As more manufacturing of footwear and apparel in the Bicycle, Outdoor, and SnowSports industries moves off-shore, the costs of protecting trademarks and intellectual increases. Many manufacturers are facing growing counterfeiting problems, including Timberland, Columbia, The North Face, and Spyder. Over the past six Months, BOSS has reported that nearly 300,000 counterfeit items have been confiscated from various countries around the world. Columbia has been one of the most aggressive brands in the fight, working with police in China, Vietnam, and Australia to conduct raids and seize fake merchandise. Nike has contracted an independent firm to protect its trademarks from counterfeiting and The North Face won a $1 million judgment against counterfeiters last week (See BOSS_0610).

More recently, The U.S. and Chinese governments have been working on initiatives that should make the protection of intellectual property easier, particularly in heavily brand-conscious consumer markets.

Last month, the U.S. Senate passed the Stop Counterfeiting in Manufactured Goods Act and last week, the U.S. House of Representatives approved the act. It is now waiting on the President to sign into law. The Act modifies federal criminal code provisions regarding trafficking in counterfeit goods or services to prohibit trafficking in counterfeit marks. It also forces the forfeiture of any item bearing a counterfeit mark and any property derived from proceeds of, or used in the commission of, the violation. The Act will close loopholes in the definition of the term “counterfeit mark,” making it easier for manufactures to show that an item has been illegally copied. It also changes the definition of “trafficking” to include the transfer of goods, regardless of compensation or value. The Act was originally introduced by Michigan Representative Joseph Knollenberg and was sponsored by a bi-partisan group of 60 other members of The House.

At the same time, China appears to be stepping up its efforts at controlling the wide-spread trade in counterfeit goods. According to the government-controlled China People’s Daily, China’s State Office of Intellectual Property Protection, together with other relevant departments, issued “China's Action Plan on IPR Protection 2006.” The plan covers initiatives to protect four major areas – trademark, copyright, patent, and import and export and includes drafting or revising laws relating to trademark, copyright, patent, and customs protection.