Counterfeit Goods And Intellectual Property Rights: What To Watch Out For This Valentine's Day

Counterfeit Goods And Intellectual Property Rights: What To Watch Out For This Valentine's Day

This past November, just ahead of the holidays, US Customs and Border Protection (CBP) warned consumers of the perils of buying counterfeit goods with their "unbox real happiness" campaign. With Valentine’s Day ahead, this message still rings true. Not only for consumers looking to purchase a gift for that special someone but also for intellectual property-holding manufacturers trying to compete for business. Let's delve into the world of counterfeit goods by unveiling the impacts these illegal tactics have on economies, businesses, and consumers throughout the year and how companies can protect their intellectual property, especially over holidays like Valentine's Day.

The Government Parties Combating Counterfeit Imports 

The US Immigration and Customs Enforcement (ICE) works alongside Homeland Security Investigations (HSI), National Intellectual Property Rights Coordination Center (IPR Center), and federal, state, and local law enforcement partners across the US to dismantle counterfeit operations. 

The US Department of State stated that "The Office of Intellectual Property Enforcement (IPE) advocates for the effective protection and enforcement of intellectual property rights (IPR) around the world." The IPE aims to make counterfeit goods less accessible to consumers and ensures that the intellectual property rights of businesses are protected for overall economic development and prosperity. 

Intellectual Property Rights And Infringements

The US Department of State stated that "intellectual property is the lifeblood of our economy" They further go on to recognize that "American scientists, engineers, and entrepreneurs invented the microchip, created the Internet, invented the smartphone, started the biotechnology revolution, sent astronauts to the Moon, and saved millions of lives through innovative medicines. America's creative artists — authors, musicians, film directors, and gamers — have captivated the imagination of people all over the world."  

Counterfeit goods have cost the global economy over $500 billion annually, according to the US Chamber Of Commerce. So how can businesses protect their proprietary designs and revenue from the impacts of counterfeits?

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There are three types of Intellectual Property (IP) rights. Each protects different types of work and is aimed at protecting and incentivizing new ideas and inventions:

  • Patents: The protection of processes, methods and inventions for 20 years.
  • Trademarks: The protection of images and words that identify goods or services. This includes a company name, tagline, and logo. Original works are protected in the US once initially used. They are typically marked with the ® symbol once registered or a ™ if unregistered.
  • Copyrights: The protection of tangible and in-tangible creative works. Music, musical theatre works, and architecture fall into this category. Like Trademarks, once created, the original work is Copyrighted. Federally registering that Copyright will, however, strengthen the owner's defense in the case of infringement.

Once received, these property laws will help protect against unauthorized use. However, it's important to note that these rights are only protected in the country where they were granted. If your business wants to sell in a foreign market, additional steps should be taken to be aware of any unauthorized use of your property. Global patents, trademarks, and copyrights are non-existent. Instead, the property owner will need to register their work in the respective countries they want to sell in, utilizing that country's IP laws. Additionally, the World Intellectual Property Organization offers international IP services that may assist in protecting intellectual capital.

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Now that we understand the rights of inventors and makers of all things, let's look at the steps businesses can take to ensure they are not buying counterfeit goods mistakenly.

How Business Can Spot A Fake

It is illegal to purchase and traffic counterfeit goods in the US. CBP has informed Importers that fake imports could subject them to civil or criminal penalties as it supports illegal activities like forced labor, non-regulated distribution, and corruption.

The top products seized at borders, as per CBP data, include; apparel and accessories, handbags, footwear, watches and jewelry, consumer electronics, consumer products, pharmaceutical, and label tags.

Tips and Tricks For Shipping Gifts

When it comes to buying for your business, there are many considerations to determine whether the products you purchase are regulated. The US Chamber Of Commerce has provided ten essential tips to protect yourself from counterfeits: 

  1. Go with your gut. Often, counterfeiters use sales, discounts, and deals that are just too good to be true. If it feels wrong, then it probably is, and you should always trust your instincts. 
  2. Ensure your transactions are secure. When making payments on websites, ensure the website URL begins with https://. The "s" stands for secure. A lock icon should be at the end of your browser navigation bar. 
  3. Check your statements. Counterfeiters refrain from resorting their sales to any financial authorities to avoid sales tax and other fees. Buyers will be able to see noticeable differences in the final price. 
  4. Seek out quality assurance. If a company is a reputable and reliable reseller, it should have comprehensive inspection and authentication procedures and technicians to inspect the goods sold. 
  5. Be cautious when buying abroad. Try finding trusted vendors online with identifiable privacy and security safeguards with responsible return policies. 
  6. Inspect labels, packaging, and contents. Check the labels or missing information, expired dates, seals, false warranty information, and low-quality packaging. 

With the subsequent increase in online shopping due to the pandemic, businesses have found e-commerce vital as it provides more convenience to shoppers and broadens the reach of brands. That said, it has also made it physically impossible to identify the fakes from the real when purchasing online. Usually, most customers can only correctly identify the worth of a product or the quality once it arrives at their door. In the event you encounter them, you can report any counterfeit goods sold or transported across US borders to the CBP or the National IPR Center

The Impact Of Counterfeit Brands 

Counterfeiting goods have become so much more dangerous than people think. Substances used to create these fake goods are not government-regulated, meaning they have yet to be tested for safe use. According to the US Department of Commerce, counterfeit purchases have led to more than 70 deaths and 350,000 injuries yearly. They state, "whether you mistakenly purchase knockoff electronics that catch fire or foods and perfumes made with poisonous, unregulated substances, buying a counterfeit product means taking a gamble on your safety."

The United Nations Office on Drugs and Crime (UNODC) provides details on the societal impact caused by counterfeiters stating that the trade of counterfeit products can result in increased corruption and law enforcement costs. It severely impacts public health and safety, leading to social and environmental concerns that infringe on criminal and administrative laws such as tax, Customs evasion, and fraud.

Each counterfeit good that is sold and purchased steals revenue from legitimate businesses, as emphasized by the CBP; this would significantly contribute to the loss of US jobs over time and is an attack on the health and safety of US citizens.

Customs brokers can assist you in reviewing the source country and company of the manufacturer for legitimacy while also helping to check everything from valuation to classification to ensure that your imports comply with the land's laws. Get in touch with one of our trade specialists today.

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About Author
Breanna Leininger

Breanna has been in the industry since 2004 and has dealt with clearances and compliance concerns for a multitude of commodities for all ports of entry and all modes of transportation. She has a Bachelors in Communications, Bachelors in Political Science & Government, is a Licensed Customs Broker as well as Certified Customs Specialist. Breanna has been asked to be the speaker in a variety of events including the BC Agriculture Show, Doing Business in the US seminar and has been a contributor to Small Business BC publications. She was recently nominated for the NCBFAA Government Affairs Conference Emerging Leaders and Mentors by the NBCBA. She participates in the Northern Border Customs Brokers Association and the NCBFAA annual conferences in Washington, DC. Breanna has a deep passion for politics, global affairs, and how communication shapes policy and international business relationships. She feels very fortunate to work in an industry that allows her to take part in how policy impacts the global economy and domestic businesses of all shapes and sizes.

While we strive for accuracy in all our communications, as the Importer of Record it is incumbent upon your company to ensure that you are aware of the requirements under the new regulations so that you maintain compliance as always.
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