Anita Gogia is an IPilogue Writer and an incoming 2L JD Candidate at Osgoode Hall Law School.

On February 3^rd 2022 Nike Inc. sued StockX LLC for Nike alleges that StockX is selling unauthorized non-fungible tokens (“NFTs”) of Nike sneakers. ��These issues are novel in their involving the metaverse. This case has the potential to . NFTs are unique digital assets that are of real-world items.

The Nike Suit

Nike claimed that the StockX NFTs were not a collaboration with them, and that they were authorized by Nike to be sold and promoted. Nike argues that the ��use of Nike trademarks are “intentionally deceiving” consumers into believing that these NFTs were Nike-sponsored. Nike has taken steps to venture into the metaverse, having acquired RTFKT Studios, an NFT-creator company, in by selling Nike’s own digital tokens.

Nike claimed trademark dilution, pointing to ��StockX’s heavy use of trademarks in attracting consumers familiar with the Nike brand. Nike argued that the NFTs’ inflated prices and terms of purchase and ownership have led to public criticism and opinion that the . With consumers attributing scams to Nike, the use of Nike’s marks on these NFTs have .

Nike seeks an injunction to stop StockX from selling any NFT products using Nike trademarks, an order of destruction of the infringing NFTs, and an order granting monetary, statutory, and punitive damages.

StockX Vault NFTs

StockX has which can be redeemed for the physical shoes On March 31, 2022, StockX filed a explaining that the NFTs are not sold as virtual assets, but are rather to authenticate physical shoes. StockX also claimed their resale methods are protected by the and their use of Nike products tied to NFTs are .

Recent Developments

On May 10^th 2022, Nike in support of its motion for leave to file a first amended complaint in a revised lawsuit. In addition to the previous causes of action, claims against StockX. Nike purchased four pairs of shoes from StockX that were supposedly “verified to be authentic,” but turned out to be counterfeit — one of which matched a StockX NFT. In particular, Nike explained in the that the counterfeit shoes had StockX’s “Verified Authentic” hangtag and came with a receipt from StockX stating that the shoes were “100% Authentic.”

The StockX slogan, “Buy/Sell Authentic Guaranteed” gives consumers a promise for verified products through their authentication services. In a StockX expressed that they take “customer protection extremely seriously” and “invested millions to fight the proliferation of counterfeit products.” StockX has previously responded that Nike’s claims are

Nike’s case depends on whether StockX can prove that the NFTs are a form of proof of ownership rather than virtual assets themselves. StockX responded that the redemption process merely illustrates that they are not virtual assets. This distinction may be in which an artist was sued for selling NFTs depicting the Birkin Bag and calling it “METABIRKINS” — see previous article . Since shoe ownership can change by trading the NFTs, StockX also demonstrates that their NFTs provide a sustainable solution to selling collectibles, as the shoes are not repeatedly shipped between consumers and StockX for authentication — the NFTs are already correlated to a specific product authenticated by StockX.

Nike that the NFTs are virtual assets as a redemption process is currently unavailable. Nike claims StockX is . For , a physical pair of Nike Dunk Lows are $282 on StockX, yet the StockX NFT linked to this shoe has traded for over $3,000.

Nike currently has multiple pending trademark applications for their NFTs. This case will be a significant development in solving metaverse-related legal issues, and may clarify the boundaries of NFT trademark-usage.

The post What legal lines can’t NFTs cross? The Nike v StockX lawsuit may provide answers appeared first on IPOsgoode.

Photo by Jakub Kapusnak ()

Emily Chow is an��IPilogue��Writer and a 1L JD Candidate at Osgoode Hall Law School.��

��

Over the past decade, the media has published several scandals about the quality and safety of the food we eat – from to . It is estimated that the counterfeit food industry

Beyond , fraudulent foodstuffs exacerbate the risks facing endangered species. Researchers found that an estimated were substituted with . Inaccurate labelling makes it difficult to track and identify what animals are at risk due to human activity; this is especially concerning given that . There are of other examples of highly substituted foods. found king scallops sold in Germany were replaced with the less valued Japanese species in 48% of samples. Another found prawn balls on sale in Singapore .

Difficult conservation policy decisions, already limited in funding, can be more effective when comprehensive data is available to inform such decisions. Oceana, whose mandate is to protect Earth’s oceans, by increasing the profitability of destructive fishing practices, undermining consumer-driven conservation efforts, and harming large-scale conservation initiatives such as quotas and restrictions.

Interestingly, food products are not the only counterfeit organic item on the market.

In 2016, An internal investigation revealed that approximately , a direct contradiction of Welspun’s appeal and promises of quality. Welspun’s intricate network of cotton suppliers, manufacturers, and retailers made sourcing the error difficult. Whether it was a mistake in labelling or a deliberate act of fraud, makes it difficult for consumers and producers alike to confirm the authenticity of an item. Luckily for Welspun, a was up to the task. In 2017, they that would allow Oritain to validate Welspun’s supply chain of home textile products.

In Oritain’s co-founder Russel Frew discussed his past life as a researcher at the University of Otago. A geochemist, Frew utilized a mass spectrometer often, which allowed him to determine the precise atomic makeup of water and soil samples gathered from across the world: a unique elemental signature for a given area. Applied to products, Oritain describes its method as

Atoms of a particular element can have different amounts of neutrons—neutral particles that do not contain an electric charge—residing within each atom’s nucleus, resulting in various isotopes. Oritain determines the relative ratios of isotopes within a sample to ascertain its origin. For instance, a sample’s . Oritain also analyzes trace elements in These can include sodium and iron derived from the composition of soils, water, and feeds. In addition to sourcing the origins of fabrics and textiles, Oritain has to combat food fraud.

The expansion of verification and traceability programs may lead to the and supply chains around the globe.

Further Reading:

Oritain Certification:

Oceana:

“What is Mass Spectrometry?” by the Broad Institute: .

Canadian Food Inspection Agency’s survey to verify the authenticity of honey samples:

“Food Fraud in Canada” published by the Arrell Food Institute at the University of Guelph:

��

The post Something’s Fishy: Counterfeit Organics and Consequences for Global Conservation appeared first on IPOsgoode.

Photo by (Pexels)

Meena Alnajar is an��IPilogue��Writer, IP Innovation Clinic Fellow,��and a 2L JD Candidate at��Osgoode��Hall Law School.

��

On July 26, 2021, the fashion brand . The complainant alleges that websites are to sell counterfeit products infringing on the ‘Fear of God’ trademark. With all things moving virtually, we are starting to see new strategies for the counterfeit market. Electronic-commerce, or ‘e-commerce’, is an expedient way for businesses to establish themselves online and create a fruitful marketplace, but it could also act as new vehicle for concealing the counterfeit industry.

Counterfeiting with the intent of using them as valid trademarked items, such as fake merchandise from a well-known brand like, in this case, Fear of God. Online retailers have noted an uncontrollable surge in counterfeit products, with some sources stating that sold online are fakes. In Canada, the punishment for someone or imprisonment for up to five years. However, e-commerce makes conviction trickier in the case of Fear of God’s suit. Web designers can effectively imitate popular online retailers or claim to be resale sites authorized to sell the trademarked items, promoting uncertainty as to which sites are counterfeiters. Fear of God’s claim is driven by the fact that the defendants have concealed their identity and constructed a “counterfeit network” with fake seller profiles. Fear of God’s complaint states that the matter can be amended, if�� “defendants regarding their identities.”

While launching lawsuits may be an effective long-term approach, they may not act fast enough to resolve online counterfeit. Counterfeiters can continue to create e-commerce sites selling counterfeit goods under different addresses and owners. By 2017, major e-commerce site its products sold by marketplace listings of outside sellers, some of which may be counterfeiters. counterfeit craze, stating in their ‘Risk Factors’ section: “Under our seller programs, we may be unable to prevent sellers from collecting payments, fraudulently or otherwise… we also may be unable to prevent sellers in our stores or through other stores from selling unlawful, counterfeit, pirated or stolen goods” and accepts possible criminal liability for counterfeit sales. Although Canada has a in place, legal experts have outlined that the crime requires extensive evidence to warrant a conviction. Federal agents also perform of alleged counterfeit crimes. In the time it takes to obtain evidence and wrap up an investigation, the seller has probably transformed into another web address or online persona.

If the law cannot act fast enough against e-commerce counterfeit, what can? Two avenues may tackle e-commerce counterfeit more expediently. The first is requiring a person behind the e-commerce. India is significantly changing its e-commerce policy to require ’ This nodal person of contact denotes an alternate authority or legal department that can assure proper implementation of all the country’s consumer regulations and e-commerce policy. With a legal source to verify the platform’s content, it may be easier to flag illegitimate or counterfeit sellers in the future. Another avenue is fighting e-commerce with what feeds it: technology and big data. E-commerce giant Alibaba announced the in 2017 and harnesses artificial intelligence (AI) and big data to keep the platform free of fake sellers. The company disclosed that the Alliance’s technological strategy successfully seized of fake goods in 2016. Perhaps fighting e-crime with e-stop-and-seizure is optimal to limit counterfeit products in the online space.

Counterfeit can deteriorate brands as consumers cannot be certain what they are purchasing, but the fight against counterfeit may never stop. Regardless of how counterfeit is combatted, be it through legal action or AI, creating new online businesses, even for unethical purposes, has never been easier.

The post ‘Fear of God’ and their Fear of Counterfeit: Taking Legal Action Against Fake E-commerce Sites appeared first on IPOsgoode.

While the counterfeit products industry has persisted for many decades, it was previously localized and limited to a specific geographical region. However, this is no longer the case. The internet and e-commerce has allowed the counterfeit products industry to evolve into a very complex entity.�� The roots of this industry now extend beyond their initial geographical barriers and illegitimate products easily find their way into global markets. The ease of flow and production of these counterfeit goods is particularly concerning for Canada, and many other jurisdictions, because it:

1. Causes confusion amongst the consumers as to the source of the product; and
2. Infringes the rights of a registered trademark holder.

Fortunately, trademark law exists to and in the past the Canadian Trademark Act has been successful at doing so. However, the issue now is that the operators of online counterfeit industries are usually foreign based and holding a judgement, let alone obtaining one, against them can prove to be a difficult task. Therefore, the existing Trademark Act, although evolving, cannot solely address the complexity of counterfeit products over e-commerce; rather, efforts must be made at a global scale to address this global issue.

The Canadian government has already taken to address the need of IP enforcement at a global scale. On September 15, 2017, Canadian officials met Chinese delegates in Ottawa, ON to discuss the IP enforcement strategies of the two respected countries, including a discussion on .

The Canada Anti-Fraud Centre (CAFC) established Project Chargeback in 2012 to address the issue of deceptive practices employed by fraudsters to sell counterfeit goods over the internet. Project Chargeback was developed with the following objectives: to protect consumers by reducing their losses, to reduce organized crime profits that originate from the sale of counterfeit and pirated materials, and to protect and support the intellectual property rights of owners. To effectively achieve these objectives, CAFC requires the assistance of the Royal Canadian Mounted Police, credit card companies, banks, right holders, and the victims themselves.

The process of Project Chargeback is simple in theory and begins when the victim with the CAFC. The CAFC then contacts the right holders of the product in question to verify if the complaint is valid, and whether the online website is in fact selling a counterfeit product. If the right holder confirms the validity of the complaint, the CAFC then requests that the victim contact their credit card issuing bank and provide them with the CAFC report. Credit card companies, upon receiving the required information, begin the chargeback process whereby they refund the victim’s money and subsequently remove money from the sellers account. The CAFC also requests that the bank close the account associated with the seller to prevent future sales of the counterfeit products over the internet. As well, to further punish the counterfeit products seller, the CAFC asks that the victim not return the product thereby causing a further loss to the seller.

Although, Canada is the only country with Project Chargeback, other jurisdictions have previously employed a similar mechanism. In Tory Burch v Yong Sheng International Trade Co. [1], the US Court froze the PayPal accounts of 41 Chinese companies that sold counterfeit versions of Tory Burch and subsequently released these PayPal funds to Tory Burch. Similarly, the US Court in Gucci America Inc v Frontline Processing Corp [2] held a credit card processing company liable for contributory trademark infringement because of their involvement in processing the payments on a website that sold counterfeit goods.

Despite the availability of similar mechanisms, the major incentive offered by Project Chargeback, and not by other jurisdictions, is the ability of individual consumers to hold accountable the sellers of counterfeit products. Comparatively, individual consumers in the US do not receive the same level of protection and their options are to proceed through the Courts or contact their credit card company and begin a chargeback process. Given that a large monetary sum is often not involved when purchasing a counterfeit product, to proceed through the Courts could be an unreasonable and a lengthy method. Alternatively, the US chargeback process does not prevent future victimization of other individuals by the seller, nor would it induce a strict liability on the seller.

Ankit Sareen��is a JD Candidate at Osgoode Hall Law School and was enrolled in Osgoode’s Intellectual Property Law Intensive Program. As part of the program requirements, students were asked to write a blog on a topic of their choice.

[1]��Tory Burch LLC v Yong Sheng International Trade Co Ltd, No. 10-cv-09336 (SDNY 2011)

[2]��Gucci America Inc v Frontline Processing Corp, 721 F Supp 2d 228 (SDNY 2010)

The post Deceiving the Canadian Consumer: A Thing of The Past? appeared first on IPOsgoode.

(the Combating Counterfeit Products Act, previously known as ) passed third reading in the House of Commons on October 2, 2014, and is now before the Senate for further review. The Bill proposes a number of legislative changes to the Canadian IP regime. One of its main objectives is to create border security measures by establishing a system empowered with the tools necessary to detain shipments of suspected counterfeit goods before they cross into Canada. Like many pieces of proposed legislation, the Bill has faced scrutiny One particular aspect of the Bill that has attracted criticism relates to its detention provisions (Section 51.09[i]), which place the costs of detention on right holders (RHs) – the very individuals whose trademarks have been potentially infringed.[ii]

At first glance, this appears counter-intuitive. Yet if one considers the structure supporting the cluster of agencies charged with maintaining control at the border, this might be the most pragmatic means of addressing the monumental task of intercepting counterfeit goods.

Bill C-8 intends to open a channel of communication between RHs and border officers through a “request for assistance” (RFA) system (Section 51.04). Under the Act, RHs will be able to submit information regarding their registered trademarks to the Canadian Border Services Agency (CBSA) by filing an RFA. If a shipment is thereafter stopped at the border for any reason, officers can consult a database derived from these RFAs in order to identify any potential trademarks that the goods may be infringing. The RH is then contacted, at which point a 10 day detention period begins. The RH can then decide whether to pursue litigation against the potential infringer.

There are, of course, certain caveats associated with the detention of goods. However, the end result is that by opting to participate in the system as a means of enforcing their IPRs, the RH will be on the hook for any costs associated with the detention of suspicious shipments.

Some critics, such as the and , have suggested that the system should look first to the perpetrators of the crimes – that is, the importers/owners – to bear the costs. Pushing aside the notion that this might enable RHs to target importers in an effort to engage in surreptitious anti-competitive practices, this proposal overlooks the simple fact that protecting any trademark you might own constitutes a private right. RHs opt-in to the RFA system and any disputes arising from their attempts to enforce the protection of their IPRs should be initially borne by them. The reality is that if an RH responds to the CBSA and pursues litigation against the infringer, they can potentially recover any and all detention costs in court. If not, the 10 day detention period can be cut short if the RH indicates the goods are non-infringing (Section 59.09[1][c]) or declines to take action (Section 59.09[1][c]), at which point the goods are typically released (barring an instance of eventual forfeiture, a concept that is deserving of its own independent analysis).

From the importer’s perspective, some might question whether this system is by being harnessed as a means of engaging in anti-competitive practices by delaying imports unnecessarily. Although the Bill does not include specific remedies for such a scenario, a number of safety valves are in place to prevent this from occurring. First and foremost, the RH will be subject to any detention fees, meaning their anti-competitive practice will cost them from the outset. Second, pursuant to Section 54.04(3), the Minister retains the discretionary authority to refuse to renew RFA applications. Consequently, an RH who attempts to use the system in this manner could be precluded from enjoying continued access. Finally, the importer always has the option of pursuing litigation against the RH for a bad faith use of the system, which could allow them to recover damages (for example, based on the tort of economic interference).

that based on this positive obligation imposed on RHs, if an individual is unwilling to pursue litigation against an infringer, “the counterfeits will enter Canada.” Litigation costs are indeed a fair concern. However, this is a broad oversimplification of the process, and reflects the need to view the system in its totality rather than its constituent parts. There still exist various mechanisms separate and apart from Bill C-8 that empower officers to sustain the detention of counterfeit goods. Legislatively, the and the describe multiple grounds upon which officers must detain dangerous goods from entering the country. Administratively, the RCMP that can be used to identify certain counterfeit goods, such as packaging and place of origin, while the CBSA for dealing with different categories of goods, including the use of x-rays and density readers. With or without the input of RHs, border officers will have systems in place to deal with counterfeit goods to an extent.

It is important to remember that no piece of legislation is perfect. There will always be competing values and interests at play and concerns will persist and evolve into the future. By establishing a line of communication via the RFA system, Bill C-8 looks to ensure efficiency through collective expedience, which is precisely why the costs of detention must rest on those harnessing the system for their own benefit.

Jason Hayward is a JD Candidate at Osgoode Hall Law School and is enrolled in Osgoode’s Intellectual Property Law Intensive Program.�� As part of the program requirements, students were asked to write a blog on a topic of their choice.

The post Considering the Combating Counterfeit Products Act: Who Should Ease the Burden of an Overburdened System? appeared first on IPOsgoode.

The problem of SFFCs has been by WHO as having a broad international impact. All varieties of medication are at risk of being counterfeited and this concern applies to both brand name and generic drugs. The results of fake packaging and improper ingredients include unsuccessful treatment as well as accidental consumption of toxic substances.

While it is difficult to paint an accurate statistical picture of the SFFC problem due to the constant evolution of illegal techniques and distribution methods, the WHO notes that the problem is most prevalent in developing nations in Africa, Asia, and Latin America and that less than 1% of the market value is from industrialized countries.�� This dichotomy is evidenced by a number of the cited by WHO. First of all, the high costs of medication often drive consumers to seek cheaper illegal sources. Similarly, in many developing nations, supplies at regular health facilities are often limited and illegal suppliers may be the only alternative option. Further, many jurisdictions lack legislation to combat SFFCs and are unable to address the increasing issues arising from the growth of international trade.

The WHO resolution aims to promote the Thus, the goal of the resolution is effectively to target the contributory factors and recognize how these factors shape the situation in developing countries. The resolution advocates for a “global strategy” involving public health, innovation and intellectual property. Part of this strategy is intended to address the lack of sufficient financing which is presently hindering WHO’s progress in combating SFFCs.

The resolution also outlines a through which all member states may take part in combating SFFCs. This mechanism reflects the contribution of international trade to the increasing prevalence of counterfeit medicine by stressing the importance of international collaboration regarding sharing of information and best practices. The intended result is to strengthen both regional and national supply chains, particularly in developing nations. In order to achieve this, existing WHO structures will be incorporated, as well as regional and subsidiary groups. The overarching perspective is to be that of a public health initiative, however, as opposed to being one of trade or intellectual property.

The resolution will be submitted for approval to the 65th World Health Assembly scheduled to meet in Geneva next May.

Nora Sleeth is a JD candidate at Osgoode Hall Law School.��

The post WHO Resolution Intended to Address Global Counterfeit Drug Market appeared first on IPOsgoode.