Online shopping

Fighting the dangers of counterfeiting as online shopping fuels the economic boom

It’s no surprise that in another year of pandemic life, e-commerce is booming. Consumers, avoiding crowded stores, are turning to the internet to buy even everyday items, such as toilet paper, groceries, hand sanitizer, prescriptions and, of course, face masks. face protection. Unfortunately, online shopping, especially in online marketplaces, is full of counterfeit products.

Counterfeit products pose real dangers to consumers, especially goods that can impact consumer health and safety. 3M, which makes brands of disposable respirators, has embarked on a massive campaign to fight counterfeit products, setting up an anti-fraud hotline and filing dozens of lawsuits. The PTO, hoping to educate the public about the dangers of counterfeit products, has teamed up with the National Crime Prevention Council and McGruff the Crime Dog for a nationwide public service campaign, warning consumers that “counterfeits [] mislead consumers and cause serious injury and death, harm American businesses and fund organized crime.

Congress is also considering legislation that would address the issue, including the Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act (SHOP SAFE Act) and the Integrity, Notification and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Consumers Act). The latter, which has the backing of some online marketplaces, would order online marketplaces to take steps to verify the identity of high-volume third-party sellers. The SHOP SAFE Act, however, would open up online marketplaces to potential contributory liability if they fail to implement certain “best practices,” such as using technology to detect counterfeit products before they go wrong. appear on the market, prohibiting repeat offenders from selling products on the market. platform and screening to ensure that terminated sellers cannot re-register.

Trademark owners, frustrated by the proliferation of counterfeits, have also sought to hold contributing infringers liable in court:

  • Omega Channel v.375Case no. 19-969 (2d 2021): The United States Court of Appeals for the Second Circuit upheld a $1.1 million judgment against a commercial landlord for contributory infringement based on the landlord’s willful blindness to the infringement occurring in the leased property. Omega, well known for its luxury watches, alleged the owner continued to rent the space to vendors despite knowing the vendors were selling counterfeit Omega products.
  • The Ohio State University vs. Redbubble Inc., Case No. 19-3388 (6and 2021): The United States Court of Appeals for the Sixth Circuit, reversing the district court’s grant of summary judgment in favor of Redbubble and remanding the case for further consideration, found that the market for Redbubble online print on demand was more than just a “passive facilitator” of infringing merchandise bearing the Ohio State University trademarks. Redbubble provides an online storefront that allows third parties to upload artwork and sell products printed with these designs. Noting, among other things, that Redbubble classifies its products as “ Redbubble products” imprinted with artists’ designs, the Sixth Circuit said that Redbubble “acts less as a hands-off middleman and more as a company that creates counterfeit products.”
  • Atari Interactive Inc. v Redbubble Inc., Case No. 4:18-cv-03451, (ND Cal. 2021): Atari sued Redbubble for copyright and trademark infringement for selling products featuring Atari’s intellectual property, including some of its famous Pong and Asteroid gaming logos. The jury, however, found that Redbubble was not liable for contributory infringement and did not sell infringing products. Rather, for the purposes of infringement, it is the individual designers – not Redbubble – who have infringed Atari’s intellectual property.

Effectively combating counterfeiting will require significant efforts from the PTO, the US government, and brand owners. Brand owners should take steps to maintain a vigilant enforcement system by working with e-commerce platforms where possible to remove counterfeit products, working with established protocols created by customs and protection borders and possibly using the ITC for infringement litigation and exclusion orders. In the meantime, all parties will monitor legislative changes, if any, made in 2022 to help resolve the issue.