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William Morris

UnderArmour Trademark Counsel

Again, Intellirights thanks William Morris, trademark counsel at UnderArmour, for providing insight on the problems his company faces in dealing with counterfeit goods.

During our interview, Morris was clear that UnderArmour is a high-quality, performance brand, and that the company intends to vigorously enforce its intellectual property rights to protect the brand. We look forward to hearing from him soon with an update on UnderArmour’s progress in this ongoing battle.

In its recent 2011 Special 301 Report, the Office of the United States Trade Representative (USTR) framed the global problem of counterfeiting this way:

Counterfeiting has evolved in recent years from a localized industry concentrated on copying high-end designer goods to a sophisticated global business involving the mass production and sale of a vast array of fake goods, including items such as counterfeit medicines, health care products, food and beverages, automobile and airplane parts, toothpaste, shampoos, razors, electronics, batteries, chemicals, and sporting goods.

Counterfeiting and piracy diminish the profits of legitimate producers and risk harm to consumers who may purchase fraudulent, potentially dangerous products. Trading partners where rampant counterfeiting and piracy occur lose tax revenue and may find it more difficult to attract investment.

Those engaged in trademark counterfeiting and piracy generally pay no taxes or duties, and they often disregard basic standards for worker health and safety and product quality and performance. Industry reports trends in counterfeiting and piracy that include:

• A greater variety in the types of goods that are being counterfeited, as well as the production of labels and components for these fake products. Counterfeiters are establishing a global trade in counterfeit items, shipping them separately to free trade zones (FTZs) to be assembled and distributed in another country. Counterfeiters have also abused FTZs to disguise the origin of counterfeit goods.
• A rapid growth in the piracy of copyrighted products in virtually all formats, as well as
counterfeiting of trademarked goods, because these criminal enterprises offer enormous profits and little risk. Such enterprises require little up-front capital investment, and even if they are detected and prosecuted, the penalties imposed on them in many countries are so low that such penalties offer little or no deterrence against further infringements and are viewed merely as a cost of doing business.
• A growth in the online sale of pirated and counterfeit hard goods that is rapidly approaching the volume of goods that sold by street vendors and in other physical markets. Legal and investigative institutions face difficulties in responding to this trend. Online advertisements for sale of unlawful physical goods that are delivered through the mail or by hand are found in many places, including China, France, Germany, Japan, Spain, and Taiwan. For example, in China, although the largest Internet-based sales portals have responded to rights holders’ complaints of counterfeit and pirated product listings, and even though major online sellers and distributors seem to be making efforts to ensure that the content available on their websites is legal, more than 75 percent of illicit sellers have reportedly re-listed the infringing goods.
• Another notable trend involves shipping counterfeit products separately from labels and packaging to evade enforcement efforts. For example, infringers in Russia reportedly import unbranded products, package these products with unauthorized packaging materials bearing the rights holders’ trademarks, and subsequently export the products to various countries. Infringers in countries such as Paraguay reportedly facilitate these illegal activities by exporting label and packaging components to these counterfeit and pirated product assemblers. There are reports of transit of illicit labels through other countries as well, including Mexico and the Philippines.

Stronger and more effective criminal and border enforcement is required to stop the manufacture, import, export, transit, and distribution of pirated and counterfeit goods. Through bilateral consultations, FTAs, and international organizations, USTR is working to ensure that penalties have deterrent effects, and include significant monetary fines and meaningful sentences of imprisonment.

Additionally, important elements of a deterrent enforcement system include requirements that pirated and counterfeit goods, as well as materials and implements used for their production, are seized and destroyed.

To learn more about UnderArmour, please click here.

To learn more about the Office of the United States Trade Representative, please click here.

We especially thank Howard University School of Law and Professors Steven Jamar and Lateef Mtima for facilitating this interview. For more information on Howard’s law program, please click here.

 


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