Fighting Counterfeits Online Is a Battle Without an End, Experts Say
Although the pandemic provided rocket fuel to an e-commerce counterfeit problem that was already massive, representatives of business groups said companies do not support mandatory data sharing from rights holders to solve the problem, and they said that making requirements of platforms has to be carefully done so as to not give giants like Amazon unfair advantages.
Piotr Stryszowski, a senior economist at the Organization for Economic Cooperation and Development (OECD), said during an Aug. 25 webinar hosted by the Center for Data Innovation that policymakers must calibrate how to set the bar high enough to curb the sale of counterfeits but not so high it's not possible to achieve.
"One easy solution -- turn off the internet," he said. "That is like curing dandruff by decapitation."
The webinar followed a report by CDI on what should be done in the EU and the U.S. to curb the sale of counterfeits online. That report said platforms should be proactive, doing more checks on "items at high risk of being counterfeited, items that pose a high risk to health and safety, and items that are obvious fakes."
The state of North Carolina, one of the few states that has aggressive enforcement of intellectual property violations through its secretary of state, also is trying to spread the word to consumers about items that are health risks. Secretary of State Elaine Marshall said her office has found fake tourniquets. She said her office is spreading the word about verifybeforeyoubuy.org by partnering with the state's Family Physicians Organization. Patients think they're buying cheaper prescription drugs from Canadian pharmacies, but they are not buying from any pharmacy, and sometimes those pills are inert.
The CDI report also said platforms should track and remove sellers who are repeat offenders, and look for other seller profiles that belong to those violators.
When it comes to fighting counterfeits, there's a lot of talk about the need for CBP to share more information with rights holders -- CBP says it is restricted in doing so, and would like a law change to make it possible.
This webinar focused on rightsholders communicating with other companies and with the government, and the barriers to that.
Patent and Trademark Office attorney-adviser Jennifer Blank said, “All trade secrets and any other kind of [intellectual property] have to be shared in a manner that is voluntary, that is protected, that is appropriate to the purpose. You certainly aren’t going to get much voluntary cooperation if companies feel they are going to damage themselves in their cooperation.” There are ways to share data without damaging IP or trade secrets, she said.
Stryszowski said, "We should not forget that any anti-counterfeiting action from rights holders or platforms is a cost," and that platforms may not be interested in bearing those costs if other firms in other countries are not doing so.
Proactive, industry-driven, public-private partnership is the right approach, U.S. Chamber of Commerce Global Innovation Policy Center Senior Vice President Patrick Kilbride said. He warned against overly prescriptive approaches from governments stepping in and trying to manage industry problems. But he warned industry that if companies aren’t proactive, the government will step in.
There is tremendous benefit to voluntary standards, but the issue is bad actors who “won’t come to the table,” Blank said. Some combination of mandatory and voluntary best practices, as seen in the Department of Homeland Security’s 2020 report on counterfeiting (see 2001240043), is a good approach, she said.
Marshall suggested that rights holders could crack down on some counterfeiting by keeping a closer eye on their foreign supply chains. She said when her investigators see counterfeit purses, the fabric is not a copy, it's the same fabric as in the legitimate purses, but it was diverted to another producer.
Like cybersecurity, combating counterfeit goods is a “race without a finish,” Marshall said.