The new Wild West: apps and infringement

19-12-2013

In the rapidly expanding app marketplace, entertainment rights owners are feeling the heat more than ever as they try to control the mobile channel. TB&I investigates some novel ways of combating the bad actors.

Apps can be both wildly popular and frustratingly addictive. Excited consumers flock in their masses to download the latest game, gimmick or genuinely useful tool. In September, technology research firm Gartner predicted that the total number of mobile apps downloaded will reach 102 billion by the end of 2013, up from 64 billion last year, before leaping to nearly 270 billion in 2017.

Apps provide exciting business opportunities, often without demanding bundles of cash or years of experience, but infringement in this world can be rife. “The app marketplace can seem like a lawless new frontier,” says Andrzej Zamoyski, co-creator of Hungry Oni, an app game in which collecting and consuming strange objects is the name of the game.

Infringement has many faces. Fraudsters target unwitting consumers to harvest their bank details. Pirates link to websites providing access to illegal downloads. Copycats mimic popular brands. While banks have traditionally been targeted most, especially as they increasingly see mobile channels as a preferred route to market, entertainment rights owners are under special pressure as they try to control the mobile channel.

The rise of app infringement goes hand in hand with a surge in Internet use on mobile devices. According to US company Cisco, which sells networking equipment, 26 percent of Internet traffic in 2012 originated from mobile devices, but by 2017 that figure will jump to nearly 50 percent. In 2009, it was just 0.9 percent.

“The growth has been quite extraordinary,” says David Franklin, global sales director, brand protection at NetNames, a brand protection company. “As people moved in droves from PCs and laptops to smartphones, it was inevitable that malware would speed its way to the new device of choice. The ease with which mobile apps can be replicated or adulterated leaves users exposed to fraud, security breaches and other acts of piracy. It’s happening almost faster than we can follow it in real time.

“The entertainment industry has had a chance in the past to address piracy in ‘traditional’ Internet channels and it is going to face a very similar issue in controlling content on mobile devices, particularly when the take-up in China and other Asian countries is extraordinary. They face an intense challenge to how they roll out legitimate services to mobile device users in those kind of countries.”

Despite the rising dominance of mobiles, awareness of app infringement is quite low among the general public, explains Franklin. The banking and entertainment sectors are more alive to the threat, he notes, as they have been used to online infringement for a long time, but some companies are far more proactive at brand protection than others, even within the same sector.

This situation poses two important questions: why are some brands struggling to keep up to speed with app infringement, and what should they be doing to tackle the problem?

For starters, users are often less educated about what infringement looks in the app sphere compared with the more ‘traditional’ problems of online counterfeiting or piracy, allowing infringers to trade heavily off consumers’ ignorance.

In addition, app marketplaces such as the App Store and Google Play are not easy to monitor for bad actors, says Franklin.

“App marketplaces are less transparent than the Internet and are challenging to search comprehensively, requiring special capabilities to do so. The smaller screens of mobile devices and slower download times add to the opacity. In short, it’s much easier to miss badly replicated details and brand markers that, on a larger screen, would send up a red flag.

“Also, putting up new apps on a store is quite a quick process and there is less rigorous checking that goes on compared with setting up a website. There are fewer checks and balances.” While compliance and cooperation from Google and Apple is strong, “we’re dealing with sheer scale here”, explains Franklin.

“Apparently Apple’s App Store gets around 26,000 requests a week to launch new apps, so you can imagine the scale of the challenge it is for Apple to work through this in a proactive way.”

What’s more, it is relatively easy to set up an app, reducing the obstacles to attacking a brand. “It really is possible to go from zero, quickly acquire the skills and knowledge to develop an app, and publish it on the App Store within a relatively short time-frame,” Zamoyski points out.

Fighting the infringers

IP owners are well advised to work with brand protection companies, whose job it is to form a strategy for combating infringers, but only the most threatened may wish to seek help.

“It depends how vulnerable they are to the threat of infringement and how their consumers behave and purchase,” says Fred Felman, chief marketing officer at MarkMonitor.

“And I think there may be an evolution in processes as well here,” he adds, explaining that the young app market will filter out bad actors as it grows older.

“THE EASE WITH WHICH MOBILE APPS CAN BE REPLICATED OR ADULTERATED LEAVES USERS EXPOSED TO FRAUD, SECURITY BREACHES AND OTHER ACTS OF PIRACY.”

“In the history of computing you tend to have proprietary platforms where single purpose applications emerge at the beginning in these platforms, and then standards emerge that allow you to exploit those platforms without having to rely on very specific applications or operating systems.

“HTML 5 and other technologies, I believe, are going to standardise how mobile devices are used because it becomes impractical for app developers to create applications across Android and all the flavours of Android, as well as the iPhone and all the flavours of the iPhone.”

This means, says Felman, that we will use apps that are specific to a single task less and less.

“We will probably see some consolidation of apps on functionality as well. A good example is we used to buy separate spreadsheets and databases and email apps in word processors, and we don’t do that any more. We group functionality to allow us to do what we need to do more effectively. Some of that will happen on the mobile platform and some of them will emerge as trusted; these will be seen as clean, brightly-lit and safe places for us to interact.

“So we are in the process of crossing the technology chasm and we are in a tornado where there is a lot of change as the majority of people adopt smartphones and tablets. The wind is going to die down and we are going to see some order come of this chaos,” Felman says.

Further, he notes that brands may need only to look to their consumers for help when fending off bad actors.

“What’s not always obvious is the democratisation of the monitoring and enforcement that is occurring, as the people who love these brands are helping the brands police themselves as well.”

uFaker

Such consumer cooperation is probably vital for brands. To see it in action, we need to look no further than uFaker, an app launched this year by Jason Drangel of IP law firm Epstein Drangel in New York.

The app is simply a reporting mechanism at the moment, allowing consumers to alert brands about suspected counterfeit goods, in reward for discounts on web purchases. Once a brand is notified, it can log that information in the uFaker database, found on the project’s website www.ufaker.com, at which point the brand can instruct law firms to work on the case and advise customs about the suspicious goods. All parties can access the report in the database, updating it as they go along.

“We have had nearly 100 reports since July and more than 700 downloads of the app,” Drangel says.

“This was an interesting test to see whether consumers would report and care or not, and they clearly do. We’re getting reports from all over the world and we’re not necessarily sure why people are doing it, but you can tell, depending on who the reporter is, why they’re doing it. Some consumers are concerned because they are paying the regular price or sometimes competitors are ratting on other entities that they know are selling counterfeit goods and are hurting their market share. It’s different people reporting.”

Although uFaker handles complaints from the ‘real’ world—a market on a high street, for example— there is no reason that consumers won’t observe the infringement of an app and report it through uFaker. Rovio, which makes the hugely popular Angry Birds game, one of the most downloaded apps, is one of uFaker’s clients, and one might expect complaints about the company’s oft-pirated game to come flooding in, though uFaker hasn't received any such complaints yet.

uFaker is interesting because it shows that anti-counterfeiting efforts are moving from the meeting room to the mobile app. In future brands, lawyers and customs officials may not need to meet in person or even speak on the phone, at least until an investigation is underway. This approach will surely be welcomed, even if it is in its infancy.

“On the legal side of things, for anti-counterfeiting teams, there has never been anything like it,” Drangel says. “The backend database is a great way for anticounterfeiting teams to work together and coordinate information—that’s never really been done.”

The world of apps is an intriguing one. They are changing the way we live and even how brand owners tackle infringers. With app usage expected to rocket, brands need to focus now on how they go about making the app world a safer place.

This article was first published on 19 December 2013 in World IP Review

Apps, infringement, uFaker, MarkMonitor

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