22.02.12

Brand Protection Strategies to Tackle Counterfeiting

In Jamaica, illicit CDs and DVDs are readily available for sale in all major cities and towns. The proliferation of fake designer perfumes, handbags and other articles of clothing is testament to the fact that counterfeiting is a significant problem. The cost conscious consumer is happy to purchase these "designer" items at far less than half the price of the original.

Unlike crimes such as, murders and robberies, which customarily grab the headlines, counterfeiting is far less publicised, as it is commonly perceived as a victimless crime. However, counterfeiting is not only one of the largest and most profitable illicit businesses in the world; it is also potentially one of the most dangerous given its reported links to organised crime and terrorism. The World Customs Organization estimates the international sale of counterfeit goods at US$600 billion; this represents 5-7% of total world trade.

Brand management and protection has become critical to the success of many businesses. Brand owners are forced to invest significant sums of money to fight against counterfeiting which, if gone unprotected, can negatively impact the revenue of a business and ultimately, jeopardize the viability of the brand. So, what should business owners do to protect their brands?

First, it is imperative that business owners familiarise themselves with the legal options available for brand protection. The problem of counterfeiting is, fortunately, countered by a strong legal landscape in Jamaica, with both the common law and statute providing criminal and civil remedies.

Though not encapsulated in a single comprehensive statute, there are several legal remedies available to business owners to protect their intellectual property rights against counterfeiters. The main statutory avenues of protection are the Copyright Act and the Trade Marks Act.

Registration of trade marks under the Trade Marks Act is the easiest and most effective means of protection from counterfeiters. There is no similar requirement for registration under the Copyright Act as rights become vested automatically upon creation of any work capable of protection under the Act.

The civil remedies available under both statutes include:

  1. an award of damages;
  2. an injunction restraining the unauthorised use of trade marks;
  3. an account of profits by the counterfeiter;
  4. an order of erasure whereby the infringer is compelled to remove unauthorized signs from any goods in his possession; or
  5. an order of delivery up whereby the counterfeiter is ordered to deliver the infringing goods to the proprietor of the trademark or such other persons as the Court directs.

As a complement or alternative to civil litigation, criminal proceedings may also be instituted against counterfeiters. For example, an individual who is found guilty for the unauthorised use of a trade mark may face imprisonment for a term of up to five (5) years and may be liable to pay a fine of approximately $1 million.

There are several other statutes which, though not primarily geared towards the protection of intellectual property, can be relied on to tackle the problem of counterfeiting. For example, the Proceeds of Crime Act makes it an offence to deal with criminal property and the Consumer Protection Act prohibits misleading or deceptive conduct in the course of trade as relates to the origin or quality of a good.

Another strategy involves brand owners liaising with customs officials to increase vigilance at our ports of entry. Increased customs and border protection is one of the most effective tools to deter the practice of counterfeiting. Section 66(1) of the Trade Marks Act provides that a registered proprietor of a trade mark may give notice in writing to the Commissioner of Customs requesting that he treat infringing goods expected to arrive in Jamaica as prohibited goods under the Customs Act.

This enables the Commissioner of Customs, pursuant to the provisions of the Customs Act, to seize counterfeit goods at the point of entry, and to order the forfeiture and disposal of these goods in such manner as the Minister may direct.

This option has the advantage of requiring limited expenditure by the registered proprietor. If the infringing goods are known to have been imported, Customs may not only seize the goods at the point of entry but may seek search warrants, seize and carry away infringing good in any other place in the island where they have reasonable cause to suspect that goods in breach of the Customs Act are located.

This course of action, however, faces various limitations in its usefulness to the registered proprietor. First, it primarily provides protection with respect to goods that are being or have been imported into the island in breach of the Customs Act.  As such, Customs would have no jurisdiction to act if the products were not imported but rather, manufactured locally. Additionally, if the products were imported without the infringing trade mark affixed, Customs would equally be unable to act.

Another limitation is that the registered proprietor obtains no monetary compensation for the infringement. The proceeds of any subsequent sale of the goods belong to Customs.

In pursuing this option, Customs normally requires the assistance of legal counsel and the registered proprietor of the trade mark to establish that any goods seized are indeed infringing goods and to request and obtain directions from the Minister as to the disposal. Local companies, in recognition of the value of this provision and as a part of their brand protection strategy, have taken steps to educate customs officers.

Counterfeiting is a lucrative activity and as such, cannot be completely eradicated. It is imperative that business owners remain one step ahead through the development of an effective brand protection strategy.

"Kerry-Ann Heavens is an Associate at Myers, Fletcher & Gordon and is a member of the firm's Commercial and Intellectual Property Department. Kerry-Ann may be contacted via kerry-ann.heavens@mfg.com.jm or www.myersfletcher.com. This article is for general information purposes only and does not constitute legal advice."