With the covid-19 pandemic and the ensuing rise in on-line procuring, the market in counterfeit items continues to thrive, as will be seen within the rising variety of shoppers mistakenly buying counterfeit items. Final 12 months, practically one out of 10 European shoppers accidently bought a faux product. Many fashionable on-line platforms are used as distribution channels, nevertheless some firms at the moment are taking pre-emptive measures towards fraudsters, for instance Amazon has reported that solely 6% of tried account registrations handed its verification course of in 2020.
The impacts of counterfeiting will be extraordinarily dangerous, from shopper security to job losses, decrease revenues and disincentivising innovation. So far as the trade is anxious, the repute and subsequently the worth of a model is put in danger when it’s related to sub-standard counterfeit merchandise. Taken on this context, it comes as no shock that tackling counterfeiting has been included on this 12 months’s European Union’s Council of Ministers’ high 10 priorities within the struggle towards organised crime.
Switzerland shouldn’t be proof against this illicit commerce. In line with a joint OECD EUIPO 2019 report, it’s among the many nations most affected by counterfeiting, rating fourth based mostly on the worth of worldwide customs seizures of counterfeit and pirated merchandise from 2014 to 2016. A brand new report OECD IPI report printed in March 2021 exhibits how dangerous the worldwide commerce in faux Swiss-made merchandise is to Swiss industries, particularly within the fields of watchmaking, electronics, mechanical engineering and steel, shopper items and prescription drugs. The whole worth of the worldwide commerce in faux items that infringed Swiss mental property rights was as Sfr 7 billion in 2018, equal to 2.3% of all real Swiss exports. Watches are by far essentially the most generally counterfeited objects – 48% of the whole worth of Swiss counterfeit merchandise. Different Swiss merchandise generally faked embrace clothes, leather-based merchandise and footwear. China, Hong Kong, Turkey and Singapore are the highest provenance nations, not forgetting Turkey and the United Arab Emirates for fast-moving shopper items, and India for prescription drugs.
The Swiss Federal Institute of Mental Property (IPI) is actively working to fight counterfeiting. The IPI screens the important thing Swiss export markets, together with China, and intervenes in suspected circumstances of misuse. It is usually value noting the work of STOP PIRACY, a non-profit organisation based by the IPI, that educates and raises consciousness amongst shoppers, in addition to selling cooperation between the enterprise group and the authorities throughout nationwide borders.
From the trade’s perspective, the subject is excessive on the agenda of the affected firms. The Federation of the Swiss Watch Business is one energetic stakeholders, with greater than 450 members. Corporations are making the most of new applied sciences to fight counterfeiting, as illustrated by well-known timepieces being assigned digital id certificates utilizing blockchain. Consumers obtain an e-warranty card to show the authenticity and possession of the timepiece via a QR code. AI proves helpful for detecting counterfeits on-line, though it stays a battle to stop the infringing web sites from reappearing. For SMEs, which characterize greater than 99% of Swiss firms, price limitations have a tendency to discourage stated firms from in search of authorized help. Sadly, too usually it’s stated that the injury has much less price impression than the motion that will be vital to stop it.
As to the authorized framework, Articles 13 (paragraph 2, 2bis) and 71 of the Trademark Safety Act prohibits the manufacture, sale, import, export and transit of counterfeit items into and thru the Swiss territory, commercially or by non-public people. Authorized motion will be taken earlier than a counterfeit is even positioned available on the market, so long as an indication has been affixed to the products in query. The possession of a faux product for personal use shouldn’t be prohibited.
The modus operandi of the border enforcement is stipulated in depth within the laws (Articles 70 et seq). As a prerequisite, a model have to be registered as a trademark in Switzerland. If this situation is met, an utility for help will be submitted to the Federal Customs Administration (FCA). The request is registered inside roughly one month and is legitimate for 2 years. The trademark proprietor is notified of any seizures and given 10 days – a deadline which will be prolonged as soon as and for a similar interval if justified by circumstances – to substantiate that the products are counterfeits. Failing this, the products are launched. In any other case, the products are retained by Customs, which is able to ask the products declarant, holder or proprietor to consent to their destruction. Consent is deemed to be given if no specific objection is made inside the prescribed interval. Alternatively, felony or civil proceedings must be initiated early on. The identical guidelines apply to designs, copyrights, patents and indications of supply.
For big consignments of suspicious merchandise, the authorities can prosecute the infringers ex officio. If the offence is recognised, the consequence could also be as much as 5 years of imprisonment or a penalty of as much as Sfr 1,080,000.
For small consignments, authorized changes are being thought-about to introduce a simplified process of destruction. As is the case at EU stage, it’s proposed that these so referred to as ‘capillary imports’ could be destroyed with out preliminary notification given to the trademark proprietor besides the place the products declarant, holder or proprietor would have objected to the destruction. The legislation is at the moment being finalised on the IPI for submission to the Federal Council within the subsequent few weeks. The latter will in flip submit it to the Parliament for debate, which is predicted to begin earlier than the tip of this 12 months.
It is usually value noting that the FCA is present process a basic transformation with the purpose of modernisation and digitisation of the entire physique.
A final phrase in regards to the battle with parallel imports as this significantly impacts Switzerland, particularly the fast-moving shopper items and pharmaceutical sectors. With regard to trademark rights, Swiss judges apply the worldwide exhaustion precept, as set out within the landmark choice by the Swiss Supreme Court docket of 23 October 1996, Chanel SA v EPA AG (ATF 122 III 469). Therefore, it’s not attainable to stop an unique product bought at a lower cost overseas from being imported into Switzerland if stated product has beforehand been positioned on a international market with the consent of the trademark proprietor. No infringement will be claimed towards such imports.
At present, greater than ever, counterfeit detection and enforcement requires energetic cooperation from all stakeholders. Solely a coordinated and inclusive workforce strategy can efficiently and considerably disrupt these illicit actions. As such, the web marketplaces play a significant part, as highlighted within the latest lawsuits initiated in the USA by some model house owners with Amazon and Fb. On high of that, prevention stays the very best remedy. It means educating all these concerned, together with on the buy stage, via media and content material tailored to the viewers and calling on social accountability. This have to be accompanied by the fostering of an IP-friendly tradition inside firms, so that every worker understands the significance of the difficulty and is aware of what to do and in good time, since on this subject as in lots of others, reactivity is essential.
The struggle may seem like emptying the ocean with a spoon, however the stakes are such that there isn’t a selection apart from to roll up one’s sleeves by a joint and coordinated engagement in tackling what rightly qualifies as against the law.
The writer wish to thank Juerg Herren, Head Authorized Companies Normal Legislation, Design and Enforcement, Deputy Head Authorized & Worldwide Affairs, at Swiss Federal Institute of Mental Property, for his contribution.