How can design registration help stop online sales of counterfeit products?

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Design Registration – Vanguard Against Counterfeits on E-commerce Platforms

It has been previously discussed that design registration is often overlooked, yet can be just as valuable as other forms of intellectual property (IP). With the pervasiveness of e-commerce, third-party (3P) marketplaces, and ease of international delivery, the war against counterfeiters is often waged on multiple fronts, both foreign and domestic. To sufficiently safeguard your business and products, it is advantageous to have a diversified IP portfolio containing trade marks, patents, and designs. When it comes to enforcing IP rights against online sales of counterfeit goods, design registrations have proven to be an effective tool for swift deployment and efficacy.

Background to Design Registration

The registration of a design aims to protect a product’s overall visual appearance, including its shape, configuration, pattern, and/or ornamentation. The registration and subsequent certification of a design allows the owner exclusive rights to monopolise the design. Effectively, designs sits in the gap between copyright and patents – where copyright protects artistic creations of work which have not been industrially applied (this being the domain of designs), and where patents protect the workings and function of an invention. Compared to patents, obtaining a design is relatively quick and cost effective.

The Need for Design Registration

Design registrations protect against infringers from producing identical goods or products which do not produce a different overall visual impression on an ‘informed user’. As such, designs in your IP portfolio can immediately challenge the unintelligent counterfeiter who is inclined to simply produce an imitation product. This situation is commonly seen when unscrupulous manufacturers secretly produce products with trade marks and branding removed, or if tools and moulds are replicated without the knowledge and consent of the IP owner.

It is understandably difficult to globally distribute counterfeit goods through brick and mortar businesses, as importation of large consignments may be subject to customs checks and other legal processes. However, the age of inexpensive air freight has eliminated the need for a store to have localised inventory. Rapid global retail fulfilment can now be conveniently carried out from an offshore country via international couriers and drop-shipping business models.  Counterfeit products can therefore quickly flood the online 3P marketplace through channels such as eBay, Amazon, AliExpress, Wish and Allegro.

The Use of Design Registration

The majority of online 3P marketplaces will endeavour to respect enforceable IP rights.  However, in fairness to their sellers, any accusation of alleged infringement must be reasonably substantiated. Accordingly, online marketplaces typically have a forum to assist with the take-down of listings which are proven to be infringing. To name a few, eBay has established their Verified Rights Owner Program (VeRO), Amazon employs an Amazon Brand Registry, and AliExpress (along with all other Alibaba platforms) provides an Alibaba Group IP Protection Platform.

If a counterfeit product features your registered trade mark, takedown requests are relatively easy to execute. However, not all infringing listings will advertise a counterfeit product while displaying a legitimate trade mark. Listing images are frequently photoshopped to remove any logos and markings, while the counterfeit product itself may omit trade marks and logos altogether or have a different trade mark applied.

If a counterfeit product appears to infringe your patent, you have the option of applying for a takedown request on the ground of patent infringement. However, employees handling takedown requests typically lack the expertise and legislative authority to interpret complex patent claims for validity and enforceability. Consequently, takedown requests on grounds of patent infringement may attract a court order or an International Trade Commission order request. The procurement of this court order may incur substantial financial expense and delay, and the resulting order may only be applicable to a single specified seller or distributor.

By way of contrast, designs simply consider whether or not the infringing product produces ‘a different overall impression on the informed user’. As such, e-commerce platform employees receiving takedown requests are in a better position to determine the similarities between designs and an infringing product. This means that a designs-related takedown of an allegedly infringing listing is usually much less contentious and involved compared to a patent-related request. In the case of a designs-related takedown, the e-commerce platform employee is often able to quickly make an informed decision. During working hours, the removal of an infringing listing may even be actioned within hours of a lodgement of a well-prepared takedown submission.

Caveats

As with all online sales, a seller may simply re-post an infringing listing that has been taken down. However, with each successful takedown of a counterfeit product, sellers are typically issued with strikes or demerits, discouraging the relisting of infringing products. It is also possible for the sellers to set up a new account and attempt to offer the infringing product once more. However, they do so with an account with very little reputation or trustworthiness.  Ideally, with vigilant monitoring (such as with routine reverse image searches), these listings can be quickly identified and dealt with before sales are made.

Sometimes, instead of removing an infringing listing, fastidious platforms may only implement an IP block, denying the listing only when a shopper is accessing from a country in which your design right is registered. As such, it is preferable to not only obtain design, and other IP rights, in your local jurisdiction, but also in the jurisdictions where the product is manufactured and in jurisdictions of major markets of interest.

Conclusion

The possession of design protection can prove to be an invaluable asset in your IP portfolio.  This is especially true for products which can be easily sold or distributed through online markets due to the relative ease of obtaining and enforcing design rights.  

If you would like further details on how to better protect your products through design registration, please refer to our Designs Information Kit.

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