IP Industry Issues Report On Intermediaries’ Role In Fighting IP Infringement In Supply Chain

A leading business group has published a report that it says shows how intermediaries can help keep fake and pirated products out of the supply chain and off the internet.

The International Chamber of Commerce BASCAP (Business Action to Stop Counterfeiting and Piracy) released the 120-page report on 26 March.

The paper is titled “Roles and Responsibilities of Intermediaries: Fighting Counterfeiting and Piracy in the Supply Chain.”

“Intermediaries must ensure they have adequate systems in place to address growing counterfeiting and piracy risks,” BASCAP Director Jeff Hardy said in a press release.

The report attempts to:

• “identify some of the intermediaries involved in a typical supply chain;
• show how criminals can infiltrate the supply chain and infringe on IP rights through these intermediary channels;
• document the steps being taken to prevent this infiltration; and
• suggest further steps to curb the abuse of intermediaries by criminal agents to facilitate the sale of fake goods.”

BASCAP starts by identifying some trends in IP infringement in the supply chain. As a result of “trade liberalization, the growth of sophisticated logistics networks and information sharing through data networks and the Internet,” the report says, “the number of supply chain intermediaries has multiplied accordingly.”

According to the Organisation for Economic Cooperation and Development (OECD), more than US$250 billion “in physical counterfeit goods move across borders each year, not including in-country activities, Internet infringement, and indirect economic activity and costs,” it states.

“It is much more difficult for rights holders to know, manage, and control every intermediary involved in their supply chains and to see their every transaction. Intermediaries face similar challenges with their sub-intermediaries, suppliers and customers,” the report continues.

The paper discusses the key principles found in intermediary-related laws and identifies two types of intermediaries – physical (raw materials and component suppliers; transport operators; and landlords) and online (sites, platforms and portals; infrastructure providers; and search, online advertisers and payment processors) – that are particularly susceptible to counterfeiting and piracy.

The report addresses the different challenges faced across the various players and current approaches taken within each group. It further offers best practices to each intermediary group and draws on lessons learned that are common across all or several groups. The latter include developing industry standards and codes of practice, establishing and enforcing clear contract terms, knowing customers and suppliers, adopting preventive tools, and deploying technologies.

Elena Bourtchouladze (LLB, DEA) holds a PhD degree in Public International Law from the Graduate Institute (Geneva) with focus on the WTO TRIPS Agreement and WIPO Conventions. She is a researcher at IP-Watch, and has experience in regulatory and litigation at a multinational company and an international organisation.