Tory Burch: A Big Win for Fashion in the Fight Against Fakes

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:

@StevenKolb  “#fightBack. Major. Good job @toryburch! in winning $164M cybersquatting Suit – @womensweardaily.”

To which Burch responded: @ToryBurch “Just starting!”


Protect IP Act: Will It Pass?

May 26, 2011 § Leave a comment

The Senate Judiciary Committee is voting on the Protect IP Act today, but will it pass? Outlined in the latest FANIF blog post, Senator Patrick Leahy reintroduced Protect IP about two weeks ago. Leahy is confident the bill will pass as AdWeek reports 12 of the committee’s 18 members are co-sponsors of the legislation.

Supporters of the bill include Microsoft, whose counsel Brad Smith, speaks out about their support of the potential new law on their blog:

“Microsoft is a company built on innovation and its protection through intellectual property rights, and we are committed to helping ensure that copyright is respected in the online environment. We look forward to working with others as this bill advances toward enactment.”

Since the beginning of the reinstated bill, Google has been very vocal about not backing the legislation. Google’s executive chairman, Eric Schmidt, spoke out saying the bill could set a “disastrous precedent” for freedom of speech. “I would be very, very careful if I were a government about arbitrarily [implementing] simple solutions to complex problems,” he said. “So, ‘let’s whack off the DNS’ (domain name systems). Okay, that seems like an appealing solution but it sets a very bad precedent because now another country will say ‘I don’t like free speech so I’ll whack off all those DNSs’ – that country would be China.

Twitter is a buzz about the bill tweeting with hashtag #ProtectIP:

“@UnderBill Censorship: the slipperiest slope? #protectip
“@marauderz I feel that Google is contesting the #protectip act because it can endanger Google Music.”
“@FashionCloture How will Google’s opposition affect #ProtectIP Act?
“@PRGPatentLaw@neverfakes @FashionCloture People seem to be nervous about any government authority to shut down websites, even sites with illegal content.”
“@SimoneBtrfly It’s fab the amount of support they’re getting!”

We are interested in the outcome of the vote today and its opposition’s efforts to stop the legislation.

Say Hello To The “PROTECT IP” Act

May 16, 2011 § Leave a comment

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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, “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?

The Battle With Online Counterfeiting

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.

Google Responds To Counterfeit Ads

March 22, 2011 § Leave a comment

Last week, in response to the Google Ad controversy, Google addressed the issue of counterfeit paid search advertisements on their blog. As something we recently covered on our own blog and a topic many of you have approached us about, we wanted to share their information with you.

According to Google Public Policy blog, Google seems to have stepped up their game in taking down ads promoting counterfeits. Google calls tracking down these bad ads a “cat-and-mouse game” because there are over 190 million advertisers using Google AdWords in over 190 countries. Google recognizes that these types of ads are not only bad for brands, but bad for THEIR brand. One blogger commented to us that after noticing GoogleAds on their blog promoting counterfeits, they discontinued the service.

The blog outlines Google’s most recent efforts to combat counterfeits:

  • We’ll act on reliable AdWords counterfeit complaints within 24 hours. In 2009, we announced a new complaint form to make it fast and easy for brand owners to notify us of misuse. For brand owners who use this form responsibly, we’ll reduce our average response time to 24 hours or less.
  • We will improve our AdSense anti-counterfeit reviews. We have always prohibited our AdSense partners from placing Google ads on sites that include or link to sales of counterfeit goods. We will work more closely with brand owners to identify infringers and, when appropriate, expel them from the AdSense programme.
  • We’ve introduced a new help center page for reporting counterfeits. That way, we aim to make it easier for users and brand owners to find forms to report abuse.

We’re glad to see Google taking action and investing in stopping counterfeiters from placing ads on Google AdWords. As a consumer and an online shopper, the best way we can help Google and stop criminals is to report these types of advertisements to the Google team and hope they do their part.

What do you think? In reading their new approach, is Google is doing enough to tackle counterfeit ads?

Google: A Gateway For Criminals?

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.

The main question is, should search engines like Google be responsible and held liable for paid search ads on their site? We asked our Facebook and Twitter fans:

  • “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!”
  • “Tricky.”
  • “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.

Operation Broken Hearted: A Valentine’s Day Counterfeit Crackdown

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.”

Operation Broken Hearted was the fourth phase of Operation In Our Sites, an ongoing investigation that started last year. We look forward to seeing the outcome of ICE’s undercover investigations.

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