Client Alert: Congressional Briefing - Consumer Shopping Tips to Safeguard Against Counterfeit Products During the Holiday Shopping Season

Congressional Briefing: Safeguarding Against Counterfeit Products During the Holiday Season

On December 3, 2019 the International Trademark Association (INTA), the U.S. Chamber of Commerce’s Global Innovation Policy Center (GIPC), and the Congressional Trademark Caucus (CTC) hosted a Briefing focusing on safeguarding against sales of counterfeit products during the 2019 holiday shopping season. The CTC is a bipartisan, bicameral group chaired by Senator Chuck Grassley (R-IA), whose mission is to highlight the vital role that trademarks and legitimate Internet domain names play in boosting the U.S. economy, creating jobs and ensuring trust in ecommerce to American consumers.

The Briefing Panelists included:

• Caitlin E. Soto, Investigative Counsel, U.S. Senate Committee on Finance
• Kasie Brill, Executive Director, Brand Protection, Global Innovation Policy Center
• Rebecca Mond, VP, Federal Government Affairs, Toy Industry Association

During this interactive event, the panelists highlighted the key challenges facing US consumers and the US economy with respect to the global market and counterfeit goods.  According to Adobe Analytics, online shoppers spent $9.4 billion on Cyber Monday. Since November 1 to December 2, holiday spending has totaled $81.5 billion in online sales. Unfortunately, the majority of consumers are not aware when they are acquiring counterfeit goods, particularly when they are purchasing from online marketplaces. 

The Panelists raised awareness regarding various sources of counterfeit goods along with key reasons why buying counterfeit products is problematic. The GIPC has publicly stated that China contributes more than 70% of global physical trade-related counterfeit goods, amounting to $285 billion in such goods.  The current level of this counterfeiting activity bears significant economic and public health implications, both domestically and internationally.  Many brand owners and trade associations are urging the US Government  to continue to enhance efforts to combat counterfeiting. Ms. Soto recommended greater authority be given to US Customs and Border Protection to protect rights holders along with the ability to  share investigation information with ecommerce platforms, such as Amazon, eBay and Alibaba. 

Ms. Mond, whose association represents over 1100 business members, noted that toy sales , on average, represent over 60% of the total annual national holiday shopping revenue, or about $27 billion in 2018.  Due to various health and safety concerns, the Toy Association is focusing on the elimination of counterfeit toys by urging Congress to create new anti-counterfeiting and related product safety laws and better enforce existing laws to ensure all manufacturers and retailers are held accountable for the distribution of counterfeit products. 

Now that the 2019 holiday season is underway, the Panelists offered the following shopping tips to ensure consumer safety and vigilance concerning possible counterfeits:

1. Trust your instincts - if it is too good to be true, it probably is 
2. Insist on secure transactions - make sure your payments are submitted via websites beginning with ‘https’ (the ‘s’ stands for secure) and look for the lock symbol within your Internet browser
3. Watch for missing sales tax fees - businesses trading counterfeit goods often do not report their sales to global authorities and often omit any kind of relevant sales tax as part of the purchase - a difference you may notice in the final price
4. Seek quality assurance in the secondary market - reputable resellers have comprehensive inspection and authentication procedures and technicians to inspect the equipment
5. Be careful purchasing medicine online - 96% of online pharmacies do not meet US safety and legal standards
6. Be vigilant when buying abroad - when shopping on international websites, look for trusted vendors that use identifiable privacy and security safeguards and have legitimate addresses and other points of contact
7. Guard your personal information - illicit websites often install malware that may steal your credit card information and other personal data
8. Scrutinize labels, packaging and contents - look for missing or expired “use by” dates, broken or missing safety seals, missing warranty information or unusual packaging
9. Report fake products - report unsafe counterfeit products to the National IPR Center or the Consumer Product Safety Commission
10. Spread the word - share these tips, teach your family, friends and coworkers about counterfeits

In addition, brand owners should be extra vigilant in raising consumer awareness regarding possible counterfeit versions of their well-known brands, including conducting general consumer outreach and providing additional anti-counterfeiting educational resources through websites and social media. Customer support, business and marketing teams, and legal teams should also be prepared for an influx of potential consumer reports regarding possibly counterfeit products.  In addition, brand owners would be well advised to amplify their general online enforcement programs throughout the year-end holiday season to proactively identify and disable potential websites selling counterfeits, as well as other similar schemes like phishing or financial fraud leveraging your brand assets.  

The growth of the global counterfeit market is real and it poses a serious threat to the US economy and individual consumers.  Risks range from hazardous materials and poor quality and sub-standard that put users’ health and safety at risk, to losses of legitimate product sales that put thousands of American jobs in jeopardy.  Consumers and brand owners alike must do their part to combat counterfeit goods and reduce their attendant risks throughout the holiday season and beyond. 

For more information on the latest counterfeiting trends and anti-counterfeiting strategies, and to discuss how these issues relate to your brands, please reach out to us at internet@winterfeldt.law.