During the last week, courts in the United States and the United Kingdom awarded considerable damages for trade mark infringement of counterfeit goods sold via social media.

In Nike Inc v Kiy LLC , a New York based claim, Nike brought proceedings against Instagram influencer Kook Kiy and his company for the sale and promotion of fake Nike Air Jordan and Dunk designed goods which diluted its brand and caused confusion amongst consumers. The parties reached a settlement where Kiy LLC agreed to pay over $US 1 million to Nike.

Similarly in the United Kingdom, an individual Sajid Hussain, who sold counterfeit t-shirts which also included Liverpool, Manchester United and Arsenal kits via social media was required to repay £118,000 or be sent to prison. Using anti-money laundering legislation was beneficial in being able to recover assets, following the money trail and bringing the offender to justice.

Effective management and prudent commercialisation of intellectual property rights such as trademarks, patents, industrial design and copyright, are invaluable to the growth and profitability of business. The three original limbs of ensuring this success remain obtaining intellectual property ownership, maintaining and promoting the brand and lastly taking all necessary steps to prevent unauthorised use or infringement of the intellectual property.

Brand reputation is how a company’s products are perceived by its investors, customers and the market as a whole. It reflects customer experience, association with the brand and the company. The risk or damage to a company and its reputation can come from a number of fronts and the sale of fake or poor quality lookalikes, particularly in the digital space and through social media is one which must be taken seriously.

Counterfeit activity is a worldwide phenomenon which continues to expand and thrive. In the Caribbean and at home persons continue to be vulnerable to the real threat. Our jurisdiction is interconnected to the global illicit economy, and the sale of counterfeit goods is a healthy catalyst for a host of illegal activity such as human trafficking, transnational crime, counter financing of terrorism, drugs, guns and smuggling to name a few.

The willingness to pursue infringers, perhaps based less on size of operation but on value and location of the counterfeiting entity, signals the importance of adapting enforcement strategies to match those of the infringer. Today, is it not enough to only bring infringement proceedings against an importer or wholesale retailer, for example via a seizure action with Customs & Excise at ports of entry. Pursuing infringement in the digital space, requires a slightly different mindset to go after the media influencer who is selling or promoting fake goods to his /her loyal followers.

Monitoring online sites and social media continues to be integral today for all business in managing any risk to brand reputation. Threats include online sites selling counterfeit goods, misspelt domain names, misdirecting online users, and ‘fake news’ being posted and quickly disseminated to the public and the effect of social media influencers complicit in the promotion of counterfeit goods.

Having the capacity to assess the full extent of the problem, gather all the facts, calculate the cost, consider all the risks, the pros and cons of acting or not and having a good well-trained team in place are only a few factors a business should face in decisively mitigating risk and protecting its reputation.

In Trinidad & Tobago, it is about four years since the implementation of trade mark legislation – Trade Mark Act No 8 of 2015 – which has specific provisions to deal with infringement, border enforcement measures and counterfeiting. There have been movements in the right direction locally in disrupting some of the incoming counterfeit activity. Much more remains to be done, particularly in relation to social media activity.

Fanta Punch is a Partner at M. Hamel-Smith & Company. She can be reached at mhs@trinidadlaw.com

Disclaimer: This Column contains general information on legal topics and does not constitute legal advice.


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