Apparel body says EU should be on counterfeit 'watch list'

The American Apparel and Footwear Association (AAFA) has said the EU should be included in the US Trade Representative's next watch list of countries that are not doing enough to protect intellectual property rights (IPR).

The 27-nation bloc is included alongside China and Bangladesh among countries that are failing to curb the trade in counterfeit goods, with the AAFA highlighting the EU's "ineffectiveness at preventing clearly bad faith trademarks."

That applies at the EU level as well as for individual member states, say the comments (PDF) sent to assistant USTR Daniel Lee from AAFA's brand protection director Jennifer Hanks.

The primary concern arises from the lack of authority in EU regulations and guidance to reject, independently or after an opposition by a rights holder, trademark applications that are made in bad faith.

"Criminals have learned to exploit the EU's system by rushing to member states that perform only obligatory minimal examination, lack comprehensive trademark examination systems to protect against bad faith applications, fail to protect well-known marks, have deficient resources, and more," says the AAFA.

With no invalidation procedures in place for spurious registrations the system "operates in favour of illicit actors – to the detriment of legitimate trademark owners and consumers."

It's not all negative – brands represented by AAFA say they can generally rely on customs offices across the EU to confiscate infringing products – but they are concerned about rising numbers of seizures at or within EU borders.

One member company said the number of raids and seizures in the EU has increased by more than 50 per cent over the past year, with more than half a million counterfeit items intercepted between January and September 2022.

They also welcome in part the EU's Digital Services Act (DSA), which has taken steps to curb the sale of counterfeit and illicit products across e-commerce, but say it still fails to impose any obligations on online retailers to implement preventive measures to stop fakes appearing on their platforms.

The comments also note that Bangladesh should be added to the list as it is increasingly a source of counterfeit apparel, as well as being a major legitimate supplier of clothing and footwear, and ask for China to continue to be included "due to the overabundance of counterfeit products originating from the country."