Eastern Europe


Eastern European countries and neighbouring Russia all attract fake goods from Asia. Experts discuss how to tackle the problem

Tatyana Kulikova
Director
PETOŠEVIĆ

Relja Mirkov
IP senior associate
Karanovic/Nikolic

How would you describe the situation with the availability of counterfeit goods online in Eastern European countries?

Relja Mirkov: As is the general trend worldwide, customers in Eastern European countries are also prone to purchasing products online. Fake goods offered and sold online are usually to be found on local websites and pages created on social networks such as Facebook and Instagram.

However, due to a lack of local regulation of secured payment via PayPal and similar online services, in countries we are covering intellectual property matters—Albania, Bosnia and Herzegovina, Macedonia Montenegro and Serbia (Kosovo)—purchases made though international websites such as eBay were for a long time quite sporadic.

It is only recently that non-EU member countries of Eastern Europe have put into place efficient laws and regulations regarding online purchases and electronic payments that now allow customers to purchase products from websites located worldwide. As much as this is a good thing since it offers a wider variety of choice of online consumer products in general, the downside is that customers are also offered a wider variety of counterfeit goods.

Furthermore, taking into account the general economic situation in the region and weak purchasing power in the above jurisdictions, it is only logical that counterfeit goods are highly prioritised among the customers in this jurisdictions.

Tatyana Kulikova: In all countries in the region, the biggest problem is with counterfeits produced and/or ordered online from Asia.

In Ukraine, counterfeits from Asia are easy to find through social networks, online ads and websites customised for selling particular categories of goods. However, please note that the parallel importation of original and trademark labelled goods does not require the permission of a trademark owner in Ukraine, because an international principle of exhaustion of rights is applied.

The quantity of counterfeit goods produced and sold in Latvia is not massive.

The bigger problem is with counterfeits ordered online from Asia.

At the same time, the quantity of such consignments from Asia is also not that extensive, so the Latvian customs officials manage to inspect the majority of them.

Counterfeit goods can also be found in Russia, mostly originating in Asia. Most frequently, counterfeits are sold online on Russian websites created by local distributors of the fake goods. As a rule, such goods are sold in Russia in small amounts.

Are strides being made to tackle the problem?

Mirkov: State authorities such as customs, market inspections and special police units take adequate steps towards tackling the problem of counterfeit goods available online, be it on domestic or international websites. Furthermore, oftentimes, in cases where high volumes of counterfeit goods are threatening to be purchased and would consequently enter state borders with the intent of being resold or just transported, state authorities of neighbouring countries work together in taking adequate steps that such goods be seized and destroyed.

On country-by-country level, many brand owners also perform their own monitoring activities of local websites and social networks, either though their legal representatives or though official state appointed authorities.

Furthermore, renowned and high-end brands tend to work together though group associations that exist on country-by-country basis and perform online monitoring activities, issue takedown notices and ultimately, seize and destroy goods in cooperation with their local legal representatives.

Kulikova: In all the countries mentioned, there are some strides being made, but improvements are needed.

The strides provided by the law are not that significant in Ukraine because the legislative practice imposed by the relevant state institutions does not provide an easy way to collect admissible evidence about an infringing website or its owner. Information about registrants of websites is also unavailable.

Moreover, if the matter is handled as a civil dispute, on the grounds of online sales and delivery by post/courier, there is no clear way of proving that what was delivered is the same item that was ordered and checked to see if it was counterfeit.

Postal companies do not open parcels or make descriptions of what was delivered, so one cannot identify properly the delivered item for the purpose of court proceedings. There is no such problem in criminal proceedings, but in order to have them completed, a crime should meet a certain requirement as to the scale of harm, and that scale has to be proven.

In Russia, there are some strides being made to tackle the problem with counterfeits online. Russian legislation allows both pre-trial and trial procedures, which could be applied against the distributors of counterfeit goods. It is also possible to deploy an administrative or a criminal proceeding. The Russian Custom Service is also quite active in fighting the matter.

Is there a one-strategy-fits-all-countries approach that can be employed in Eastern Europe to tackle counterfeiting online, or must brands do it country-by-country? What would you recommend?

Mirkov: There is really no unified approach in tackling this problem. Due to the fact that many Eastern European countries are still not members of the EU, the principles of free transit of goods through state boarders do not apply here, so one unified strategy would be hard to put into place.

However, in the past few years we have witnessed the creation of international brand associations that tend to be active in several countries at a time and, in cooperation with legal representatives, investigators and local chambers of commerce, work to tackle the issues of counterfeiting online.

Our advice for brand owners would be to mainly focus on country-by-country actions, as such actions provide more targeted approach and so more efficient results.

Kulikova: There is no universal recipe applicable in the region, but close cooperation with the local customs is the most advisable first step.

In Ukraine, it depends on the scale of the problem and the number of counterfeit goods. Sending cease-and-desist letters to hosting providers and website registrars is usual practice, which should be used no matter how complex the problem.

If a matter is more complicated, we’d recommend taking measures at the border and initiating criminal proceedings through law enforcement bodies.

In general, there is no universal strategy applicable in all countries due to specific features of each country. For example, Russia is a member of the Customs Union with Belarus and Kazakhstan, which means that there is no customs control at the borders inside the union. It is better for the brand owner to deal with the problem country-by-country.

What would be your top piece of advice for a brand that discovers fake goods in an Eastern European country, and why?

Mirkov: The top piece of advice for the brands that discover fake goods online being offered and sold in Eastern European countries is to, first and foremost, take adequate legal steps towards combatting further sale of such goods online. In order to do so, measures should be taken towards requesting a takedown of offers of counterfeit goods online.

From our experience, such actions oftentimes have positive results when formal requests are made through local legal representatives.

Should such a direct approach have less than desired results, the second step would be to address a formal request to the state authority appointed to deal with the protection of IP rights online. For instance, in Serbia, the authority appointed for the monitoring of counterfeit goods online is the special unit within the Ministry of Interior, which can be addressed with a request for takedown.

Please note that in non-EU member states that have either partially harmonised their local legislation with EU legislation, or are taking steps towards such harmonisation, oftentimes, counterfeit goods purchased in small quantities and for a personal and non-commercial use are not considered to be infringing any IP rights, and no measures are taken towards their seizure and destruction.

With respect to that, our additional advice would be for the brand owners to mainly focus on takedown notices as the first and most efficient tool. Should counterfeit goods be taken down from the websites, even small quantity purchases for personal use would then not be possible.

In cases of big quantity offers and purchases for further commercialisation, our advice for brand owners would be to focus on making formal requests to customs authorities for monitoring activities at state boarders, followed by seizing and destroying goods.

Kulikova: For all covered countries, actions may vary.

If a brand owner discovers fake goods in Latvia, it would be necessary to investigate channels of delivery and sale, as well as production origins and act fast to seize and destroy the counterfeit goods. The brand owner should take all the necessary steps to make this brand too problematic for counterfeiters to copy.

Entering IP rights that one wants to protect into the customs register should be the first step to prevent counterfeit shipments in Ukraine. The next step could be collecting the information (not necessarily in the form of admissible proofs) about the person(s) who market and/or produce the counterfeit goods in order to come up with an elaborate strategy against the infringer(s). Approaching them with a proposal to stop this illegal activity and asking them to destroy or to transfer counterfeit stocks to the rights holder can be recommended as a soft strategy.

Regardless of the response, further monitoring of the market should be applied. If the activity continues, civil and criminal proceedings should be initiated, and warnings about the sales of counterfeit goods should be publically announced and widely spread.

For Russia, the advice depends on the kind of counterfeit goods, country of origin and delivery/sale channels. If the goods are imported to Russia, entering IP rights into the customs register should be the first step. If the origin of the goods is unknown, it is advisable to initiate proper proceedings against the local seller of the goods.

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