Newsletter

Protecting Your Trademark Worldwide Using The Madrid System

• Homeland Security gets creative - fake website launched to fight… Fakes! Page 2

• Bill C-56 “Combating Counterfeit Products Act“ introduced in Canadian parliament

Page 3

Other AC Stories • Aussie “kingpin” arrested –

FB and eBay implicated • IPR in Chinese companies • Alarming Survey Results • ACSG Bits & Pieces

Issue 13-03A

The Madrid System for the international registration of marks functions under the Madrid Agreement (1891), and the

Madrid Protocol (1989). The International Bureau of World Intellectual Property Organization (WIPO) in Switzerland administers it.

Although almost 100 years newer than the Madrid Agreement, the Madrid Protocol has rapidly overtaken its predecessor in importance. There are currently 88 signatories to the Madrid Protocol and 56 to the Madrid Agreement. Member countries include all G8 countries – with the exception of Canada – as well as Australia, China, Mexico, New Zealand, and all EU nations.

Put simply, the international procedural mechanism offers a trademark owner the possibility to have their trademark protected in several countries by simply filing one application directly with their own national/regional trademark office. An international mark so registered is equivalent to an application or a registration of the same mark affected directly in each of the countries designated by the applicant. Essentially, if the foreign trademark office of a designated country does not refuse protection within a specified period, the protection of the mark is the same as if that office had registered it. The process also greatly simplifies subsequent management of the mark, since it is possible to record subsequent changes or to renew the registration through a single procedural step.

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Differences between the Madrid Protocol and the Madrid Agreement are as follows:

a. Disadvantages of the Madrid Protocol

• Longer Refusal Periods: Foreign national trademark offices can refuse to register a Protocol application 18-months from the application date (vs. only-12 months under the Agreement)

• Higher Fees: The fees for Protocol applications are slightly higher than for Agreement applications (although still far less than filing direct one-off filings)

b. Advantages of the Madrid Protocol

• Language: Madrid Agreement applications must be in French, whereas Protocol applications may be in French, English or Spanish

• Timing: Protocol applications can be based upon either an existing trademark registration (equating to much earlier protection) or a pending application, whereas Agreement applications can only be based on existing registrations.

• Coverage: Protection is available under the Protocol in some 30+ additional markets

• A “Plan B” Option: If the basic trademark application is refused/withdrawn/cancelled, a Madrid Protocol registration can be converted into national applications without losing the original filing date.

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March 14: At first glance, it may look like a real online store, but DesignFauxReal.com is actually a counterfeit site mocking Web sites that sell counterfeit merchandise.

It's the latest reaction to a booming black market industry that has faked out real brands for years on street corners of big cities around the world and has now moved online. Just last week, the seizure of 1,500 counterfeit Chinese-made Hermes purses was announced by U.S. Customs and Border Protection. The fakes would have been worth as much as $14 million had they been sold at full price.

Counterfeit brands can be found everywhere on the web, making it increasingly difficult for consumers to purchase the real thing. In fact, a recent survey indicated that 20 percent of online shoppers are duped into buying fake goods online. Even worse, sites that sell fake merchandise may be a front for identity theft and other scams.

That's why the International Anti-Counterfeiting Coalition (IACC), in collaboration with U.S. Immigration and Customs Enforcement, the U.S. Department of Homeland Security and MasterCard are fighting fire with fire by launching a website that itself is a fake.

At first, DesignsFauxReal.com has the look and feel of a legitimate website that sells clothing, accessories and jewelry, but consumers will quickly realize that it's anything but. "Free

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Identity Theft with Every Purchase" reads one headline. "50% Off Your Life Savings when you give your credit card to counterfeit sites like this one" reads another. Merchandise is pictured on the site, but each item comes with a caption intended to make the same point. "HOT DEAL If you like spending 500 hours erasing fraudulent charges" reads the copy under a designer shirt.

If the consumer clicks on "About Us," "FAQ," or "Learn More" in the navigation, DesignsFauxReal reveals its true mission: all of the links lead to the IACC website, where consumers can learn about counterfeiting and report fakes. Neil Kraft of KraftWorks, the agency that designed the site, told Women’s Wear Daily that DesignsFauxReal.com was intended to "both scare and amuse people." It serves another useful purpose: When a site that sells counterfeit goods is seized by the federal government, it is taken down and its URL is pointed to DesignsFauxReal.com.

The website strives for its own brand of legitimacy, relentlessly driving home the point that fakes are bad. Even when a website visitor tries to leave the page, he or she is greeted by this pop-up: "Don't leave without knowing this: When you shop for fakes online, you put yourself at risk for credit card fraud, identity theft and more. That's the REAL PRICE of counterfeit goods."

Source: http://www.brandchannel.com

US Homeland Security Launches Fake Site to Fight Fake Goods

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Fresh off passing of the Copyright Modernization Act (Bill C-11) last year, the Combating Counterfeit Products Act was introduced in Canadian parliament on March 1st. The stated aim is to - “protect Canadian consumers, Canadian manufacturers and retailers as well as the Canadian economy from the health and economic threats presented by counterfeit goods”. But will similarities to the Anti-Counterfeiting Trade Agreement (ACTA) prevent this new legislation from passing?

The Minister of Industry, Christian Paradis, stated: “Our Government is standing up for Canadian consumers and businesses, ensuring they do not fall victim to trademark counterfeiting. In today's global marketplace, we need strong, modern rules to protect our economy and the health and safety of Canadians and their families.”

The proposed anti-counterfeiting Act (Bill C-56) would:

• give border officers the authority to detain suspected commercial shipments and contact the rights holders;

• allow Canadian businesses to file a request for assistance, with the CBSA, in turn, enabling border officers to share information with rights holders regarding suspect shipments;

• provide new criminal offences for the commercial possession, manufacture or trafficking of counterfeit trademark goods;

• provide rights owners with new tools to protect their rights and take civil action against infringers;

• create new offences for trademark counterfeiting; and

• provide better tools to investigate commercial counterfeiting.

Importantly for trademark owners, it also proposes the expansion of the definition of ‘trademark’ to cover non-traditional trademarks (including holograms, colours, motion marks and sound marks) and the simplification of trademark registration processes, removing all “impediments to the use of electronic documents”. However, Experts have noted that while the new border provisions include prohibitions against import or export of pirated or counterfeit products, “the prohibitions are subject to exceptions regarding

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transiting goods, goods imported for personal use and, in the case of the Trademark Act provisions, an exception if the trademark was applied with consent of the owner of the trademark in the country where the mark was applied”.

Looking at the bill as a whole, the government certainly deserves recognition for finally making an effort to address the lack of effective laws for combatting counterfeit products in Canada. In short, this Act is long overdue and will ideally be reviewed, amended and passed without delay.

Already, organizations such as Food & Consumer Products of Canada have voiced support of the proposals, however media reports are already likening the bill to ACTA, raising “fears that Canada may be preparing to ratify ACTA. Washington has recently encouraged Ottawa to comply with the notorious agreement”.

Michael Geist, a law professor at the University of Ottawa, states in his blog: “The core elements of the bill include the increased criminalization of copyright and trademark law, as well as the introduction of new powers for Canadian border guards to detain shipments and work actively with rights holders to seize and destroy goods without court oversight or involvement. While the bill could have been worse - it includes an exception for individual travellers (so no iPod searching border guards), it does not include patents, and excludes in-transit shipments - the bill disturbingly suggests that Canada is gearing up to ratify ACTA since this bill addresses many of the remaining non-ACTA compliant aspects of Canadian law”.

Of note, in Europe, ACTA was the focus of heated debate and a string of public protests, with the European Parliament later rejecting the treaty. In the United States, a similar outcry was directed towards the proposed PROTECT-IP and SOPA legislation.

If the argument that Canada’s move signals a return of ACTA gains momentum, it will be interesting to see if politicians in Ottawa can succeed where others have failed.

Source: www.news.gc.ca

Canadian Government Initiates Brand Protection Reform

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March 20: Police arrested the alleged kingpin of Australia's counterfeit black-market after uncovering a nerve-centre of designer fakes housed in Sydney's southwest.

Authorities swooped on a storage facility, raiding five warehouse-sized rooms allegedly filled with brand-name fakes.

The Daily Telegraph was on the scene and saw boxes of handbags, colognes, wallets, suits and shoes being confiscated. One storage area was allegedly set up to resemble a department store, with perfumes allegedly stacked on shelves for easy viewing and suits hung on racks according to their style.

Police arrested 50-year-old Gabi Zayout at the scene before escorting him away for questioning. He was released pending further inquiries. Police expect charges to be laid.

Zayout is alleged to be the importer of the goods and a "main player" in the trade of counterfeit items.

"This guy, we say, is a main player in importing counterfeit goods into Australia," Fair Trading Assistant Commissioner Rob Vellar said.

"Not only are consumers getting ripped off in respect to counterfeit goods, these charlatans hurt small business."

Authorities needed trolleys to shift the large boxes, each one filled with allegedly counterfeit items.

They included fake Givenchy handbags, Nike shoes and jackets, Marc Jacob and Louis Vuitton wallets and perfumes from Ralph Lauren, Chanel and DKNY.

"It's a huge amount of product. If all these items were legitimate they (would be) worth hundreds of thousands of dollars," Inspector Paul Warden said.

It will be alleged the items were being sold through eBay and Facebook, and possibly legitimate shops, for a fraction of their retail value.

Nike Airmax shoes, normally costing $220, were allegedly being sold for as little as $65 - along with shoes made for children which were available for $35 - about a third of their retail value.

Counterfeit Kingpin Arrested in Australia – Facebook and eBay Implicated

Chinese Companies and IPR

The investigation started when Nike representatives became aware of the syndicate.

The company began "test buying" a substantial number of items off Facebook to check their legitimacy and soon realized they needed to investigate further.

Fair Trading Minister Anthony Roberts said dealing with counterfeit goods was not a victimless crime.

"The owners of small businesses doing the right thing by purchasing genuine products are also being hurt by suppliers and traders accessing counterfeit goods," he said.

Sources: http://www.dailytelegraph.com.au

March 22: Chinese companies have been urged to draw up a strategic plan in order to protect their intellectual property rights (IPR), according to the China Council for the Promotion of International Trade (CCPIT) deputy secretary-general Yu Xiaodong.

"Chinese enterprises, which aim at global markets, should have much earlier concerns over protecting their IPRs," said Yu.

Yu said the CCPIT is making efforts to provide a better service to Chinese companies under cooperation with the State Intellectual Property Office (SIPO).

Ma Hao, chairman of the International Chamber of Commerce (ICC) China IP Committee, said intellectual property has become a core value to compete in the international community and appealed for all people working in industry to innovate.

The ICC China IP Committee was established by the CCPIT in 2012, and is expected this year to release a series of activities concerning IP issues to form a platform for enterprises to protect their IPRs.

According to SIPO figures, a total of 217,105 invention patents to domestic and overseas applicants were authorized in 2012, up 26.1 percent from the previous year.

Source: http://news.xinhuanet.com/english

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March 17: Christian Louboutin, Manolo Blahnik and Jimmy Choo are just a very small few of the designers we would love to dress our feet – but in reality what are the chances of this?

As a result more and more women are turning to counterfeit designer goods.

In a poll conducted by MyVoucherCodes they found that of those who said they owned designer items, 39% were unsure whether or not they were in fact real.

Only 8% said they owned one or more pieces of authentic designer fashion.

Mark Pearson, Chairman of MyVoucherCodes.co.uk, had the following to say about the findings:

“While it may be cheaper at the time, counterfeit goods are not only made of lower quality materials, buying them also helps fund illegal activities. While you might think a fake Prada purse is a great deal, you are actually purchasing poor quality products that are nowhere near the level of designer goods.”

67% admitted to knowingly buying counterfeit designer items and the most popular piece being shoes. This was followed by a handbag, purse, watch and then dress.

Source: http://www.femalefirst.co.uk

Another Survey with Alarming Numbers

Other Interesting Recent Headlines (please cut and paste link) 1. EU - Plugging the leak: MARQUES reacts to unofficial European trademark proposals

http://www.worldtrademarkreview.com/daily/detail.aspx?g=37094ef6-fad9-46af-8985-196a840023f3

2. When Business Names Confuse Consumers: The Basics of Trademark Law http://www.entrepreneur.com/article/226140#ixzz2OVlQ7HQu

3. Canada Ranks Poorly in Global Intellectual Property Index Part 1: http://lillypad.lilly.ca/entry.php?id=1826 Part 2: http://lillypad.lilly.ca/entry.php?id=1827

4. $1.5M of counterfeit goods seized from Baltimore flea market http://articles.baltimoresun.com/2013-03-13/news/bs-md-co-flea-market-raid-update-20130313_1_flea-market-counterfeit-goods-counterfeit-merchandise

ACSG provides a range of anti-counterfeiting services - all designed to help your company reach its potential and more importantly, protect your brand. Clients benefit from our ‘Brain Trust’ made up of business strategists, legal gurus, trusted investigators, product design and factory audit specialists security professionals, etc.

In this issue, we feature company co-founder and director – Winnie Ip.

Winnie brings 10+ years of experience in operational consulting and program management to ACSG clients.

More specifically, Winnie contributes to all ACSG activities and is also currently the Director of Consulting for Humantech, Inc. an Ann Arbor, Michigan-based company specializing in the deployment of large-scale ergonomics initiatives for Fortune 500 companies across a wide variety of industries. In her role at Humantech, she manages a team of consulting engineers to deliver complex program management and technical services, including process reviews, high-impact training initiatives, and the establishment of management reporting systems. Also of note, Winnie is fluent in Cantonese and functional in Mandarin.

• MBA – Ivey Business School/Western University • BSc (Hons) – University of Waterloo

ACSG Bits & Pieces

Australia – Canada – Hong Kong – New Zealand – USA www.ac-strategygroup.com

USA/Canada: 727.235.6466 or NZ/Australia: +64.21.520.466

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