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In light of the foregoing discussion, proposals to shift additional authority from the courts and Congress to the Office should be met with skepticism. Recent years have seen suggestions for the Office to adjudicate small claims,226 resolve fair use disputes,227 and craft exemptions to traditional infringement liability.228 But the Office is poorly positioned to take on these additional obligations. 229 It lacks the necessary expertise and resources. Although it continues to make progresses, the Office is struggling to hoist its registration and recordation systems into the twenty-first century.

Rather than expanding the Office’s portfolio, Congress should consider scaling back its duties. The DMCA rulemaking is an obvious place to start. Short of repealing § 1201 altogether—an option that has considerable merit beyond lessening the burdens facing the Office230—there are a number of steps worth considering. Informed in part by the Office’s prior rulemaking efforts, Congress should significantly expand the existing statutory exemptions for reverse engineering, security testing, and encryption research.231 Moreover, Congress should consider crafting new permanent statutory exemptions. Those might address specific concerns, like repair and unlocking, that have emerged since the DMCA’s enactment.232 Or more broadly, Congress could exempt circumvention that lacks any nexus with infringement 233 or circumvention undertaken by the owner of a device or copy.234 After twenty years, the unintended consequences of § 1201 have become abundantly clear to anyone paying attention.235 Rather than force the Office to plug new holes in the dike every three years, Congress should take responsibility for the over breadth of the anticircumvention rules.

4 The legal question to be resolved by the court is whether the word "should" in the May 18 order connotes futurity or may be deemed a ruling in praesenti. The answer to this query is not to be divined from rules of grammar; it must be governed by the age-old practice culture of legal professionals and its immemorial language usage. To determine if the omission (from the critical May 18 entry) of the turgid phrase, "and the same hereby is", (1) makes it an in futuro ruling - i.e., an expression of what the judge will or would do at a later stage - or (2) constitutes an in in praesenti resolution of a disputed law issue, the trial judge's intent must be garnered from the four corners of the entire record.

[FOOTNOTE]

The options of an independent agency or a stand-alone agency within the legislative branch offer the greatest opportunity for the Copyright Office to design and implement a modernization program that is precisely tailored to its needs. However, these approaches raise other concerns, namely that the Office be subject to sufficient limits to its regulatory authority and appropriate oversight to ensure that the Office does not abuse its authority.

At present, the Copyright Office’s regulatory authority is relatively narrow. The Register is authorized “to establish regulations…for the administration of the functions and duties made the responsibility of the Register under this title.”111 The functions and duties of the Register involve the registration of copyright, recordation of transfers of copyright, the procedures for submitting statements and royalties under statutory licenses, and the procedures for filings for various other purposes enacted by Congress.112 The Copyright Office has no enforcement role (beyond the indirect function of advising the enforcement agencies on technical and legal issues), nor does it have a basis to expand the current scope of its functions and duties through regulatory act. Only Congress can do that. This limited scope of authority distinguishes the Copyright Office from certain existing agencies that have generated significant controversy (and litigation) by forays into expansive rulemaking and enforcement activities. Nor is there any reason to think that Congress would have to enact new legislation to expand the scope of the Office’s regulatory authority as part of any restructuring option.

Despite the existence of these treaties, trademark enforcement still lacks a harmonious global approach.45 The treaties rely on national courts to manage trademark litigation domestically.46 Countries have introduced new laws that directly address various trademark issues.47 However, a purely national approach cannot solve what is an international issue. If the extraterritorial reach of some jurisdictions is not expanded, some infringers will go unpunished and both trademark holders and consumers will be harmed. But merely extending the extraterritoriality of domestic jurisdiction will have detrimental effects on the trademark holders and raise further questions about which body enforces the law.

//DH

II.A-B. The government agrees the Lanham Act does not apply extraterritorially. It suggests that applying the Act to a foreign sale represents a “domestic” application if the “effect” of that sale might be U.S. consumer confusion. That argument is waived and without merit. The Lanham Act requires “use in commerce.” Because the Act’s definition of “commerce” does not extend to foreign conduct, the “use in commerce” must be in the United States.

Despite the seemingly territorial nature of trademarks, the sale of trademarked goods on e-commerce and social media have exponentially increased the amount of cross-border transactions, and therefore also the amount of infringing goods sold online across multiple jurisdictions. Because infringers can reach potential consumers of goods and services anywhere in the world, a tension now exists between the territorial nature of a trademark and the global nature of the potential consumer. The basis for extraterritorial reach is mainly “to either prevent spillovers from extraterritorial activities into the local market (inbound regulation) or to protect and enforce the interests of the rightsholders also in other territories by implementing the local IP regime (outbound regulation).”19

Today, e-commerce and the sale of products occurs on a global scale. Whereas commerce and the trade of goods used to be done almost entirely within a territory or through goods moving across borders, the global supply chain now has many different forms and can cross many borders, jurisdictions, and the online space. While reaching consumers has become easier for sellers, protecting intellectual property has become increasingly complex. Globalization is prompting a reevaluation of this field as the Internet reduces the importance of national borders. Trademarks are particularly susceptible to the effects of globalization because, unlike copyrights and patents, trademark law is perceived, at least in the United States, to “extend across national borders.”1 In this paper, we focus on the enforcement of trademark rights, particularly those used against counterfeiters. We examine the concept of extraterritorial enforcement of trademark rights—the extending of enforcement across national borders—and review how different countries and jurisdictions approach this practice. In order to examine extraterritoriality in this context, we need to review the history and basis of jurisdiction. In the global enforcement of intellectual property rights, a general principle of territoriality exists.2 This principle exists beyond the scope of intellectual property and goes to the root of international law, noting that countries, or nation-states, can only enact and enforce laws within their own territory.3 This concept originates in public international law and can be found in international intellectual property conventions and treaties, such as the Agreement on Trade-Related Aspects of Intellectual Property Rights,4 the Madrid Agreement Concerning the International Registration of Marks,5 and the Protocol Relating to the Madrid Agreement.6 However, while spelling out details of enforcement in intellectual property, these international agreements contain only minimum standards,7 and each individual country must have domestic implementing legislation to enforce that law and fulfill their treaty obligations.8 Once a country creates and implements domestic legislation, the executive, judiciary, or other appropriate government body interprets the laws, which is often where we see the doctrine of extraterritoriality arise.9

Intellectual property (IP) law is a complex and ever-evolving field, with different rules and regulations governing different countries. It is essential to comprehend the distinction between domestic and international IP law to guarantee that your IP rights are secured. Domestic IP law is the set of laws that control intellectual property inside a particular nation. These laws are typically set up by the legislature of that nation and are intended to secure the privileges of people and organizations to their intellectual property.

This incorporates patents, trademarks, copyrights, trade secrets, and other forms of IP. Domestic IP law is usually enforced by the courts of that country, although some countries may have international agreements in place that allow for enforcement of IP rights in other countries as well. International IP law, then again, is a set of laws that control intellectual property across multiple countries. These laws are typically established through international treaties or agreements between countries.

Some considerations can also be made on the interplay between liability rules and competition. As already discussed, liability regimes impact both the fixed and marginal costs a platform faces to operate in the market. The lenient liability regime that online platforms have been subject to in the past years may have helped the existing platforms to grow as well as to become well-equipped and have the financial resources to comply with more stringent liability than entrant platforms. Thus, a more stringent one-size-fits-all liability regime for platforms might further amplify asymmetries in the market.36 To see why, consider a competitive environment in which a big incumbent platform faces smaller potential entrants. A stringent one-size-fits-all liability regime increases the cost of entry and may result in the potential entrants deciding to stay out of the market, which would benefit the incumbent platform. Of course, this platform will also suffer from higher liability costs but this negative effect on its profit may well be outweighed by the positive effect resulting from the increase in entry barriers. This is to the detriment of market participants, who may face higher prices and fewer choices. An interesting analogy can be drawn with the implementation of the General Data Protection Regulation (GDPR) which may have helped big tech giants (Batikas et al., 2021; Gal & Aviv, 2020; Johnson et al., 2020).

First, the size of the platform may affect intermediaries’ costs of detection, monitoring and removal because of possible economies of scale in precautionary measures. Economies of scale may be more relevant in relation to active monitoring than to passive monitoring. As regards passive monitoring, large intermediaries, with more activity or transactions on their platform, likely deal with more instances of illegal material than small intermediaries do. As a result, they are likely to receive more requests to remove content or offers than small platforms. They may have few means to economise on handling these notifications. However, as regards active monitoring, larger intermediaries may be able to benefit from economies of scale. Because of their large scale, it may pay off for large intermediaries to invest in developing or acquiring software tools to identify and filter out illegal content. Large intermediaries can spread the high fixed costs of such software tools over all instances of illegal material, and cover it with their higher revenues. Also, the precision of warnings generated by software tools may increase with the volume of transactions. Investments in advanced software tools might not pay off for smaller platforms, forcing them to do more detection and monitoring work manually, at higher average costs and less precision per instance of illegal material.

Economies of scale are a relevant consideration in deciding on liability rules for intermediaries, also because of the effects on competition these rules may have. The duty of care imposed by a liability rule results in higher costs of doing business for intermediaries. As a possible downside, this may discourage socially beneficial business activity of intermediaries as it increases the cost of operation; see the discussion in Section 3.2.5. below. If the costs to comply with the duty of care are significantly higher for small intermediaries than for large ones, the liability rule may make doing business too costly for small intermediaries. Large incumbents obtain an advantage as compared to small competitors, potential entrants may be discouraged from entering the market and small intermediaries may exit the market. Thus, there may be a trade-off between static efficiency of liability rules and dynamic considerations that include entry and exit of intermediaries in response to changes of the liability regime. In order to prevent a detrimental effect of liability rules to competition, it may be necessary to determine a threshold for some monitoring obligations. Particularly with respect to active monitoring, where scale economies may be more relevant, small platforms might need to be relieved from some obligations. Static efficiency considerations should prevail if the cost inflicted upon all market participants is considered low, while the expected benefit generated by the liability rule is high. In such cases, it may be preferable to apply a liability rule across the board.

Congress also must ensure that sellers that are operating in good faith are not overly burdened by new regulations. Companies that only have a few employees could be put out of business by improper demands by brand owners whereby legitimate products on sale are reported by brand owners who seek to control the distribution channels for their goods. As currently written, SHOP SAFE would empower brands to erroneously report listings that would eliminate competition and lead to fewer choices and higher prices for consumers.

We also oppose the three-strikes policy that would require covered platforms to permanently ban sellers as especially small businesses should be given opportunities to cure and brand owners should be punished for bad-faith takedown requests. Instead SHOP SAFE should include a small seller exception for casual sellers and microbusinesses and the thresholds in SHOP SAFE should align with thresholds in INFORM for consistency.

//DH

CBP = Customs and Border Patrol, TFTEA = Trade Facilitation and Trade Enforcement Act

//DH

CBP = Customs and Border Patrol

//DH

CBP = Customs and Border Patrol

Changing the secondary liability standards also does not address the true cause of counterfeiting—the actual infringer. Although several U.S. agencies have the authority to investigate criminal counterfeiting (as noted above), only 229 counterfeiters were referred to the U.S. Sentencing Commission in the 2019 fiscal year. Indeed, the U.S. Sentencing 24 25 Commission reported that counterfeit offenses decreased by 37.4 percent between the Fiscal Year 2015 and Fiscal Year 2019. But law enforcement agencies—not online services—have the expertise and mandate to investigate criminal counterfeiting. Accordingly, IA respectfully suggests that it might be more impactful to focus legislative efforts on increasing resources allocated to agencies that are charged with investigating and enforcing existing laws against the counterfeiters themselves (an effort that IA’s members are already helping with) than to change the standards for secondary liability.

//DH

CBP = Customs and Border Patrol

//DH

CBP = Customs and Border Patrol

//DH

CBP is also home to the IPR Center, whose role is to coordinate diverse federal efforts related to interdiction, investigation, and outreach to the public and law enforcement.41 As a part of this effort, rights holders, online marketplaces, payment processers, and companies involved in all points across the supply chain regularly meet with members of the IPR Center to share their best practices, concerns, and suggestions. This information could enable further collaboration on complex cross-cutting challenges, including enhanced information sharing, joint enforcement actions, and specialized, targeted training and outreach. For example, Amazon’s new Counterfeit Crimes Unit is already sharing and analyzing data to assist targeted inspections by CBP aimed at preventing counterfeit products from entering the U.S. markets. Amazon is also working with the IPR Center to develop an “information exchange that will enable industry participants—stores, payment service providers, banks, and shipping companies—to better identify and stop counterfeiters before they can reach consumers.”42

//DH

To better address this vulnerability, the Customs and Border Protection Agency (CBP) at the Department of Homeland Security (DHS) should help establish a public-private partnership to share information across brand sellers, online marketplaces, and U.S. enforcement agencies—and foster data-driven strategies to both reduce the spread of fake goods and disable counterfeit networks.

Let’s start by adding “slow” to the term “circular economy”, because language matters.

For our economy to be restorative and generative, not just cycling more and more resources around faster and faster, we need to both: slow the flow and close the loop by reducing production and consumption. This means reversing the waste hierarchy and putting “refuse” (as in, “don’t want it”) and “reduce” at the top of the list. This allows us to tackle consumerism, overconsumption and overproduction head-on while questioning the notion of growth altogether.