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There are various avenues for brand owners to tackle the issue of online fraud in an attempt to make national and international legal regulation of internet commerce more effective, as John Anderson of the Global Anti-Counterfeiting Groups Network describes.
The internet is thought to provide around 80% of the worldwide trade in fakes—figures are notoriously difficult to compile and even more difficult to verify. Suffice to say that many brand and content owners will now claim that sellers of online fake and pirated products are their biggest competitor.
A major downside to this is that enforcement on the internet is hugely complicated, time-consuming and expensive. Worst of all, it is very rarely a final fix. Some commentators have likened sending take-down requests to the game ‘whack-a-mole’: bash down one toy mole and another pops up in a different position.
There is not enough scope for an in-depth review of the problems and potential solutions to the challenge of online intellectual property crime in this short article but I propose to highlight the main issues.
Online IP crime takes many forms: fake domain names, cybersquatting, misleading (leading to fakes) AdWords on search engines, ‘free’ illicit content sites and simple fraud, such as the ‘sale’ of a photograph of a watch when the buyer has ordered the real thing online.
One issue we are all concerned about these days is the sale—wholesale and retail—of fakes. The problem has grown from the early days of a few sales on auction sites such as eBay to today’s position of vast quantities of fakes being sold on mega-marketplaces online, including China-based e-commerce websites Alibaba and Taobao and, increasingly, on social networking sites such as Facebook.
The two basic problems for combating IP crime online, apart from its sheer scale, are first the territoriality of IP rights, and second the still unclear position of ‘intermediaries’.
On territoriality the obvious challenge is jurisdiction, but probably more important is IP protection procedures and judicial interpretation in different countries. Many people will recognise that enforcing rights in China, for example, is immensely complex, bureaucratic and very often frustrating—and that’s just for fake products seized in factories, warehouses or physical markets.
The measures that right owners have to employ to prove online infringements can be even more expensive than enforcing rights offline. And despite the claims of many online markets, their ‘anti-counterfeiting services’ leave an awful lot to be desired. More often than not they are largely symbolic—such as memoranda of understanding between various well-known mark brand owners and IP right owner groups.
“On territoriality the obvious challenge is jurisdiction, but probably more important is IP protection procedures and judicial interpretation in different countries.”
The whole issue of these sites and services (for example, internet service providers) being ‘intermediaries’—recently highlighted in an excellent report by the International Chamber of Commerce’s Business Action to Stop Counterfeiting and Piracy (BASCAP)—is still fraught with challenges of proving legal liability. The same goes for payment portals, credit card companies and advertising networks.
Many people, especially brand and content owner associations, are tackling different issues within this sprawling ‘web of deceit’. Efforts are focusing on making national and international legal regulation of internet commerce more effective and, as a deterrent, depriving those who make a profit from the business of fakes of their ill-gotten gains.
Many brand owners and IP right owner associations are increasingly engaging with e-commerce platforms and/or with law enforcement agencies to mitigate the worst excesses of online IP crime.
In the early days was eBay’s VeRo programme; more recently there are directly contracted agreements such as the International Anti-Counterfeiting Coalition’s (IACC) ‘MarketSafe’ initiative—a fully resourced programme of take-downs with Alibaba—and the UK Anti-Counterfeiting Group (ACG) campaign to take down fake listings on Facebook.
Two of the biggest trademark associations—International Trademark Association and Marques—have monitored the detailed legal position of working to remove fake sales from the internet and readers who have problems could do worse than check all these associations to see if they have a best practice that could match their strategy to deter and prevent online theft of IPRs.
The Chinese authorities—somewhat belatedly—have set out plans to boost a clampdown on IP breaches online. These plans include a more focused use of existing laws; better supervision of e-commerce platforms; strengthened law enforcement cooperation both nationally and regionally; an ‘improvement’ to ongoing implementation of regulations; and the introduction of a black list of offending companies.
The solutions to these challenges are varied and could be generally divided into strategic and operational.
Strategically, brand owners and IP right owner groups need to work together to improve the national and international legislative framework on IP rights enforcement and particularly to work on the national judicial processes involved with existing legislation.
Operationally, we need to monitor the net constantly and effectively. Get filters in place for keywords, prices (too low?), quantities (too many?), categories (‘replicas’, ‘seconds’) etc. Redirection pages installed on sites selling fakes—see the Swiss Watch Federation activity—can be doubly effective as deterrents and in raising public awareness.
Payment portal campaigns (take-down of merchants’ ability to take payments from credit card companies and Paypal, etc) such as the IACC ‘RogueBlock’ have also proved effective.
The French Union de Fabricants (Unifab) has a good deal of information and advice on both strategy and tactics for working against online fakes and is actively lobbying for many of the proposals mentioned above.
The Global Anti-Counterfeiting Groups Network and its members such as IACC, ACG, Unifab and Marques are fully committed to helping businesses, consumers and law enforcement agencies stamp out online IP crime and to working with governments and regulatory authorities to provide some of the tools and remedies that we need.
Note: Except where noted the views expressed in this article are the author’s own.
John Anderson is chair of the Global Anti-Counterfeiting Groups Network. He can be contacted at: email@example.com
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