How the Megaupload Case Has Hurt Brand Protection

How the Megaupload Case Has Hurt Brand ProtectionThe reason the case against Megaupload founder Kim DotCom has hurt brand protection is because it has nothing to do with trademark enforcement and no one knows it.  With all of the news this case is getting, the public-at-large does not know the difference between counterfeiting and piracy.  There are many different kinds of Intellectual Property but only trademark was set up to protect the consumers before the content owner.  The purpose of a trademark is to identify the origin of a good or service.  The way this works is that, if you see my name or logo on my product, you can trust that it was made by me.  Trademarks are set up as a seal of trust and quality between a manufacturer and a consumer.  People who slap your favorite company’s logo on an inferior product deserve to be made to stop.  By placing a company’s logo on a commercial work without permission helps dilute the brand.  Even if your use is apparently harmless, they must enforce all unauthorized uses in order to be allowed to enforce the baddies.  It’s the basic rule that your school teacher had when you were a child, “If I make an exception for you, I’d have to do it for all the other kids.”  Copyright protection is quite different.  It protects the creator or the owner.  While that is still a noble cause, the difference needs to be made clearer to the public.  The Copyright Act of 1790 granted an author up to 28 years of exclusive rights to his work as long as he was alive.  In 1948 the United Nations passed The Universal Declaration of Human Rights which states ‘Everyone has the right to the protection of the moral and material interests resulting from any scientific, literary or artistic production of which he is the author.’  I am citing this to make it clear that I vehemently support the protection of content.  I do not, however, support the combining of these interests.  Our founding fathers were careful to place copyright in the hands of the legislature (Library of Congress) and trademarks in the hands of the Executive Branch (US Patent and Trademark Office).  This was no mistake.

In 1946 the United States passed the Lanham Act which prohibited trademark infringement, trademark dilution and false advertising.  In 1984 the Trademark Counterfeiting Act established specific criminal penalties for the commercial use of a counterfeit trademark.  Later, in 1999, the AntiCybersquatting Act was passed to prohibit the unauthorized commercial use of a trademark in a domain name.  President George W. Bush made trademarks a priority when he appointed the first-ever Intellectual Property Czar, which was an undersecretary position within the Commerce Department.  Of course trademark protection should be important.  Our brands are exported all over the world and we rely on the reputation of those brands for more than a third of our economy.  When President Obama was elected, he promoted the IPEC (Intellectual Property Enforcement Coordinator) position from undersecretary to full cabinet status.  Somewhere between then and now this person with executive power has been dubbed the Copyright Czar.  If the Executive Branch is granted to be in charge of trademarks and patents, why are they in the copyright business?  Perhaps American corporations and our own government have been blurring the distinction between the two to make sloppy cases less noticeable.  Or perhaps this is happening so that the specificity of Intellectual Property Rights becomes so unrecognizable that anyone can be prosecuted for almost anything.  Or perhaps this is all just a completely innocent mix-up.  Once we start to see copyright enforcement activity at the USPTO, we will know that our constitution is being ignored.  Protection of all property needs to be respected, but the trademark community needs to stand alone in this fight if we want to bring trust back to the consumer.

Now I’m going to finish my coffee.

Even Some Prisoners are Chinese Knockoffs

Throughout the years in the anti-counterfeiting business there have been a few times where we, and our clients, have lauded our victories when a raid was accomplished on a factory making Chinese knockoffs.  Once, I remember, back in 2006 our client’s attorney actually saw thirteen people in handcuffs.  Chinese nationals, in China.  In cuffs for making fakes.  Not bad for a case that started with some handbags sold by a Purse Queen in Missouri!  Every time I tell that story, I finish it with the punchline that “I’m sure the cuffs came right off when my client boarded the plane.”  I’m not faulting China and that really isn’t my point here.  But the disconnect between cultures is.  There is obviously a totally different meaning of ‘authenticity’ when you cross oceans.  You may recall the incident during the opening ceremony of the 2008 Beijing Summer Olympic Games when the seven year-old vocalist who was commissioned to sing ‘Ode to the Motherland’ was replaced by a prettier lip synching faker.  A recent Slate article reports on a whole new kind of counterfeiting: fake prisoners.  No kidding, guys.  People who are facing jail time in China can hire a less-fortunate guy to confess, or just replace him in the can.  This brings me to a whole new thought on the counterfeit enforcement business.  While diplomacy with China is important in the fight against counterfeit goods, raiding their factories and jailing their owners is probably not effective.

The  most important facet of my solution is to curtail the demand in the United States and other countries with a massive consumer base.  The way to do that is to enforce against all sellers of this product in those countries.  Contrary to the spirit voice in Field of Dreams, wise businessmen will tell you that supply does not dictate demand.  Stop promising your client you’re gonna get the “big factory” and focus on stopping the mid-level distributors here.  I promise your performance numbers will increase and, most important, you will help restore value and dignity to the client’s brand.  I know from great experience that many people who became huge sellers of counterfeit goods here in the United States would have stopped if they had just worn a pair of handcuffs early on.  One night in jail works wonders on the soul.  Enforcing the smaller crimes is part of the plan that makes many of our inner cities safer.  Curtailing vandalism in your neighborhood leads to less violence down the line.  In tough economic times it is easy to cut costs and focus on the biggest problems.  The problem with the latter is that no big problem started that way.  My suggestion to my readers is to simply place most of your efforts on the cities and countries with the highest retail sales of genuine product.  I’m not talking about the people selling fakes at swap meets or in the bad neighborhoods.  I’m speaking of the mid-level distributors who are getting their product directly from China and supplying those folks.

Now I’m going to finish my coffee.

Sincerely, neruaelle

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Hi-Tech P.I.

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