3 Questions For A Counterfeit Crimes Crusader (Part II)

This week, I continue my written interview with the Director of Amazon’s Counterfeit Crimes Unit, Kebharu Smith. Last week, he shared how impactful the work of the CCU can be in assisting brands looking to protect themselves on Amazon’s store and beyond. The combination of Amazon’s resources — including its anti-counterfeiting expertise — and a willing brand invested in policing counterfeit activity is a powerful one. It is heartening to see such a major company so willing to do what it can to stop counterfeiters, even when the tide of counterfeits can seem like it will never abate.

Now to the remainder of my interview with Kebharu. As usual, I have added some brief commentary to the answers below but have otherwise presented his answers to my questions as he provided them.

Gaston Kroub: How can the IP community — lawyers, brand owners, and others — help fight counterfeiting at the source?

Kebharu Smith: Unfortunately, counterfeiting remains a persistent threat around the world. The Organization for Economic Cooperation and Development (OECD) estimates that pirated and counterfeit products make up 2.5% of world trade — that’s $464 billion a year — equal to the gross domestic product of the country of Belgium. Counterfeiters deprive brand owners of the value of their intellectual property and compete unfairly with honest entrepreneurs. Moreover, counterfeiting can be a predicate crime to far more nefarious activity, including drug trafficking, child exploitation, and terrorism. Counterfeiting is a crime in most countries, but for too long, counterfeiters have not been held accountable. As a result, they have continued to seek out any opportunity — including preying on consumers during a pandemic — to try to trick people into buying their fake goods.

Together, we can more effectively detect and stop counterfeiters, which allows us to better protect customers and rights owners. A few areas we can do this are:

• Holding counterfeiters accountable: Amazon continues to innovate on its robust proactive controls and tools for brands, and won’t rest until there are zero counterfeits in the Amazon  store. However, this is an escalating battle with criminals that continue to look for ways to sell counterfeits, and the only way to permanently stop these counterfeiters is to hold them accountable through the court system and criminal prosecution. Last year, we provided in-depth referrals and evidence of over 250 counterfeiters for criminal investigation in the U.S., U.K., the EU, and China. We also filed civil litigation against 64 counterfeiters in U.S. courts.

In November 2020, we filed a lawsuit against social media influencers who ran a social media counterfeiting scheme to promote and facilitate the sale of counterfeit luxury fashion goods in Amazon’s store. We reached a settlement last year and as part of the settlement, the influencers, Kelly Fitzpatrick and Sabrina Kelly-Krejci, will make settlement payments to Amazon, which will be donated to charities including the International Trademark Association’s (INTA) Unreal Campaign, a consumer awareness initiative to educate 14- to 23-year-olds about the importance of intellectual property rights.

• Use Amazon’s brand protection tools: Brand owners can’t be in all places at all times. Our brand protection tools give brand owners the ability to protect their brands and IP around the globe. Brand owners know their products best. They know their logos, patterns, and intellectual property inside and out. They can partner with us through tools like:
  • Brand Registry — a free service that gives a brand owner, regardless of whether they sell in our store, more control over the text, photos, and content on detail pages for their products. We can more effectively protect the brand through automated protections that leverage machine learning and the data brands provide in Brand Registry. Brands can also find and report suspected infringement quicker. Brands are, on average, reporting 99% fewer suspected infringements than before the launch of Brand Registry.
  • Transparency — a serialization service that protects each individual product unit. Brands apply a unique 2D code, similar to a QR code, to their products, and we scan the code to verify authenticity before shipping it to a customer. If a product fails this authenticity check, it is immediately set aside for further investigation. Transparency enabled the protection of more than 500 million product units.
  • Project Zero — combines Amazon’s advanced technology with the sophisticated knowledge brands have of their own intellectual property and how best to detect counterfeits of their brands. In 2020, there were more than 18,000 brands enrolled in Project Zero. For every one listing removed by a brand through our self-service counterfeit removal tool, our automated protections removed more than 600 listings through scaled technology and machine learning that proactively addresses potential counterfeits and stops those listings from appearing in our store.

GK: The sheer depth and breadth of resources that the CCU brings to the fight against counterfeiters is astonishing. At the same time, there will always be a role for brand owners and their counsel taking proactive steps of their own to identify, isolate, and use legal mechanisms to try and shut down counterfeiters. As IP lawyers, it behooves us to remain collectively vigilant about counterfeit activity, even if it does not directly affect our clients in any given situation. As lawyers trained in IP, we are often in a real position to help identify counterfeit activity that may have until that point evaded detection. We should each take that responsibility to heart.

GK: Tell us how your prior government experience has helped you in your current role at CCU?

KS: Our whole team brings government experience to their roles as the CCU is made up of former federal prosecutors, experienced investigators, data analysts, and others with expertise in catching and prosecuting criminals with the goal to ensure customers never see a listing with a counterfeit or infringing product.

Prior to joining Amazon’s Counterfeit Crimes Unit, I worked as a senior trial attorney with the Department of Justice – Computer Crime and Intellectual Property Section (CCIPS). While at CCIPS, I worked with rights owners to help them protect their intellectual property from trademark counterfeiters, copyright pirates, and trade-secret thieves, using federal criminal statutes. For example, I partnered with Apple to pursue criminals who were participating in a ”return fraud scheme” by shipping counterfeit iPhones to the U.S. from China that were being swapped for authentic iPhones from Apple stores. The bad actors used a scheme that identified IMEI numbers that were tied to warrantied Apple iPhones. Once they received the legitimate iPhone from Apple, they would ship the phones to China. Prior to my work with CCIPS, I worked as an assistant United States attorney (AUSA) in the USAO – Southern District of Texas (Houston Division), where I prosecuted a range of federal criminal offenses from violent, IP, and white collar crime. I began my legal career as a Texas state prosecutor.

During the course of my career as a prosecutor, I trained judges, prosecutors, and law enforcement all over the world on case investigation techniques, electronic evidence collection, and effective ways to partner with brands in IP investigations. I’ve been able to provide this same training to our team at Amazon to help brands protect their IP.

GK: There is no doubt that Kebharu has plenty of additional colorful stories to share about his exploits both directing the CCU and in his prior government experience. If anything, the effort described above where he partnered with Apple provides even more validation for the idea that public-private partnerships can be potent tools in the fight against counterfeiting. It is no surprise, therefore, that Kebharu and his CCU colleagues are bringing that same sensibility to their partnerships with brand owners big and small against counterfeiters. In my view, there is no doubt he is the right man, in the right role, at the right time.

My thanks to Kebharu for the insights and cooperation, especially for his willingness to do this interview right at the beginning of the year. I wish him and his colleagues at Amazon’s CCU the best of luck in 2022 with their important efforts. There is no doubt that solving the problems posed by counterfeiters requires the participation of professionals across the IP spectrum, working together with brand owners and retailers like Amazon to try and improve matters for customers. Here is hoping that the CCU will continue to find success in its efforts.

I am always open to conducting interviews of this type with other IP thought leaders, so feel free to reach out if you have a compelling perspective to offer.

Please feel free to send comments or questions to me at [email protected] or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

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Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at [email protected] or follow him on Twitter: @gkroub.