Remember the hype surrounding Tickle Me Elmo in 1996, Sony's Playstation in 1995 and, if you're old enough, the Cabbage Patch Kids in 1986?  Each holiday season features new "must-have" gifts—that toy your child just cannot live without or that next generation video game or console or that one special pair of boots.  Hot products are good.  They attract attention and consumers.  But they also attract knock offs.  Counterfeits, pirated copies and gray-market goods often closely follow a new hot product in the marketplace.  And, of course, knock offs mean lost sales as well as tarnishment of the hard-earned goodwill associated with your brands and products. 

You can position your company to protect the integrity of its products, brands and intellectual property rights by preparing early for an efficient and effective enforcement program.  This update introduces the central considerations for this holiday season. 

A trademark is any word, symbol or design used in commerce that identifies you as the source of a product or service; it distinguishes your products or services from theirs.  Your company name, brand names, logos and the names, styles or designs of your products may all be marks protectable under the law.  Copyrights, on the other hand, protect the original expression of an idea (an original work of authorship) in a fixed medium.  While it is commonly known that copyrights protect art and literary work, copyrights can also protect instruction manuals, characters, video content, graphics, software and photographs, among other things.  Infringement of trademarks and copyrights in retail typically takes three forms. 

Counterfeiting is the manufacture or distribution of a product bearing a trademark that is identical with, or substantially indistinguishable from, a registered mark.  15 U.S.C. §§ 1116(d)(1)(B)(i) & 1127.  The street vendor hawking purportedly branded sunglasses could be selling counterfeits—classic "fakes."  Piracy is a colloquial term for the illegal copying, display, distribution or importation of a product or other copyright-protected item or material.  17 U.S.C. §§ 106, 501.  Movies, music, video games and software are commonly pirated items, but dolls, toys, clothes, jewelry and innumerable other retail items have also been targets of pirates.  Infringing goods can be both counterfeit and pirated.  Gray-market goods generally refer to branded products manufactured and sold with the consent of the mark owner into foreign markets but imported into the United States without the consent of the mark owner.  The distribution or sale of gray-market goods can be illegal if the products are materially different (physically or otherwise) than those sold by the mark owner in the United States.  See generally SKF USA, Inc. v. ITC, 423 F.3d 1307 (Fed. Cir. 2005); Davidoff SA v. CVS Corp., 571 F.3d 238 (2d Cir. 2009).  Luxury goods (such as high-end purses, watches and perfume) are common gray-market targets.

Here are some practical tips for combating counterfeiting, piracy and gray-market goods.

(1)  Evaluate Your Preparedness

• Consider conducting an intellectual property audit  to identify and assess your portfolio of common law and registered rights, including trademarks, copyrights, trade names, trade dress and others.
• Review and evaluate your IP enforcement resources.  What policies and programs do you have in place to fight pirates or counterfeiters?  Who in your organization would lead the effort?  With what budget?  Can you leverage past enforcement successes?  Do you have relationships  in industry associations or government that might assist an enforcement effort? 

(2)  Strengthen Your Rights

• Register your trademarks with the U.S. Patent and Trademark Office (generally 15 U.S.C. § 1051 et seq.) and record your registrations with U.S. Customs (generally 19 C.F.R. § 133.2).
• Register your copyrightable works with the Copyright Office (generally 17 U.S.C. § 101; 37 C.F.R. § 202) and record your registrations with U.S. Customs (generally 19 C.F.R. § 133.31).
• Refine your IP usage.  You should use trademarks and trade names consistently and as adjectives.  Use the ™ or ® symbol for all trademarks and a copyright notice (© 2009 YourCo) for all copyrightable works.
• Monitor your channels.  Anticipate problems in supply and distribution channels and enforce your policies.  Suppliers, wholesalers, distributors, retailers and customers can all be valuable resources in identifying and responding to infringements in the marketplace.  Counterfeit, pirated and gray-market goods can appear anywhere in the distribution channels.  Check internet sale and auction sites, flea markets, closeout and dollar stores, house party programs and even major retail chains.

(3)  Develop a Plan

• Know your goals.  Stopping the infringement is usually the first priority.  Other goals might include identifying the source of the infringing goods, generating positive media and messaging to customers ("see what we're doing . . ."), deterring other infringers, or recovering monetary damages for your harm and losses.  Or you might want (or need) to just ensure that you do not lose your rights.  Clear goals and priorities at the outset are key to efficient and effective enforcement efforts.
• Pick targets carefully.  You can pursue manufacturers, individual sellers, importers, distributors, retailers and most other participants in the manufacturing and distribution chain.  Target defendants that complement your goals.
• Know your enforcement options.  Your enforcement options are broad.  They include cease and desist letters, referrals to government or law enforcement and private civil actions.  Industry associations might also have enforcement programs of which you can avail.  Seizure orders, injunctions and damages (including statutory damages) are available against counterfeiters in the United States.  See 15 U.S.C. §§ 1116, 1117.  Injunctions, seizure orders and forfeiture, and damages (including statutory damages) are also available under the U.S. Copyright Act against pirates.  See17 U.S.C. §§ 502, 503, 504. 
• Know your constraints.  You may have time, budget, resource or personnel constraints on your enforcement activities.  For business, strategic or public relations reasons, you also may choose not to enforce certain IP rights in certain jurisdictions or against certain defendants (e.g., minors).  Evaluating your constraints is an essential factor in setting your goals and selecting your enforcement strategy.