Protecting the Brand

Busting the Bootlegs

Peter Hlavnicka, Anthony Keats

• Publisher: Business Expert Press
• Year: 2022
• ISBN:
  9781637422076
• Topic: Business
• Subtopic: Business Law
• Index: Business

Protecting the Brand, Volume II: Busting the Bootlegs follows Volume I which provides a unique combination of legal and business best practices related to intellectual property protection.

This second volume showcases U.S. states specific legal statues and examples related to legal approach to counterfeiting and grey market issues. The primary emphasis is to prove advice to U.S. companies navigating the complex domestic legislation and provide a single source of reference for both law practitioners and those tasked with intellectual property rights enforcement and compliance who need to understand the applicable state legislation.

Both volumes of this book are focused on leveraging trademark enforcement while also commenting on copyright and patent enforcement, establishing a framework for successful brand protection in the future.

CHAPTER 1

State Civil and Criminal Anti-Counterfeiting Statutes

A Parallel System of Trademark Anti-Counterfeiting Statutes

Although the Founding Fathers of the United States considered the need to encourage innovation and protect creativity for limited periods of time through patents and copyrights, they did not give trademarks similar consideration. In fact, although counterfeiting had been taking place in various forms for centuries, trademark counterfeiting has grown exponentially in the modern industrial age. While federal and state governments have recognized the need to protect the consumer from confusion with regard to the source of a product or service, there has also been a significant surge in the value of trademark assets through commercial advertising and sales of branded goods. This has created portfolios of valuable assets for the brand owners as well. The confluence of these two interests has brought about the passage and implementation of state, as well as federal, civil, and criminal anti-counterfeiting statutes.

In the United States, unlike the exclusive federal laws pertaining to patents and later to copyrights, a parallel system of state and federal law developed to protect trademarks. Commercial issues relating to false labeling, forgery, and the like led to the development of various unfair trade practice laws among the states. Almost every state had these types of consumer protection statutes. For example, in 1881, New York’s legislature enacted Penal Code Section 364, which made trademark counterfeiting a misdemeanor.¹ However, as commerce became national in scope and products and services were available throughout the country, consumers needed the same protection everywhere. Unfortunately, many states treated the same harm to the consumer differently.²

Congress enacted the Lanham Act in 1946 in order to provide national protection for trademarks used in interstate and foreign commerce. S. Rep. No. 1333, 79th Cong., 2d Sess., 5 (1946). Previous federal legislation, such as the Federal Trademark Act of 1905, 33 Stat. 724, reflected the view that protection of trademarks was a matter of state concern and that the right to a mark depended solely on the common law. S. Rep. No. 1333, at 5. Consequently, rights to trademarks were uncertain and subject to variation in different parts of the country. Because trademarks desirably promote competition and the maintenance of product quality, Congress determined that “a sound public policy requires that trademarks should receive nationally the greatest protection that can be given them.”³

Congress passed the Lanham Act in 1946 to bring a single unified statutory scheme to the treatment of trademarks, similar to that accorded to patents and copyrights before.

Why Is the Parallel System of Trademarks Important or of Value?

Unlike patent and copyright protection, state laws relating to trademarks may be broader than the Lanham Act.⁴ The Lanham Act does not preempt state law.⁵ Both federal and state courts have ...