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United States Agents Search Mail For Counterfeit Drugs

U.S. Agents Search Mail for Counterfeit Drugs

On May 13, the U.S. Food and Drug Administration (FDA) led a foreign mail inspection in West Miami-Dade, Fla., designed to weed out thousands of counterfeit and unapproved medicines and stop them from entering the country.

The three-day search had agents poring over packages of illegal pharmaceutical drugs, dietary supplements and home remedies mailed from foreign countries. Reporting on the inspection, the Miami Herald noted that many medications are “purchased from foreign suppliers over the Internet, an increasingly risky shopping place for pharmaceutical drugs with unsafe ingredients, inaccurate dosages and false expiration dates.”

The inspection and subsequent media coverage highlights four key barriers to mitigating the threat of counterfeit drugs:

1. Regulation of Internet pharmacies. Online pharmacies should be subject to the same rigorous oversight and standards that govern their offline counterparts. “In addition to requiring licensure through a national internet pharmacy licensing program such as Verified Internet Pharmacy Practice Sites (VIPPS), said PSM Vice President Bryan Liang, MD, PHD, JD, “We need new legislation that prohibits financial transactions for drug sales of unlicensed online pharmacies and creates substantive criminal penalties for any party, including websites and search engines, who engage in the illegal sale of contraband or counterfeit drugs.”
2. Lack of regulation for products trans-shipped through foreign countries. While the West Miami-Dade inspection weeded out medicines shipped from Latin America and the Caribbean, even “safe” countries like the Canada and the United Kingdom pose threats due to lax regulations on medicines earmarked for other countries. For example, fake or low-quality drugs made in countries around the globe could ship through Canada to the U.S. without Health Canada’s oversight.
3. Additional FDA agents for Internet investigations, including foreign assignments to source countries. Criminals selling counterfeit or unapproved drugs over the Internet are beyond the reach of FDA regulators and investigators. As we told the Office of Intellectual Property Enforcement Coordinator (IPEC) earlier this year, by exploiting the anonymity of the Web and the complex jurisdictions of international criminal laws, purveyors of these unsafe medicines remain outside the reach of domestic law enforcement.
4. Additional onshore support and authority. The U.S. has 300 customs ports, but the FDA has only 200 port inspectors and a mere 17 inspectors to cover all international mail centers. We must hire more inspectors and grant the FDA and other agencies the authority to destroy unapproved drugs entering the U.S. rather than returning them to the criminals who sent them here-a sentiment echoed by one FDA supervisor who told the Miami Herald that the vast majority of intercepted pharmaceuticals were returned to sender: “We have no authority to destroy them. We have to send them back.”

According to the Miami Herald, the Miami Customs facility processed about 36 million pieces of foreign mail last year. Of that total, inspectors relayed between 8,000 and 10,000 foreign pieces containing unapproved medicines to the FDA for further assessment-showing that the threat of counterfeit drugs may be hitting closer to home than many are aware of.

Online Guy Rob Holmes kicks off IACC Meeting

IACC (International AntiCounterfeiting Coalition) Annual Meeting is getting kicked off with a bang this morning at the Hyatt Hotel in Downtown Boston, MA. Rob Holmes of IP Cybercrime and my partner in busting crime with the Online Guys is giving out some amazing secret information about techniques to do online investigations.

I could tell you some of these tips here, but Rob would have to kill me.

IACC Starts Next Week – May 18-20, Boston MA

The 2010 Annual Meeting of the International Anticounterfeiting Coaltion (the “IACC:) is next week in Boston, MA and yours truly will be attending along with Online Guy, Rob Holmes. We will be tweeting and reporting on the conference from the site and hope to see some of you peeps there.

Check out http://www.iacc.org

If you don't know where Holmes and Montan are - you aren't trying very hard.

The Online Guys

The AntiCounterfeiting Agreement – by Tom Walsh

The first issue I will pass upon regarding the recently released ACTA text is the definition of “willful trademark counterfeiting or related rights piracy on a commercial scale.” This concept is defined in Section 3, Article 2.14 of Chapter 2. The definition is quite broad in scope and encapsulates “(a) significant willful copyright or related rights infringements that have no direct or indirect motivation of financial gain; and (b) willful copyright or related rights infringements for purposes of commercial advantage or financial gain.”

Even though Subsection (b) generally conforms to traditional views of counterfeiting, Subsection (a) has been the subject of much controversy and merits further examination. At first glance, there appears to be a conflict between the concept’s requirement that the infringement or piracy be on a “commercial scale” and the definition’s clear statement that the infringement or piracy need not have any financial motivation. However, it is clear that Subsection (a) targets large-scale, anti-copyright file sharing networks such as The Pirate Bay.

The drafters are correct to permit rights holders to press claims against anti-copyright groups who distribute protected content. When a tangible product is counterfeited, supply of the actual product is increased. An increase in the supply of the aggregate market for the product should create undesired downward pressure on the price of the actual product. Conversely, in cases of file-sharing, the counterfeit product is digital in nature and supply is virtually unlimited. Each time a file is shared, demand decreases while the supply of that file remains unchanged. Rights holders therefore require tools to control supply of their digital assets in order to preserve equity.

However, while I commend the drafters of ACTA for providing rights holders with addressing piracy by anti-copyright persons and organizations, Subsection (a) is ripe for abuse, or at the least heavy-handedness, on two fronts as a result of its present vagueness. First, the released ACTA text does not define the term “significant”. The lack of precision in drafting this term may lead to the unintended prosecution of smaller-scale infringers as member states struggle to quantify “significant” piracy. In the United States, we have seen this in prosecution of commercial claims by the RIAA against music piracy. In an effort to publicize the issue and deter future piracy, the RIAA initiated lawsuits against individual infringers. While the lawsuits were effective at deterrence, it was by no means popular.

A second concern for individuals under Subsection (a) is the use of conspiracy laws to target P2P networks. Under this legal theory, even a legitimate user of a P2P network could face criminal liability if other users of that same network engaged in illegal file sharing. While large-scale infringers would be subject to criminal prosecution, such prosecution may also envelope small-scale or “insignificant” infringers, contrary to the intentions of the drafters.

Fake and counterfeit goods promote unethical behaviour | Not Exactly Rocket Science | Discover Magazine

April 12, 2010 Leave a comment

Fake and counterfeit goods promote unethical behavior | Not Exactly Rocket Science | Discover Magazine.

Adorning yourself in fake goods, be it a replica Gucci handbag or knock-off Armani sunglasses, makes a statement. It says that you want to feel, or be seen as, wealthier than you actually are. It signals an aspiration towards a richer lifestyle. Of course, such products can’t actually change a person’s status, but a new study suggests that they can change people’s behavior, and for the worse.

IACC Files Submission to Office Of US IP Coordinator

March 26, 2010 Leave a comment

In late February, Victoria Espinel, the United States Intellectual Property Enforcement Coordinator, published a request in the Federal Register seeking comments regarding the development of a Federal Joint Strategies Pan. The idea is to improve the ability of the US Federal government to fight against piracy across the many agencies that may have juristiction.
The International AntiCounterfeiting Coaltion filed its response to the request yesterday. Among the statements made by the IACC is a request seeking improvements in the manner in which the Customs Service, known as the US Customs and Border Protection, imparts information to IP owners. The IACC submission said in part:

“At present, the single greatest policy priority for the IACC and its members concerns the availability of information regarding shipments of goods detained by US Customs and Border Protection (“CBP”) which are suspected of being counterfeit, or otherwise violating the rights of intellectual property owners in trademarks registered in the United States and recorded with CBP.

As the manufacturing capabilities of counterfeiters have increased in recent years, with the more widespread availability of tools which facilitate the replication of products and packaging, Customs’ ability to detect counterfeit goods has grown exponentially more difficult. Rights-holders have adopted a variety of technologies, both overt and covert, which are commonly used to aid in identifying illicit product or verifying the legitimacy of goods. The volume, and variety, of goods entering the domestic stream of commerce at US ports obviously makes it unfeasible for Customs personnel to receive the extensive training or level of familiarity necessary to verify the legitimacy of every trademark that comes before them. Traditionally, private sector rights-holders have been consulted by CBP, and have offered assistance in making such verifications. Regrettably, CBP has adopted a policy – citing the Trade Secrets Act – which has significantly reduced the ability of CBP to ask for, or for rights-holders to provide, such assistance.

By way of example, many legitimate manufacturers and rights-holders have adopted verification procedures which involve the marking of product containers and packaging with unique serial identification markings at the time of manufacture. Current CBP policy precludes the disclosure of such markings to a rights-holder either through the provision of samples or photographic evidence. In practice, CBP has provided redacted photographs or digital images of the goods; or when physical samples have been provided, Customs personnel have physically removing or obliterated the markings prior to providing the sample to the rights-holder. Unfortunately, absent those identifying codes, in many cases, the trademark owner has been unable to make a positive determination regarding the products’ authenticity. The implication of the Trade Secrets Act (and the potential for criminal prosecution for violations of that statute), has, according to reports from IACC member companies, resulted in Customs’ reluctance to share information which might allow rights-holders to provide the type of assistance necessary to verify whether a suspected shipment is, in fact, counterfeit. The clear result of this policy is an increased likelihood that greater volumes of counterfeit product will enter through the borders, posing greater threats to consumers, and greater economic harm to legitimate businesses.

Information is arguably the most powerful weapon available to law enforcement and rights-holders in addressing the problem of counterfeiting. IACC members continue to report however that current policies in place are hindering their ability to identify individuals involved in the trafficking of counterfeit goods. Rights-holders noted that they frequently encounter cases of fraud when conducting follow-up investigations, subsequent to their receipt of Customs Seizure Notices from the Office of Fines, Penalties, and Forfeiture. In some cases, the individual named as the importer of record has been the victim of identity theft (and is in no way connected to the importation); while in other cases, a fictitious name has been provided by the importer to a customs broker, and in turn, to CBP.

Customs and Border Protection has the authority to regulate customs brokers, and to conduct audits of customs brokers’ records. Even a relatively minor step such as a due diligence requirement similar to that set forth in other areas of federal law (e.g., the Bank Secrecy Act, 31 USC 5318), or a requirement that customs brokers require an importer to provide two valid forms of government identification (and copies of corporate papers, in the case of a business), would help to deter such fraud. The ability to accurately identify and locate importers could also be useful in the enforcement of fines assessed against importers for violations (whether related to the importation of counterfeit products or other provisions of the Customs laws).

The PRO-IP Act was grounded in the idea that improving IP enforcement required improving the communication and coordination among all of those tasked with the job. That idea applies equally within the government, in the private sector, and between the two. To that end, the IACC supports a comprehensive review of these and other Executive Branch policies to ensure that open communication and cooperation between rights-holders and government personnel tasked with enforcement is not unduly burdened.”

More information can be found out about the IACC at http://www.iacc.org.

Counterfeit Perfumes May Have Some Unusual Ingredients

January 29, 2010 1 comment

Counterfeit Perfumes May Contain Urine, Bacteria, Antifreeze.

For most shoppers, getting fancy-looking goods at low prices is a good enough reason to buy counterfeit products. But a knockoff bottle of the sweet smelling stuff is not always a great deal, especially when it comes to counterfeit perfume, because a fake fragrance can get absorbed into the skin.

“Active ingredients found in counterfeit fragrance include things like urine, bacteria, antifreeze,” reports Valerie Salembier, senior vice president and publisher of Harper’s Bazaar.

Salembier and her staff have dedicated themselves to exposing counterfeits for more than six years. In the January issue of Harper’s Bazaar, they target fake fragrances. They brought the issue of counterfeit perfume to “GMA’s” attention.
“You’re putting something on your face, on your neck, on your wrists. Those are sensitive parts of the body, so, to have active ingredients that could endanger your life is a very serious health risk,” Salembier said.