INDUSTRIAL PROPERTY ATTORNEYS AND THE FIGHT AGAINST COUNTERFEITING

Presentation

In order to create awareness amongst French people, a major information campaign was launched in April 2006, “Counterfeiting, no thanks”. The CNCPI, which has for many years committed itself to combating counterfeiting alongside the INPI and the CNAC, is a partner in this campaign.

The CNCPI emphasise the fact that counterfeiting has become a major problem in society, sparing no sector of the economy. To deal with this, mobilisation of all business sectors in the French economy is necessary, and a real awareness on the part of French people in their daily life.

Faced with this phenomenon, the CNCPI has issued several proposals:

  • reinforce the resources allocated to the Customs;
  • prohibit counterfeiting companies from exporting;
  • make the judicial systems in charge of counterfeiting cases in France more dynamic, with the creation of a hub specialising in intellectual property in Paris;
  • facilitate the execution of legal decisions made within the EU in the field of counterfeiting;
  • reinforce at the anti-counterfeiting communication campaigns.

It should be stated that, though counterfeiting for luxury products has been talked about for a long time, it has been found more recently that it extends to many consumer goods. It remains difficult to quantify precisely the economic impacts of counterfeiting, but it is known that this form of crime contributes to eliminating more than 200,000 jobs in the world each year, including 100,000 in Europe, and more than 30,000 in France (source: OECD).

In a few years counterfeiting has gone from the marginal, small workshop stage to the industrial stage. Now powerful and international, often equipped with technologically advanced industrial installations and highly structured distribution networks, this form of crime is organised in highly reactive and extremely profitable networks. The development of the internet – and in particular auction sites – provides new channels for selling counterfeits in a massive and anonymous fashion.
 

Counterfeiting represents (Unifab 2003):

  • 5 to 9% of world trade
  • 12% of the world toy market
  • 10% of the world perfumery and cosmetics market
  • 5 to 10% of the European market for car spare parts
  • annual turnover estimated at 500 billion euros

Breakdown of counterfeits entering the EU by country of origin in 2003 (source: European commission)

  • China 62%
  • Hong Kong 6%
  • Taiwan 3%
  • Malaysia 2.5%
  • Benin 2%
  • United Arab Emirates 2%
  • Others 24.5%

Questions and answers

How is counterfeiting defined ?
Counterfeiting is a violation of an intellectual property right.
In the case of manufactured goods, counterfeiting is deception: the aim of the counterfeiter is to create confusion between the original product and the counterfeiting product: he/she thus seeks to appropriate for himself the renown of others and to profit unduly from the investments made by the true owners of the intellectual property rights.

What is the role of industrial property attorneys with companies attacked by counterfeiters ? 
Industrial property attorneys are members of a liberal profession who assist companies in the management of their industrial property rights, whether it is a case of their acquisition, their exploitation or their defence. Companies are confronted with two types of problem. In the first situation, the products are counterfeited, in violation of their intellectual property rights. In the second situation, it is the company that finds itself in a position of violating the intellectual property rights of a third party. The latter situation has become much more frequent, an obvious corollary of these very high increases in the number of intellectual property rights protected, in particular in the United States and Japan. At the present time, before thinking of having its rights protected, a French SME must envisage the conditions under which it is confronted with the rights of all third parties. For this reason the CNCPI campaigns for patents to be granted with a high degree of precision, so that third parties have an exact idea of what the rights of the applicant cover. IP law must be fair, so that a balance is established between the interests of the creators and those of third parties.

What does the CNCPI recommend for combating counterfeiting ?
Consumers must as a priority be made aware of the damages counterfeiting brings. For this purpose, public opinion must be alerted to the fact that counterfeiting harms companies, the employment market and the safety and health of consumers.

To combat counterfeiting, the CNCPI in 2005 – 2006 issued several proposals:

  • reinforce the resources allocated to the Customs;
  • prohibit counterfeiting companies from exporting;
  • make the judicial systems in charge of counterfeiting cases in France more dynamic, with the creation of a hub specialising in intellectual property in Paris;
  • facilitate the execution of legal decisions made within the EU in the field of counterfeiting;
  • reinforce anti-counterfeiting communication campaigns.

What must be done to make the counterattack against counterfeiting more effective ?
It must be ensured that the counterfeiter has no advantage in devoting himself to this activity. This is the problem of reparation for the damage that must be posed.
The creation of a judicial hub specialising in IP is necessary. The volume of current cases is not such that it justifies its distribution between around 10 courts of first instance. A single court should be competent, which would make it possible to combine competencies, so as to lead to an effective crackdown on counterfeiting.