Online Counterfeit Good Legislation

I'm always reading about the challenges other corporations face when their goods are resold in the black or grey market or counterfeited. I receive a lot of comments and messages from customers regarding our products being resold on eBay and other online retailers. The products that you see on these sites are the same diverted products you will see in your mass retailer or local grocery store. We do not sell to or guarantee our products available on these sites. I recently read an interesting article about legislation pertaining to stolen and counterfeit goods sold on eBay. US Representative Brad Ellsworth of Indiana introduced legislation last week that would make organized retail crime a federal offense and would make marketplaces like eBay more accountable for stolen goods listed on their sites. Last week, many companies were disappointed that Tiffany lost their suit against eBay for selling counterfeit products. This new proposed law could provide protection for brand equity where no online laws exist. If the law gets passed, online sites such as eBay could be considered "facilitators" for the sale of unauthorized goods.

NRF Vice President for Loss Prevention Joseph LaRocca said, "A significant portion of this bill deals with on-line fencing of stolen goods. On-line auctions and other markets on the Internet provide a Wild West environment where thieves can re-sell stolen property to customers on a national or even international level with virtually no questions asked.


The bill would define organized retail crime as "the acquiring of retail merchandise by illegal means for the purpose of reselling the items" and make such activity - including transportation, sale or receipt of stolen retail goods, - a federal crime. Among other provisions, sale of stolen or counterfeit gift cards, or items with faked Universal Product Codes or Radio Frequency Identification chips would be considered fraud. Those found guilty of committing or facilitating organized retail crimes would be subject to appropriate existing fines, prison terms and forfeiture, and the legislation would require the U.S. Sentencing Commission to review its guidelines for cases involving such crimes.

I'm not sure what this could mean as we continue to battle diversion, but I'll definitely be following this story.