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.
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.
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.