CIPR Activities - Conferences

Timothy P. Trainer
President
International AntiCounterfeiting Coalition, Inc
www.iacc.org or
©2000 T.Trainer

Enforcement of intellectual property (IP) rights is the ability of the right holder to protect its asset. Without an efficient system that provides effective protection through reliance on enforcement mechanisms, the IP rights themselves become meaningless. Right holders understand that there are differences in all countries regarding procedures, legal interpretations and other functions of the enforcement system. What is important to right holders is that within any particular country there is some consistency of legal and regulatory interpretation, enforcement procedures and judicial decisions. Right holders want to have confidence in the overall system (judicial, administrative, civil, criminal and border enforcement) that they must rely upon to obtain protection and enforcement. As with many things, there are many ways to reach the same objective—that of effective enforcement of IP. The Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPs) is an outline that leaves many of the details to be determined by the Members.

The TRIPs enforcement provisions hint at the role of right holders in the enforcement process as they initiate civil actions and border measures. Because TRIPs outlines obligations on Members, i.e., governments, there is little concrete language regarding the right holder. It is important to keep in mind that a right holder that avails itself of the enforcement mechanisms of any system has, in many cases, already made an investment of its resources to work within a system.

1. Resources

In any discussion about enforcement, whether it is enforcement of intellectual property laws or any other laws, there are always limited human resources to pursue violations of law. The issue of “limited resources” is also one that confronts right holders. Right holders, like governments, have budgets and expenses that must cover the cost of the business. Right holders’ budgets include costs for product development and research, marketing, advertising, distribution, legal and many other costs associated with running a commercial enterprise. In addition, like governments that must have the tools to enforce laws and regulations, right holders must invest in protecting the assets they have, including their intellectual property assets.

Similar to governments that allocate funds for police and other law enforcement entities, many right holders have internal departments responsible for overseeing the protection of their patents, copyrights, trademarks, trade secrets and other intellectual property assets. Some right holders will spend millions of dollars in order to protect these assets. What does this include? In addition to an internal legal staff, it may include a department that is staffed with people with police and other investigative backgrounds so that the right holder has its own investigative capabilities to detect and uncover pirate and counterfeit operations.

In addition to these “in-house” resources, many right holders must also invest in hiring outside legal counsel and investigative firms closer to the location of the counterfeiting and pirate activity. Because of the costs of hiring outside legal counsel and investigators, right holders, like government agencies, must make decisions on how to best utilize the limited funds they have allocated to the protection of their intellectual property assets. As a result, they, too, are confronted with decisions about which cases to pursue.

It is precisely because of limited resources, human resources and funds, that right holders are not likely to make frivolous claims of infringement against a party. The use of limited resources to investigate a potential infringer and to initiate legal action is labor intensive and right holders must use their resources in an effective and cost efficient manner. Therefore, the use of their limited resources requires them to make some cost-benefit analysis in deciding when to devote extensive amount of time and funds against a particular infringing enterprise.

In the end, the issue of limited resources is a non-issue only because all parties engaged in combating piracy and counterfeiting, government and private enterprises, have the same problem. Thus, the only real issue is how to improve the use of existing resources to obtain the maximum result.

Right Holders as Partners in Enforcement

It should be accepted as a fact that the government’s role in actively protecting and enforcing IP is in most, if not all, cases dependent upon the involvement of the right holder. Initially, there is nothing to protect unless an individual or entity has:

Thus, at the outset, the right holder has already made a significant investment, an investment that it deems worthy of protecting. Given the fact that the right holder has invested in creating and developing something that it deems valuable, the right holder is the party that knows the IP asset and is able to assist the police, customs, prosecutors and judicial authorities.

Right Holders as Experts

The right holder is inevitably the “expert” about the genuine product incorporating the IP that is to be protected. The right holder is the person who knows its product and the particular details about its product. It has information regarding the genuine product that makes it easier to conclude that a product is a pirate or counterfeit copy. For example, the right holder has information related to:

This is not an exhaustive list, but it provides some examples of the type of information the right holder has about its genuine products that can help the law enforcement authorities make informed decisions regarding possible infringement. Several TRIPs Articles (50, 51, 52, and 57) recognize that the right holder is in the best situation to provide information to the authorities, judicial or administrative, when infringement cases are initiated or under investigation. As a result, in some of the TRIPs provisions, the judicial authorities must have the power to call upon the right holder to provide more information if the right holder is asking judicial authorities to take certain actions.¹

Interestingly, in the border measures provisions, Article 57 reflects the recognition that the right holder is, in fact, the party that is able to confirm the existence of a violation of its rights. Article 57 provides that the authorities must have the power to allow the right holder to inspect goods suspected of infringing a copyright or trademark. This provision, more than any other in TRIPs, demonstrates the active role of the right holder in verifying whether infringement in a particular case exists.

2. Training

In the partnership to protect IP and to initiate actions against pirates and counterfeiters as to a particular IP, enforcement authorities should be receptive to training from right holders. Although right holders cannot visit every location in every country where law enforcement officials are working, right holders are interested in providing information about their products and how infringing goods can be detected. There is great value in working with right holders and receiving information about their goods. Some of the benefits in receiving this training include:

In addition to face-to-face training, right holders who cannot visit field offices may be able to provide manuals, booklets, or pamphlets that contain photographs and explanations of ways to identify pirate and counterfeit products. Although this may not be the ideal way to learn about infringing product, it does provide information that might not be available otherwise.

3. Detecting IP Violations

In most of the cases involving IP infringement, the right holder takes the initiative in seeking enforcement of its rights against an infringer. Civil cases require the least amount of involvement by government authorities because it is the right holder who bears the burden of gathering evidence and proving that its rights have been violated. As a result, the right holder relies on judicial resources, but usually not the police and other enforcement entities. To the extent that civil administrative remedies may be available, the right holder may first seek this type of resolution of the problem if the administrative remedies available are comparable to what the courts may provide and if it is more cost efficient to proceed through the administrative process because of cost and time.

As mentioned above, many right holders have legal counsel on staff within their companies. But, because instances of IP infringement often occur far from where the right holders’ offices and factories may be, they must employ legal counsel and investigators where the infringement is occurring. In addition, when infringement is taking place in a foreign country, it means that right holders must obtain legal counsel not only for the enforcement actions themselves, but learn how the legal system is structured and the most effective way in which to proceed against an infringer.

An effective way to alleviate demands on governments and public resources to fight infringement is to provide the legal means that right holders can use to bring the infringer to court. The laws must be sufficiently broad to permit right holders to investigate potential violations of their rights. This should permit right holders to hire legal counsel and investigators to carry out their own investigations, without violating the rights of others or other laws, in order to determine, first, if their rights are being violated and, second, the extent of the violation (quantity of goods involved and whether the infringement operation is small or large scale).

The ability of the right holder to conduct this type of information gathering reduces the resource demands on police and other public officials, but does require that laws be in place so that right holders can take these actions. Some of this may be as simple as investigators entering a retail facility and examining goods to determine if the goods are infringing or making purchases at retail locations that are open to the public and having experts examine the product. Thus, laws should permit the use of investigators in this way to allow right holders to engage in this activity. In addition, based on the information, laws should provide right holders with the ability to obtain court orders to enter premises and take custody of the goods as evidence of infringement.

TRIPs foresees the need to give right holders these self-help powers. In Articles 44 and 50, TRIPs requires Members to have civil injunctive remedies available so that the courts have the power to prevent goods from entering the channels of commerce based on information that the goods are infringing. In addition, Article 50 gives right holders the ability to give judicial authorities information about infringement and the imminent harm that would be caused if the judicial authorities fail to act. Thus, Article 50 states that judicial authorities must have the power to act against a defendant without notice to the defendant prior to the action being taken. It is expected that right holders must provide information to the judicial authorities before the courts take these extraordinary steps. Article 50 explicitly states that the judicial authorities can require the applicant (right holder) for provisional measures to provide evidence that its rights are being infringed.

In order for the applicant (right holder) to take advantage of these procedures, first, legal means must exist by which the right holder can obtain information to provide to the courts and benefit from the provisional measures of either Article 50 or Article 44. Second, the national laws should provide for these types of actions.²

It is important to consider what can be done under these civil legal provisions in order for right holders to help themselves and not burden public resources. Is it enough that the right holder that makes the substantial investment in protecting and enforcing its IP assets is successful only in getting the judicial authorities to confiscate the infringing goods? If the IP enforcement system is to have any effect on deterring future infringement of a particular defendant or others in general, what other legal tools should the courts and the right holders have available?

It is unlikely that confiscation of infringing goods alone will be a serious deterrent to future infringement. Equally important to right holders is information about:

These legal tools are contemplated in TRIPs. Articles 46, 47 and 50 address the issues listed above, but do not make all of these elements mandatory. While Members must give the judicial authorities the power to order confiscation of materials and implements used predominantly to make infringing goods,⁴ Members are not required to give judicial authorities the power to order an infringer to disclose information regarding third parties to the right holder.⁵

From the right holder’s perspective, there is no readily apparent reason to deny the courts the power to order infringers to provide information about third parties nor is there a reason to deny the right holders the ability to obtain documents that are related to the infringing activity as long as there are mechanisms to protect the defendant. It is important to remember that giving the courts power to take certain actions should not be interpreted as requiring the courts to take the authorized action in every case, but to give the courts authority and permitting the courts to decide when it is appropriate based on the evidence to use the power it has.

Although infringers would not agree, there are benefits to having provisions of law or code that permit right holders to obtain documents. First, the documents may provide right holders with information that will expose the identity of others engaged in the infringing activity. This allows right holders and other relevant authorities to try and eliminate larger elements of the illegal enterprise faster because some of the investigative efforts to gain this knowledge will not be necessary. In addition, documents may also shed light not only the people involved, but also the quantity of product and the extent of the funding involved in the illegal enterprise. Thus, the ability to obtain documents benefits not only right holders, but also law enforcement authorities because the documents may expose the extent of tax evasion or involvement in other illegal activities.

Where right holders are able to conduct investigations to determine the existence of infringement and, to some extent, the scale of the infringing enterprise, they are able to provide the information to police or other administrative investigative authorities. Because right holders do engage in some degree of investigation, it is their desire that if evidence and information is provided to the relevant authorities that they will accept the information from right holders and conduct their investigation to confirm the existence of the violation and those involved. Moreover, when right holders present evidence of commercial scale IP violations, they encourage the authorities to investigate, confirm the existence of these activities and work with prosecutors to obtain criminal penalties against the infringers.

A concern that right holders have in some countries is the repetitive nature of investigations because the police or other law enforcement entities and prosecutors each conduct their own investigations. The repetitive nature of investigations prolongs the process and, if appropriate protective legal mechanisms are not in place, permits infringers to continue their illegal activities for a longer period of time before any penalty might be imposed. Thus, right holders want to see greater coordination and cooperation between those officials conducting the investigation and the prosecutors in order to make the prosecution process efficient.

Targeting Vendors, Distributors and Producers: Dual Action

From the right holders’ perspective, street vendors and retail outlets are the easy targets of their enforcement actions. Right holders, like other consumers, can easily examine and/or purchase suspect merchandise offered for sale and determines if the goods are infringing. Right holders can seek injunctive relief and pursue civil actions at this level because of the obvious target of their efforts.

It is much more difficult, if not impossible, for right holders and their representatives to infiltrate the operations of a large, commercial scale infringement operation in order to bring about raids and criminal prosecutions. When the circumstances involve large commercial scale entities engaged in an infringement enterprise, the right holders’ limited abilities to conduct investigations will likely require the involvement of police or other administrative authorities having the legal powers to conduct undercover investigative operations. Thus, an effective enforcement effort requires actions on dual tracks. Both the civil and criminal tracks will often stem from information initially gathered by the right holders seeking to initiate civil actions, but who determine from their investigation that sufficient evidence exists to present it to the enforcement authorities for a criminal investigation.

Because the police or other public law enforcement officers have the legal power to conduct undercover investigations, but not individuals or other private legal entities, public authorities undertake the criminal investigation track. Due to the resources required, both public and private, it would seem that the efficient use of these resources is to cast a net over as much of the illegal enterprise as the evidence will allow. Recognizing that there may be many law enforcement officials and prosecutors involved in a case, it would seem that one in-depth investigation that infiltrates various levels of an illegal operation and finds multiple defendants, infringing product and equipment and puts a large scale operation out of business through criminal fines and imprisonment is preferred over initiating numerous investigations over a longer period of time that lacks sufficient resources to combat the illegal operation.

Right holders and public officials, the police and other law enforcement officials, have strengths and weaknesses regarding their own resources, as well as, what they can legally do with these resources. In many countries, right holders can take enforcement actions against retailers, street vendors and other more obvious targets through civil actions. However, when right holders’ investigations uncover leads that point to bigger operations that may require the police and their powers, it becomes necessary for right holders to work with public officials, police, prosecutors and the judiciary, to pursue criminal cases. Although the right holders’ role in a criminal case is very different than in a civil case, it is still crucial for right holders to provide information, point to evidence and provide expert testimony to assist in a successful prosecution.

Public Officials: Laws & Regulations, Enforcement—
Some Considerations

From the outset, laws and the detailed regulations implementing laws exist to provide information. Laws generally inform us about certain things, which may include:

While this information should be provided in laws and the details provided in the implementing rules, one thing that should be remembered by government officials is that these laws and implementing rules should be written with non-government persons in mind. In addition to public officials operating under these laws and regulations, government officials should remember that private individuals and businesses need to understand these laws and regulations so that they, too, know what the government can do and how their involvement can be initiated.

This is not to imply that the laws and regulations regarding enforcement only apply to public officials. Certainly, regarding civil enforcement, laws and regulations tell private parties what they can and cannot do under the law. But, because it is the government that is tasked with writing laws and regulations, it is important that public officials remember that they must communicate what the laws and regulations mean in detail to private individuals. There cannot be an assumption by public officials that because they understand what is intended that private individuals are also able to make the same assumptions.

One way to avoid problems with laws and regulations is to invite the private sector’s participation in the process. Similar to developing cases by having right holders provide information, the role of the non-government sector in drafting laws and providing input in the process of preparing implementing rules can also have benefits. Procedures that involve the parties whose interests are affected are likely to be more effective in meeting their intended objectives.

The issue of limited resources should not paralyze efforts to conduct effective enforcement actions. It may be necessary to examine several things to determine how to maximize resource efficiency:

Within many administrative or police entities, there are sections, branches or offices that have many people with specialized training. Sometimes, the solution to maximizing limited resources is to re-assign specialists with other specialists who might not normally work together. This may be in circumstances within the same organization or when different government agencies must work together because alone none of the agencies have the needed specialization. Thus, interagency or intra-agency cooperation and coordination may be a simple answer to combating difficult problems.

In combating pirate or counterfeit operations, it may be necessary to consider combining different specialists to work together. Some examples might be:

Efforts to improve enforcement capabilities require the consideration of different approaches, including those used by other governments. Within the Asian region alone, there are different models that might provide possibilities for structuring enforcement systems. There is no right system. The “right” system is one that can reduce the level of piracy and counterfeiting that exists and keeps piracy and counterfeiting under control.

There are many possible approaches to effective enforcement. A system that works in one country is not guaranteed to work elsewhere. There are many variables involved in an effective system. But, some elements necessary for a successful approach to enforcement is to promote dialogue between right holders and enforcement authorities, which includes training. Right holders and enforcement authorities should not be seen as being in competition with each other, but in having a common objective—detecting violations of law and eliminating these violations. The simple fact is that infringement of intellectual property, regardless of the intellectual property and the product involved, is a violation of law, which may necessitate the imposition of criminal penalties.

¹ Articles 50(3), 50(5), 51, and 52 refer to the powers of the judicial authorities to be able to have the right holder submit additional evidence in the case of provisional measures and to include information when filing an application for border measures.

² The domestic laws of the United States include general and specific provisions for injunctive relief. Rule 65 of the Federal Rules of Civil Procedure provide for injunctions in civil cases. In intellectual property cases, more specific authority exists for trademarks (Title 15, United States Code, section 1116); copyrights (Title 17, United States Code, section 502); patents (Title 35, United States Code, section 283); and semiconductor chips (Title 17, United States Code, section 911).

³ E.g., 17 U.S.C. §1116(d), gives courts the power to grant an order providing for the seizure of not only goods, but also “records documenting the manufacture, sale, or receipt of things involved in such violation”. This order can be granted on application by the right holder without prior notice to the alleged infringer.

⁴ See TRIPs Article 46.

⁵ See TRIPs Article 47.