Being the proud owner of a knockoff Chanel classic flag bag might seem innocent enough (and cause temporary delusions of wealth and relevance), but that small, synthetic object is a powerful symbol of the many counterfeit consumer products that sabotage designers and rob people of jobs around the world. As previously noted by Ella Brodskaya and Melissa Morales, representatives from the United States and seven other countries signed the Anti-Counterfeiting Trade Agreement (ACTA) on October 1, 2011.
ACTA is a groundbreaking attempt to combat trademark counterfeiting and copyright piracy on a global scale. “The illegal business drains the economy of actual lawful employment and even more so, tax revenue,” said Ella Brodskaya. These harmful trends inspired eight governments to sign the ACTA and join forces to remedy many of the problems associated with counterfeiting and piracy.
“The ACTA reflects tremendous progress in the fight against counterfeiting and piracy – a global crime wave that robs workers in the United States and around the world of good-paying jobs and exposes consumers to dangerous products,” said U.S. Trade Representative Ron Kirk. “This should send a strong message to pirates and counterfeiters that they have no place in the channels of legitimate trade.”
According to the International Trademark Association, recent studies suggest that millions of legitimate jobs are destroyed by counterfeiting and piracy each year across the globe, and the value of counterfeit and pirated goods could grow to $1.77 trillion by 2015. WWD reported that the fashion industry has spent hundreds of millions of dollars trying to curb the proliferation of counterfeit products. Footwear, apparel and accessories were among the top 10 counterfeit items seized by U.S. officials during fiscal 2010.
The Department of Homeland Security reported that footwear was the top product seized for the fifth year in a row by U.S. Customs and Border Protection and U.S. Immigration and Customs Enforcement. These seizures account for 24 percent of the entire domestic value of intellectual property rights infringing goods. According to WWD, “federal agencies also seized $18.6 million worth of counterfeit apparel, giving it a ranking of third and representing 10 percent of the total value of seizures. Seizures of fake handbags, wallets and backpacks totaled $15.4 million, representing another 8 percent of the total, ranking it fourth, while, ranking ninth, seizures of jewelry were $6.7 million and accounted for 4 percent of the total.”
According to a Joint Press Statement of the Anti-Counterfeiting Trade Agreement Negotiating Parties, “Expertise, innovation, quality, and creativity are the main factors for success in knowledge-based economies. Adequate protection and enforcement of intellectual property rights is a key condition for nurturing those factors.”
It is interesting that the representatives who signed ACTA have emphasized that “creativity” is an essential reason to prevent counterfeiting. Ella Brodskaya also previously stated, “Intellectual property right owners are not rewarded for their creative and innovative efforts, thus reducing the incentive to invest into developing products and improving quality.” While it may seem counterintuitive, trademark rights are not designed to protect one’s creativity. This is the function of copyright. The purpose of trademarks are to decrease search costs and enable consumers to find their favorite brands in a marketplace overflowing with products. So, if a consumer can distinguish between a fake Chanel bag and an authentic one, does the law care about the designer’s creative process?
The ACTA arguably does protect designers’ originality in that it punishes those who attempt to free-ride on the goodwill of those designers. There is something unsettling about the counterfeit bags, shoes, and scarves displayed in stores along Canal Street in New York City, and that feeling has little to do with consumer confusion. Many people just think it is wrong to reap the benefits of someone else’s trademark. What do you think?
The final text of the Anti-Counterfeiting Trade Agreement may be found here.