Counterfeit Measures

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Access to a database containing valuable shipping information may help copyright owners stop overseas infringement and collect monetary judgments.

A new weapon now is available to copyright owners in fighting overseas counterfeiters: information found on www.manifestjournals.com. Since 9/11, the U.S. government has required that certain information be provided to it before a ship leaves a port bound for the U.S. The Manifest Journals database lists the name of the shipper, the recipient, the contents of the cargo, the port of shipment, the port of entry, the shipment document numbers, and much more. This information is transmitted in electronic form and is available on a subscription basis from companies that have compiled it. To obtain this information, you have to subscribe to the Website, choosing either unlimited access or prepaying for a fixed number of searches. Art Copyright Coalition members receive this service as part of their membership dues. The coalition comprises about 40 copyright-owning entities whose sole purpose is to share information on infringements and infringers and then to jointly pursue them. For information, visit www.artcc.org or call (202) 344-8500.

How can copyright owners use the Manifest Journals information to their advantage? Say you find infringing goods in "Big Box Store X." You enter the store's name and the type of goods, and you'll receive a listing containing the name and contact information of everyone who shipped Big Box X those types of goods. Usually in your negotiation with Big Box X, it also will provide you with the source of the infringing goods. Then you can enter the name of the shipper and find out to whom else they are shipping these types of goods. Further investigation at those stores likely will reveal other infringers, as well, who then can be contacted, and additional infringements can be stopped. Since most legitimate stores do not wish to deal in counterfeit goods and are not interested in being embroiled in copyright infringement suits, they often stop dealing with the infringing entity upon being notified that they are being sold counterfeit goods.

Also using the database, you can identify a container carrying infringing goods on its way to the U.S. You then can have it seized at the border by U.S. Customs and have the goods destroyed. Remember, you get the information around the time the shipment is being loaded, and it takes days if not weeks for it to cross the Pacific and land in a U.S. port. (Note: It is essential that copyright owners have their copyright registrations in place ahead of time as copyright registration is a prerequisite to U.S. Customs assistance. If the copyrights are not registered ahead of time, it may be too late for goods to be seized.)

On the legal side, U.S. law does not apply abroad, so you cannot sue in the U.S. for infringing actions that solely occur abroad. To sue in the U.S., some part of the infringing activity—design, manufacture, shipping, exporting, importing, or sale—must take place on U.S. soil. One of the difficulties in acquiring jurisdiction over foreign infringers in the U.S. is that many transactions with infringers are done on what is called an FOB basis. In these transactions, the infringing activities do not take place in the U.S. An FOB transaction, in essence, is when the transfer of ownership of the goods occurs overseas, specifically at the time the goods are loaded on board the ship at the point of demarcation; thus, the transfer of ownership of the goods to the U.S. company actually occurs in the offshore port. So the illegal importing, distribution, and sales all are being undertaken by the U.S. entity and not by the offshore manufacturer as its ownership and relationship to the counterfeit goods ends at the point of transfer of ownership at a port somewhere overseas. So in an FOB transaction, these infringers are outside the reach of U.S. courts.

On the other hand, for transactions in which the ownership occurs after the goods have reached the U.S., then U.S. courts have jurisdiction over them and the infringers can be sued in the U.S. One can assume that most offshore counterfeiters will not show up in the U.S. to defend their claims. So with a relatively modest expenditure and legal fees, a judgment can be acquired against the offshore infringer. But the question remains: How to collect on the judgment? It serves no copyright owner's purpose simply to get a judgment that can be used for wallpaper. The judgment needs to be translated into cash. This can be accomplished in one of two ways:

  • Using the database, you can track the infringer's future shipments to the U.S. and seize the goods with a Writ of Attachment—even if they are not infringing goods—at the port of entry before they are transferred to the U.S. owner. It is no different than seizing any other creditor's goods to satisfy a judgment.
  • Seize money owed to the foreign counterfeiters. Since you now know who their customers are by using the database, any of those entities that are purchasing the goods on net terms—10/30/60 days net—owe money to the infringers. So those also are assets of the infringers that can be seized. So when you know a shipment, even of non-infringing or unrelated goods, recently was sent to a U.S. company, there is a good chance the U.S. company will owe the counterfeiter money. You then can serve a Writ on the U.S. company, which is required to turn the money over to you—not the counterfeiter—to satisfy your judgment.

If the infringers are found online in cyber stores, Websites, or online auctions selling counterfeits, U.S. law also provides useful tools to assist the copyright owner. Under the DMCA law, the copyright owner can go to the Website host, the ISP, and demand the removal of any infringing material from the Website and at times might even be able to have the entire Website taken down. In terms of auctions, eBay has established an effective system for removing infringing works from auctions under its VeRo program.

Joshua Kaufman, Esq., is a partner in the law firm of Washington, D.C.-based Venable, LLP. One of the country's foremost attorneys in the field of copyright, art, and licensing law, Kaufman has published more than 200 articles on various topics in the field (visit www.jjkaufman.com to read and download articles). He also is an adjunct professor of law at American University Law School.

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