China reveals 2014 counterfeit arrests
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As China continues down the path of globalisation, laws protecting IP have been playing catch up.
The past few years has seen the country strengthen protections for both national and international rights holders, allowing them to better take online counterfeiters to task for infringing IP.
WIPR spoke with WIPR Trademarks Live guest Jenna Curtis, director of brand programmes at Corsearch, to discuss how exactly brands should adapt their protection approach when fighting against counterfeiting in China.
WIPR: Has efforts by China’s President Xi to create a more robust IP system and crackdown on 'junk' filings had an impact on counterfeiters?
JC: In my opinion, while there may have been some positive changes in recent years, there has also been a noted rise in the number of fraudulent or illegitimate trademark filings and a continued series of threats from counterfeit goods, brand abuse, and digital piracy.
Based on this, I believe that there are two main concerns. First, I think it’s possible that the increase in illegitimate filings may slow down the examination process that so many US companies rely on when making business decisions and growing their brands. Based on US Patent and Trademark Office (USPTO) reports showing a large amount of these filings originating in China, it’s crucial to watch the trends in the markets there and have in-depth knowledge of that landscape.
Secondly, it appears that counterfeiting and piracy issues have been exacerbated by the economic and technological changes of recent times—especially because of the COVID-19 pandemic.
The efforts of agencies such as the US Customs and Border Protection (CBP) and the USPTO to counter these risks have been great to see, but much of the responsibility also falls to brands and brand protection providers.
I think what the COVID-19 pandemic has highlighted is that counterfeiters are particularly agile and quick to adapt. The number of fake face masks, hand sanitisers, and other related items has been staggering.
There have even been cases of fake vaccines and vaccination certificates. We will wait and see what changes come from the new administration, but in the meantime, it’s our duty to remain vigilant in the protection of brands and consumers alike.
What has been done to combat the substantial growth in the number and sophistication of counterfeiters in the past few years?
I think that it has been encouraging to see some of the changes in China when it comes to tackling counterfeiting. The law has increased statutory damages from CNY 3 million ($425,000) to CNY 5 million ($708,500), and punitive damages from three times to five times the actual damages based on the rightsholder's losses, the infringer's illegal profits, or a reasonable multiple of the trademark license fees.
To my knowledge, China has also introduced new regulations on live streaming (effective since May 2021). The regulations require live stream platforms to have better risk management systems that will make it possible to identify suspicious marketing tactics, for example.
Platforms will also have to verify the identity of hosts before live streaming sessions. We hope that these and other changes will discourage rights infringement and brand abuse in territories such as China.
What role does emerging technology (such as AI) play in combating counterfeiters?
I think emerging technology can be tremendously helpful and can be utilised to employ maximum impact and strategy. Corsearch’s Brand Protection Platform identifies millions of brand-related online references and assigns a level of risk to each listing. We recently projected that by the end of 2021, we will have used the system to identify more than 12 billion online references for our customers.
I don’t think it would be possible to identify that volume of references, associated images and data without advanced technologies. In addition to the raw data, it’s vitally important to have access to filters and other tools that allow the brand and our own analysts to filter through the listings that are likely to be the most damaging. When it comes to online enforcement, the decks aren’t stacked in the brand owner’s favour.
Brands tend to have small enforcement teams and large workloads because there’s a seemingly endless number of listings to review across all global platforms. I believe the best course of attack is with tools that use technology to escalate the most dangerous online sellers and cluster the data to help brand owners forge connections and scale the supply chain to the highest level.
Do you have a wish list for upcoming Chinese IP legislation to protect brands?
China’s e-commerce Law took effect on Jan 1st, 2019 and I'm hopeful this will be a step in the right direction. However, to my knowledge, some see the law as more of a framework for legal practices rather than a rigid code to adhere to that could be truly effective and create large-scale change.
As far as a wish list, I think it would be for legislation that would require e-commerce platforms to allow listings and posts to be more easily monitored by brand owners. In our experience, China’s largest grocer Pinduoduo is a great example here because capturing and removing listings from the platform can be extremely difficult. I think that with the right legislation in place, and more transparency from the platforms, we could make tremendous progress.
If you are interested in watching Curtis’ session, there is still time to register for WIPR Trademarks Live today to watch the full recording.
The full agenda of all 18 seminars can be viewed here.
Those wishing to register their interest for next year’s event can email Kieran Murphy at email@example.com
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China, Counterfeiters, Corsearch, Trademarks, USPTO, CBP, Pinduoduo
China reveals 2014 counterfeit arrests