In Part 1, we addressed the pros and cons of molding your mark directly into your goods in the context of 3D printing. In Part 2 of this series, we evaluated potential benefits and pitfalls that businesses may encounter when applying a mark to products at a later stage in manufacturing (e.g., via sticker or ink-printing). Here, we will look at two counterfeiting scenarios: Case 1, in which your mark has been molded or 3D printed into your product, and Case 2, in which your mark is ink-printed on your product.
In both scenarios, you have no utility patents, design patents, trade dress, or copyrights with which to protect your product. Of course, this addresses a particularly limited situation. However, a great number of businesses find themselves in a similar position. Not all products can be patented. Not all products are proper subjects for trade dress or copyright protection.
In both cases, along comes a so-called “counterfeiter” who obtains a specimen of your product, scans it with a 3D scanner, and starts making copies. In Case 1, the 3D scanner acquires a scan of your mark on your product. The copies made by the counterfeiter in Case 1 therefore also include your mark, leading to clear-cut trademark infringement. However, in Case2, the mark is not detected by the 3D scanner, and is therefore not included on the copies.
Although distasteful to most businesses, in Case 2 the “counterfeiter” may be more accurately called “a completely legitimate product manufacturer who has broken no laws by copying your product because there can be no infringement of your non-existent intellectual property.” Essentially, if you have no other IP which could be infringed and if the copies do not otherwise include your trademark, then you have no basis to force the “counterfeiter” to stop and/or pay you damages. There has been no counterfeiting, and the person is not a counterfeiter. You are simply left competing with (likely) cheaper imitations of your own product, and there is little you can do about it.
As 3D printing becomes more common and less expensive, a company’s decision to mold or ink-print its mark may determine whether trademark infringement is likely to occur. Interestingly, counterfeiting and trademark infringement may be more likely to occur with a product having a molded mark. This is diametrically opposed to realities of only a few years ago.
So what are the pros and cons of Case 1 and Case 2? The major negative of Case 1 is: your trademark rights are being infringed. Your mark and goodwill are damaged, consumers were confused, and now you have to spend time, money, and effort to enforce your rights. However, in theory, a potential positive of Case 1 is: you will be entitled to damages and an injunction. Let’s say the counterfeiting occurs in a geographic area in which you have no presence. The counterfeit products may have reached consumers to which you have no access as yet. By counterfeiting, sales have been made by consumers who would not otherwise have purchased your products. In such a situation, by acquiring damages from the counterfeiter, you may actually increase your revenue, to the detriment of your trademark rights and associated goodwill. This assumes, of course, that you are able to extract damages from a counterfeiter.
In Case 2, no trademark infringement has occurred. That is certainly a positive. However, no infringement or legal violations of any kind have occurred. You may have no remedy against the “counterfeiter,” and no ability to prevent continued copying or obtain any sort of compensation.
So which is worse? Having no remedy against someone who is 3D printing cheap copies of your otherwise unprotected product without using your trademark? Or having to deal with the horrors of trademark infringement, but with the option to actually obtain an injunction and damages? Are the headaches and damage to your mark and associated goodwill worth the monetary damages and injunction you’ll receive? Frankly, probably not. Even in Case 1, with the newfound agility that 3D printing affords, the counterfeiter could simply come back the next day with a modified CAD drawing that excludes your mark, and keep right on printing the product. Now, all of a sudden, you’re in Case 2 and there is no possibility of a further injunction or damages.
Simply put, 3D printing has made the copying of products easier. Although trademark protection could serve as a basis for damages and an injunction, a smart counterfeiter can easily circumvent trademark protection. This just highlights the importance of a well-rounded IP strategy involving patents, trademarks, copyrights, and trade secrets.