Don't Do It: Nike's Fight Against Counterfeit Trade Mark Goods

 

Don't Do It: 

Nike's Fight Against Counterfeit Trade Mark Goods

Dareem Scipio*

Counterfeit goods are defined as those bearing an identical trade mark without authorization of the rightholder.[1] In recent times, there has been a proliferation of counterfeit goods making their way into our markets. Unfortunately, although there are intellectual property laws in place to counter the illicit trade of these goods, enforcement of these laws remains a difficult task or non-existent. Apart from the legal side of things, there is also the social/ethical aspect whereby persons do not view the trade of counterfeit goods as a crime/wrong and freely engage and participate in its consumption and use. However, the impact of these activities can have dire consequences on rightholders, causing damage to a brand’s image and reputation and more importantly, financial losses. There has therefore been an extra push by rightholders to protect their brands through cross-border surveillance and collaboration with customs agencies. One such brand, NIKE, is currently suing a Trinidad and Tobago company for trademark infringement.

Brief facts of the case

In May 2021, customs authorities in Trinidad and Tobago intercepted a shipment containing shoes and clothing belonging to New Choice Trading Company. The shipment was stopped based on the suspicion that the goods were counterfeit and in violation of  Nike’s intellectual property rights. Subsequently, customs officials informed Nike Innovate CV (proprietor of the trade mark Nike) who issued a notice of objection. The shipment was then formally seized and NIKE instituted legal proceedings against the company. These proceedings are still ongoing in our local courts, though there have been attempts by the company to object based on procedural issues. [2]

Legal position in Trinidad and Tobago

The Trade Marks Act contains extensive provisions to protect against counterfeit goods that infringe intellectual property rights. The Act prohibits the import of goods that infringe upon trade marks registered in Trinidad and Tobago.[3]  

Section 32(1) states that an infringement of a registered trade mark is actionable by the proprietor of the trade mark. This section provided Nike innovate CV with the authority to commence civil legal proceedings in the jurisdiction. Although there are civil remedies for the proprietor of the mark to pursue, the legislation also creates criminal offences. A fine of $250,000 and imprisonment for a term of 10 years is the applicable punishment for any person convicted on indictment for importing infringing goods for the purpose of trade.[4] The difference between civil and criminal liability seems to be the availability of a defence for the latter. A person may become absolved of liability if they are able to show that they took reasonable precautions to avoid committing an offence under the Act or had acted innocently.[5]

Although there have not been any reported cases of persons being convicted or even charged for importing infringing goods, the civil legal action taken by Nike should be a wake-up call for persons who might be engaging in these types of activities to desist from doing so. The incentive to desist might be difficult when there is an available market for the infringing goods, however, the consequences of being caught might hurt even more in the end.

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* Author can be contacted at studentscipio@gmail.com.

[1] Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) 1994.

[2] Jada Loutoo, ‘Jude rules against objection in alleged counterfeit shipment case’ Newsday (Trinidad, 22 December 2022).

[3] Trade Marks Act, s.35(2)(b).

[4] Trade Marks Act, s.52(1).

[5] Trade Marks Act, s.52(2).