James Kryskowiak
Brand Protection Manager Church and Dwight

Michael LeMieux
Principal Consultant, White River Consulting
Law Enforcement Fellow, Center for Anti-Counterfeiting and Product Protection

The COVID-19 global pandemic of 2020 has already caused many industries to fundamentally change the way in which they operate. While many businesses ceased operations during the public’s response to the virus threat, many others saw significant increases across their e-commerce channels as consumers sought alternate ways to acquire products. Unfortunately, increased consumer demand for some products was also met with a surge in counterfeit goods offered in e-commerce. Infringers likely sought to capitalize on the consumers’ lack of understanding of the counterfeit industry in the public’s anxiety over the pandemic threat. Most troubling, law enforcement worldwide reported seizures of counterfeit medications and health products, along with reports of widespread pandemic-related fraud. But, with great challenge also comes opportunity, including a growing public understanding of the concerns related to counterfeit products as well as an expanded population engaged in e-commerce. As worldwide business emerges from this pandemic response, brand protection professionals are presented with a number of shifts — most prominently the changing e-commerce landscape that is likely to require us to rethink our brand protection strategies to meet what is likely to be a “new normal”.

Before the Pandemic

The rapid emergence of the COVID -19 environment has relegated the U.S. Department of Homeland Security (DHS) report, Combating Trafficking in Pirated Goods to what seems to be ancient history. The January 2020 report advised strong government action was required and identified DHS as the lead agency. This new initiative positions DHS as a formidable ally to rights owners in the war on counterfeit goods, but it also increases the agency’s already saturated workload in a post-pandemic world. This will most certainly create challenges for those in brand protection. Manpower and resources are critical factors when conducting criminal investigations and when manpower is slim, cases are necessarily prioritized. Looking forward, brand protection teams will need to take these resource limitation factors into consideration before approaching law enforcement (LE), especially at the federal level. Federal prosecution resources must also be considered by the U.S. Attorney’s Office (USAO) when deciding if a case should be considered for federal prosecutorial support. Federal system limitations are not necessarily the end of the road, however, as brand protection teams can alternately pursue state or local investigative and prosecution support where necessary. (DOJ, Title 9 Principles of Federal Prosecution).

Understanding the complexities of law enforcement in the U.S. can be overwhelming, especially for those without a criminal justice background or significant experience in working IP-related issues alongside LE partners. Many current best practices in brand protection tend to guide brand protection teams towards utilizing federal law enforcement resources. This is often an advisable practice, as federal agencies normally have broad jurisdiction and vastly more resources than a state or local agency. Federal convictions can also carry more severe penalties. The jurisdictional differences often equate to an assumption that federal agencies are best equipped to handle a brand protection investigation but, in some circumstances, it may be more advisable to begin working your brand protection investigation with a state or local LE agency first. In a post-COVID world, the rights-holder will likely need to do more investigation to establish a viable criminal IP case (let alone establishing probable cause) before contacting LE for further assistance.

Brand Protection & Law Enforcement in a Post-COVID-19 World

Moving forward in a post-pandemic environment, brand protection managers should endeavor to utilize their full complement of resources before approaching law enforcement for case adoption. These steps would include identifying suspects, gathering and documenting evidence, conducting data aggregation and open source intelligence (OSINT) exploitation and developing an investigative plan. It is important to remember that investigators at the state and local level may not be well-versed in brand protection investigations. By identifying possible suspects and gathering evidence prior to case referral, you will not only conserve the LE investigator’s time, but more importantly early effort may increase the odds of an agency taking your case. To expand their all-important experience base, brand protection managers should also consider engagement with organizations such as MSU’s A-CAPP Center, the International Trademark Association (INTA) and the International Anti-Counterfeiting Coalition (IACC). These organizations each offer a wealth of information for brand protection professionals. For example, a brand protection manager can look up IP-specific state laws utilizing INTA’s U.S. State Anticounterfeiting Contact Information, locate a local investigator familiar with IP cases through the IACC’s subject matter expert groups, or read through back issues of A-CAPP’s BPP to glean best practices. These organizations are at the forefront of brand protection, working to champion industry efforts, establish best practices among IP professionals and promote positive change in the industry. Their input and assistance can be invaluable to your own efforts, and it may also lead you to other brand protection professionals with whom you can collaborate and share information with.

Brand Protection Professionals Will Have Access to More Data

The overall impact of the COVID-19 pandemic on recent growth trends in e-commerce is not yet known, but there are early indications that more consumers have been pushed into online shopping while more businesses have been forced to adopt greater e-commerce presence to survive. (Retailtouchpoints.com, Mobile Projected to Reach 54% of e-commerce Sales by 2021).

Remarkably, social distancing has also resulted in an emphasis on “contactless” transactions, likely pushing consumers further into e-commerce transactions (including mobile commerce) than ever before. According to a recent Zipwhip.com survey, the majority of people (56%) have been using their cell phone more since COVID-19 began, and of those people, 46% said they’re using their phone for four or more additional hours each day than before COVID-19. While brand protection use of branded mobile applications has been more successful within some product lines than others, the early trends from the pandemic are indicative that brand protection professionals will have even more opportunities to engage directly with consumers in e-commerce and generate even more impactful data for effective brand protection efforts. One probably only needs to look at their own smartphone to see greater evidence of this consumer connection to brands through e-commerce, as we have downloaded more branded apps to facilitate our online shopping and contactless payment.

Increasing numbers of brand owners were already engaging online brand protection vendors to protect their IP rights in e-commerce, resulting in the harvesting of millions upon millions of data points. An increasing percentage of consumers engaged in e-commerce, along with greater use of technology in brand protection, will result in even more IP risk data available for brand protection operations. It will become increasingly important for brand protection professionals to effectively leverage this data for protection of their intellectual property rights. Brand owners may use this data for civil enforcement of IP rights or to improve their own understanding of their brand’s exposure when interacting with e-commerce intermediaries regarding their own brand’s IP risk. Externally, a brand protection professional is more likely to use this IP risk data to enhance the quality of the cases they refer to criminal justice agencies or enhance the quality of the data they are sharing with other brands and industry coalitions to address their mutual infringement challenges.

There is a Growing Opportunity to Influence IP Policy

The COVID-19 pandemic happened to arrive at an interesting time in the history of intellectual property, as several key jurisdictions were already proposing new e-commerce related laws and/or regulations. As noted in the referenced DHS report from January 2020, the US federal government has developed immediate actions to further assess potential contributory trademark infringement liability for e-commerce platforms. At the same time, efforts are also underway in the U.S. legislative branch on recently proposed legislation from both the U.S. House of Representatives and the U.S. Senate to address e-commerce risks for brands and consumers (SHOP SAFE Act of 2020, SANTA Act, and INFORM Consumers Act). All three proposed bills are currently under committee review. Further, additional executive branch evaluations are currently underway to examine potential antitrust issues in the e-commerce environment, including a July 2019 announcement of the US DOJ’s antitrust review of “market-leading online platforms” as well as the February 2019 announcement of the Federal Trade Commission’s review of past acquisitions by large technology companies.

The COVID-19 pandemic also resulted in substantial disruptions to business operations worldwide, some of which exposed significant deficiencies in supply chains from raw materials to distribution networks. These challenges have not gone unnoticed by the executive level of brand organizations, and brand protection professionals can likely expect greater future attention from business leaders on many of these supply chain and business disruptions. For those brands occupying product sectors that have been rightfully deemed critical to the health and safety of our nation (e.g. food supply, pharmaceutical, or health/safety products) there has also been increasing attention by government regulatory bodies (See Risk Assessment on the Impact of Supply Chain Presented by the Coronavirus Outbreak).

Consumers are Watching and Listening

Finally, even the most casual observer of current news on the health and safety aspects of the pandemic response will note that the average consumer is likely more familiar now than ever with the term “counterfeit,” and the consumer also has a much greater understanding of the negative effects of counterfeit products. The brand protection community has already worked hard to educate consumers on the negative impact of infringements. The pandemic has accelerated that learning curve in a way that we could have never imagined. Perhaps, now more than ever, brand protection professionals are presented with opportunities to influence their own organizations at the highest levels, contribute to industry’s overall influence on IP policy and law changes and to communicate with consumers about the importance of avoiding counterfeit products in the marketplace. Simply put, this is a very impactful time in history to be a brand protection professional and your brand’s consumers are likely listening in a way they never have before.

Brand protection professionals are accustomed to an ever-changing landscape of challenges. While this is not new, the COVID-19 pandemic has brought about changes to consumer behaviors and perceptions, e-commerce growth trends that may or may not remain in the permanent landscape and a further strain on IP criminal justice resources. However, brand protection professionals are also presented with some unique opportunities that were unforeseen even a few years ago. Faced with those challenges, it is now more important than ever to leverage industry, government and academic resources to help protect your brands and to foster those required changes that have been brought on by evolutions of technology, policy and circumstance.