Earlier this year, in the wake of online protests, votes on federal versions of anti-counterfeiting bills were postponed. With the federal government unable to get a handle on counterfeiters, California decided to take matters into its own hands. Last week, the California Senate Appropriations Committee unanimously passedS.B. 1185 which would establish a centralized intelligence partnership targeting counterfeiters.
The partnership includes nine state agencies working together to exchange information to investigate and prosecute counterfeiters, smugglers and other illegal operators in the “underground economy.” Support for the measure stems from a focus on the economic impact counterfeiters have on the California economy. Aside from stifling innovation, counterfeiters and other operators in the underground economy avoid paying taxes in order to increase their profit. It is estimated that California loses approximately $8 billion dollars in tax revenue annually from such transactions. The committee hopes that taxes can be recaptured more efficiently by working together, decreasing investigation time and prosecution.
While the federal bills are on hold indefinitely, the California bill heads to the full Senate for a vote later this week. With the vast majority of people agreeing that counterfeit goods and piracy are significant problems, California’s proposed cross-agency initiative might just be the solution.© MICHAEL BEST & FRIEDRICH LLP