USPTO Forum on Brand Protection and Anti-Counterfeiting Strategies Keynote Address
USPTO Forum on Brand Protection and Anti-Counterfeiting Strategies Keynote Address | Thursday, June 6, 2019, 10 AM in the Clara Barton Auditorium at the U.S. Patent and Trademark Office
Thank you to the Patent and Trademark Office and the McCarthy Institute for organizing today’s forum.
This forum convenes an impressive and broad range of voices in the intellectual property space and for a thoughtful exploration of the challenges and opportunities that come with addressing the growing problem of counterfeits in today’s 21st century environment.
This forum is also incredibly timely. In Congress, we have heard continued and growing complaints from brand owners about the problem of counterfeiting as well as about the potentially harms and dangers that counterfeits can pose.
As Chairman of the House Intellectual Property Subcommittee, just this week, I joined with some of my colleagues to hold a roundtable on the issue of counterfeits being sold through online marketplaces so that we could begin to consider what role Congress needs to play in addressing this growing problem. What we heard only confirms the urgent need to consider creative and comprehensive approaches to address this issue.
This is because, just as the marketplace has changed and advanced over the years, counterfeiting has also changed fundamentally. Counterfeiters have become bolder, savvier, and more innovative. Back in the day, counterfeit goods were, frankly, more obvious: They looked fake and were poorly constructed. Their prices were much lower than the prices of authentic products. And they were often sold on the street or at a flea market, and not where you normally would find the real products. Chances are, if you were walking downtown and came across a $50 watch with a rusty exterior and the word ROLEX etched unconvincingly on the face, you knew you were not getting the real deal.
As the years have passed and the marketplace has become more digital, counterfeiters have adopted new technologies and made more advancements, which means these red flags have essentially disappeared. Counterfeiters are becoming more sophisticated in both mimicking the packaging for authentic products and mimicking the products themselves. Counterfeiters are pricing counterfeit goods close to the retail price of authentic products. And counterfeiters are taking their operations primarily online, including becoming third-party sellers on popular e-commerce websites. These online operations even include using images of authentic products to promote the sales of their counterfeit versions.
In today’s age, if I go online to by a ROLEX watch, the counterfeit version may have the product images as an authentic ROLEX and may be priced just a few dollars below the real retail price. Changes like these have made counterfeit goods harder to spot by everyday consumers.
Alarmingly, these counterfeit goods can be dangerous to consumers. A fake ROLEX watch may fall apart easily, but what happens when you unknowingly purchase a sought-after electronic toy online that that turns out to be counterfeit. That toy could not just break easily, but also overheat and put you at risk. You all may remember those hover boards that used to be popular. One family purchased a counterfeit version online, and it overheated and caused a large fire at their home.
And this harm does not just end at luxury watches or counterfeit gifts. Counterfeiters are even targeting medical devices, where authenticity is paramount for protecting consumers’ safety. You would not want a counterfeit blood pressure monitor keeping track of your health or counterfeit contact lenses in your eyes.
And when consumers become aware that they have a defective or harmful product, they may associate that sub-standard product with the authentic brand, thereby hurting the value of that brand. This in turn has a direct effect on the trademark system as a whole, which is designed to incentivize companies to invest in developing a good reputation so that consumers associate their trademarks with quality and reliability. This is a particular concern of mine as Chairman of the subcommittee that has jurisdiction over intellectual property.
But the harm does not end there. Over time, counterfeiting will also erode consumers’ confidence in online marketplaces if they start to believe that they routinely are not receiving authentic versions of what they intend to purchase.
Getting ahead of this problem presents real challenges. This is because counterfeiters continue to step up their game, employing artificial intelligence and advanced technologies to make counterfeits. Their use of new technologies to illicit ends will continue to advance.
Getting ahead and staying ahead will require a coordinated response from Congress, the executive branch, and stakeholders. We in Congress must consider whether the law is keeping up the facts on the ground. In the Executive Branch, nearly twenty U.S. agencies have a hand in intellectual property enforcement, including the Federal Bureau of Investigation, the Consumer Product Safety Commission, the Department of Justice, the Food and Drug Administration, among others.
Of course, the USPTO is playing its part as well by convening stakeholders and experts to consider this multifaceted problem through this conference today.
A key part of the response will be to look at what new tools and new technologies can help us in our fight against counterfeits. I applaud the USPTO for having today’s forum include emphasis on this aspect of combating counterfeiting: just as counterfeiters are using new technologies like artificial intelligence and machine learning to evade detection, so too must brand owners and online platforms. It is not enough to be reactive, to truly get ahead and put a meaningful dent in the prevalence of counterfeits will requires a proactive approach, and one where legitimate businesses and government partner together.
The more traditional approach of building consumer awareness must play a role too. I think many of my constituents in Georgia would be surprised to hear some of what stakeholders shared with me and my staff during our roundtable this week. Public messaging is needed to ensure that today’s consumers are aware of this issue. As counterfeiters get smarter, it becomes ever more important to educate today’s consumers to ensure that the hard-earned money they spend is going to safe and genuine products.
This is not an easy problem to solve. I applaud the willingness of everyone here today to participate in a dialogue for how to move forward. With worldwide e-commerce sales are expected to reach over $4 trillion by 2020, it is imperative that we take steps now to bolster and maintain the integrity of online marketplaces.
Thank you for inviting me here today, and I wish you all a productive day of discussion on this important topic.