I don’t love surprises. Well, if you want to send me a surprise red velvet birthday cake, please feel free. Otherwise, I like being prepared – and infringement of intellectual property is one type of surprise that you can prepare yourself to handle. To assist in that effort, here’s a non-exhaustive list of questions you can ask yourself and your team members, to help determine next steps if you suspect infringement of your trademarks or copyrights. These questions may also come in handy if you find yourself on the receiving end of an allegation of infringement.
E-commerce was already booming when the pandemic struck, and now it feels ubiquitous. Consumers spent $861.12 billion online with U.S. retailers in 2020, up 44.0% from $598.02 billion in 2019, representing 21.3% of total retail sales last year compared with 15.8% the year prior.2 The statistics only underscore what we’re all witnessing — technology stocks appreciating rapidly, a steady drumbeat of brick-and-mortar retailer bankruptcies, shopping mall closings, conversion of massive properties to logistics centers, catch-up efforts by traditional retailers to offer online sales and curbside pickup, and our own increasingly online shopping habits. Even when the sale of goods and services are not executed online, brick-and-mortar sellers are nonetheless utilizing the internet like never before to reach potential customers, educate them about their products, and coax them into stores. Whatever the world looks like after the pandemic ends, these e-commerce gains are likely here to stay.
It has never been more important therefore for brand owners to monitor and protect their brands online. E-commerce is a counterfeiter’s paradise, as explained succinctly by the OECD, “E-commerce platforms represent ideal storefronts for counterfeits and provide powerful platform[s] for counterfeiters and pirates to engage large numbers of potential consumers.”3 Why is this? E-commerce enables counterfeiters to send cheap knockoffs, which garner high margins, to unwary purchasers across the globe with little risk of legal repercussions.4 The first obstacle to legal enforcement is the anonymity afforded by both the internet generally and e-commerce platforms specifically. ICANN’s interpretation of Europe’s GDPR privacy legislation has generated a blackout of Whois information, making it more difficult to identify the perpetrators behind many illicit webshops.5 Moreover, e-commerce platforms do not operate by the same “know your seller” obligations burdening brick-and-mortar retailers. Whereas a brick-and-mortar retailer could be found liable for selling a counterfeit product in its store, and therefore presumably conducts diligence on and obtains contractual protections from each of its sellers, e-commerce platforms are considered mere intermediaries connecting sellers with buyers, ignorant of and without liability for the nature or quality of the products transacted. As summarized by the U.S. Department of Homeland Security, “While the U.S. brick-and-mortar retail store economy has a well-developed regime for licensing, monitoring, and otherwise ensuring the protections of intellectual property rights (IPR), a comparable regime is largely non-existent for international e-commerce sellers.”6
Since the SARS-CoV-2 pandemic began, many companies have continued to develop antimicrobial products and devices to address health and safety concerns. Many of those companies are surprised to learn that the way in which they are marketing their products may subject them to regulation by EPA under the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA).
Even before COVID-19 had turned each of us into an amateur epidemiologist, companies in nearly every industry had begun to recognize the magnetic appeal of health and wellness claims in consumer advertising. Marketers of everything from cleaning products to apparel to furniture to homes were suddenly making claims touting the health and wellness benefits of their products. It wasn’t just better, it was better for you and your family. It will surprise no one to learn that the pandemic year of 2020 only intensified this trend, as consumers focused as never before on the ways that their purchases might not only help them live better lives, but perhaps even keep them alive.
Predictably, competitors, regulators and the plaintiff’s bar have all taken notice of this trend, and moved aggressively in response. In 2020, for example, the BBB National Programs’ National Advertising Division (NAD), the nation’s premier forum for competitor initiated advertising challenges, recorded an extraordinary 50% uptick in challenges to health-related advertising. Similarly, the Federal Trade Commission (FTC), Food and Drug Administration (FDA), Environmental Protection Agency (EPA), and state regulators across the country have focused intense scrutiny on companies claiming to offer health benefits to consumers often desperate for help. It is natural to predict that class actions and Lanham Act activity will soon reflect these trends as well.
So you’re thinking about changing your company name, brand, or both. We usually like to allow at least a few months to identify the new name and initiate protection. To help you plan, here’s a high-level overview of significant steps in the process. Happy rebranding!
In February 2020, Faegre Baker Daniels and Drinker Biddle & Reath LLP combined to form one of the nation’s 50 largest law firms. Soon after the combination, Faegre Drinker shifted to a virtual work environment to protect our clients, colleagues and loved ones during the global COVID-19 pandemic. We nevertheless remained committed to the success of our clients in a challenging year, and focused on serving clients with our new firm’s combined capabilities.
This month marks not only the first year of Faegre Drinker, but also the inaugural year of TCAM Today – Faegre Drinker’s blog covering all things trademark, copyright, advertising and media. In 2020, Faegre Drinker’s team of more than 30 T-CAM professionals shared their insight on topics ranging from social media influencers to trademark trolls.
Amidst public criticism and pressure from corporate sponsors, many well-known brands are taking a hard look at their trademarks and choosing to move in a new direction. These changes are impacting brands in various industries from sports teams, like the currently unnamed Washington NFL team, to retailers, like Trader Joe’s. While appeasing the call for change, an unfortunate consequence with which these brand owners must deal are trademark trolls.
Intellectual property rights holders are constantly seeking creative ways to protect their brands, including preventing counterfeit products from entering the marketplace. There are the traditional methods – such as federal trademark registration with the United States Patent and Trademark Office – that are well-known to most companies. However, many companies are less familiar with the high-value, low-cost enforcement tools available through a Customs Recordation filing with United States Customs and Border Protection.
United States Customs and Border Protection (CBP) can be a vital partner in your company’s efforts to enforce its trademarks and copyrights, and to stop counterfeit imports. Intellectual property enforcement is currently a “Priority Trade Issue” for CBP, and the increased focus on such enforcement is highly beneficial to companies who can then leverage CBP’s database and workforce to identify and stop counterfeit product imports. CBP uses the information contained in its database of recorded trademarks and copyrights in order to target and seize imports of counterfeit and pirated goods at various U.S. ports of entry. In FY 2019, CBP seized more than 27,000 shipments containing counterfeit goods, enforcing over 18,500 active recordations1. Notably, CBP rarely takes action to detain or seize goods displaying trademarks or copyrights that are not recorded; therefore, it is critical to include CBP recordation as part of your enforcement strategy.
The global COVID-19 crisis has created dynamic shifts in how businesses source and sell goods and services. Whether those shifts are temporary or will solidify into more permanent structures ushering in a “new normal” era of consumerism, remains to be seen. As I write this, it is the weekend after Memorial Day 2020. Just yesterday, my home state of Virginia commenced phase I of a graduated reopening of the state economy, while last weekend’s headlines focused on widespread defiance of stay-at-home orders and social distancing guidelines as the U.S. death toll climbed towards 100,000 (a milestone it has now passed). It is clear that there are limits to our willingness to stay home, and that bodes well for the survival of some brick-and-mortar retailers. But brick-and-mortar retail and business in general may look significantly different in a post-pandemic world. The companies emerging stronger will likely be those that use this time to rethink who they are, what they do, and how they do it — and the ways in which they convey that message to consumers.
In a world where social media influencers can wield more power over consumers than network media buys, the Federal Trade Commission’s (FTC) Endorsement Guides felt increasingly like a relic from an earlier era. While not wholly ineffective, the FTC’s formal guidance to businesses on the use of endorsements and testimonials in advertising was still a policy with roots in the limited media environment of the 1970s, the decade when the Guides originated. There were no Instagram influencers, no sponsored posts, and no hashtags in 1980, when the Guides were finally enacted, and even cable television was in its infancy. And despite important and well-intentioned 2009 amendments crafted during the early days of social media, so much has happened in the intervening years that the Guides never seemed fully engaged with the radical implications of a marketing environment where blurring the lines between advertising and reality is more often a feature rather than a bug.