Canadian Lawyer InHouse

17 CANADIANLAWYERMAG.COM/INHOUSE JANUARY 2017 chased from us directly through our whole- sale channel but are then sold down the line without our knowledge and consent to unauthorized retailers. That means our products are ending up in places they are not supposed to be such as discount stores, and that really devalues our brand. We take that really seriously." How a company like Hershel goes about fi nding grey marketers has changed rapidly in the last few years. About 10 years ago, a company could confront a grey marketer at a bricks-and-mortar store and deal with it. But the Internet has changed the game so much and makes it so easy for unauthorized sellers and counterfeiters to sell knockoffs. "They can sell a lot more product and replenish product than they were before and pass on the cost savings to consumers," she says. Jamieson has been challenged by her management team to fi nd brand protection solutions outside the traditional legal mod- el. And in the age of online proliferation of grey marketers, chasing them down can feel like playing a game of Whac-A-Mole. "There's obviously a time and place for intellectual property litigation and we do use it as a tool, but it is costly, time con- suming and ineffi cient," she says. "By the time it gets down the chain of litigation into discovery, if they were ever to go to trial, that infringer may be scared off but 20 more have popped up. That's an ineffi cient model for us." As Hershel has an intellectual property portfolio in 70 different countries, the grey-market and counterfeiting rules are different in each country. That means Ja- mieson relies on good external counsel in Canada and foreign associates worldwide to advise on the matters they have. Herschel uses a third-party service pro- vider called NetNames that monitors on- line marketplaces and social media sites using algorithms that crawl the web look- ing for specifi c trademark search and logos. Their tools locate unauthorized product sales all over the world in online market- places such as Amazon, eBay and Chinese marketplaces such as Taobao. "The founders were recently on a trip to China and met with people from Tmall, an Alibaba platform, and they suggested to us they sold $7 million of Herschel product in China last year," says Jamieson. "We don't sell any authentic product on Taobao, so that gives you a sense of the level of the problem we are facing here. So we are able to use technology to help us stay one step ahead of these very sophisticated infringers." NetNames searches the Internet and fi nds the fake product. It then provides people who are dedicated to the brand for a certain number of hours per week to go through the enforcement and takedown process for the company. "Being the only lawyer here, for me to try and do that would be impossible to stay on top of it all. In the fi rst six months alone, they took down 20 million units of unau- thorized Herschel merchandise. If we did a rough translation, it was over $620 million worth of counterfeit, grey-market and fake products from the Internet," says Jamie- son. "That gives you an idea of the size and scope of the problem we are facing." In the U.S., there are also legal service providers who work on contingency to fi nd fake domain names that use trademark phrases in the domain name selling coun- terfeit goods. They keep them in a portfolio and litigate them all at the same time, about once a quarter or once a year. They take them to courts in the U.S. and the courts will award damages. Herschel has been working with a law fi rm in Chicago on the preliminary search- es on Herschel-related counterfeit domain names, but they aren't yet at the point where they have fi led any actions. "Sometimes, it's a bit of a misnomer be- cause the damages awarded can be high and so good luck in enforcing the judgment, but they have been successful in freezing their PayPal accounts and taking an accounting of profi ts," she says. "These fi rms will actually turn legal departments from a cost centre into profi t generator and send them cheques once a quarter," she says. "It's that type of inno- vative thinking I've been impressed with. The cool thing about anti-counterfeiting and anti-grey-market IP enforcement mea- sures is that there is this whole cottage in- dustry that has grown up around allowing me to do other things and focus internally as they run with it." IH Being the only lawyer here, for me to try and do that would be impossible to stay on top of it all. In the fi rst six months alone, they took down 20 million units of unauthorized Herschel merchandise. If we did a rough translation, it was over $620 million worth of counterfeit, grey-market and fake products from the Internet. KATIE JAMIESON, Herschel Supply Co. ROBIN KUNISKI

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