IN THE SPOTLIGHT: BAKER & McKENZIE
should be aware of these administrative bodies and work with them to track and shut down counterfeit production bases and distribution channels.
Playing catch-up
Most countries outlaw the production, transportation and sale of counterfeit pharmaceuticals, but they can use quite different approaches to deal with the problem and in reality are playing catch-up.
In Brazil, counterfeiters face up to 15 years in jail, and public authorities and the police have stepped up efforts in recent years to identify and apprehend offenders. Counterfeiting is oſten related to organised crime in Brazil (as it is elsewhere) and police investigations and criminal lawsuits can therefore be complex. Operations against counterfeit products in Brazil have intensified since 2007. In 2009, for instance, there were 63 operations, 203 arrests, more than 500 companies inspected and more than 300 tons of goods seized.
In Canada, activities relating to the counterfeiting of pharmaceuticals are criminal offences under the Trademarks Act and the Copyright Act, and there are various forgery and fraud-related offences under the Canadian Criminal Code. Counterfeiting activities are being given increased attention by police and other law enforcement authorities, again taking into account the involvement of criminal organisations.
Tere is a significant enforcement issue in Canada as it currently lacks a regime for recordal of trademarks or other IP rights with Canadian Customs. As a result, customs officials will not act independently to search for and seize goods that violate a trademark owner’s rights. It is possible to seek to have counterfeit goods seized at the Canadian border in certain situations, though, through a civil action based upon violation of a trademark right under the Trademark Act or as a result of the Royal Canadian Mounted Police acting upon information provided by a trademark owner respecting an offence under the Canadian Criminal Code.
In Italy, counterfeiting can be punished by up to four years in prison and substantial damages awards against the infringer. Also, representatives from police forces, the Italian Customs Agency, the Superior Institute of Health and three ministries have set up IMPACT. Tis is an autonomous group that has the power to investigate and prosecute any activity relating to counterfeited pharmaceuticals on Italian territory, with recourse to the Criminal Court.
In Switzerland, dealing with cases using the criminal track can be very effective, as it oſten
allows the complainant to obtain further information on the scope of the alleged infringement and distribution channels. Rights holders can also rely on civil measures, and obtain injunctions to enjoin infringers from dealing with counterfeit goods. Injunctions are available in full as well as interlocutory proceedings, and can be granted ex parte. In addition, infringers must compensate rights holders.
The role of the brand
IP rights owners must take primary responsibility for protecting their own product lines and brands, and cannot realistically expect government agencies to tackle counterfeit pharmaceuticals on their own. Brand owners uniquely have the information that is relevant to their own products, and no other entity or agency will be so concerned to ensure that they are protected.
“ BORDER MEASURES USING CUSTOMS RECORDATION AND NOTICE PROCESSES CAN BE HIGHLY EFFECTIVE IN REDUCING THE INCIDENCE OF REPORTED COUNTERFEIT GOODS.”
Tere is a wide variety of approaches among IP rights owners, but a multi-faceted strategy is common, involving co-ordination across a number of key jurisdictions; and combining civil and criminal enforcement, partnering with police, government authorities, and other stakeholders. Public education, intelligence gathering and networks, monitoring Internet activity, packaging protection technologies and authentication systems all have their part to play. As there is considerable room for improved legislation and administrative action, lobbying is becoming increasingly important, oſten involving industry groups and cross-border initiatives as well as individual companies and countries.
In the UK, the Medicines and Healthcare products Regulatory Agency monitors medicines sold or distributed there. It has the power to prosecute those who distribute counterfeit products in the UK in conjunction with other law enforcement agencies such as the police, customs and trading standards officers. Criminal actions in the UK can lead to raids of premises, arrests and prosecutions. However, the deterrence value of these criminal sanctions is limited as the return on investment can be high and penalties relatively light. Brand owners oſten opt to take civil action to obtain injunctions and compensation.
In the US, counterfeiting can be a criminal offense. Under statutory law, those found guilty of criminal counterfeiting may be sentenced to up to 10 years in prison and/or fined up to $2 million dollars. Historically, the majority of counterfeiting cases in the US have focused on civil litigation. However, the US Department of Justice recently instituted the Intellectual Property Task Force as a means to combat, in part, counterfeiting and assess criminal sanctions, particularly against counterfeiters endangering the public safety, as with counterfeit pharmaceuticals.
In all countries where they are available, border measures using customs recordation and notice processes can be highly effective in reducing the incidence of imported counterfeit goods. Once counterfeits enter the market, it is a considerably more difficult, uncertain and expensive process to deal with them.
38 World Intellectual Property Review November/December 2010
While many of these measures apply in all countries, local differences in approach can be important. In China, for instance, multiple authorities can have jurisdiction over pharmaceutical counterfeiting activities and the most appropriate enforcement channel must be considered carefully in each case, depending on location and circumstance. Co-operation with local enforcement officials is the key to increasing the likelihood that counterfeit drugs are discovered, and that they receive enforcement attention. Consumer education and raising public awareness must be conducted within the confines of pharmaceutical advertising laws in China.
For the quintessential global crime, ultimately all strategies converge on the counterfeiters, particularly at the points of organisation and manufacture, so that it becomes much harder for them to turn a profit without significant risk to their assets and freedom.
Te following members of the Baker & McKenzie Global IP Practice Group made contributions for their respective jurisdictions: Managing contributor Richard Gough (Australia); Luba Poukchanski (Australia); Flavia Vasconcelos, Debora Pimentel and Flavia Amaral (Brazil); Christopher Aide and Jim Holloway (Canada); Isabella Liu (China); Marco Piana (Italy): Carles Prat and Montserrat Llopart (Spain); Eva- Maria Strobel (Switzerland); Beverley Potts (UK); and Lisa Meyerhoff (US). For more information, visit
www.bakermckenzie.com/IntellectualProperty
www.worldipreview.com
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