From the Climate Crisis to China, What Companies Need to Focus on When it Comes to Brand Protection

Image: Unsplash


From the Climate Crisis to China, What Companies Need to Focus on When it Comes to Brand Protection

The first quarter of 2021 has proven to be a strange time. We are still in the middle of a pandemic, with some countries returning to lockdown. The impact of vaccines is on the horizon, but there is no clear timeline for a return to normality. The U.S. government has recently ...

March 29, 2021 - By Nick Redfearn

From the Climate Crisis to China, What Companies Need to Focus on When it Comes to Brand Protection

Image : Unsplash

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From the Climate Crisis to China, What Companies Need to Focus on When it Comes to Brand Protection

The first quarter of 2021 has proven to be a strange time. We are still in the middle of a pandemic, with some countries returning to lockdown. The impact of vaccines is on the horizon, but there is no clear timeline for a return to normality. The U.S. government has recently changed, the United Kingdom has left the European Union and China’s economy remains strong but with uncertain trade headwinds. Some businesses – like those in digital and consumer tech – are thriving, whereas others, such as those involved in industrial and commodities, are weaker. 

With such uncertainty in play, what do intellectual property (“IP”) rights holders focused on brand protection and IP enforcement need to think about in 2021? Here is a look a handful of key concerns … 

1. Costs and budget worries for IP owners

Budget cuts are top of the corporate news. IP strategy and management consultancy NovumIP’s “IP industry outlook 2021” report confirms IP budget cuts across many industries (fashion and retail, more generally, included). The key to future actions is the ability to convince business stakeholders of the value of IP work, including IP enforcement – the commercial returns not legal outcomes. 

In some ways, this feels like 2010. IP owners will need to do more for less going forward. With profits down across many sectors, those IP holders will need to almost start afresh. Many travel brands with little budget will limit enforcement. Some brands at the opposite end of the spectrum, (e.g., the booming digital space) will undertake broad enforcement to support their growth. 

Anti-counterfeiting remains a major challenge for consumer goods companies with developments far too slow for old world enforcement to keep up. Old metrics are becoming redundant. IP advisors need to come up with innovative new solutions. Fixed fees, contingency fees, focusing on key infringements only and scaling down enforcement that cannot produce an immediate return, are some of the obvious options. Many IP owners will need to develop new KPIs for the future given a changing enforcement landscape (see Point 4). The start of 2021 is the ideal time for a review.

2. China U.S. IP policy under the new Biden administration.

Following his January 20th inauguration, President Biden is expected to continue to pursue policies in China over “stealing intellectual property.” However, a more bipartisan approach and less confrontation will likely be on the table. Monitoring the impact of the Trump Phase One Agreement IP changes to China’s rules and practice on pharmaceutical IP protection, trade secret violation, criminal anti-counterfeiting steps, ecommerce IP protection and trademark squatting is likely. Technological protectionism is not likely to be turned around, especially given continued digital security risks demonstrated by the recent attack on the U.S. But perhaps a more multilateral approach with other trade partners is on the cards.

Asia is not waiting with the Comprehensive and Progressive Agreement for Trans-Pacific Partnership and Regional Comprehensive Economic Partnership treaties now coming into force. 2021 will be the setting of new China policies and new IP areas to focus on. Some following the existing concerns and perhaps additional steps for digital tech IP issues around software and trade secrets. IP owners need on the ground information on the fast-evolving China and Southeast Asian IP landscape.

3. Counterfeit Covid related products – from PPE to vaccines 

2020 saw reports of a wide range of pandemic critical products such as masks, PPE, sanitizers and cleaners, testing kids and medicines, and this is expected to continue throughout 2021. All over the world criminal, customs and regulatory officers must work with IP owners, many of whom have special IP teams working on Covid related products protection. Ensuring a continuous genuine supply of a wide range of Covid protection products remain a critical global need. 

With the arrival of vaccines comes a new challenge: how to stop the fakes? Action requires the management of ingredient producers and supply chains, which often start in India and China. Vaccines are biologics, limiting the number of producers. While patents are typically used to stop illegal active ingredient production and transport for pharmaceutical products, the patents won’t exist. Reluctance to seek patent protection and the short timeframe since invention means few patents will exists for such novel vaccines. Trademarks and regulatory approvals must be used, which limits action to end markets only. 

The status of generic vaccines may be tested. Counterfeits could prove extremely harmful to recipients if they are dangerous; and even if harmless and ineffective they will allow the continued spread of Covid. The global PR risk is huge, with vaccines already a touchy subject; this suggests that government and the enforcement world need to be very proactive and stamp on the slightest whiff of illegal vaccines.

4. Changing trends in IP enforcement 

Online IP commerce enforcement is now the number one priority for brand owners (see Point 6). But they cannot ignore that fake products must still be made and shipped; IP owners must work out how to apportion resources, to stop visible online offers and target the offline sourcing trade behind this. Customs in many countries have not yet stepped up to do more, meaning overtaxed police and criminal authorities must conduct more anti-counterfeiting work, since most counterfeit goods are imported. Covid saw some countries cease IP enforcement altogether (e.g., Saudi), but conversely, we have in China seen the first emergence of ‘home managed’ raids, the authorities take phone call complaints, accept evidence by email and conduct actions without an IP practitioner’s attendance – reducing costs. 

Pressure on China to stop its huge illegal counterfeit export trade will continue. E-commerce platforms will in 2021 be expected to deliver the technology and other monitoring solutions to take the burden away from endless notice and takedown systems. Brand interference and services enforcement is becoming more mainstream, with a recognition that misuse of trade names and products names on services is a huge cost to companies. Anti-piracy is now almost entirely a digital matter, with technology solutions to block streams, files and signals as important as lawsuits. 

Expect more pressure on supporting actors in the digital commerce space; IT infrastructure providers, advertising networks (even advertisers), payment gateways cannot expect to gain from illegal traffic with no penalty.

5. The Global Environmental crisis

This is now firmly at the forefront of everyone’s minds as climate change deniers lose ground. IP protection and enforcement will be impacted in a number of ways. Many old-world energy IP owners are suffering budget and resource cuts as their fossil fuel businesses shrink. A shrinking market sector means less enforcement, more focused enforcement and new lower cost enforcement solutions are needed. The damage from IP enforcement is of growing concern, how counterfeit products are destroyed or reused is a key concern, so too are the carbon costs in the IP industry. 

New tools like ClIPmate help to measure this so don’t wait to be asked what carbon impact your IP activities are having. Find out now and act accordingly. New renewable energy IP is also being created, but there lies a conundrum. IP ownership is regarded as critical to renewable technology solutions like solar, geothermal etc., but allowing wider access, possibly overriding IP protections may distribute these technologies more effectively. 

A solution has not yet been found, but will be discussed at the United Nations Climate Change Conference in Glasgow, Scotland in November 2021. Enforcement in this space will therefore be contentious if its impact is to reduce access to renewables; IP owners will need to come up with radical ways to protect their investment in a non-exclusionary way, such as through more effective licensing, open access and tech transfer. There may be learnings from Covid that sharing technology to combat global problems is the best solution.

6. E-commerce IP enforcement – New trends, new IP rules and new practices emerge 

Growing pressure from IP owners on ecommerce platforms to control IP infringements exists now, especially as genuine goods are now increasingly sold through the same channels. Vast numbers of notice and takedowns do not work and are inefficient and expensive. Platforms know they must do more (some in fact do). Regulators are trying to keep up, but consensus for law changes takes time. 

Meanwhile, new forms of e-commerce make for new IP challenges – this includes live-selling, group purchasing, influencer sales, replica collecting. Europe’s new Digital Services and Digital Markets Acts seek to bring a uniform upgrade to its rules. In South East Asia, IP offices have started signing memorandums of understanding with ecommerce platforms, pressuring them to do more, help IP owners more effectively, and allow IP offices into the enforcement process. We can expect new infringement identification technologies to appear, lobbying programs for specific issues as well as new regulations in many countries and perhaps platform driven consumer and merchant education programs. The need for regional approaches where commonalities exist (ASEAN, GCC, etc.) is now being expressed.

7. Trade secrets enforcement

It has been said that “Data is the new Patents” by which it is meant that customer data in the digital industries is the most valuable form of IP now, more so than patents. Aside from the privacy regulatory overlap, trade secrets are the body of law protecting data. Keeping it secret and protected is proving critical to tech companies worldwide. Meanwhile as the numerous hacks in 2020 and prior show, IT theft is a huge corporate concern. Trade secrets laws are being strengthened all over the world. The U.S. enacted its first federal law in 2016. China made changes to its Anti Unfair competition law in 2019, strengthening trade secret protection. Electronic intrusion is a new specific crime, and urgent injunctions are now available; and through amendments to the criminal law trade secret infringement no longer requires proof of actual loss.

An additional judicial interpretation in June 2020 mandated punitive damages and legal fee awards, and criminalized electronic intrusion. Criminal cases for trade secret theft are on the rise around the world. Civil law jurisdictions tend to be easier to start criminal cases, since trade secrets are a protected IP asset class just like copyright or trademarks. Common law confidential information rules may be practically the same, but often civil action is preferred. Too many companies wait for a breach/loss before taking significant steps. Pre-emptive steps are always best.

Keeping up with a fast-changing IP enforcement and brand protection world in 2021 will require extra focus and in many cases reconfiguration of activities.

Nick Redfearn is Deputy CEO and Enforcement Head at Rouse, where he helps international institutions implement IP capacity building.

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