March 8, 2025 • 20 mins
Counterfeiting stands as one of the most pervasive threats to innovation and brand integrity today. Mario Milano joins Craig Andrews to unpack this complex issue, revealing how counterfeiting extends far beyond luxury handbags to potentially dangerous pharmaceuticals, electronics, and consumer products that bypass crucial safety regulations.
The conversation takes a deep dive into how counterfeit products dramatically impact the research and development cycle of legitimate businesses. When counterfeiters steal market share and force price reductions, companies lose the profit margins necessary to fund tomorrow's innovations. Milano explains the powerful role the International Trade Commission plays in stopping imported counterfeit goods at the border—a faster alternative to traditional litigation that many businesses overlook.
Technology has transformed counterfeiting in alarming ways. What once required weeks of reverse engineering can now be accomplished in hours through 3D scanning and printing. Meanwhile, artificial intelligence introduces new complexities to intellectual property protection, as the USPTO continues to require significant human contribution for patent eligibility. Milano offers practical strategies for protecting your innovations, including filing provisional patents throughout the development process rather than waiting until completion, and consistently monitoring online marketplaces where counterfeits typically appear.
Whether you're a startup founder or established business leader, understanding how to defend against counterfeiting isn't just about protecting today's revenue—it's about preserving your ability to innovate tomorrow. Visit MilanoIP.com to learn more about securing your valuable creations from those looking to profit from your hard work.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:02):
And welcome to this episode of Secure your Creation
podcast.
I am Craig Andrews and this isMario Milano, my co-host.
Today, we're going to betalking about something that's
actually very true and dear toMario, which is talking about
counterfeiting.
Counterfeiting is a veryimportant aspect of IP because
it's something you have toconstantly keep an eye on.
(00:23):
So, mario, welcome, and let'sget into this.
So kind of give me anunderstanding of what
counterfeiting is in the IPspace.
Speaker 2 (00:32):
Yeah, so counterfeiting is typically when
somebody tries to pass thegoods of another person, when
they try to pass the goods offas their own.
So we see a lot of times peoplewant to counterfeit goods that
have a high profitability, soyou can think of like designer
handbags, things like thatPeople want to.
(00:52):
The materials required to makesomething like that are not that
much, but the brand behind thedesigner bag is worth a lot of
money.
So by passing your goods off asa high-end designer handbag,
the profit margin can be great.
And so when you'recounterfeiting, you just want to
(01:13):
capitalize on the brand name ofsomebody else and pass their
goods off as your own.
Speaker 1 (01:18):
And so you mentioned the brands.
In terms of fashion brands, arethere other industries that are
vulnerable to counterfeiting?
Speaker 2 (01:26):
Yeah, we've seen counterfeiting in a lot of
different areas.
One of the, you know, some ofthe more dangerous aspects are
you know they can even bedangerous to your health, right,
like you think about fake drugsor fake lotions or things like
that.
You know, things that eitheryou're ingesting or you're
applying to your body topicallythat can lead to sickness, death
(01:48):
.
You know, because if it's acounterfeit drug there's no fda
regulation there.
It's just somebody else iscooking up whatever drug or
lotion that they want tocounterfeit and, you know,
hopefully it meets the samestandards that the fda applies.
But you know it might not andin that situation mean not only
is the counterfeiter, stealingthe profits and revenue of the
(02:11):
actual brand owner.
But you know they're puttingeveryone at risk.
Speaker 1 (02:15):
Wow, and I didn't think about it from the drug
perspective.
Are there other industries thatmaybe exist, like so?
For instance, just the otherday my wife and I we went to a
CVS and saw kind of you know, asseen on TV, and I'm going wait
a minute that thing is nodifferent than this but it's
(02:36):
just here.
Speaker 2 (02:36):
You know what's your take on that?
Yeah, that can certainly happenin all industries.
You know, I like the as seen onTV commercials.
They're usually prettyentertaining, energetic to say
the least.
And so these products, yeah,you know they'll just copy
whatever they see that's outthere and it could be any
industry.
You know, I've seen it inelectronics, we've all seen it
in electronics.
Right, you go on Amazon or eBayand you're looking for a phone
(02:57):
charger and you know theofficial Apple charger.
You know that might be 30 bucks, or you can see the one that's
right next to it that basicallylooks the same for $10.
And so you know, sometimes youbuy the $10 one and hope it
doesn't blow up your phone orcatch fire, but sometimes it
does.
And I saw it a lot when thehoverboards had first come out,
(03:18):
and they were.
The hoverboards were reallypopular and you know they were
some of the counterfeit ones.
Not only were they directlycopying competitors goods, but
they were also using cheapercomponents inside of it.
So you know that was leading tofires, explosions, and you know
you can see how that would bedangerous, absolutely,
absolutely.
Speaker 1 (03:36):
And so, taking that case in terms of like an Apple
to your example, you knowthere's a lot of companies that
rely on research and developmentto grow their business.
You know, give me an idea ofthe impact of counterfeiting
against a company who relies onresearch and development.
Speaker 2 (03:52):
Yeah, you know that's .
One thing that a lot of peoplemight not appreciate is that the
R&D money has to come fromsomewhere, right, and so these
companies that have a long R&Dcycle that takes a while to
develop a new product, make itprofitable, make it safe for
everybody to use.
That takes a lot of R&D, ittakes a lot of money, and so
once they finally start sellingtheir product and making money,
(04:14):
that's what is going to pay forthe R&D for the next product.
And so when we have people thatare out there counterfeiting,
that's stealing theprofitability of the R&D cycle.
So, number one, the companyisn't going to have as much
money to pour into the nextround of products and number two
, it's going to discourage thebig companies from even trying
to do any r d, because they'lllook at it and say, well, why
(04:35):
should we spend all the moneyfor the r d?
why don't we just wait forsomebody else to, you know, come
up with a great new product andthen we can just use our
economies of scale, becausewe're a large company and make
whatever products cheaper,faster and you know find some
improvements to do it, and sowhat I see is, instead of taking
that approach, which nobodywould appreciate, I see
(04:58):
companies, larger companies, endup, they file for intellectual
property protection and thenthey can go to something like
the International TradeCommission when counterfeit
goods are coming from outsidethe US.
The ITC, as it's called, will,once you have your registered
intellectual property, the ITCwill then look at any goods that
are coming from outside the US.
The ITC, as it's called, will.
Once you have your registeredintellectual property, the ITC
will then look at any goods thatare coming into the country,
(05:19):
and if it's a counterfeit andit's infringing your
intellectual property, the ITCwill hold onto it until
everything gets sorted out, andso you know it's a very
effective way of preventingcounterfeit goods from coming
into the country.
It's also helpful that you knowif somebody is infringing your
intellectual property in the US,you know, you send them a cease
and desist letter, you file alawsuit against them, you try to
(05:42):
enforce your patent.
That way it can take a littlewhile.
If it's coming from outside theUS and the ITC seizes it, it's
just a much quicker process andeven the whole enforcement
mechanism at the itc is is a lotmore rapid than it is for other
types of proceedings.
So you know, if you are acompany that is having your
(06:02):
products imported or you thinkthat your competitors might be
importing their products whichis pretty common for a lot of
manufacturers then youdefinitely want to have your
intellectual property squaredaway and you know, be familiar
with the process at the ITC.
Speaker 1 (06:16):
Wow.
So one of the things that wetalked about as well is you
referenced the larger companies,right.
So those companies that are outthere that might be saying, hey
, get your trademark for 100bucks or get your something for
250, you know something verysimple.
How is a small business guy whomight be looking at that, what
is?
What is advantages legally dothey have?
Speaker 2 (06:38):
Yeah, so those deals seem pretty good.
Right, it's a very low priceand all of a sudden you can get
a trademark.
Unfortunately, you know, like alot of things in life, it's not
quite that simple as far asgetting a valuable trademark.
You know those types ofcompanies that are offering
these really low prices.
They're not going to do any ofthe background work or any of
(07:00):
the legwork before filing thetrademark, which is crucial if
you're going to be launching anew brand.
And the background work isreally, you know, conducting a
search and making sure thatnobody else has a trademark,
making sure that you're notgoing to be infringing anybody
else's trademark and making surethat your trademark is going to
be registerable.
Because when we're going to befiling a trademark and we do
(07:20):
that search, we look at all theother trademarks that are out
there, whether they're pendingapplications or registered marks
, and we determine you know, wehave a pretty good idea of
whether your mark is going to beregisterable or not.
And so once you actually thenonce we go ahead and file it,
you know we, we feel prettyconfident that you're going to
be able to make sure you getthrough.
The worst thing is, you knowyou go to one of those companies
(07:43):
, you file your trademark forvery cheap.
Then you find out, you know,close to a year later, number
one, your trademark is notregisterable and number two,
you're getting a cease anddesist letter from somebody else
saying you know you have tostop using that name because
you're infringing our trademark.
Now you have to go through awhole rebranding process, apply
for another trademark, which cancertainly cost you a lot of
(08:05):
time, energy and money.
So you know you have to becareful when you're going with
those types of companies.
They're not, typically they'renot doing any of the background
work that's going to be all onwhoever's coming up with the
trademark and paying them topilot for them.
They're really just I'll takewhat you give me, I'll pilot for
you with the USPTO and that'sall I'm going to do.
Speaker 1 (08:26):
So, ultimately, what you're trying to say is you get
what you pay for.
Speaker 2 (08:29):
Yeah, yeah.
Speaker 1 (08:31):
You get what you pay for.
Yeah, yeah, you pay for it.
So my next question here relieson uh, the obviously
development of technology.
So in an e-commerce space, in auh technology space like 3d
printing you mentioned before inreference to cheaper components
, but 3d printing is here tostay for sure yeah, how do you
(08:53):
see in your space where 3Dprinting and patents come into
play?
Speaker 2 (08:58):
Yeah, so 3D printing has really changed everything as
far as manufacturing isconcerned.
You know, maybe 25, 30 yearsago, maybe more, if you wanted
to counterfeit something, youhad to look at a product, see
all the components that make upthat product, and then either
you, know, find a way to makethe parts for it.
And you know, first you had to,like, measure each part and get
(09:21):
all the dimensions andeverything like that, and then
figure out you know, make eachpart and then assemble the whole
thing.
Then, as time went on, then theystarted to get, you know, two
dimensional sc and thenthree-dimensional scanners,
which made it very easy todetermine the exact measurements
and what size all the partswere.
And then now that we have 3Dprinting, now you can take your
(09:42):
3D scanner.
You know you have thiscomponent, you put it under the
3D scanner, you see what size itis and everything like that.
You take that information, handit over to the 3D printer and
that can just print out thatproduct.
So you know, it went from likea couple of weeks or a couple of
months to get a counterfeitproduct.
Speaker 1 (10:03):
And now you know a couple hours and you could have
a counterfeit product ready togo.
And so now let's turn it to alittle bit more economic.
So from having your patent,let's say you're a business
owner and you have a patent thatyou have now registered and is
fully available.
Tell me about the taximplications of having a
(10:23):
counterfeit out there.
I know you're not an accountant, but do you have any studies or
case studies that you'veexperienced in terms of that?
Speaker 2 (10:29):
Yeah, so one of the immediate things that we see
when a counterfeit productenters the market is the profit
margin on the actual good isgoing to go down.
Right, you get a patent, youhave a monopoly on your product,
you can charge as much as themarket will bear for your
product, and so profit marginsare usually pretty high.
And that's the tradeoff thatthe USPTO says look, if you file
(10:51):
your patent application, youteach everybody how to do it.
You get this monopoly on yourproduct for 20 years and you can
charge as much as you want.
And so you know you're charginghigh prices, higher prices, if
you want.
Then the counterfeit comes onthe market.
Now, all of a sudden, you haveto reduce your price in order
just to compete with thecounterfeit product, in order
just to compete with thecounterfeit product.
(11:12):
And so again, like we said,with the R&D cycle and
everything, once the counterfeitis out there, your profit
margins are going to go down,and then you're just not going
to have as much money for yourfuture activities.
Speaker 1 (11:25):
That makes sense and you know everything ties
together.
It's sort of like the Lion Kingright, the circle of life.
It all ties together in afunction of how one thing works
with another and helpingincrease the size of your
business.
And the valuable piece of it ishaving that patent makes your
business even more valuable ifyou're looking to grow your
business.
So just for the people in theback right Quote unquote the
(11:48):
people in the back or thelisteners in the back in the
back or the listeners in theback um?
Give me a clear definition ofthe difference between the
counterfeiting and the copyrightand, I'm sorry, the um ip
infringement yeah.
Speaker 2 (12:02):
So to me, you know, counterfeiting is where you're
just blatantly copying somebodyelse's product and trying to
pass it off as your own.
Uh so um, counterfeiting is ispretty, is something that in
trademarks, you know, we wouldsee that a lot, where somebody
is just copying the exact sameLouis Vuitton logo and slapping
it on a handbag and trying tosell that as their own
(12:25):
Intellectual propertyinfringement.
There's other flavors of it.
Some of it isn't quite asnefarious.
People aren't doing it onpurpose.
Somebody has a widget and ithas a patent on it.
You come out with a competingwidget.
You don't copy the exact design, but you want to get something
close because you want to dokind of the same thing Sometimes
you do run a foul there and itends up being something that
(12:48):
would infringe somebody else'spatent.
Speaker 1 (12:50):
But you know, you're not necessarily doing it on
purpose.
Speaker 2 (12:53):
And also, you know, the thing with patents is it
doesn't matter if you know thatsomebody else's patent is out
there or not.
So sometimes you end upinfringing somebody else's
patent just because you haven'tdone a patent search.
You know which?
Of course, I recommend that youdo a patent search before you
release any new products, but ifyou didn't do a patent search,
you might be infringing somebodyelse's patent without being
(13:15):
aware of it.
To me, counterfeiting is likeyeah, we know that that other
thing is out there and that'swhat we're trying to do.
We're trying to copy that exactproduct and have other people
think that the product thatwe're selling is from the actual
brain donor.
Speaker 1 (13:27):
And I know that in a lot of situations, especially
going forward, technology ismoving so fast that you might be
in a position where you'repotentially infringing somebody
who just got to the door beforeyou did.
And then you go back to thedrawing board again because all
of those different measuresthat's in place to make sure
that you don't infringe uponsomebody else's copyright.
Speaker 2 (13:48):
Yeah, and that's a very good point.
Um you know, with some of thesetechnologies that are just
coming out rapid fire then, umyou, know when you file your
patent application.
It doesn't get published for 18months, so you know somebody
else might already have theirpatent application in there that
you're just not aware of.
You come out with a new productand then you know, six months
later they're patent grants andall of a sudden you're
infringing, and you had no ideait was out there because it
(14:10):
hadn't published yet it wasn'tpublicly available.
So even if you did a search,there was no way that you could
have known about it, and sosometimes it just happens.
Speaker 1 (14:18):
So the big term today , in 2025, so far is AI.
Right.
How is AI in the counterfeitand AI in the IP space?
What have you heard about AIand how can you use it?
Tell me about it.
Speaker 2 (14:31):
Yeah.
So as far as you know gettingyour own patents or trademarks
or any intellectual property forsomething that came from AI,
you know the USPTO is a littleleery on how much you can use it
.
You know they really want tosee that it was a person who
developed the invention.
You know for a patent that youcan use some AI, but it really
(14:54):
needs the actual human has to bethe person who really
contributes a lot to the idea.
And so you know there's notlike a set rule on.
You know it has to be 65% or 80.
It's kind of a fluid test.
But you know if you come upwith an idea solely using AI,
you're not going to be able toget a patent on that and
(15:15):
copyright as well.
So that's something that's beeninteresting.
As far as like software isconcerned, you know a lot of
coding now is done by AI.
You tell it what the softwareprogram to do and the AI can
just code that for you, whereasit used to be a person doing it.
So you would already have acopyright on that and it would
(15:36):
automatically usually employmentagreement would automatically
assign that copyright to thecompany.
So then if the coder left thecompany, they couldn't just copy
the code because the companyalready had a copy.
Now with AI, if somebody isjust putting all that into AI,
(15:56):
getting the software code fromthere, there's not really
anything that would prevent theperson from the person who
leaves the company.
You know, there's nothing thatwould prevent them from just
copying that code.
Speaker 1 (16:05):
Yeah, and it's getting real tricky now, right?
So this is why I'm a big fan tobe done properly and made sure
that you have somebody trustedenough to do it right for you
(16:34):
and consult you back and forthwhich Mario does to make sure
that when you go through thiswhole process as painstaking as
it may be, because we're in avery big rush society now we won
everything yesterday you don'twant to get to the end of that
track and then all of a suddenrealize you got to start over as
best as possible.
It happens, but as best aspossible.
Talk to a little bit about that, if you can.
Speaker 2 (16:56):
Yeah, so yeah, you want to, like you said, get
everything done and get it filedright away, but the more we can
take our time and think aboutokay, this is what the product
does today, but what's theproduct going to do tomorrow?
What is?
What are your competitors doing?
Let's talk about.
You know, when your competitorssee what you're doing, how are
they going to try and compete?
Are they going to try and makesomething faster, more features?
(17:19):
Are they going to try and makeit cheaper?
You know these.
When we can take a holisticview of what you're doing and
what your competitors are doingnow, we can really start to
build in options for how we'regoing to.
You know, craft your patentapplication and make sure that
we can.
You know, not only do wecapture what you're doing, but
we cast a wide net around whatyou're doing to make sure that
(17:40):
nobody can come close.
Speaker 1 (17:43):
And I think that the importance of that is I can't
stress enough make sure you doit right the first time, and I
think that a lot of times peoplewant to take.
You know, they spent so muchtime in the back end and so much
time doing all the littledetails.
It's sort of like we do inbusiness.
Ultimately, you're in aposition where you work so hard
on something that you just wantto get it out and tell the world
(18:05):
, but just not be ready to cookyet.
Speaker 2 (18:08):
Yeah, and I mean we have strategies like you know,
if, look, if you're developing,you know, don't wait until you
get two years into development.
You know, talk to your attorneyevery six months, you know, and
we'll file a provisionalapplication, and then you know,
another three months later wecan file another provisional
application, and so that way youdon't have to wait until the
whole thing is complete.
You know you can keep filing asyou go and then you know, that
(18:32):
way you can start to disclosesome of the features of your
products, rather than having towait until the whole thing is
done.
Speaker 1 (18:38):
That's a great piece of advice.
You know that's a great pieceof advice.
Actually, I didn't even thinkabout it that way in terms of
piecemealing it along the way,just to make sure if you hit any
bumps, you don't have to go toodeep before you do it.
Yeah, all right.
So I'm going to put you on thespot here a little bit as we
close out the show.
Give me tips in thecounterfeiting space, even if
it's what we already talkedabout.
(18:59):
Give tips people can walk awaywith and remember.
Speaker 2 (19:01):
Yeah.
So number one is make sure youhave intellectual property to
protect your devices orinventions.
That's going to be the biggestthing.
Once you have intellectualproperty, that's your
enforceable rights.
You know, make sure, try tofind where the counterfeit is
most likely to occur If it'sgoing to be imported, and make
sure you are familiar with theITC process and that way they
(19:24):
can prevent it for you andconstantly monitor for
infringement of your goods.
You know, ultimately preventingthat counterfeit is going to
fall on the company.
You know, make sure that you'reaware of what's going on.
Speaker 1 (19:35):
So you want to patrol uh sites where that could occur
eBay, amazon, any onlinemarketplace wow, and that takes
a lot of research right, whichis why, yeah, like Mario in
place to keep an eye on thatstuff for you, absolutely
Anything else you want to tellthe audience before we take off
for this episode.
Speaker 2 (19:53):
You know.
If you need any help withfinding the right path on how to
protect your inventions orfinding these types of
counterfeiters you know, feelfree to reach out.
I'm always happy to talk.
Speaker 1 (20:03):
And you can see him at Mario.
You can see Mario at MilanoIPcom and ask him any questions.
Fill out the forms.
If you have any questions inthe chat or you want to add it
to the chat, we'll follow it andwe'll get back to you as fast
as we can.
I'm Craig Andrews.
This is Mario Milano.
Please, by all means, secureyour creations from the Secure
(20:24):
your Creations podcast and we'lltalk to you guys next time.
Thanks,
And welcome to this episode of Secure your Creation
podcast.
I am Craig Andrews and this isMario Milano, my co-host.
Today, we're going to betalking about something that's
actually very true and dear toMario, which is talking about
counterfeiting.
Counterfeiting is a veryimportant aspect of IP because
it's something you have toconstantly keep an eye on.
(00:23):
So, mario, welcome, and let'sget into this.
So kind of give me anunderstanding of what
counterfeiting is in the IPspace.
Speaker 2 (00:32):
Yeah, so counterfeiting is typically when
somebody tries to pass thegoods of another person, when
they try to pass the goods offas their own.
So we see a lot of times peoplewant to counterfeit goods that
have a high profitability, soyou can think of like designer
handbags, things like thatPeople want to.
(00:52):
The materials required to makesomething like that are not that
much, but the brand behind thedesigner bag is worth a lot of
money.
So by passing your goods off asa high-end designer handbag,
the profit margin can be great.
And so when you'recounterfeiting, you just want to
(01:13):
capitalize on the brand name ofsomebody else and pass their
goods off as your own.
Speaker 1 (01:18):
And so you mentioned the brands.
In terms of fashion brands, arethere other industries that are
vulnerable to counterfeiting?
Speaker 2 (01:26):
Yeah, we've seen counterfeiting in a lot of
different areas.
One of the, you know, some ofthe more dangerous aspects are
you know they can even bedangerous to your health, right,
like you think about fake drugsor fake lotions or things like
that.
You know, things that eitheryou're ingesting or you're
applying to your body topicallythat can lead to sickness, death
(01:48):
.
You know, because if it's acounterfeit drug there's no fda
regulation there.
It's just somebody else iscooking up whatever drug or
lotion that they want tocounterfeit and, you know,
hopefully it meets the samestandards that the fda applies.
But you know it might not andin that situation mean not only
is the counterfeiter, stealingthe profits and revenue of the
(02:11):
actual brand owner.
But you know they're puttingeveryone at risk.
Speaker 1 (02:15):
Wow, and I didn't think about it from the drug
perspective.
Are there other industries thatmaybe exist, like so?
For instance, just the otherday my wife and I we went to a
CVS and saw kind of you know, asseen on TV, and I'm going wait
a minute that thing is nodifferent than this but it's
(02:36):
just here.
Speaker 2 (02:36):
You know what's your take on that?
Yeah, that can certainly happenin all industries.
You know, I like the as seen onTV commercials.
They're usually prettyentertaining, energetic to say
the least.
And so these products, yeah,you know they'll just copy
whatever they see that's outthere and it could be any
industry.
You know, I've seen it inelectronics, we've all seen it
in electronics.
Right, you go on Amazon or eBayand you're looking for a phone
(02:57):
charger and you know theofficial Apple charger.
You know that might be 30 bucks, or you can see the one that's
right next to it that basicallylooks the same for $10.
And so you know, sometimes youbuy the $10 one and hope it
doesn't blow up your phone orcatch fire, but sometimes it
does.
And I saw it a lot when thehoverboards had first come out,
(03:18):
and they were.
The hoverboards were reallypopular and you know they were
some of the counterfeit ones.
Not only were they directlycopying competitors goods, but
they were also using cheapercomponents inside of it.
So you know that was leading tofires, explosions, and you know
you can see how that would bedangerous, absolutely,
absolutely.
Speaker 1 (03:36):
And so, taking that case in terms of like an Apple
to your example, you knowthere's a lot of companies that
rely on research and developmentto grow their business.
You know, give me an idea ofthe impact of counterfeiting
against a company who relies onresearch and development.
Speaker 2 (03:52):
Yeah, you know that's .
One thing that a lot of peoplemight not appreciate is that the
R&D money has to come fromsomewhere, right, and so these
companies that have a long R&Dcycle that takes a while to
develop a new product, make itprofitable, make it safe for
everybody to use.
That takes a lot of R&D, ittakes a lot of money, and so
once they finally start sellingtheir product and making money,
(04:14):
that's what is going to pay forthe R&D for the next product.
And so when we have people thatare out there counterfeiting,
that's stealing theprofitability of the R&D cycle.
So, number one, the companyisn't going to have as much
money to pour into the nextround of products and number two
, it's going to discourage thebig companies from even trying
to do any r d, because they'lllook at it and say, well, why
(04:35):
should we spend all the moneyfor the r d?
why don't we just wait forsomebody else to, you know, come
up with a great new product andthen we can just use our
economies of scale, becausewe're a large company and make
whatever products cheaper,faster and you know find some
improvements to do it, and sowhat I see is, instead of taking
that approach, which nobodywould appreciate, I see
(04:58):
companies, larger companies, endup, they file for intellectual
property protection and thenthey can go to something like
the International TradeCommission when counterfeit
goods are coming from outsidethe US.
The ITC, as it's called, will,once you have your registered
intellectual property, the ITCwill then look at any goods that
are coming from outside the US.
The ITC, as it's called, will.
Once you have your registeredintellectual property, the ITC
will then look at any goods thatare coming into the country,
(05:19):
and if it's a counterfeit andit's infringing your
intellectual property, the ITCwill hold onto it until
everything gets sorted out, andso you know it's a very
effective way of preventingcounterfeit goods from coming
into the country.
It's also helpful that you knowif somebody is infringing your
intellectual property in the US,you know, you send them a cease
and desist letter, you file alawsuit against them, you try to
(05:42):
enforce your patent.
That way it can take a littlewhile.
If it's coming from outside theUS and the ITC seizes it, it's
just a much quicker process andeven the whole enforcement
mechanism at the itc is is a lotmore rapid than it is for other
types of proceedings.
So you know, if you are acompany that is having your
(06:02):
products imported or you thinkthat your competitors might be
importing their products whichis pretty common for a lot of
manufacturers then youdefinitely want to have your
intellectual property squaredaway and you know, be familiar
with the process at the ITC.
Speaker 1 (06:16):
Wow.
So one of the things that wetalked about as well is you
referenced the larger companies,right.
So those companies that are outthere that might be saying, hey
, get your trademark for 100bucks or get your something for
250, you know something verysimple.
How is a small business guy whomight be looking at that, what
is?
What is advantages legally dothey have?
Speaker 2 (06:38):
Yeah, so those deals seem pretty good.
Right, it's a very low priceand all of a sudden you can get
a trademark.
Unfortunately, you know, like alot of things in life, it's not
quite that simple as far asgetting a valuable trademark.
You know those types ofcompanies that are offering
these really low prices.
They're not going to do any ofthe background work or any of
(07:00):
the legwork before filing thetrademark, which is crucial if
you're going to be launching anew brand.
And the background work isreally, you know, conducting a
search and making sure thatnobody else has a trademark,
making sure that you're notgoing to be infringing anybody
else's trademark and making surethat your trademark is going to
be registerable.
Because when we're going to befiling a trademark and we do
(07:20):
that search, we look at all theother trademarks that are out
there, whether they're pendingapplications or registered marks
, and we determine you know, wehave a pretty good idea of
whether your mark is going to beregisterable or not.
And so once you actually thenonce we go ahead and file it,
you know we, we feel prettyconfident that you're going to
be able to make sure you getthrough.
The worst thing is, you knowyou go to one of those companies
(07:43):
, you file your trademark forvery cheap.
Then you find out, you know,close to a year later, number
one, your trademark is notregisterable and number two,
you're getting a cease anddesist letter from somebody else
saying you know you have tostop using that name because
you're infringing our trademark.
Now you have to go through awhole rebranding process, apply
for another trademark, which cancertainly cost you a lot of
(08:05):
time, energy and money.
So you know you have to becareful when you're going with
those types of companies.
They're not, typically they'renot doing any of the background
work that's going to be all onwhoever's coming up with the
trademark and paying them topilot for them.
They're really just I'll takewhat you give me, I'll pilot for
you with the USPTO and that'sall I'm going to do.
Speaker 1 (08:26):
So, ultimately, what you're trying to say is you get
what you pay for.
Speaker 2 (08:29):
Yeah, yeah.
Speaker 1 (08:31):
You get what you pay for.
Yeah, yeah, you pay for it.
So my next question here relieson uh, the obviously
development of technology.
So in an e-commerce space, in auh technology space like 3d
printing you mentioned before inreference to cheaper components
, but 3d printing is here tostay for sure yeah, how do you
(08:53):
see in your space where 3Dprinting and patents come into
play?
Speaker 2 (08:58):
Yeah, so 3D printing has really changed everything as
far as manufacturing isconcerned.
You know, maybe 25, 30 yearsago, maybe more, if you wanted
to counterfeit something, youhad to look at a product, see
all the components that make upthat product, and then either
you, know, find a way to makethe parts for it.
And you know, first you had to,like, measure each part and get
(09:21):
all the dimensions andeverything like that, and then
figure out you know, make eachpart and then assemble the whole
thing.
Then, as time went on, then theystarted to get, you know, two
dimensional sc and thenthree-dimensional scanners,
which made it very easy todetermine the exact measurements
and what size all the partswere.
And then now that we have 3Dprinting, now you can take your
(09:42):
3D scanner.
You know you have thiscomponent, you put it under the
3D scanner, you see what size itis and everything like that.
You take that information, handit over to the 3D printer and
that can just print out thatproduct.
So you know, it went from likea couple of weeks or a couple of
months to get a counterfeitproduct.
Speaker 1 (10:03):
And now you know a couple hours and you could have
a counterfeit product ready togo.
And so now let's turn it to alittle bit more economic.
So from having your patent,let's say you're a business
owner and you have a patent thatyou have now registered and is
fully available.
Tell me about the taximplications of having a
(10:23):
counterfeit out there.
I know you're not an accountant, but do you have any studies or
case studies that you'veexperienced in terms of that?
Speaker 2 (10:29):
Yeah, so one of the immediate things that we see
when a counterfeit productenters the market is the profit
margin on the actual good isgoing to go down.
Right, you get a patent, youhave a monopoly on your product,
you can charge as much as themarket will bear for your
product, and so profit marginsare usually pretty high.
And that's the tradeoff thatthe USPTO says look, if you file
(10:51):
your patent application, youteach everybody how to do it.
You get this monopoly on yourproduct for 20 years and you can
charge as much as you want.
And so you know you're charginghigh prices, higher prices, if
you want.
Then the counterfeit comes onthe market.
Now, all of a sudden, you haveto reduce your price in order
just to compete with thecounterfeit product, in order
just to compete with thecounterfeit product.
(11:12):
And so again, like we said,with the R&D cycle and
everything, once the counterfeitis out there, your profit
margins are going to go down,and then you're just not going
to have as much money for yourfuture activities.
Speaker 1 (11:25):
That makes sense and you know everything ties
together.
It's sort of like the Lion Kingright, the circle of life.
It all ties together in afunction of how one thing works
with another and helpingincrease the size of your
business.
And the valuable piece of it ishaving that patent makes your
business even more valuable ifyou're looking to grow your
business.
So just for the people in theback right Quote unquote the
(11:48):
people in the back or thelisteners in the back in the
back or the listeners in theback um?
Give me a clear definition ofthe difference between the
counterfeiting and the copyrightand, I'm sorry, the um ip
infringement yeah.
Speaker 2 (12:02):
So to me, you know, counterfeiting is where you're
just blatantly copying somebodyelse's product and trying to
pass it off as your own.
Uh so um, counterfeiting is ispretty, is something that in
trademarks, you know, we wouldsee that a lot, where somebody
is just copying the exact sameLouis Vuitton logo and slapping
it on a handbag and trying tosell that as their own
(12:25):
Intellectual propertyinfringement.
There's other flavors of it.
Some of it isn't quite asnefarious.
People aren't doing it onpurpose.
Somebody has a widget and ithas a patent on it.
You come out with a competingwidget.
You don't copy the exact design, but you want to get something
close because you want to dokind of the same thing Sometimes
you do run a foul there and itends up being something that
(12:48):
would infringe somebody else'spatent.
Speaker 1 (12:50):
But you know, you're not necessarily doing it on
purpose.
Speaker 2 (12:53):
And also, you know, the thing with patents is it
doesn't matter if you know thatsomebody else's patent is out
there or not.
So sometimes you end upinfringing somebody else's
patent just because you haven'tdone a patent search.
You know which?
Of course, I recommend that youdo a patent search before you
release any new products, but ifyou didn't do a patent search,
you might be infringing somebodyelse's patent without being
(13:15):
aware of it.
To me, counterfeiting is likeyeah, we know that that other
thing is out there and that'swhat we're trying to do.
We're trying to copy that exactproduct and have other people
think that the product thatwe're selling is from the actual
brain donor.
Speaker 1 (13:27):
And I know that in a lot of situations, especially
going forward, technology ismoving so fast that you might be
in a position where you'repotentially infringing somebody
who just got to the door beforeyou did.
And then you go back to thedrawing board again because all
of those different measuresthat's in place to make sure
that you don't infringe uponsomebody else's copyright.
Speaker 2 (13:48):
Yeah, and that's a very good point.
Um you know, with some of thesetechnologies that are just
coming out rapid fire then, umyou, know when you file your
patent application.
It doesn't get published for 18months, so you know somebody
else might already have theirpatent application in there that
you're just not aware of.
You come out with a new productand then you know, six months
later they're patent grants andall of a sudden you're
infringing, and you had no ideait was out there because it
(14:10):
hadn't published yet it wasn'tpublicly available.
So even if you did a search,there was no way that you could
have known about it, and sosometimes it just happens.
Speaker 1 (14:18):
So the big term today , in 2025, so far is AI.
Right.
How is AI in the counterfeitand AI in the IP space?
What have you heard about AIand how can you use it?
Tell me about it.
Speaker 2 (14:31):
Yeah.
So as far as you know gettingyour own patents or trademarks
or any intellectual property forsomething that came from AI,
you know the USPTO is a littleleery on how much you can use it
.
You know they really want tosee that it was a person who
developed the invention.
You know for a patent that youcan use some AI, but it really
(14:54):
needs the actual human has to bethe person who really
contributes a lot to the idea.
And so you know there's notlike a set rule on.
You know it has to be 65% or 80.
It's kind of a fluid test.
But you know if you come upwith an idea solely using AI,
you're not going to be able toget a patent on that and
(15:15):
copyright as well.
So that's something that's beeninteresting.
As far as like software isconcerned, you know a lot of
coding now is done by AI.
You tell it what the softwareprogram to do and the AI can
just code that for you, whereasit used to be a person doing it.
So you would already have acopyright on that and it would
(15:36):
automatically usually employmentagreement would automatically
assign that copyright to thecompany.
So then if the coder left thecompany, they couldn't just copy
the code because the companyalready had a copy.
Now with AI, if somebody isjust putting all that into AI,
(15:56):
getting the software code fromthere, there's not really
anything that would prevent theperson from the person who
leaves the company.
You know, there's nothing thatwould prevent them from just
copying that code.
Speaker 1 (16:05):
Yeah, and it's getting real tricky now, right?
So this is why I'm a big fan tobe done properly and made sure
that you have somebody trustedenough to do it right for you
(16:34):
and consult you back and forthwhich Mario does to make sure
that when you go through thiswhole process as painstaking as
it may be, because we're in avery big rush society now we won
everything yesterday you don'twant to get to the end of that
track and then all of a suddenrealize you got to start over as
best as possible.
It happens, but as best aspossible.
Talk to a little bit about that, if you can.
Speaker 2 (16:56):
Yeah, so yeah, you want to, like you said, get
everything done and get it filedright away, but the more we can
take our time and think aboutokay, this is what the product
does today, but what's theproduct going to do tomorrow?
What is?
What are your competitors doing?
Let's talk about.
You know, when your competitorssee what you're doing, how are
they going to try and compete?
Are they going to try and makesomething faster, more features?
(17:19):
Are they going to try and makeit cheaper?
You know these.
When we can take a holisticview of what you're doing and
what your competitors are doingnow, we can really start to
build in options for how we'regoing to.
You know, craft your patentapplication and make sure that
we can.
You know, not only do wecapture what you're doing, but
we cast a wide net around whatyou're doing to make sure that
(17:40):
nobody can come close.
Speaker 1 (17:43):
And I think that the importance of that is I can't
stress enough make sure you doit right the first time, and I
think that a lot of times peoplewant to take.
You know, they spent so muchtime in the back end and so much
time doing all the littledetails.
It's sort of like we do inbusiness.
Ultimately, you're in aposition where you work so hard
on something that you just wantto get it out and tell the world
(18:05):
, but just not be ready to cookyet.
Speaker 2 (18:08):
Yeah, and I mean we have strategies like you know,
if, look, if you're developing,you know, don't wait until you
get two years into development.
You know, talk to your attorneyevery six months, you know, and
we'll file a provisionalapplication, and then you know,
another three months later wecan file another provisional
application, and so that way youdon't have to wait until the
whole thing is complete.
You know you can keep filing asyou go and then you know, that
(18:32):
way you can start to disclosesome of the features of your
products, rather than having towait until the whole thing is
done.
Speaker 1 (18:38):
That's a great piece of advice.
You know that's a great pieceof advice.
Actually, I didn't even thinkabout it that way in terms of
piecemealing it along the way,just to make sure if you hit any
bumps, you don't have to go toodeep before you do it.
Yeah, all right.
So I'm going to put you on thespot here a little bit as we
close out the show.
Give me tips in thecounterfeiting space, even if
it's what we already talkedabout.
(18:59):
Give tips people can walk awaywith and remember.
Speaker 2 (19:01):
Yeah.
So number one is make sure youhave intellectual property to
protect your devices orinventions.
That's going to be the biggestthing.
Once you have intellectualproperty, that's your
enforceable rights.
You know, make sure, try tofind where the counterfeit is
most likely to occur If it'sgoing to be imported, and make
sure you are familiar with theITC process and that way they
(19:24):
can prevent it for you andconstantly monitor for
infringement of your goods.
You know, ultimately preventingthat counterfeit is going to
fall on the company.
You know, make sure that you'reaware of what's going on.
Speaker 1 (19:35):
So you want to patrol uh sites where that could occur
eBay, amazon, any onlinemarketplace wow, and that takes
a lot of research right, whichis why, yeah, like Mario in
place to keep an eye on thatstuff for you, absolutely
Anything else you want to tellthe audience before we take off
for this episode.
Speaker 2 (19:53):
You know.
If you need any help withfinding the right path on how to
protect your inventions orfinding these types of
counterfeiters you know, feelfree to reach out.
I'm always happy to talk.
Speaker 1 (20:03):
And you can see him at Mario.
You can see Mario at MilanoIPcom and ask him any questions.
Fill out the forms.
If you have any questions inthe chat or you want to add it
to the chat, we'll follow it andwe'll get back to you as fast
as we can.
I'm Craig Andrews.
This is Mario Milano.
Please, by all means, secureyour creations from the Secure
(20:24):
your Creations podcast and we'lltalk to you guys next time.
Thanks,
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