Intellectual Property: Collaborative Law Enforcement to Combat Prolific Forgers and Pirates

Counterfeiters and piracy infringers have grown increasingly organized and tech-savvy. Albert Ho, assistant commissioner of Hong Kong Customs and Excise Department (HKCED), who oversees crimes such as faked merchandise and infringed content online, reveals the latest threats facing Hong Kong and how the department adapted to tackle these crimes.

By Nan-Hie In


Albert Ho, assistant commissioner of Hong Kong Customs and Excise Department (HKCED)
Albert Ho, assistant commissioner of Hong Kong Customs and Excise Department (HKCED)

Recently, Assistant Commissioner of the Hong Kong Customs and Excise Department (HKCED) Albert Ho learned he is the winner of a World Customs Organization award on coordinated border management. Homeland Security Investigations (HSI) and Customs and Borders Production (CBP), both US law enforcement agencies that work in collaboration with HKCED on various operations in areas such as intellectual property crimes, had nominated Ho for this accolade.

Humbled by this achievement, the senior customs official who oversees all intelligence and investigation work, reflects upon the award’s theme of “coordinated border management” as the future of combating counterfeiting and piracy, especially digital piracy. “The way ahead is not going to be easy because the problem now is multijurisdictional and transnational, as it’s on the internet,” he says.

It wasn’t always this way. Catching prolific counterfeiters and pirates has always been a cat-and-mouse game, but how the city tackled these issues has evolved tremendously since 1997.

Ho recalls back then when the enforcement approach was more local. At the time, DVDs and CDs had just emerged; around 1,000 small street stores and hawkers mushroomed across the city, selling fake goods and pirated software and films. So a special taskforce was established, which routinely went after these operators four to five times daily. Crime was reduced by 90 percent within 12 months, yet around 100 illegal operators persisted. “The problem was that they have become organized and they knew how to circumvent enforcement,” explains Ho.
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By 2000, amendments in copyright and trademark under the Organized and Serious Crimes Ordinance empowered HKCED to take more aggressive action against organized infringed goods operators. For instance, punishments levied on these syndicates got heavier. “The OSCO [let us] enhance the sentence upon conviction by 50 percent, so if the punishment was 4 years, we can increase it by [another] 2 years.”

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“Today it is difficult to find fake goods in Hong Kong in the physical market. But we still have problems mainly in two areas: [IP crimes via] transshipment through express cargo couriers and the internet,” says Ho. In 2014, the department detected around 850 IP crimes, the bulk of which involved transshipment and the internet; here lies the reality where IP crimes have become multijurisdictional.

HK-US Collaboration

29Unlike most customs agencies around the world, the HKCED has sole authority to investigate and prosecute IP crime in in the city, which means it takes its own initiative when necessary at the border or the market. “We not only have power in the boundary control points to make seizures in counterfeited and pirated goods, but we also have the power to carry out the investigation.” In simplest terms, this regime lets the department do their job effectively, but it’s not enough. Collaboration is needed with other overseas counterparts to crackdown IP violators.

His department works closely with the World Customs Organization and Interpol. Another great overseas partner is the US through Homeland Securities Investigations, Immigration and Customs Enforcement and the Customs and Borders Production. A highly successful example of this HK-US collaboration is through the Swift Intelligence Exchange System.

In the past, counterfeit goods were trafficked through 20-foot containers. According to Ho, now counterfeiters separate the goods into 4,000 small parcels and deliver them through express cargo channels. “That’s why we need to cooperate with overseas enforcement agencies and the express cargo couriers to extend and widen our enforcement effect beyond customs personnel to express couriers, and beyond Hong Kong to overseas,” explains Ho.

For instance, seizure data shared with both sides has helped block the flow of illegal goods through these channels in multiple operations. “Whenever customs in the US intercept any counterfeit products, they will have a report sent to us with all the details of the sender, consignee, description of the goods and so forth.”

“As a result the number of seizures after such cooperation has increased by around 1,000 percent over three years,” he says. In addition, cooperation with the logistics operators was integral to this success, notably DHL, UPS, FEDEX, TNT and S.F. Express. Two more logistics operators will join this network to work with the HKCED.

Electronic Recordation and Triage Centre

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Customs need all the relevant information to investigate and prosecute IP violators; the cooperation with trademark or copyright owners is essential to this process. “Sometimes the problem is, we found counterfeit goods in Hong Kong but cannot locate the owner [of the genuine goods],” says Ho. Their absence can be for many reasons, that this is not their main market or the IP holder overseas is not bothered to fight the case here. But their cooperation is essential to enforce the law.

The Electronic Recordation and Triage Centre was established as a result. A high-definition internet-based television lets rights holder abroad to log in and verify to customs officials if the seized goods are genuine or fake.

For urgent cases, the rights holder overseas can send a 3D printable file of the original product so the HKCED can compare the counterfeit goods with the 3D model of the genuine artifact.

The ERTC encourages rights owners to help Hong Kong customs tackle IP crime in the city, says Ho. “Thanks to the ICE, they have helped us engage with a number of right holders to use the system; we are getting more recordation through the ERTC now,” reveals the customs official. Additionally, the HSI in the US have been coordinating with the HKCED to have US trademark holders record their brands in Hong Kong to help law enforcement to combat cases of infringed goods.

Combating Digital Piracy

The joint efforts extend to the fight against online piracy. A case study example is the In Our Sites, Project Cyber Monday IV operation led by HIS, the National Intellectual Property Rights Coordination Center in Washington, D.C. for ICE, and Europol. The HKCED participated in this operation with the aim of shutting down rogue websites trading infringed merchandise.

This operation net 706 domain names selling counterfeit goods. The Hong Kong counterpart acted on intelligence from the US agencies to seize 16 suspicious domains hosted in this jurisdiction. “Without such cooperation, we could not have shutdown of these 16 domains because the operators of those websites were not in Hong Kong – they never sold any product in the city, they sold goods to other countries,” explains Ho.

According to the assistant commissioner, this is typical challenge in law enforcement worldwide. “Whenever IP crime is happening on the internet, it’s bound to be difficult because one could operate a website set up in country A and country B, but he or she is physically located in country C.” He adds, “Because it involves many jurisdictions, you have to work with other jurisdictions to tackle this problem.”

Amidst this reality, Ho also underscores the need to exchange expertise between different customs agencies. For example, at an upcoming workshop, enforcement officers worldwide will converge in Hong Kong to discuss how to overcome these challenges to protect intellectual property rights. HSI from the US and HKCED in Hong Kong will co-host this IPR Training Workshop slated for June this year.

Online IP infringement has become globalized and organized courtesy of the internet, which has no borders. Ho says, “If you want to tackle internet IP crime, you have to cooperate with other customs jurisdictions or enforcement agencies.”

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