Robert Smith, lead singer of The Cure, has engaged in litigation in an attempt to tackle unauthorised third parties selling The Cure counterfeit merchandise.
The suit, filed on 3 January 2024 at the US District Court for the Northern District of Illinois, is pursuing trademark infringement claims against the unauthorised parties under the Lanham Act.
The litigation seeks to identify and hold accountable infringers located in China who sell into the United States. These infringers typically conceal their identities and counterfeit network by setting up multiple aliases and store fronts to avoid detection and make it harder for IP owners to identify connections and determine who the ultimate infringer(s) are.
Robert Smith is one of many IP rights owners facing this issue. In this article we consider the other options open to IP rights owners seeking to remediate counterfeit goods sold online – and when litigation (often the last resort) may be appropriate.
Tackling infringements online
Online sales platforms have long been a forum that counterfeiters have used to sell fake goods to consumers. The problem is only increasing with the growing popularity of e-commerce.
Given the widespread use of online marketplaces, many brands recognise the need for a proactive monitoring program. Understanding the size, nature, and locations of counterfeit issues with respect to a particular brand and its goods enables a strategic approach to be taken, focusing efforts appropriately. These days, automatic website scraping and analysis tools provide an inexpensive way to quickly identify large numbers of infringing products.
Monitoring should come hand in hand with enforcement – whether this be a comprehensive programme, or (if budgets or brand/territory focuses don’t allow for this) something narrower and more targeted.
Takedowns are often the first line of attack. Many marketplaces – including, for example, Amazon, eBay, Etsy and Meta – have developed dedicated reporting functions and programs to remediate or remove infringing content. Stobbs regularly coordinates bulk takedown programmes across a variety of platforms (often using clustering techniques to link infringements together). The benefit of such programmes is that they are low-cost and offer quick results.
However, anyone who has dealt with online takedowns knows that it can sometimes feel like a game of “whack-a-mole”, where infringing listings or sites are taken down only to pop up again a short time later. If particular individuals or businesses are identified as persistent infringers, further escalation should then be considered.
Cease and Desist Letters
IP rights owners may also resort to sending cease and desist letters to identified sellers of fakes. This may be required where: a) the site on which the infringer is selling counterfeits does not have an effective, or any, takedown programme, b) the seller in question persists in infringing practices after initial takedown, c) the brand owner has another objective, such as upstream identification of suppliers, and/or d) there is a particular territory or brand concern, or worrying neighbouring issues (such as, for example, health and safety considerations with respect to children’s toys or electrical goods) that may require further investigation.
Sending such letters is of course only possible where the infringing party has been identified and their contact details obtained. This is where disclosure requests (dealt with later in this article) may be necessary.
Domain Takedowns and Dispute Procedures
As well as listings takedowns, domain takedowns may sometimes be in order where an infringer sets up their own site to promote and sell counterfeits. A first step would usually be to send a cease and desist to the registrant themselves. However, if no resolution is forthcoming, the next step open to IP rights owners is to alert hosting providers or – often more preferably – the registrar company to the infringing site(s) and require that action is taken by them (either to de-host the site or to suspend the domain, respectively).
Where takedowns are not possible or a brand owner is keen to obtain the domain(s) themselves (often for defensive purposes), a domain dispute procedure may be required, although this is a longer, and more costly, route.
Online counterfeiters concealing their identity can be a major obstacle to enforcing (as appears to have been the case for The Cure’s Robert Smith). Many IP rights owners face this issue on a regular basis on platforms such as Amazon.com, Wish.com, AliExpress.com, eBay.com and Alibaba.com, and it raises the question of whether online marketplaces should do more to protect IP owners’ rights and brand image by implementing more robust verification processes for sellers online.
Data disclosure requests to the operator of the platform in question or, for a domain name, the registrar, can be an effective way of identifying individuals who are operating online accounts across multiple networks. TSA and PIPCU.
Trading Standards and PIPCU
Where larger scale infringements, or those with particular health and safety concerns, are identified, it may be appropriate for IP rights owners to refer the matter to the relevant Trading Standards Authority or the Police Intellectual Property Crime Unit. Where a TSA or PIPCU takes on a case, this approach has the benefit of enabling offence proceedings to be brought, for example under s92 of the Trade Marks Act 1994 or Regulation 9 of The Consumer Protection from Unfair Trading Regulations 2008.
Tackling infringers via the Anti-Cybersquatting Consumer Protection Act is another effective option in identifying and targeting trade mark infringers that operate on online marketplace platforms where there are attachable financial accounts, for example Amazon.com, Wish.com, eBay.com and Alibaba.com.
Engaging in ACPA action places a temporary restraining order and preliminary injunction on the infringer to i) cease from infringing or passing off their goods as those of the IP owner and ii) not transfer or dispose of any money or other assets from their online accounts.
It places responsibility on online marketplaces to provide disclosure to enable the IP owner to identify the infringer and to provide information associated with the marketplace and infringer’s financial accounts (including credit card associations e.g MasterCard, VISA, PayPal).
It also places responsibility on third party providers (e.g. PayPal, AliPay, Amazon Pay etc) to locate all accounts and funds connected to the infringers seller aliases and restrain and enjoin any such accounts or funds from transferring or disposing of any money.
The benefits of ACPA action are that there are no upfront costs to the brand owner and there can be a repurposing of funds into a brand protection programme.
Of course, sometimes the infringement is severe enough to warrant litigation. An expensive and time-consuming option, IP rights owners should be alive to the possibility that they may not recoup their costs – even in the event of a successful claim – where the infringer in question does not have ready funds. Litigation may also not be wholly effective where the infringements are multi-jurisdictional (as they often are).
One interesting alternative is that undertaken by Meta and (i) Gucci (ii) Louboutin in 2021 and 2023 respectively. The technology conglomerate joined forces with the luxury goods brands in joint lawsuits to combat online infringers. In both suits, the targeted infringers were using digital platforms, including Facebook and Instagram, to promote the sale of counterfeit goods. Meta’s policies and terms prohibit the sale and promotion of counterfeit goods and in line with this they proceeded with enforcement action against the infringers’ online accounts, alongside an IP infringement claim by the brand owners. This has clear disincentivising benefits and is a strong public display of unity by the platforms and brand owners in their fight against counterfeits.
There are a variety of tools IP owners can utilise to identify, report and remove online infringing content. However, issues with identification of infringers, especially those working across networks through a series of aliases, can hamper brand owners’ efforts to tackle the problems with lower-end enforcement methods, leaving litigation as a last resort. More proactive disclosure of personal information, support from online marketplaces and stricter verification processes would better aid IP owners in identifying infringers that operate across multiple networks.