Jeans Makers Want PHL to Remain on Watch List

Posted by Kirhat | Friday, March 01, 2013 | | 0 comments »

Levi Strauss & Co
A Special 301 Review that was just released showed that the Philippines has been taken out of the international piracy watch list category and even elevated to Special Mention level. However, two American jeans makers want the country to remain on the piracy watch list of the Office of the US Trade Representative (USTR). Their reason: the government's failure to TOTALLY make a dent in the market for fake products,

In separate submissions to the USTR during the eview for the 2013 Special 301 Report, Levi Strauss & Co (LS&Co) as well as VF Corp, whose subsidiary The H.D. Lee Co Inc owns the Lee brand, complained about the large presence of counterfeit manufacturers in the Philippine market.

"The Philippines remains on our list of countries of concern. The National Bureau of Investigation, Intellectual Property Rights division and the Philippine court system remain largely ineffective in protecting IPR [intellectual property rights]. The weak enforcement and judicial system has led us to curtail our enforcement work against counterfeiting in the Philippines," LS&Co said in its 8 February 2013 submission.

"Counterfeit goods are sold throughout the country, with little to no enforcement against manufacturers and vendors of fake products. IPR cases continue to languish in the courts due to endemic delays in the judicial system. Neither LS&Co nor other brands have an effective and cost efficient remedy to seek action against the manufacture and sale of counterfeits in the Philippines," the San Francisco, California-based company said.

"Over the past several months, reports of 'overruns' being sold through unauthorized channels have spurred LS&Co to liaise with investigators, government officials and other brands, but we are wary of falling into the historical pattern of high costs yielding little gain. Meager penalties, ineffective enforcement, and protracted delays all contribute to a situation that favors the counterfeiter rather than the legitimate rights holder," it added.

"We are aware of that in 2011, new rules of procedure for intellectual property cases were issued to streamline civil and criminal pre-trial procedures and trials, with a view to making prosecution of IPR cases faster and more efficient. We have not heard whether these new rules have actually been implemented or whether they have had a positive impact on court procedures. We urge USTR to continue to work with the Philippine government to reform its enforcement framework including reform in the judicial system to provide the necessary minimum standards for adequate and effective protection for IPR," LS&Co said.

Besides the Philippines, LS&Co also identified Canada, Costa Rica, Mexico, Thailand, Turkey, Ukraine and Venezuela as markets where fake Levi's are being sold. The company said its products are available in over 110 countries.

The H.D. Lee Co Inc meanwhile has complained about the similarity of the "Lee" trademark with the "Stylistic Mr. Lee" mark being used by Philippine company Emerald Garment Manufacturing Corp.

In 1981, the Wilmington, Delaware-based company filed a trademark infringement complaint against Emerald, and in 2003 sued for unfair competition.

The latest Court of Appeals ruling issued last October upheld the previous 1995 Supreme Court decision that dwelt on the comparison of the two trademarks.

According to The H.D. Lee Co Inc, "the Court of Appeals failed to apply the principles of unfair competition and simply relied on the earlier Supreme Court decision which only dealt with the issue of the trademarks."

"In the 1995 decision, the issue was whether there was confusing similarity between the two trademarks. In the subject unfair competition action, the issue is whether the products of Emerald are confusingly similar to H.D. Lee’s products which involves a review of the overall appearance of the product, trade dress, etc.," the company said in its 7 February 2013 submission to the USTR.

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