On Oct. 13, President Donald Trump signed a “Memorandum on Stopping Counterfeit Trafficking on E-Commerce Platforms Through Fines and Civil Penalties.” This memorandum builds on his prior Jan. 31 executive order, discussed in the first article of this series, on the increased focus in 2020 on combating the sale of counterfeit goods.
The president’s latest memorandum seeks to focus enforcement efforts on e-commerce platforms selling counterfeit goods. As part of this policy, he aims to “pursue legislation that would clarify and strengthen the executive branch’s authority and increase its resources to deter and address counterfeit trafficking on e-commerce platforms.” The memorandum implores the secretary of Homeland Security and the attorney general to consider taking appropriate actions to seize counterfeit goods imported into the United States in connection with a transaction on an e-commerce platform and impose the maximum fines and civil penalties permitted by law on any e-commerce platform that is in any way connected to the importation. Additionally, the president directs the secretary of Homeland Security, consulting with the attorney general, to develop a legislative proposal to promote the objectives of the memorandum within 120 days. The proposal will therefore be due on or before Feb. 10, 2021.
The SHOP SAFE Act, discussed in our previous article, is still currently before the House Committee on the Judiciary. This bill also seeks to hold e-commerce platforms liable for the sale of counterfeit goods on their sites. It will be interesting to see whether the secretary of Homeland Security puts forth a similar proposal to the SHOP SAFE Act or one that is broader in scope and seeks harsher penalties. Under the current draft of the SHOP SAFE Act, an e-commerce site is only liable if it fails to adopt the 10 best practices and the counterfeit goods are ones that implicate health and safety. The secretary’s proposal could extend a similar type of legislation to all counterfeit goods given the policy outlined in the Memorandum of including intellectual property rights holders, businesses and workers in the list of individuals it seeks to protect. Stay tuned for an article on the proposal once it issues.