June 10, 2011 § 2 Comments
Today was a big win in the fight against fake designer products. Initially reported by WWD, Tory Burch has won a $164 million lawsuit against over 230 websites who have been cybersquatting and selling counterfeit Tory Burch products online. The term cybersquatting refers to a website who uses a designer or brand’s name in the domain name (URL) in order to deceive shoppers into believing their site sells legitimate merchandise.
Burch spoke out against fakes to Women’s Wear Daily saying, “Many people think that buying a fake product is harmless, but counterfeiting is estimated to result in annual losses of over $20 billion to American companies.”
And that is just in the United States. Counterfeiting is a global problem that effects more than just corporations, brands and designers. Besides contributing to criminal acts, counterfeits deprive jobs from hard working citizens as well as contribute to down economies.
Key numbers to know:
- Estimated $600 Billion annual sales in counterfeit products worldwide
- $512 Billion global sales lost to counterfeit goods
- $1 Billion estimated annual loss in New York City tax revenues due to counterfeiting
- 750,000 jobs lost due to intellectual property theft in the United States
It could be seen this morning that the fight against fakes is only going to get stronger. Executive Director of the CFDA, Steven Kolb, who was also quoted in the WWD article, tweeted this morning:
To which Burch responded: @ToryBurch “Just starting!”
May 16, 2011 § Leave a comment
(Image Taken From Wired.com)
Last week Senator Leahy introduced his revision to the controversial Combating Online Infringement and Counterfeits Act (COICA). The bill now stands in its new form, the PROTECT IP Act, short for “Preventing Real Online Threats to Economic Creativity and Theft of Intellectual Property.” According to Wired.com, “under the new proposal, search engines, internet providers, credit card companies, and ad networks would all have cut off access to foreign “rogue sites”– and such court orders would not be limited to the government. Private rightsholders could go to court and target foreign domains, too.”
What we are most particularly interested in is the effect on search engines, such as our previous discussions surrounding Google AdWords. The PROTECT IP Act “responds to concerns raised that search engines are part of the ecosystem that directs Internet user traffic and therefore should be part of the solution.” We agree, Google must help in being part of the solution.
Some key points of the PROTECT IP Act via Wired:
- The bill is an attempt to deal with foreign sites which can be difficult for US enforcement to reach.
- It does provide a more limited definition of sites “dedicated to infringing activities.”
- Ad networks and payment processors will be protected if they “voluntarily cease doing business with infringing websites, outside of any court ordered action.”
- Copyright and trademark holders are allowed to seek court orders directly, though these orders would only apply to payment processors and advertising networks (not to ISPs or search engines).
- A search engine can simply cut off advertising for that reason and be immunized under the law.
- Encourages everyone—domain name registries, search engines, payment processors, and ad networks—to cut off access to infringing sites that “endanger the public health.” That is, online pharmacies (which are often hotbeds of counterfeiting).
What are your thoughts on the new bill? Do you think it will further the government’s attempts to take down foreign rouge websites selling counterfeits?
April 14, 2011 § 1 Comment
The discussion over whether or not search engines should be responsible for promoting websites that sell counterfeit products remains a heated debate. A recent article in PC World summarizes a hearing last week about digital piracy. To date, Google has shut down about 50,000 accounts for attempting to use their Google Adword program to promote counterfeit goods. The hosting site Go Daddy has been shutting down all sites that have any sort of infringing content.
Kent Walker, senior vice president and general counsel at Google spoke about their fight against fakes:
“Google does bury the search results of sites that sell pirated or counterfeit products after complaints from copyright holders…But it’s difficult to filter Web searches ahead of time because searches for legal sites are often similar to searches for piracy or counterfeit sites, and Google doesn’t want to be in the position of deciding what sites should be excluded from search results.”
Nonetheless, Google is certainly taking the necessary precautions to protect the public from ads for counterfeit goods (see our recent blog post), but the question still remains if search engines should be held liable. Walker stated that lawmakers should focus on the advertising and financial transactions that pay for the websites selling counterfeits instead of focusing on search results.
In order to control the online counterfeit industry, companies and government agencies should work together. Google should do what they can to delete infringing accounts and hide search results for counterfeit sites. Brands should monitor the internet and work with prosecutors in shutting down websites selling counterfeits of their products. Hosting sites should shut down any sites that are infringing. Lastly, prosecutors and lawmakers should work with all parties in order to hinder counterfeiting online. Battling online counterfeits should be a global group effort in order to prevent criminals from selling fakes.
March 5, 2011 § 3 Comments
This week we came across several articles and Facebook posts from our followers about online advertisements promoting counterfeit products. The problem with these advertisements, beside the fact that they promote counterfeits, is that they are not monitored or regulated. A recent article cited Rosetta Stone, the language instruction software company, demanding that Google be held liable for presenting paid search ads that link to counterfeit sites. Rosetta Stone has had problems with those specific ads using their trademarked name “Rosetta Stone” and linking to a site selling counterfeit software.
Below is an example of an ad recently shared with us by one of our Facebook fans. When the advertisement is clicked, it brings you to the obviously fake site selling discount designer products.
- “If you’re not part of the solution then you’re part of the problem. Perpetuating the advert of such sites = enabling the practice”
- “They need to check out everyone they allow to advertise. Called quality control. Everyone pitch in!”
- “Yes, Google and Facebook should both be held liable.”
Many brands are struggling with counterfeiters using their trademarked brand name or logo in their online advertisements to lure in consumers. This is a trademark infringement and something companies like Rosetta Stone are taking up with the government. Senator Judiciary Chairman Patrick Leahy prepares to reintroduce the Combating Online Infringements and Counterfeits Act and I am sure many brands will be interested in amending that bill to include liability of search engines.
February 18, 2011 § Leave a comment
In honor of Valentine’s Day, U.S Immigration and Customs Enforcement led a huge online seizure of domain names selling counterfeit accessories. The customs agents previously bought counterfeit bracelets, earrings, handbags, rings, sunglasses, wallets and watched from sites and later determined that many of the sites sold fakes. Titled appropriately as Operation Broken Hearted, it was meant to protect consumers from counterfeit Valentine’s Day products. As a result of the investigation, 18 websites’ domain names were seized without any previous warning in order to save valentines from buying fakes for their sweethearts.
“Even on Valentine’s day, American business is under assault from counterfeiters and pirates,” said ICE Director John Morton. “These counterfeits represent a triple threat by delivering shoddy, and sometimes dangerous, goods into commerce, by funding organized criminal activities and by denying Americans good-paying jobs. HSI and our partners at the IPR Center will continue to work together to keep counterfeit products off our streets.”