, Poland, Russian Federation, Spain, Sweden, Ukraine, United Kingdom and Vietnam. Specific physical markets in Argentina, China, Colombia, Ecuador, India, Indonesia, Mexico, Paraguay, Spain, Thailand and Ukraine were also deemed notorious.
What’s The Takeaway? Every foreign market has its own IP protection challenges. U.S. businesses that are exploring expansion into new markets should consider the IIPA’s Special 301 Report Submission (as well as the USTR’s Final Special 301 Report due out later this year), and the USTR’s Out-of-Cycle Review of Notorious Markets to help evaluate the IP risks associated with such markets. Doing so can help to ensure that such businesses can better protect their IP assets as they expand.
I have again been given the honor of guest posting for The IPKat on a follow-up story about the Canadian Olympic Committee’s trademark dispute (now a lawsuit in British Columbia) with the U.S. outdoor clothing company The North Face. Check it out at: http://ipkitten.blogspot.com/2014/02/will-north-face-put-on-brave-face-coc.html.
Enjoy the 2014 Sochi Winter Olympic Games!
Today I had the privilege to provide a guest contribution to one of my favorite intellectual property blogs, The IPKat, on a story about the Canadian Olympic Committee’s unfair competition dispute with the The North Face over the U.S. clothing company’s International Collection. Check it out at http://ipkitten.blogspot.com/2014/01/friday-fantasies_24.html.
Earlier this month, a number of international news outlets reported about Canadian clothing manufacturer Canada Goose who filed a trademark and trade dress lawsuit in Canadian Federal Court against Sears’ Canadian subsidiary (Sears Canada). The suit alleges that Sears Canada was selling knock-off versions of Canada Goose’s well-known parkas. In a statement of defense to Canada Goose’s lawsuit, Sears Canada claimed that Canada Goose’s lawsuit claims were not only unfounded, but that they were intended to bully retailers and control pricing. As reported in The Globe and Mail, the statement stated “the real purpose of Canada Goose’s campaign of intimidation is to attempt to prevent or lessen sales in the marketplace of less expensive winter jackets” and “to preserve its temporary ability to sell its garments at a huge markup to the public.”
Although Sears Canada’s comments are by no means unique for a defendant in such a trademark lawsuit, the reporting of the comments in several news outlets has significant public relations (PR) implications. By claiming that Canada Goose is using trademark laws to bully retailers and control prices, Sears’ comments inevitably impact the ways retailers and the general public perceive Canada Goose and its parka jackets. Negative public perceptions about a business’ IP enforcement actions can tarnish a business’ brand and hinder its domestic and foreign market opportunities—just like the counterfeit goods that it tries to protect itself against.
As I read multiple stories about Sears’ comments, I could not help but to think that Canada Goose did not effectively counter Sears’ accusations in the public forum. Many major international clothing manufacturers such as Gucci and Burberry pursue similarly proactive cross-border trademark enforcement strategies as Canada Goose. Yet, few of the reporting news outlets carried the comments of Canada Goose’s spokespersons who gave justifications for the lawsuit against Sears Canada. In fairness, claims of bullying are likely more sensational than justifications for brand protection. However, emerging global companies like Canada Goose must ensure that they effectively communicate to the public the justifications behind their IP enforcement actions. As growing businesses set their sights on international expansion, PR becomes nearly as valuable as trademark protection to ensure that they can take advantage of domestic and foreign market opportunities.
What’s The Takeaway? Businesses who seek legal protections for their brands need to consider the PR implications of their enforcement actions. This is even more important in an international context. As many countries and cultures have negative perceptions towards litigation, businesses need their legal counsel and public relations professionals to collaborate to ensure that the public is educated about their global IP enforcement activities. Doing so can help to prevent the unintended PR consequences that global IP enforcement can bring.
What PR issues does your business face in international IP enforcement?
In November, Wikileaks leaked positions papers from the 18th round of Trans Pacific Partnership (TPP) negotiations concerning the intellectual property (IP) chapter of the TPP agreement. The papers including positions held by TTP member states (Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam) on all forms of IP protections they will provide to IP rights owners and rights holders from their countries, and in many cases, from abroad under a final TPP agreement. Several IP news outlets have provided good analyses of the position papers including The IPKat and InfoJustice, among others.
These position papers also provide updated positions TPP member states have on online copyright enforcement, and particular, the positions each country has on adopting notice and takedown online copyright enforcement systems. In order to provide an update on my October article on the TPP’s implications on online copyright enforcement, the following are positions TPP member states have adopted in the position papers on crucial issues concerning online copyright enforcement under the TPP.
Article QQ.G.1 of the position papers propose that authors of works and producers of phonographic works will have exclusive rights concerning the reproduction of their works in any manner, including any temporary or permanent electronic reproductions and storage. Canada, New Zealand and Vietnam object to such proposed protections. Additionally, Brunei Darussalam, Chile, Japan, New Zealand and Malaysia suggest in a footnote to the Article (“Article QQ.G.1 Footnote”) that exceptions and limitations to such exclusive rights should be established for:
Temporary acts of reproduction which are transient or incidental and an integral and essential part of a technological process and whose sole purpose is to enable (a) a lawful transmission in a network between third parties by an intermediary; or (b) a lawful use of a work; and which have no independent economic significance.
Alternatively, Vietnam proposes that “it shall be a matter for national legislation [of a TPP member state] to determine exceptions and limitations under which the right may be exercised.”
What’s Does This Mean? Providing authors of works and producers of phonographic works exclusive rights to all reproductions of their works, including electronic reproductions for any duration, gives such persons or entities greater direct ability to enforce rights in their works online because Internet Service Providers (ISPs) would ultimately have less discretion to reject notice complaints. As several commentators have mentioned, the text of Article QQ.G.1 effective eliminates fair use copyright exceptions provided under U.S. copyright law and the copyright laws of other TPP member states such as Japan. By doing so, TPP member state ISPs will have greater incentive to act on any copyright infringement on their networks, including alleged infringement notified through rights owner/holder notices, due to the likely elimination of the ISPs’ own fair use defense to contributory copyright infringement for hosting unauthorized reproductions of protected work. Although notice and takedown and notice and notice systems were adopted in TPP member states to provide ISPs safe harbor from such liability upon complying with submitted notices, many ISPs in practice do not act on such notices, by determining that their users’ unauthorized reproduction of copyright-protected works on their networks is fair use, and therefore permissible. Adoption of Article QQ.G.1 would effectively force ISPs to remove allegedly infringing content or face contributory liability for the copyright infringement of their users.
However, if TPP member states ultimately adopt the Article QQ.G.1 Footnote or Vietnam’s proposal, it is likely that they will be given the option to retain any fair use exceptions provided under their own national laws, potentially impacting the degree to which TPP member state ISPs will feel compelled to act on rights owners/holders notifications of alleged infringement.
The TPP member states have divergent positions on the liability ISPs should be subject to for hosting content that infringes copyright-protected works. Article QQ.I.1 provides that the U.S., Australia, New Zealand, Peru and Singapore propose (while Malaysia and Vietnam oppose) that each TPP member state provide “legal incentives for [ISPs] to cooperate with copyright owners in deterring the unauthorized storage and transmission of copyrighted materials.” Similarly, Canada proposes that each TPP member state “provide legal incentives for [ISPs] to comply, or remedies against [ISPs] who fail to comply, with any procedures established in each party’s law for: (a) effective notifications of claimed infringement; or (b) removing or disabling access to infringing material residing on its networks.”
What Does This Mean? The U.S. and Canada’s Article QQ.I.1 proposals likely leave mandating the adoption of notice and takedown systems in all TPP member states in doubt. The U.S. Article QQ.I.1 proposal provides the same ambiguous text as the February 2011 U.S. Draft IP Chapter, and the Canadian proposal goes so far as leaving the type of ISP legal incentive system each TPP member state should adopt up to its own discretion. As a result, both proposals would likely make the adoption of notice and takedown systems in TPP member states optional. For example, less forceful online enforcement systems, such as Canada’s notice and notice system provides legal incentives for ISPs to coordinate with copyright owners despite lacking the forceful effectiveness of notice and takedown systems currently available in other TPP member states such as U.S., Australia and Japan.
Despite the limitations of such proposals, mandating that TPP member states adopt some form of legal incentives for ISPs to enforce online copyright protections may likely compel TPP member states without any rights owner/holder notification systems, including Brunei Darussalam, Mexico and Vietnam, to adopt some form of rights owner/holder ISP notification system.
Notice and Takedown Procedures
The U.S., Australia, and Singapore propose in Annex to Article QQ.I.1.3(b)(ix) (while Canada, Malaysia and Mexico reject) adopting notice and takedown procedures as the “legal incentives” identified in Article QQ.I.1. These procedures closely resembles notice and takedown procedures provided under U.S., Australian, and Singaporean law. As a part of these procedures, copyright owners and/or rights holders whose works qualify for copyright protection in a TPP member state would have to submit a notice to an ISP that provides the following information in order to have the ISP examine and remove the infringing content in question:
- The identity, address, telephone number, and electronic mail address of the complaining party (or its authorized agent);
- Information reasonably sufficient to permit the ISP to identify and locate the material residing on a system or network controlled or operated by it or for it that is claimed to be infringing, or to be the subject of infringing activity, and that is to be removed or disabled;
- Information reasonably sufficient to enable the ISP to identify the copyrighted work(s) claimed to have been infringed;
- A statement that the complaining party has a good faith belief that use of the material in the manner complained of is not authorized by the copyright owner, its agent, or the law;
- A statement that the information in the notice is accurate;
- A statement with sufficient indicia of reliability that the complaining party is the (U.S. propose “holder”) (Australia and Singapore propose “owner”) of an exclusive right that is allegedly infringed, or is authorized to act on the owner’s behalf; and
- The signature of the person giving notice.
What Does This Mean? If a final TTP Agreement mandates that TPP member states adopt a notice and takedown system, implementing Annex to Article QQ.I.1.3(b)(ix) would effectively require TPP member states to adopt similar notice and takedown procedures provided under U.S., Australian, Japanese and Singaporean law. Yet, opposition from Canada, Malaysia and Mexico may make the adoption of such requirements more unlikely.
Additionally, as Australia and Singapore propose that the “owner” of the alleged infringed copyright work be the “complaining party” listed in a notice, it is unknown whether an adopted TPP notice and takedown system would allow licensees of copyright-protected works (the “holders”) to utilize notice and takedown procedures in TPP member states. Limiting such a system’s accessibility to copyright owners only may be overly burdensome for such owners, as it would force them to enforce protections in their works on behalf of their licensees.
What’s The Takeaway?
If the U.S.-backed proposals listed above are enacted in a final TPP Agreement, copyright owners and rights holders from TPP member states, and other countries, will qualify for greater online copyright enforcement protections in TPP member states. However, such proposals have multiple obstacles before being effectively implemented. Such proposals must be included in a final TPP agreement, fully implemented as legislation in each TPP member state, and effectively upheld in each TPP member state’s legal system. Time will tell whether such enhanced online copyright enforcement protections will be adopted in the final TPP Agreement and enacted in all TPP member states.
 See Sean Flynn, Margot Kaminski, Brook Baker, & Jimmy Koo, Public Interest Analysis of the US TPP Proposal for an IP Chapter, Program on Information Justice and Intellectual Property, American University Washington College of Law, Dec. 6, 2011, 13, available at http://infojustice.org/wp-content/uploads/2011/12/TPP-Analysis-12062011.pdf (Analysis of the TPP’s fair use exception elimination was based on the U.S.’ leaked IP chapter proposal from Feb. 2011).
 Cartoon Network LP, LLLP v. CSC Holdings, Inc., 536 F.3d 121, 140 (2d Cir. 2008). See Saiful Bakri Abdul Aziz, An Assessment of Fair Dealing in Malaysian Copyright Law in Comparison with the Limitation Provisions of Japanese Copyright Law – Within the Current Technology Background, 41 Hosei Riron J. of L. & Pol. 298, 300, 305 (2009), available at http://dspace.lib.niigata-u.ac.jp:8080/dspace/bitstream/10191/12583/1/41(3.4)_298-327.pdf.
Last week, I had the privilege of being a guest writer for Seattle-area based Efinitytech on an article dealing with infringing online advertisements. Although it was focused on combatting trademark infringing online advertising on U.S.-based search engines such as Google, Bing and Yahoo!, as well as U.S. social media sites such as Facebook and Twitter, it contained many of the same considerations trademark owners, and their agents, should consider when combatting infringing online advertisements abroad. However, there are a few additional foreign issues trademark rights holders should consider.
1. Obtain A Trademark Registration. U.S. businesses generally need a U.S. federal trademark registration to submit an advertising complaint to a U.S. online advertising website. A U.S. federal trademark registration establishes a presumption of ownership and exclusive rights in a trademark in the U.S. This gives U.S. search engines and social media sites assurances that a filed advertising complaint is valid.
Additional Foreign Considerations: A trademark registration is also generally required to submit ad complaints in other countries. Many countries do not even recognize a business’ rights in a trademark unless it has registered the mark with the country’s national trademark office. As a result, Google, Bing and Yahoo!, their foreign subsidiaries, as well as many other foreign advertising sites, require that a business have a valid trademark registration in the country where they are filing an online ad complaint. This means that if a rights holder wants to enforce their trademark rights against a foreign ad, they generally have to have a valid trademark registration in that foreign country.
2. Advertising Websites Have Different Trademark Enforcement Reputations. U.S. search engines and social media sites have their own track records for responding to advertising complaints. For example, Bing and Yahoo!’s U.S. sites will often remove an infringing ad upon evidence of a valid U.S. federal trademark registration, while Google U.S.’ site generally declines removing ads infringing a descriptive trademark, even if the mark is federally registered through acquired distinctiveness (aka secondary meaning).
Additional Foreign Considerations: The varied reputations of online advertising sites’ handling of trademark ad complaints are even more disparate at the global level. Many foreign sites have good track records, while others less so. Also, some foreign advertising sites have ad enforcement features that offer benefits beyond those offered on most U.S. websites. For example, China’s leading search engine, Baidu, allows trademark rights holders to register their Chinese registered marks with their representatives in order to prevent others from purchasing infringing ads and ad words on their website. However, like Google, Baidu’s IP enforcement system is imperfect, as it has been criticized in the past for failing to stop the sale of ad words to fraudulent advertisers.
3. Multiple Ad Complaints May Need To Be Filed. Trademark rights holders may need to submit multiple complaints against an infringer before an infringer’s ad appears removed. This can be due to the ineffectiveness of an advertising website complaint system, or more likely because an infringing advertiser has made several ad purchases, requiring the submission of multiple ad complaints in order to effectively remove all of an infringer’s advertisements.
Additional Foreign Considerations: None. Additional complaints may need to be filed for foreign trademark ad complaints as well.
4. Consider The Ramifications Of Filing An Online Complaint. Lastly, submitting an online ad complaint may impact an infringing advertiser’s online reputation as well as the trademark rights holder. Based on these ramifications, trademark rights holders should consider reaching out to alleged infringers, either directly or through an attorney, to see if the disputed ad can be removed amicably.
Additional Foreign Considerations: The consequences of filing online trademark ad complaints abroad is as significant, or even more so, then doing so in the U.S. As I have previously highlighted, countries maintain different beliefs and perceptions towards the legal rights that should be given to trademarks and other forms of IP. In particular, several important and emerging foreign markets such as Canada, Chile and New Zealand disagree with forceful online IP enforcement, as seen in their current rejection of copyright website takedowns. This means that submitting online trademark ad complaints may have similar or even more negative reactions in a business’ particular industry (and among the public) abroad than at home. Based on these circumstances, businesses should feel even more inclined to first reach out to foreign infringing advertisers before they submit online ad complaints.
What’s The Takeaway? As combatting infringing online advertisements has many of the same challenges and considerations in the U.S. as abroad, businesses wishing to protect their brands abroad need to identify the countries where they have or may have significant business and develop strategies to protect against online ad infringement. This requires considering foreign trademark registration, identifying major foreign online advertising websites, and developing processes and procedures to monitor and enforce rights against infringing advertising activity on such websites. Doing so can help businesses to more effectively protect their brands in the foreign markets they wish to grow.
The Canadian Parliament reintroduced proposed legislation late last month that will dramatically impact how foreign copyright and trademark owners can protect their rights in Canada, and ultimately around the world. Reported to be enacted by the end of this year, the Combatting Counterfeit Products Act (Bill C-56; CCPA) proposes specific amendments to Canada’s Copyright Act and the Trade-marks Act that will allow foreign rights owners to better control the cross-border flow of counterfeit goods in Canada. The CCPA provides several notable reforms, including the expansion of registerable trademarks and new claims of recovery for trademark counterfeit goods. However, I believe its most important proposed reform is the establishment of a system allowing rights owners to register their copyrighted works and trademarks with Canadian authorities—while gaining help in detaining counterfeit shipments entering and leaving Canada.
The CCPA’s proposed request and detention system is an expansion of legal protections against counterfeit goods under current Canadian law because it introduces non-judicial measures rights owners can use to prevent the import and export of counterfeit goods in Canada. Currently, rights owners must obtain a Canadian court order to halt infringing imports and exports of counterfeit goods in and out of Canada. The CCPA addresses these limitations by allowing copyright and trademark owners to file a request for assistance with the Ministry of Public Safety and Emergency Preparedness (Ministry). This allows Canada’s border authority, the Canadian Border Services Agency (CBSA), to monitor inbound and outbound shipments of counterfeit products for a two-year period, and temporarily detain counterfeit good shipments to allow further investigation.
Although rights owners will be required to provide a security deposit and fees for a detention, the request and detention system will provide a more expedient, inexpensive and overall more effective means for foreign rights owners to prevent the dissemination of counterfeit products, both in Canada and beyond. Filing a request for assistance with the Ministry is a faster and relatively less expensive procedure that seeking a court order. It also allows the CBSA to assist in policing shipments, complementing any monitoring activities conducted by foreign rights owners, and ultimately improving a foreign right owner’s overall global IP enforcement efforts.
Despite these benefits, the proposed request and detention system also has limitations:
Goods for Personal Use: The CCPA’s system does not cover counterfeit goods for personal use, such as those in personal baggage.
Parallel Importation: The system excludes copyright grey goods, namely copies of copyright-protected works made in a country outside of Canada where the copies were authorized to be made.
Transshipment: The CCPA’s system does not apply to transshipments. This means that foreign rights owners’ requests to the Ministry will not assist in detaining shipments of counterfeit goods that are only intermediately transiting Canada.
National Treatment: A foreign rights owner’s access to the request and detention system may also be limited depending on the type of IP they wish to enforce. A foreign copyright rights owner can likely access the system regardless if they are Canadian or if their work was created in Canada due to the legal protections provided in the Berne Convention for the Protection of Literary and Artistic Works (Berne Convention). The Berne Convention allows a work from a Berne Convention country (Berne Convention countries) to qualify for protection in another Berne Convention country when it becomes attached. Attachment requires that the author of the work be a national of a Berne Convention country, the author is a habitual resident of a Berne Convention country, that the work is first published in a Berne Convention country, or that the work is published in a Berne Convention country within 30 days after an initial publishing in a non-Berne Convention country.
If a work is attached through any of these means, it is treated as if the work originated in each Berne Convention country, and is then subject to each Berne Convention country’s copyright protection requirements in order to qualify for copyright protection in that specific country. This means that if a foreign work becomes attached, and qualifies for protection under Canada’s Copyright Act, a copyright rights owner will have copyright protection for their work in Canada and may utilize the CCPA’s request and detention procedures once the CCPA is enacted.
Trademark rights owners will not be as easily able to utilize the CCPA’s system. Unlike copyrights, trademarks are generally territorial, meaning that a trademark or service mark registration only grants its owner rights in the mark in the territory of the registering country. This means that a trademark owner must generally have registered their mark in Canada in order for them to utilize the CCPA’s trademark request and detention system. Further, as Canada is not a member to the Protocol Relating to the Madrid Agreement Concerning the International Registration of Marks (aka the Madrid Protocol), foreign trademark owners need to obtain a Canadian trademark attorney to register their marks in Canada.
What’s The Takeaway?: The CCPA will give foreign copyright and trademark owners more effective and less expensive tools to protect their copyrighted works and trademarks in Canada and beyond. Its request and detention system does this by not only restricting imports of counterfeit goods, but also limiting their dissemination from Canada to other countries. Yet, the CCPA underscores the vigilance that foreign rights owners must have to ensure that they register and re-register requests for assistance for their works and marks. Only copyright and trademark owners (not authorized parties, e.g. licensees) can file requests with the Ministry to utilize the system’s full protections.
Further, the CCPA shows that foreign trademark owners who are serious about protecting their brands in Canada, and ultimately throughout the world, need to consider registering their marks in Canada in order to effectively utilize the CCPA’s request and detention system once it is enacted. Upon doing so, such owners can better insure protection for their marks in Canada and beyond.
In recent months, representatives from the Trans Pacific Partnership Agreement (TPP; Australia, Brunei Darussalam, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, United States and Vietnam) member states have been pushing to finalize a final TPP agreement. A particularly contentious issue in these negotiations has been the intellectual property (IP) chapter of the TPP Agreement. A predominant proposed version, the U.S. Draft IP Chapter, has been controversial as it requires TPP member states to adopt IP standards that are in many cases is on par with those under U.S. law, and in some cases, beyond U.S. law and generally-accepted global IP protection standards in the World Trade Organization’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS). As a result, several TPP member states have objected to U.S. Draft IP Chapter, thereby stalling progress towards a final TPP agreement.
Of particular importance in these debates is the online copyright enforcement protections procedures the TPP agreement will mandate for its member states. If enacted, the U.S. IP chapter would likely require TPP member states to adopt copyright enforcement measures that would allow copyright owners, rights holders, or agents thereof (collectively, “Authorized Party”) to directly petition Internet Service Providers (ISPs) to remove hosted infringing content. Article 16.3(a) of the U.S. Draft IP Chapter requires that TPP member states provide “legal incentives for [Internet] service providers to cooperate with copyright owners in deterring the unauthorized storage and transmission of copyrighted materials.” Although ambiguous, adopting such provisions would likely require TPP member states to maintain or enact a form of copyright protection protocols that would allow Authorized Parties to petition ISPs hosting or transmitting infringing content to remove such content.
The main question arising from these potential reforms is whether they would result in TPP member states adopting U.S.-like notice and takedown protocols, or less forceful ISP copyright enforcement measures. Notice and takedown systems generally provide ISPs a safe harbor from liability for hosting or transmitting infringing content if they remove infringing content they host or transmit upon receipt notice from an Authorized Party. In contrast, other TPP member states do not provide copyright owners such a level of protections. Some of these states do not require that a ISP take down allegedly infringing content upon receipt of notice from an Authorized Party to qualify for safe harbors. Others require that Authorized Parties seek judicial copyright enforcement to combat online infringement, which is a more delayed and costly process.
Although not stated in the U.S. Draft IP Chapter, the U.S. may, as it has in previous U.S. free trade agreements (FTAs), negotiate that TPP member states adopt notice and takedown protocols in TPP side letters. In previous U.S. FTAs, the U.S. has executed additional annexed agreements, known as “side letters,” where other countries agreed to adopt U.S.-like notice and takedown protocols. This has had varying degrees of success. Australia, Peru and Singapore, among others, have adopted notice and takedown protocols similar to those under the U.S.’ Digital Millennium Copyright Act (17 U.S.C. § 512(c)(3)(A)) in FTA side letters with the U.S., while Chile rejected adopting such a system.
Similar mixed outcomes could result from the TPP as well. Brunei Darussalam, Mexico and Vietnam do not maintain any ISP copyright enforcement protocols short of judicial action. Further, a number of TPP member states including Canada, Chile and New Zealand maintain online copyright enforcement systems that arguably do not provide the same level of direct and expedient enforcement power or protections to Authorized Parties as notice and takedown systems. Lastly, some TPP member states such as Malaysia that do maintain notice and takedown protocols have called for establishing TPP agreement implementation exceptions for existing domestic legislation. This would likely give TPP member states with weaker online copyright enforcement systems such as Canada, Chile and New Zealand the ability to maintain their less forceful online copyright enforcement systems, while still remaining parties to the TPP Agreement.
Despite these limitations, the TPP’s potential adoption of notice and takedown protocols will ultimately impact the ability to which Authorized Parties can more quickly, cheaply and effectively enforce online copyright protections in the TPP member states. Adoption of notice and takedown protocols will enable Authorized Parties to more easily enforce online copyrights in TPP member states, while making such protocols optional would likely make such enforcement more difficult. Only time will tell whether the U.S. and other notice and takedown proponents will persuade other TPP member states to adopt notice and takedown protocols.
To understand how the TPP would impact individual TPP member state online copyright enforcement systems, the following are brief summaries of the TPP member states’ current online copyright enforcement systems. However, there are a few things to note:
- Jurisdiction and National Treatment: In order for an Authorized Party to utilize a notice and takedown in a TPP member state, their content must generally qualify for national copyright protection in that TPP member state, and the particular ISP must be subject to the jurisdiction of that country. Further information about these preliminary issues can be found in my March 25, 2013 posting.
- Enforcement System Legend: As mentioned, online copyright enforcement procedures vary amongst the TPP member states. Countries that maintain a notice and takedown protocols are identified below as a “Notice and Takedown,” while countries that maintain systems that simply require ISPs to notify infringers of their infringing acts without infringing content removal are listed as “Notice and Notice.” Countries that do not have means for Authorized Parties to directly enforce their copyright protections through ISP notices, and are instead forced to seek judicial action are referred to as “Judicial System.”
TPP Member State Online Copyright Enforcement Systems
|Enforcement System||Notice and Takedown|
|Overview and Notes||The U.S. notice and takedown protocols have been implemented in FTAs with Bahrain, Dominican Republic, Morocco, Oman, Peru, Singapore and South Korea.|
Digital Millennium Copyright Act (17 U.S.C. § 512(c)(3)(A))
|Enforcement System||Notice and Takedown|
|Overview and Notes||Australia adopted notice and takedown protocols based on a side letter annexed in the U.S-Australia FTA.|
Regulation 20(I-J), 1969 Copyright Regulations, Schedule 10 (Part 1), 1969 Copyright Regulations
|Enforcement System||Judicial System|
|Overview and Notes||Brunei does not currently maintain any legal means for Authorized Parties to directly petition ISPs to takedown infringing content. However, recent reports have indicated that Bruneian authorities are evaluating copyright reforms, which may include ISP notice and takedown protocols.|
|Enforcement System||Notice and Notice|
|Overview and Notes||Although Canada considered adopting a notice and takedown protocols in 2006, they opted for a notice and notice system in 2012 in order to balance the interests of copyright owners and Internet users.|
Section 41.25-41.27, The Copyright Act
|Enforcement System||Judicial System (*notice and takedown variation)|
|Overview and Notes||Chile rejected adopting notice and takedown protocols in both the U.S.-Chile FTA and proposed copyright reforms in 2010. Instead, Chile requires that Authorized Parties submit an expedited judicial petition to evaluate alleged infringement and be granted a takedown.|
Article 85R, Law No. 20.435 (amending Law No. 17.336 on Intellectual Property
|Enforcement System||Notice and Takedown|
|Overview and Notes||Japan’s notice and takedown protocols establishes that allegedly infringing content will be taken down seven days after notice is provided from the ISP to the alleged infringer.|
Article 3(2)(ii), Act No. 137 0f 2001 (Act on the Limitation of Liability for Damages of Specified Telecommunications Service Providers and the Right to Demand Disclosure of Identification Information of the Senders)
|Enforcement System||Notice and Takedown|
|Overview and Notes||Malaysia enacted copyright reforms in 2010 that permit Authorized Parties to submit infringement notices to ISPs that will remove infringing content within 48 hours of notice to the alleged infringer from the ISP. However, The International Intellectual Property Alliance (IIPA) has criticized Malaysia’s notice and takedown protocols for not providing enough details about notice requirements and enforcement procedures.|
Article 43H, Copyright (Amendment) Act 2010
|Notice Requirements||As mentioned, Malaysia does not provide specific content requirements for ISP takedown notices.|
|Enforcement System||Judicial System|
|Overview and Notes||Mexico has no legal procedures for Authorized Parties to remove infringing online content short of seeking judicial action. It is also important to note that Mexican telecommunications laws prohibit ISPs from disclosing their customers’ personal information.|
|Enforcement System||Notice and Takedown-Judicial System Mix (aka Three Strikes)|
|Overview||After enacting notice and takedown protocols in 2008, New Zealand repealed them in February 2010. They were replaced with a Three Strikes System, requiring Authorized Parties to submit multiple notices to an ISP, and a takedown application to the New Zealand Copyright Tribunal in order to obtain the removal of infringing content. The Three Strike System subjects the Authorized Party to fees of NW$25.00 (US$20.00) per notice, and NZ$200.00 (US$208.00) per application.|
Section 92C and 92D, Copyright Act 1994;
Section 4, Copyright (Infringing File Sharing) Regulations 2011
|Enforcement System||Notice and Takedown|
|Overview and Notes||Peru adopted notice and takedown protocols based on a side letter annexed in the U.S-Peru Free Trade Agreement.|
|Governing Legislation||Copyright Law (Legislative Decree No. 822)|
|Enforcement System||Notice and Takedown|
|Overview and Notes||Singapore adopted its notice and takedown protocols in 2006 based on a side letter agreement annexed in the U.S-Singapore FTA.|
Section 193C(2)(b) Copyright Act (Chapter 63), Copyright (Network Service Provider) Regulations 2005
|Enforcement System||Judicial System|
|Overview and Notes||Although Vietnam recently adopted Internet liability reforms under the Internet Laws (Decree No. 72/2013), such reforms were silent on online copyright enforcement. The IIPA has criticized Vietnam for failing to adopt effective procedures to address online piracy administrative complaints.|
**Important Note**: Even if a country maintains notice and takedown protocols, an ISP is generally not obligated to take down infringing content despite legal incentives to do so. Those with further questions about a TPP member state’s online copyright enforcement procedures should seek qualified counsel in that particular country.
 Joint Press Statement TPP Ministerial Meeting Bandar Seri Begawan, Brunei Darussalam, Office of the U.S. Trade Representative, Aug. 2013, available at http://www.ustr.gov/Joint-Press-Statement-TPP-Ministerial-Brunei.
 See Sean Flynn, Margot Kiminski, Brook Baker and Jimmy Koo, Public Interest Analysis of the US TPP Proposal for an IP Chapter, Program on Information Justice and Intellectual Property: American University Washington College of Law, 3, Dec. 6, 2011, available at http://infojustice.org/tpp-analysis-december2011.
 Id. at 50.
 Copyright Issues in the TPP: Malaysia, Public Citizen, 2012, available at http://www.citizen.org/TPP-Copyright-Issues-MY#_ftnref.
 See id.
 See Calls For Brunei To Carry Tougher Copyright Laws, The Brunei Times, Aug. 10, 2013, available at http://www.bt.com.bn/news-national/2013/08/10/calls-brunei-carry-tougher-copyright-laws.
 Paul Chwelos, Assessing the Economic Impacts of Copyright Reform on Internet Service Providers, Industry Canada, Jan. 2006, available at http://www.ic.gc.ca/eic/site/ippd-dppi.nsf/eng/ip01090.html; Bob Taratino, Online Infringement: Canadian “Notice and Notice” vs US “Notice and Takedown”, Heenan Blaikie LLP, Jun. 27, 2012, available at http://www.lexology.com/library/detail.aspx?g=e0e3ffdb-a96f-4176-add3-92fd2812d4bc.
 Chile’s Notice-and-Takedown System for Copyright Protection: An Alternative Approach, Center for Democracy & Technology, Aug. 28, 2012, available at https://www.cdt.org/files/pdfs/Chile-notice-takedown.pdf.
 IIPA 2012 Report: Malaysia, IIPA, 207-08, 2012, available at http://www.iipa.com/rbc/2012/2012SPEC301MALAYSIA.PDF.
 IIPA 2013 Report: Mexico, IIPA, 210, 2013, available at http://www.iipa.com/rbc/2013/2013SPEC301MEXICO.PDF.
 Section 92A Bill Introduced in Parliament Today, Behive.Gov.Nz, Feb. 23, 2010, available at http://www.beehive.govt.nz/release/section-92a-bill-introduced-parliament-today.
 IIPA 2013 Report: Vietnam, IIPA, 289, 2013, available at http://www.iipa.com/rbc/2013/2013SPEC301VIETNAM.PDF.
By guest blogger Mark Kusic, President, Founder and Private Investigator, Kusic and Kusic Private Investigators Ltd., Vancouver, British Columbia, Canada.
Obtaining a foreign private investigator (PI) can have a significant impact in foreign intellectual property (IP) litigation. A good and experienced foreign PI understands how to collect evidence in a way that is legally relevant and admissible in the country they are located. The recent Canadian trademark counterfeiting case Guccio Gucci S.p.A. v. Mazzei,  F.C. 404 (Can.) illustrates this point. The famous Italian fashion designer Gucci investigated and brought suit against a Toronto-based seller of counterfeit Gucci products. As a part of their investigative efforts, Gucci worked with three Canadian investigators to investigate and collect evidence on the seller. Initially, one PI working undercover responded to the seller’s online advertisement and set up a meeting with the seller where the investigator purchased the seller’s counterfeit Gucci goods.
Next, a second undercover investigator responded to the seller’s online advertisement and scheduled a time to meet the seller at his storage facility. Once at the facility, the investigator witnessed and was able to video record hundreds of counterfeit items, as well as purchase counterfeit Gucci and other luxury brand products.
Lastly, a third investigator accompanied an attorney and a police detective to the seller’s storage facility and served the seller a cease and desist letter. During the process, the investigator saw and discretely recorded the interaction, which also included evidence of a number of counterfeit Gucci products.
Based on these investigations, the team of Canadian investigators was able to assist Gucci in documenting the existence and sale of the seller’s counterfeit Gucci goods, ultimately helping Gucci obtain a summary judgment ruling and compensatory damages for each count of trademark infringement.
So how can IP owners ensure that a foreign PI they hire will be as effective as those hired by Gucci in Guccio Gucci S.p.A? Well, there are few things IP owners should look for when hiring a foreign PI, as well as things to keep in mind once a foreign PI is hired.
Experience. IP owners should make sure that the foreign PI they hire has extensive IP investigation experience. There are several ways to verify such experience. First, an IP owner can check the PI’s online presence by reviewing the PI’s website, and searching their name online in conjunction with terms such as “anti-counterfeiting” and “brand protection” to obtain further information about the PI’s IP investigation experience. They can also check to see if the PI firm is accredited and licensed by regional, national or international PI associations that handle IP investigations (see next point).
It is also good to ensure that a foreign PI has extensive online investigation experience if that is to be the focus of the IP investigation. The foreign PI needs to be able to expertly navigate and research the Internet including websites where potential foreign infringers and counterfeiters are active, such as on Alibaba, Craigslist, Facebook and eBay, among others. As each website and online marketplace has their own rules and processes for handling IP violations, IP owners with a specific website concern should inquire whether the foreign PI they wish to hire has in-depth experience with the particular website in question in order to determine whether the foreign PI can be of assistance.
Licensing. IP owners should make sure the foreign PI they wish to hire is licensed and accredited with governing authorities and industry associations, both regionally, nationally and (preferably) internationally. Any foreign PI firm chosen should be a member of their regional and national professional association, such as the Private Investigators’ Association of British Columbia and the Canadian Association of Private Investigators in the case of my firm respectively. Although not required, a foreign PI firm’s membership with a recognized international investigator association such as the World Association of Detectives and the International Trademark Association (INTA) further solidifies their credentials.
Know Your Ethical and Legal Obligations. IP owners also need to be aware of their legal and ethical obligations once they hire a foreign PI. They should not direct their foreign PI to access information that is not available to the general public, misrepresent themselves, or conduct other illegal practices. Any evidence gathered by a foreign PI under these circumstances is likely inadmissible, and may even result in legal action taken by the subject of the foreign investigation.
Parting Notes. Obtaining a good and experienced foreign PI can significantly benefit a IP owner’s foreign IP litigation efforts. Following these suggestions can help to ensure that the right foreign PI is chosen and effectively utilized.