Black Friday or Bleak Friday?

A recent report ( here) by the European Union Intellectual Property Office (EUIPO) provides a useful snapshot of the landscape of online counterfeiting in the UK, Germany, Spain and Sweden.

Of particular interest is the practice of the operators of e-shops who repurpose domains that were previously used legitimately into counterfeit outlets. This domain squatting practice counted for approximately 70 - 80% of the suspected infringing websites.

Where the domain is unrelated to any brand or any relevant industry term (e.g. balloons4u.com selling counterfeit designer bags), it can be difficult for brand owners to detect and stop such practices. In contrast, in the case of an industry-related domain, the infringer can benefit from any leftover trappings from the old owner’s use, such as good SEO rankings, positive reviews about the website, and web traffic redirects from third party websites.

Addressing this issue requires brand owners to ensure that their online enforcement programmes can deal with this phenomenon. It is no longer sufficient for a successful e-commerce brand to rely on a domain name watch. Similarly, watching platforms that search for keywords alone can struggle where there is only copyright infringement of images, i.e. no use of the brand name. There are now a number of image matching tools that offer a reverse image matching facility, from TinEye through to dedicated online enforcement platforms. Brand owners should consider utilising these in order to gain full visibility of their online infringement problem.

The report also shows that despite an apparently large number of infringers, these may in fact link back to a far smaller number of fraud actors. Again, this is where technology can assist in a brand enforcement strategy, given the ever-increasing ability for platforms to draw links between otherwise seemingly-unrelated individuals. Brand owners may also wish to consider knowledge-sharing their intelligence in order to develop a more knowledge-based enforcement programme that can prioritise bigger picture enforcement issues over playing website takedown whack-a-mole.

Shoes are the most targeted product category (67.5 % of the suspected e-shops). A recent OECD study ( here) found that mobile phones were one of the most commonly counterfeited telecoms items. From this, it is clear that smaller consumables are prime targets for counterfeiting, making detection for customs very difficult. Ensuring that accurate record keeping of test purchases is followed, and the data/intelligence properly analysed, can be key to identifying trends and forecasting future problems.

For now, it is clear that the counterfeiting conundrum is not going away anytime soon. Brand owners should remain vigilant during the festive season, with Cyber Monday, Christmas and Chinese New Year all coming up. Utilising a mix of public (Action Fraud and PIPCU) and private resources (IPEC claims, domain registry complaints, test purchases and investigations) will prove essential in fighting the battle. Joining the dots between online and offline (physical) marketplaces is also more important than ever.

Given the increase in the use of social media platforms to sell counterfeit and other infringing products, a ‘Phase 3’ report by the EUIPO looking at infringements beyond the traditional web would be welcome.

Stobbs join dots between online and offline infringements and approaches brand enforcement as part of a wider IP/brand issue. If you would like to discuss any of the issues covered here, please get in touch.

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