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book image Protecting the Brand: Counterfeiting and Gray Markets
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Author Name Peter Hlavnicka
Anthony Keats
Ryan Drimalla
Published date 2016
ISBN no. 978-1-58852-339-6
eBook ISBN no. 978-1-58852-209-2
Condition New
To purchase this book, you must first complete the registration or login.
About the Authors
Chapter 1: What Is Brand and Why Protect It?
§ 1.01 Brand Protection—What Is It and Why Is It So Important?
§ 1.02 The Effects of the Internet and Globalization on Brand Protection
§ 1.03 The Gray Market
[1] What Is the Gray Market?
[2] Secondary Markets Distinguished from Gray Market
[3] Ignore Gray Goods at Your Own Peril
[4] How, Why, and When Do Products Enter the Gray Market?
[a] Currency Differential
[b] Varying Cost Structures
[c] Price Discrimination
[d] Differences in Government Regulations
[e] Consumer Preferences
[f] Dumping
[g] Fraud
[5] Materially Different Standard
[6] Differences Found to Be Material
[a] Altered or Obliterated Serial Numbers
[b] Foreign Language Decals and Manuals
[c] Lack of Standard Domestic Warranty at a Substantially Reduced Price
[d] Product Composition or Physical Differences or Both
[e] Example Involving Several Material Factors
§ 1.04 What Is the Black Market?
Chapter 2: Problems Caused by Counterfeit and Gray Market Goods
§ 2.01 Degradation of Brand and Loss of Good Will
[1] Customer Confusion and Dissatisfaction
[2] Dangers Caused by Gray and Counterfeit Goods
[3] Bundling with Legitimate Products
§ 2.02 Channel Partner Dissatisfaction
§ 2.03 Effect on Quality Control
§ 2.04 Service and Warranty Abuse
§ 2.05 Free Rider
§ 2.06 Impact on Economy and Society
Chapter 3: Incidents of Counterfeiting and Gray Marketing in Various Industries
§ 3.01 Introduction
§ 3.02 Gray Market and Counterfeit Goods
[1] Fashion and Luxury Goods
[2] IT
[3] Transportation (Automotive, Aviation)
[4] Pharmaceuticals
[5] Personal Hygiene Products, Cosmetics
[6] Cameras
[7] Watches and Textbooks
[8] Toys
[9] Cigarettes
[10] Candy and Soft Drinks
[11] Humanitarian Sales to Third World Countries
Chapter 4: Proactive Internal Procedures to Combat Counterfeiting and the Gray Market
§ 4.01 Overview
§ 4.02 Licensing and Distribution Agreements
[1] Scope and Grant of Rights
[2] Purchasing and Resale Constraints
[3] Audits
[4] Software License Agreements
[5] Warranty
§ 4.03 Pre-Sale Due Diligence
§ 4.04 Partner Screening and Contracting
[1] Selecting Partners: Screening and Certification
[a] Credit History and Overall Financial Strength
[b] Business Hierarchy
[c] Credit Assurance or Security Deposit
[2] Contracting with Partners to Prevent Gray and Counterfeit Goods from Coming into the Supply Chain Through Partners
[a] Scope and Grant of Rights
[b] Definitions
[c] Relationship
[3] Right to Audit
[4] Incentives
[5] Penalties
[6] Record Keeping and Audit
[7] Under-Reporting Sales
[8] Consent to Injunctive Relief
[9] Limitation of Liabilities and Damages
[10] Patents and Copyrights
[11] Indemnity
[12] Arbitration
[13] Jurisdiction and Venue
§ 4.05 Identifying the Perpetrators
[1] Warning Signs of Gray Market and Counterfeiting Activity
[a] Pricing Anomalies and Requests for Special Discounts
[b] Changes in Ordering Habits
[c] Changes in Delivery
[d] Spike in Returns or Warranty Requests
[2] Monitoring
[a] Internet
[b] Stings and Active “on the Street” Investigations
[c] Tradeshow Canvassing
[3] Monitoring Sales Trends and Channel and Supplier Audits
[a] Auditing Sales Activity: Ensuring Volume Discounts Going to Proper Place
[b] Product Tracking
§ 4.06 Discounting Programs
§ 4.07 Improving Warranty and Service Process
§ 4.08 Global vs. Regional Price and Control
§ 4.09 Building Corporate Awareness
[1] Sales Force Education and Due Diligence: Training Salespersons to Spot Red Flags
[2] Educate Dealer Network Regarding Differences and Steps Taken to Stop Gray Marketing
[3] Tools and Processes to Enforce the Strategy
§ 4.10 Public Relations: Inform Public and Customers Regarding Differences and Dangers of Gray/Counterfeit Goods
[1] Website Disclaimer: Detailing Above and That No Service on or Return of Gray/Counterfeit Goods
[2] Website with Policy, Processes, Tools and Examples of Actions Taken (Communication Hub)
§ 4.11 Engineering and Supply Chain Process Controls
[1] Shipping Controls
[2] Tracking
[3] Safeguarding Products and Serial Numbers
[4] Product Enhancements
[5] Authentication Technologies
§ 4.12 Government and Law Enforcement Agencies and Organizations
[1] Overview of a Basic Public Policy Program
[2] Establishing a Basic Public Policy Program
[3] Federal Bureau of Investigation (“FBI”)
[4] Internal Revenue Service (“IRS”)
[5] Immigration and Customs Enforcement (“ICE”)
[6] National Intellectual Property Rights Coordination Center
§ 4.13 Industry Cooperation
§ 4.14 Disciplining Channel Partners
[1] Probation
[2] Suspension
[3] Monetary Penalties or Reduction in Allotment
Chapter 5: Using the Lanham Act to Combat Gray and Counterfeit Goods
§ 5.01 What Is the Lanham Act?
[1] Section 32: Infringement of a Registered Mark
[2] Section 43(a): False Designation of Origin and Unfair Competition
[3] Section 43(c): Dilution
§ 5.02 Gray Market Goods vs. Counterfeit Goods
§ 5.03 History of the Lanham Act
§ 5.04 Jurisdictional Issues Related to the Lanham Act
[1] When to Use Which Section
[a] Section 32: Infringement of a Registered Mark
[b] Section 43(a): False Designation of Origin and Unfair Competition
[c] Section 43(c): Dilution
[2] Standing to Bring a Claim
[a] Section 32: Infringement of a Registered Mark
[b] Section 43(a): False Designation of Origin and Unfair Competition
[c] Section 43(c): Dilution
[3] Concurrent Action Under the Lanham Act and the ITC
[4] Common Element: Material Difference Test
Chapter 6: The Material Difference: Sections 32, 43(a) and 42 of the Lanham Act and Section 526 of the Tariff Act
§ 6.01 Introduction
§ 6.02 The Material Difference: the Presumption of Consumer Confusion
§ 6.03 Examples of Material Differences
[1] Use of Packaging or Composition of Product Different from That of the Domestic Market
[2] Altered Product Unique Identification (Serial Numbers)
[3] Sale Without Standard Warranty and at Significantly Lower Pricing
[4] Foreign Language Labels, Markings, and Other Product Documents
Chapter 7: Trademark Infringement: Diminishing the Value of Brand Identification
§ 7.01 Elements of Trademark Infringement
[1] Registered Mark
[2] U.S. Intent to Use Requirement
[3] Tacking
[4] Use Without Consent of Owner of Mark
§ 7.02 Use in Commerce
§ 7.03 Sale of Goods or Services
§ 7.04 Reproduction, Counterfeit, Copy, or Colorable Imitation
§ 7.05 Likelihood of Confusion: Balance of Factors
[1] Strength of Marks
[2] Degree of Similarity
[3] Proximity of Products and Likelihood of Bridging the Gap
[4] Evidence of Actual Confusion
[5] Intent to Copy/Infringe
[6] Quality of Infringing Product
[7] Sophistication of Buyer
[8] Initial Interest, Post-Sale and Reverse Confusion
§ 7.06 Trademark Dilution
[1] Nature of the Tarnishment
[2] Defenses to Dilution Under the TDRA
§ 7.07 Impact of New Technology on Trademark Protection: 3-Dimensional Printing
Chapter 8: The Legal Framework for Protection from Copyright Piracy
§8.01 Digital Space Creates Need for Significant Revisions to U.S. and European Copyright Laws
§ 8.01A Scope of Copyright Piracy: Software, Film, Music, Books
§ 8.02 Jurisdiction
§ 8.03 Registration
§ 8.04 Rights Protected by the Copyright Act
§ 8.05 International Treaties and Their Impact on Infringement
§ 8.06 Elements of the Prima Facie Case of Infringement
§ 8.07 The First Sale Doctrine: a Defense to Piracy?
[1] Lessons in Software and Music
[2] Counterfeit Items
[3] The Gray Market
§ 8.08 Fair Use
[1] Fair Use and the Internet
[2] De Minimis Use
§ 8.09 Online Piracy
[1] Contributory Liability
[2] Vicarious Liability
[3] Inducement
[4] Notice and Takedown Under the DMCA
[5] Scraping
§ 8.10 New Media: Videogames and Virtual Worlds
§ 8.11 Technologies Challenging the Boundaries of Copyright Law
[1] Relevant Law
[2] Positions of the Litigants
[3] Does Aereo Perform?
[4] Is the Performance Public?
[5] Infringement?
[6] General Comments
§ 8.12 Impact of New Technology: 3-Dimensional Printing
Chapter 9: State Civil and Criminal Anti-Counterfeiting Statutes
§ 9.01 A Parallel System of Trademark Anti-Counterfeiting Statutes
§ 9.02 Why Is the Parallel System of Trademarks Important or of Value?
§ 9.03 State Statutes and Common Law Relating to Counterfeiting
§ 9.04 Chart of State Criminal Counterfeiting Statutes
Chapter 10: International Trade Commission and U.S. Customs and Border Protection, the Lanham Act and the Tariff Act
§ 10.01 The International Trade Commission
§ 10.02 Advantages of Using the ITC
§ 10.03 Disadvantage of Using the ITC vs. a Federal Lanham Act Action
§ 10.04 Complaint Before the ITC
§ 10.05 Responding to a Complaint
§ 10.06 Prima Facie Case
[1] Unfair Acts
[2] Importation
[3] Domestic Market
[4] Substantial Injury
§ 10.07 The Proceedings
[1] Pre-Hearing
[2] Hearing
[3] Appeals
§ 10.08 Remedies
§ 10.09 U.S. Customs and Border Protection (“Customs”) Standards
§ 10.10 Recordation of Mark/Name with Customs
§ 10.11 Recording Assignment and/or Renewal of a Mark with Customs
§ 10.12 Counterfeit vs. Gray Market
§ 10.13 Exceptions to the Restricted Mark Standard
[1] Authorized Use and Common Control or Ownership
[2] Exception to the Exception: Physical and Non-Physical Material Difference Between the Authorized Product and the Unauthorized Product
[3] Obtaining Lever Protection from Customs
[4] Gaining Entry Despite the Existence of a Material Difference Between a Gray Market Product and a Domestic Product
Chapter 11: Federal Criminal Law
§ 11.01 Background to the 1984 Trademark Counterfeiting Act
[1] Need for Deterrence
[2] Criminal and Civil Actions
§ 11.02 Evolution of the Trademark Counterfeiting Act
[1] Elements of 18 U.S.C. § 2320(a)(1)
[2] Elements of 18 U.S.C. § 2320(a)(2)
[3] Elements of 18 U.S.C. § 2320(a)(3)
[4] Elements of 18 U.S.C. § 2320(a)(4)
[5] Amendments to the Trademark Counterfeiting Act
[6] Legislative Intent, Case Law, and Legislative Changes to the Elements of the Trademark Counterfeiting Act
[a] Defendant Trafficked in Goods or Services or in Labels, Patches, Stickers, Wrappers, Badges, Emblems, Medallions, Charms, Boxes, Containers, Cans, Cases, Hangtags, Documentation, or Packaging of Any Type or Nature
[i] Definition of “Trafficking”
[ii] “Goods or Services”
[b] Defendant Intended to Traffic in Goods or Services
[c] Defendant Used a “Counterfeit Mark” on or in Connection with the Goods and Services
[i] Definition of Counterfeit Mark
[ii] Counterfeit Mark Must Be Identical to or Substantially Indistinguishable from a Genuine Mark
[iii] Genuine Mark Must Be Federally Registered on the USPTO Principal Register
[iv] The Prosecution Must Prove That the Genuine Mark Was in Use During the Counterfeiting
[v] Use of Counterfeit Mark on or in Connection with Goods and Services
[vi] Counterfeit Mark Must Have Been Used for Same Type of Goods and Services for Which the Infringed Mark Is Registered with the Principal Register at the USPTO
[vii] Counterfeit Mark Must Create Likelihood of Confusion, Mistake, or Deception
[d] Defendant Knowingly Used the Mark and Knew the Mark Used Was Counterfeit
§ 11.03 List of Defenses and Affirmative Defenses to the Trademark Counterfeiting Act
[1] Improper Venue
[2] Jurisdiction
[a] Subject Matter Jurisdiction
[b] Personal Jurisdiction: Civil Case Law, the Internet, Extraterritorial Effects
[3] Statute of Limitations
[4] Authorized-Use Defense: Overrun Goods
[5] Authorized-Use Defense: Gray Market Goods
[6] Repackaging Genuine Goods
[7] Ineffective Assistance of Counsel
[8] Laches
[9] Unconstitutional Vagueness
[10] Traditional Lanham Act Affirmative Defenses and Other Defenses
[a] Estoppel
[b] Acquiescence
[11] Other Defenses
§ 11.04 Penalties and Sentencing
[1] Mandatory Maximum Criminal Fines and Imprisonment Under the Trademark Counterfeiting Act
[a] Punishment for a Single Violation of the Trademark Counterfeiting Act
[b] Punishment for Repeat Offenders and Those Who Cause Bodily Harm
[2] General Rules for Sentencing in Federal Court
[3] Sentencing Trademark Counterfeiters
[4] Immigration Consequences for Convicted Trademark Counterfeiters
[5] Relief for Victim: Restitution for Trademark Owners
[a] Mandatory Victims Restitution Act
[b] Victim and Witness Protection Act of 1982
§ 11.05 Procedure and Practicalities of Prosecution
[1] Federal Law Enforcement Policies
[2] Private Assistance to Prosecutors and Ethical Issues
[3] Rights of Crime Victims
[4] Criminal Procedure and Evidence Issues in Trademark Counterfeiting
[a] Motion for Judgment of Acquittal Because of Insufficient Evidence to Sustain a Conviction
[b] Motion to Suppress Evidence
[c] Sixth Amendment Confrontation Clause Issues
[5] Forfeiture Proceedings and Destruction of Counterfeit Goods
§ 11.06 Related Statutes: Amendments to Lanham Act
[1] Ex Parte Seizures
[2] Treble Damages
§ 11.07 Other Related Statutes for Federal Criminal Prosecution
[1] Criminal Conspiracy: 18 U.S.C. § 371
[2] Racketeer Influenced and Corrupt Organizations Act (“RICO”): 18 U.S.C. §§ 1961 et seq.
[3] Mail Fraud: 18 U.S.C. § 1341
[4] Money Laundering: 18 U.S.C. § 1956
[5] Wire Fraud: 15 U.S.C. § 1343
[6] Trafficking in Counterfeit Labels
§ 11.08 Foreign Enforcement of Criminal Trademark Counterfeiting
[1] Customs Duties in the United States
[a] Customs and Border Protection
[2] Multilateral Treaties for Enforcement and Trade Agreements
[a] Agreement on Trade-Related Aspects of International Property Rights
[b] Anti-Counterfeiting Trade Agreement
§ 11.09 Solutions to Insufficient Enforcement Against Foreign Infringing Websites and Other Potential Legislative Additions to Section 2320
Chapter 12: Issues Relating to Websites
§ 12.01 Overview
§ 12.02 Increase in Online Infringement
§ 12.03 Internet Monitoring
§ 12.04 Raising Awareness About Online Counterfeit Trade
§ 12.05 Enforcement Against Online Infringers
Chapter 13: Cybersquatting
§ 13.01 What Is Cybersquatting and How Does It Affect Business?
§ 13.02 Responding to Cybersquatting
[1] Arbitration for Domain Name Disputes
[2] U.S. Anti-Cybersquatting Legislation
[a] Personal Jurisdiction with ACPA Claim
[b] In Rem Jurisdiction for ACPA Claim
§ 13.03 State Anti-Cybersquatting Legislation
§ 13.04 Protecting Your Domain Name
§ 13.05 Beyond Traditional Domain Names: Social Media Usernames
Chapter 14: International Remedies
§ 14.01 World Customs Organization (“WCO”)
§ 14.02 International Treaties
[1] North American Free Trade Agreement (“NAFTA”)
[2] Agreement on Trade-Related Aspects of Intellectual Property Rights (“TRIPS”)
[3] World Intellectual Property Organization Copyright Treaty (“WIPO Copyright Treaty”)
[4] Patent Law Treaty (“PLT”)
[5] Convention on Cybercrime
[6] Dominican Republic-Central America Free Trade Agreement (“DR-CAFTA”)
[7] Anti-Counterfeiting Trade Agreement (“ACTA”)
[8] Republic of Korea-United States Free Trade Agreement (“KORUS FTA”)
[9] U.S.-Panama Trade Promotion Agreement
[10] U.S.-Colombia Free Trade Agreement
§ 14.03 Europe
[1] European Union
[2] REACT (The European Anti-Counterfeiting Network)
§ 14.04 Asia
[1] China
[2] India
[3] Indonesia
[4] Pakistan
[5] Thailand
§ 14.05 Middle East
[1] United Arab Emirates
[2] Egypt
[3] Kuwait
[4] Israel
§ 14.06 Central and South America
[1] Brazil
[2] Argentina
[3] Colombia
[4] Peru
[5] Guatemala
[6] Trade Treaties in South and Central America
[a] Comunidad Andina
[b] Mercosur
[c] Amazon Cooperation Treaty Organization (“ACTO”)
[e] Central American Integration
§ 14.07 Africa
[1] Kenya
[2] South Africa
[3] Angola
[4] Nigeria
[5] Algeria
§ 14.08 Canada
[1] Remedies
[2] Anton Piller Orders
[3] Enforcement Efforts/Counterfeiting Cases
[4] Criminal Remedies: Criminal Enforcement Protocol
[a] Copyright Criminal Provisions
[b] Trademark Criminal Provisions
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