G20 Executive Talk Series

Branded Story / International Trademark Association

How Governments can Lead the Fight for Brand Owners’ Rights

As any leading businessman can confirm, a strong brand is at the heart of a successful business. This meeting in Germany gives us the chance to reflect on the strengths of the many businesses that are built on outstanding brands and a reputation for high quality products and to discuss what our priorities should be to grow and protect those brands.

The International Trademark Association (INTA) is the global association that represents brand owners worldwide. It is our mission to protect the trademark rights that underpin these brands. INTA recommends that brand owners should prioritise the following challenges over the next 12 months: counterfeiting, protecting brands online and dealing with attempts to restrict the rights of businesses to use their brands as they see fit.

1. Tackling the counterfeiters
Counterfeiting is the most critical IP issue facing brand owners and consumers today. It directly affects national security, the global economy, and poses significant health and safety risks for consumers and their communities.

The growing economic impact presented by counterfeiting has been underlined in the findings of a few recent key research studies. Ten years ago, in 2007, worldwide counterfeiting was valued at an estimated US$250 billion and accounted for 1.8% of world trade. Last year, a 2016 report by the Organisation for Economic Co-operation and Development (OECD) estimated that in 2013, these numbers rose to US$461 billion and 2.5% respectively. In addition, a 2017 report (commissioned by INTA and the International Chamber of Commerce–Business Action to Stop Counterfeiting and Piracy (ICC-BASCAP)) forecasts that international trade in counterfeiting will more than double over the next few years to US $991 billion by 2022.

These studies reveal a simple fact: counterfeiting is a profitable, low-risk, high-reward business. Counterfeit goods can often be sold for ten times the amount it costs to manufacture, and the risk is low.

In an increasingly integrated global economy, the task of combating counterfeiting is one that rests with all stakeholders in all corners of the world, and with the active players at all stages of the supply chain. But as the primary victims (along with consumers) brand owners need to make their voice heard.

Addressing the issue at the source – going after the counterfeit factories wherever they are located – is critical, but it is only one piece of the puzzle. Even more important is dealing with how easy it now is to buy counterfeits. Consumers are increasingly moving online to do their shopping and the counterfeiters have followed. By 2020, there will be 6.1 billion smartphone users globally; led by growth in less-mature markets; and in about five years’, over 70% of the world’s population will be online.

International criminal networks are creating hundreds of websites – on servers across multiple jurisdictions – selling the same counterfeit products. Every time a consumer receives a counterfeit product when they thought they had found a bargain genuine product online, the value of the counterfeited brand diminishes. Arresting counterfeiters selling their products online is difficult as they can very quickly shut down one website and replace it with another.

The fightback against such a difficult enemy will be difficult. Our goal is to convene all those with a part to play, to open communication channels between them, and to foster meaningful collaboration among them. We aim to put brand owners at the centre of the debate and make sure that their voice is heard.

Counterfeiting is the most critical IP issue facing brand owners and consumers today. It directly affects national security, the global economy, and poses significant health and safety risks for consumers and their communities.

2. Taming the internet
While the internet has in some ways been a boon for brand owners, allowing them to reach more consumers than ever before, it can also be a threat. In addition to facilitating the sale of online counterfeits, the expansion of the domain name system can be extremely challenging and just as damaging when it comes to protecting brands.

In 1995, less than 1% of the world’s population had an internet connection. Today, more than 3.5 billion people are online, and it is estimated that 10 more people come online every second! The internet is an integral part of our daily lives, and in the operation of our businesses, stock markets, and government agencies. Global business-to-consumer e-commerce is growing at an incredible rate. In 2012, it surpassed $1 trillion. By 2015, it more than doubled to $2.2 trillion. Consumers in the Asia-Pacific region are responsible for more than half of online shopping, followed by North America, accounting for around a quarter, or $644 billion, of all business-to-consumer sales in 2015.

It is in brand owners’ interests to ensure that trademarks receive the same protection on the internet as they do in the brick-and-mortar world, and that consumers can make safe, reliable, and informed choices about the products and services they seek online. Brand owners’ voices are critical to the security and stability of the internet as they are on the frontlines of protecting consumers from fraud and abuse.

We are making sure that the voice of brand owners is heard at the Internet Corporation for Assigned Names and Numbers (ICANN), which was created to ensure a secure, stable, and resilient Internet. INTA members are participating in key review processes that have a direct impact on the ability of brand owners to protect their names in the domain space.

For example, we have been the voice of brand owners during the launch of the Generic Top-Level Domains program (gTLDs). Brand owners may not know that acronym, but they will have heard of the launch of new domains such as .guru, .club and, more worryingly, .sucks and .xxx.

While some businesses have chosen to launch domains for their dot brand and create new channels for brand awareness and community building, most are closely monitoring the program to ensure that their brands are protected within the new domains. INTA is helping brand owners police and protect their brands.

3. Restrictions on using brands
In recent years we have seen increased regulations and legislation to restrict brand use including plain and standardized packaging, which reduces the use of trademarks on packaging or even bans them altogether.

This issue has been controversial because much of the focus recently has been on tobacco products as a means to deter people from smoking. As a result, governments have justified these brand restrictions as a public health issue and have not taken trademark rights into consideration. Although this may at first glance seem like a fight only for a few brand owners, these restrictions are increasingly being applied to non-tobacco products. For example, we have observed brand restrictions on baby formula and on fast-food, including pizza. These restrictions often dictate what images or logos may be applied to labels for these products.

The threat to brand owners is clear – reducing the right to use a trademark is a threat to business and an attack on the right to use the brand that has often taken years to build.

Looking Ahead
While these three challenges may at first look daunting, brand owners are not alone. We will continue to continue the fight against counterfeiting, to monitor and promote trademark rights in ongoing discussions on internet governance and expansion, to stress the implications for IP with regards to brand restrictions, and to advocate on behalf brand owners globally. With your help, we can succeed.