A Legislative Review of 2021 and a Look Ahead at 2022

A Legislative Review of 2021 and a Look Ahead at 2022
By: Travis Johnson
IACC Senior Counsel and Vice President of Legislative Affairs

2021 saw a variety of challenges to government operations including continuing COVID-19 related impacts to operations and travel, inherent disruptions associated with the changing of administrations – further complicated by the storming of the U.S. Capitol on January 6, 2021 – among other events. Despite these difficulties, it was an incredibly busy year on the legislative and policy front. As we begin the new year, we’d like to provide a brief recap of some of our work to provide a voice to rights-holders throughout 2021, and a glimpse at what lies ahead in 2022. 

Counterfeit Goods Online

It will surely come as no surprise that the trafficking of goods online – whether on standalone sites that seek to dupe consumers, on e-commerce platforms where third-party sellers seek to exploit popular retail channels, or via search or social media ads to drive traffic to online storefronts – remained a primary focus in 2021.  The IACC has continued to monitor efforts both in Congress and within the Executive Branch aimed at reining in this illicit trafficking.

In January, we provided additional feedback  to the USPTO as it began an inquiry recommended by a 2020 Report to the President by the Department of Homeland Security – an assessment of the current legislative framework for the application of secondary liability for trademark infringement in the e-commerce context.  Our comments to the PTO underscored the significant frustrations and challenges faced by rights-holders in protecting and enforcing their rights online in the years since the Second Circuit handed down its ruling in the Tiffany v. eBay case.  We further stressed the desirability of an approach that would spread the burden of enforcement more equitably, recognizing the substantial changes that have taken place in the e-commerce landscape over the years; as well as the development of best practices and reasonable measures to ensure that sellers who are availing themselves of the benefits of the online market are identifiable and able to be held to account for illicit sales.  We strongly believe that all stakeholders should share in the responsibility of keeping the internet safe for consumers and legitimate businesses.

The urgent need for action by governments to address these issues was underscored that same month by the U.S. Trade Representative’s publication of its annual Notorious Markets Review.  That report incorporated a number of the recommendations made by the IACC in late-2020, highlighting the truly global scope of the problems faced by rights-holders online.

To its credit, the 117^th Congress hit the ground running on these issues, seeking to build on efforts begun in the previous Congress.  While numerous bills were introduced in both houses during the past year, the SHOP SAFE Act and INFORM Consumers Act – both aimed at rebalancing the respective roles and responsibilities of stakeholders in policing the online market – have garnered the most attention and support to date. 

The House version of SHOP SAFE was reported by the Judiciary Committee in late-September, but the remaining bills have yet to progress beyond their committees of jurisdiction; and despite an apparent consensus that the current state of affairs is untenable, House and Senate members have yet to reach agreement on a path forward. 

The SHOP SAFE Act (Stopping Harmful Offers on Platforms by Screening Against Fakes in E-commerce Act – HR 5374 / S 1843) would amend the Lanham Act to provide for contributory liability of e-commerce platforms for third-party sales of counterfeit goods, unless the platforms adopted certain enumerated best practices provided by the bill.  The legislation would be limited to sales of goods deemed to implicate consumers’ health and safety.

The INFORM Consumers Act (Integrity, Notification, and Fairness in Online Retail Marketplaces for Consumers Act (INFORM Consumers Act) – S. 936 / HR 5502), meanwhile, would impose requirements on e-commerce platform operators requiring the verification and disclosure of the identities of high-volume sellers operating on the relevant platforms, and vest enforcement authority with the Federal Trade Commission.

One other bill to watch – the Domain Reform for Unlawful drug Sellers (DRUGS) Act (S.3399), introduced by Sen. Marco Rubio in mid-December, takes another approach to combating the illicit online trafficking of pharmaceuticals.  The bill seeks to protect patients from rogue “pharmacy” websites by mandating that registries and registrars lock and suspend domains that are illegally selling drugs online upon notice from a trusted notifier (including the FDA, DOJ, DHS, State AGs, Boards of Pharmacy, and certain nongovernmental organizations).

With mid-term elections looming this November, and amid seemingly ever-increasing partisanship; the road to passing any of these bills will be a difficult one.  We will continue to engage with our colleagues on the Hill however, to stress the importance of addressing these long-standing issues. 

Raising Awareness and Educating Consumers

2021 got off to a quick start with our submission of comments to the U.S. Patent & Trademark Office (USPTO) on January 7^th, in connection with the agency’s development of a national campaign to raise consumer awareness about counterfeiting and piracy.  The USPTO was tasked with creating such a campaign pursuant to the previously-mentioned DHS Report to the President published in early 2020. 

While numerous public- and private-sector groups have undertaken similar initiatives in the past, there has often been a lack of follow-on to determine the type of messaging that various audiences are most receptive to, and that which is most effective in changing consumers’ behavior.  The IACC is broadly supportive of the proposed campaign, but we’ve encouraged (and continue to encourage) the adoption of a data-driven approach to messaging and targeting to ensure maximum impact.

Continuity of Government / Administration Appointments

Following President Biden’s inauguration in late-January, the Administration set to work on the arduous task of filling numerous vacancies in the Executive Branch relevant to rights-holders – among them, Katherine Tai, who’d previously served as chief trade counsel to the House Committee on Ways & Means, was confirmed as the new U.S. Trade Representative in mid-March; and Chris Magnus, confirmed just last month as Commissioner of U.S. Customs and Border Protection.  Several key positions within the Administration remain vacant however, including those of Director of the USPTO, USTR’s Chief Innovation and IP Negotiator, and the White House IP Enforcement Coordinator.  Kathi Vidal, a seasoned litigator, was nominated as PTO Director, but has yet to be confirmed; the nomination of Chris Wilson as USTR’s Chief IP Negotiator has been reported by the Finance Committee, but has yet to receive a final vote on the Senate floor; and no nominee has been announced for the IPEC role.  We will continue to engage with the Administration to urge quick action to fill these and other roles in the new year.

Promoting Modernization and Collaboration in the Enforcement of IP at the Border

The IACC has also been vocal in its support for provisions advanced as part of the U.S. Innovation and Competition Act (S. 1260) which would enhance the ability of U.S. Customs and Border Protection to share information and collaborate with a broader range of stakeholders as part of a more efficient and effective public-private collaboration to enforce IP rights.  CBP’s ability to share intelligence on shipments of goods seized and abandoned in connection with IP violations has been hampered for a number of years by a perceived lack of authority under existing statutes and regulations.  The IACC has been a vocal proponent for expanding and clarifying the agency’s authority, and in November, led a coalition of 10 industry associations in a letter to the Ways & Means Committee calling upon the House of Representatives to follow the Senate’s lead in advancing legislation to address these long-standing concerns. 

We are also engaging closely with colleagues in the Senate on legislative proposals focused on comprehensive modernization of our customs framework.  Sen. Bill Cassidy, who has emerged in recent years as a strong voice on IP issues, began seeking input on proposed legislation late last year; we’re hopeful that, when introduced, his bill will include significant enhancements to the border enforcement regime for IP.       

We will continue to work with our colleagues in the House and Senate to encourage the adoption of commonsense steps to protect rights-holders, and consumers, from the sale of illicit counterfeits, while underscoring the significant harm that results from Congress’ failure to take meaningful steps to curb online trafficking.

The IACC is proud to serve as a voice for rights-holders, and we look forward to continuing our work on your behalf in the coming year. 

If you’d like to contribute to our efforts, please contact Travis Johnson (tjohnson@iacc.org) for further information.