Toy Association Wants Three Counterfeiting Issues Addressed

The Toy Association (TA) January 15 called for solutions to tackle three problems related to counterfeit toys, especially those that fail product safety requirements.

It pointed to a recent incident involving a magnetic toy that violated intellectual property, writing, "[A]n unknowing consumer was able to purchase the set, and the four-year-old was able to easily break apart the toys to ingest more than a dozen magnets, causing a life threatening situation."

TA's report (bit.ly/2RVb1FK), The Real Threat of Fake Toys, identified the expansion of e-commerce as increasing access to fakes, and it used a broad definition: "counterfeit products, trademark infringing products, unlicensed merchandise, and knock-off products."

E-Commerce Has Low Hurdles: TA wrote that online platforms can make it easy for unscrupulous sellers to reach large markets and to compete with legitimate companies. The group called for credentialing by platforms and at least to demand details besides minimals like a name and emails.

Changes could include increased screening and verification steps that might mimic "the way certain social media has proposed verifying authenticity and contact information for those seeking to run certain political or issue ads." Merchants should demonstrate authority to sell brands, TA said.

TA also called for platforms to police products better including steps like demanding CPSC children's product certificates (CPCs) for items that require them. This idea echoed recent discussion between CPSC commissioners and representatives of the National Association of Manufacturers (PSL, 12/24/18). TA members were part of that delegation.

TA additionally urged better product tracking and pointed to warehousing problems such as one merchant's item getting sent to a consumer who bought from another seller.

Enforcement Burdens Are on IP Holders: TA complained that platforms presume sellers are legitimate and it is difficult to get fraudulent ones removed. The report suggested changes in six areas addressed in the Digital Millennium Copyright Act (DCMA):

• Shifting the burden to sellers to show legitimacy and streamlining removal steps.

 

• Creating single points of contacts at platforms for IP disputes, especially for brands that often have to manage multiple take-down requests.

 

• Educating industry on obtaining and protecting IP rights.

 

• Making seller information more transparent to aid scrutiny, including finding compromises to privacy concerns.

 

• Addressing abuse of the DCMA counter-notification provision by which infringing items get reposted if the seller counter files and the IP holder does not sue quickly. The goal of this tactic by counterfeiters is to flood IP holders with the need to file an unmanageable number of lawsuits.

 

• Enhancing customs enforcement, including dealing with an $800 de minimis exemption that eliminates scrutiny of some shipments. TA pointed out that $10 is a typical cost of a toy, so an $800 threshold lets many shipments pass.