The counterfeit goods market is a global problem and President Trump recently issued a memoranda taking aim at it. The memoranda states that it is the policy of the Trump Administration to protect American businesses, intellectual property rights holders, and consumers from counterfeit and pirated goods, including those imported through online third-party marketplaces and other intermediaries.
The Organization for Economic Co-operation and Development (“OCED”) indicated that $100 Billion each year in counterfeit goods comes at the expense of United States intellectual property owners. And the Government Accountability Office found that, based on a small sample of frequently counterfeited goods, more than 40% of these goods purchased online were counterfeit. In addition to studying the existing policies of procedures of online retailers and other third-party intermediaries, the memorandum also orders the report o include the identification of administrative, statutory, regulatory, and other changes, including enhanced enforcement actions.
Amazon responded to the White House’s memoranda saying that it strictly prohibits the sale of counterfeit products, and has built industry-leading tools like Brand Registry, Transparency, and a newly launch Project Zero to protect consumers and intellectual property rights holders. Until the launch of Project Zero, Amazon’s tools are all reactive instead of proactive.
Another problem with Amazon’s Brand Registry program and other similar programs is that it does not extend protection as broadly as it should and is too easy to game by a counterfeiter. First, Amazon’s program and others like it apply only to registered trademarks. In the United States, registration is not required to establish trademark rights. Year to date, only 90,192 registrations have been issued. While that seems like a lot, it is a fraction when compared to the number of new businesses started every year.
Second, only trademarks registered on the Principal Register need apply. If your mark happens to be on the Supplemental Register, you are out of luck. Unless, you register the entire logo on the Principal Register and disclaim the literal portion of the mark, then you are eligible for the program. But then all the counterfeiter needs to do is use only the literal portion of the mark to avoid the consequences of the Brand Registry.
What this means for trademark owners if they will be doing any business online is that registration is a necessity even though it is not legally a requirement.