On October 13, 2020, President Trump signed the “Memorandum on Stopping Counterfeit Trafficking on E-Commerce Platforms Through Fines and Civil Penalties,” which orders various law enforcement agencies to take a more aggressive approach to stopping the sale of counterfeit goods on e-commerce platforms such as Amazon and eBay.
The memorandum orders the Secretary of Homeland Security, through the Commissioner of U.S. Customs and Border Protection and in consultation with Attorney General William Barr, to take all appropriate action, consistent with applicable law, to:
• Seize counterfeit goods imported into the United States in connection with a transaction on an e-commerce platform;
• Impose the maximum amount of penalties fines and civil penalties permitted by law on any e-commerce platform that directs, assists with, or is in any way concerned in the importation into the United States of counterfeit goods; and
• Develop a legislative proposal within 120 days of the memorandum’s issuance that would promote the policy objectives of this memorandum.
The memorandum expressly recognizes the need for legislation that “would clarify and strengthen the executive branch’s authority and increase its resources to deter and address counterfeit trafficking on e-commerce platforms.” The president of the American Apparel & Footwear Association, Steve Lamar, expressed support for this type of legislation, emphasizing the need for greater transparency on e-commerce sites as the popularity of online shopping continues to skyrocket during the COVID-19 crisis:
“The fight against fake consumer goods is about far more than lost sales and brand reputation. We continue to push e-commerce platforms to prioritize the sale of authentic product and to increase their vetting process for third-party sellers this holiday season and into the year ahead. We look forward to detailed proposals to further reconcile this incredibly concerning, ongoing and increasingly prevalent issue.”
It is difficult to predict whether this memorandum will actually lead to any concrete results, particularly ahead of the 2020 presidential election, which is only 15 days away. For instance, it is unclear whether the Secretary of Homeland Security will be able to coordinate the necessary policies and procedures in conjunction with the U.S. Customs and Border Protection and the Attorney General to be able to carry out the seizures and impose the fines detailed in the memorandum. The United States Congress is currently mired in difficult negotiations around a new round of COVID-19 stimulus plans, and on the Senate is currently occupied with confirmation hearings regarding President Trump’s nomination of Amy Coney Barrett to the Supreme Court. Thus, there would seem to be limited bandwidth to push through any proposed legislation as foreseen in the memo before the election. In addition, depending upon the election outcome, it is unclear whether a potential Biden administration will follow through on the actions to address online marketplace counterfeiting as proposed in this memorandum, or whether the new administration might formulate a different approach to combat this important issue. Nonetheless, it is still welcome news to know that the administration remains committed to improving anti-counterfeiting efforts, particularly ahead of the upcoming holiday shopping season.
For more information on the latest counterfeiting trends and anti-counterfeiting strategies, and to discuss how these issues relate to your brands, please reach out to us at email@example.com or contact any of the following Winterfeldt IP Group team members:
Brian Winterfeldt, firstname.lastname@example.org, +1 202 903 4422
Griffin Barnett, email@example.com, +1 202 759 5836