The US International Trade Commission is a powerful and cost-effective weapon in the ongoing brand protection war, but remains underused
The US International Trade Commission (ITC) investigates imports connected with unfair acts such as IP infringement and directs US Customs and Border Protection (CBP) to exclude those products from the United States. In 2012, around 75% of all exclusions by the CBP resulted from ITC investigations into brand protection claims sought by Crocs, Inc. (for its foam footwear) and Philip Morris (for counterfeit cigarettes). That figure is remarkable on its own, and even more so in light of the fact that brand protection claims comprise only a small fraction of ITC investigations. Naturally, this begs the question of why more companies do not use the ITC as a weapon in the brand protection war.
Brand owners in all industries should consider adding ITC actions to their arsenals. Methods such as online monitoring, site raids and conventional lawsuits through the US and Chinese court systems are still necessary, but should be seen as elements in a multipronged strategy. Site raids are effective because they often raise the costs and risks of doing business for counterfeiters. Counterfeiters may incur fines, face jail time or lose inventory and manufacturing capacity due to raids and seizures. Although district court lawsuits can be effective, they are becoming prohibitively expensive as infringers multiply and often vanish, only to reappear under a new name and address, making it impossible to trace them, let alone add them as defendants to existing actions. Such efforts should be part of a brand owner's armoury. However, as the problem of counterfeiting and grey-market goods distribution escalates, brand owners should look to the ITC and the in rem jurisdiction that it offers as an additional and efficient means of attack. It is a weapon that, when successful, enables the CBP to do the brand owner's work. Indeed, more companies should use the ITC as a weapon in the ongoing brand protection war.
Whether the infringement involves luxury goods, textiles, electronics, pharmaceuticals or other products, brand owners must continue to enhance their enforcement efforts to prevent counterfeits from reaching the stream of commerce. Section 337 actions offer brand owners an additional tool to counteract the negative effects of counterfeit goods.
This article was originally published in the October/November issue of World Trademark Review. Click here to read the complete article.
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