Brand Protection And Fighting Fakes Online – Intellectual Property

The shift to online marketplaces has created an incredible boom
for some, and significant loss to others. Branding has become more
important than ever, particularly in developing an online presence
through search engines, various online platforms, and social media.
Further, the rise of the “influencer” has opened
additional opportunities to deliver brands and products to targeted
demographics. However, these great advances also come with some
disadvantages that can become quite onerous and problematic. Fakes
and counterfeits are part of these unwelcome advances, and seem to
have come out of the “dark back alleys,” finding a
“legitimate” storefront on various websites and
platforms. Unfortunately, a brand owner must continually
“police” its marks or suffer a loss in value and
recognition, and, potentially, loss of the brand.

The ever-expanding internet presents a daunting task to any
brand owner trying to police its marks. Due to the protections
extended to “internet content providers” under Section
240 of the Communications Decency Act, most websites and platforms
are absolved of liability for infringing third-party content. As a
result, the burden to police falls on the mark owner. There are a
number of companies and law firms that are able to harness software
and manpower to scour the internet on behalf of brand owners, but
those routes can be cost prohibitive for some. However, there are a
number of easy steps any brand owner can use to protect its brand
online. 

Online Marketplace Protection

Nearly every mainstream marketplace and social media platform
has Acceptable Use Policies, which provide procedures for reporting
intellectual property infringements. Despite the proliferation of
counterfeit goods and fake accounts, there are surprisingly few
companies that offer monitoring services. The most prominent are
Amazon and Facebook.

The Amazon Brand Registry (“The Registry”)¹ is a free service, which allows
the brand owner to search for content using images and keywords and
report violations. In order to utilize The Registry, the brand
owner must have a federally-registered trademark that appears on
products or packaging. The Registry requires verification of the
rights by the brand owner listed with the USPTO on the registration
in order to create the account. The owner must apply for
registration and will need to provide the trademark registration
number, product categories, and a list of countries where products
are manufactured and distributed. In addition to streamlining the
brand owner’s proactive monitoring, The Registry uses the
information provided by the brand owner to proactively remove
suspected infringing listings. According to Amazon, The
Registry’s automated screening process stopped more than 10
billion suspected problematic listings.

In order to take advantage of Facebook’s free monitoring
service, the brand owner must apply for access to Facebook’s
tool and must have a registered trademark.² The program is limited to
searching ads, marketplace posts, and group sale posts and does not
cover copyright or unregistered trademarks.

Third-party services such as those offered by Corsearch or
MarkMonitor, allow a brand owner to not only monitor infringing
uses, but also identify counterfeits and lookalike products.

Combatting Cybersquatters

While cybersquatters have been around for decades,
cybersquatters in the 2020s are amping up their game by leveraging
counterfeit websites to perpetrate fraud in the name of the brand
owner. While “run of the mill” cybersquatting undoubtedly
damages brands and goodwill, adding a counterfeit website gives the
cybersquatter an additional layer of perceived legitimacy. This
perceived legitimacy ups the confusion ante and exposes consumers
to fraud and identity theft, all at the expense of the brand
owner’s reputation.

For example, a financial investment firm that is subject to
various regulatory bodies was the target of cybersquatting
involving both an infringing domain name and a counterfeit website.
The counterfeit website went so far as to include the same physical
address and business license information for the investment firm.
At least two consumers lost thousands of dollars each, not only
damaging the investment firm’s brand and goodwill, but also its
reputation with regulatory authorities. In another case, a
well-known sports exhibitor encountered similar cybersquatting plus
counterfeit website, which purported to offer streaming services of
its events. The counterfeit website included nearly identical
photos and text to those used by the brand owner on its website,
which caused greater consumer confusion. Here again, innocent
consumers provided private financial information believing they
were receiving legitimate services from the brand owner, when they
were not.

With these higher-stakes infringers looking to exploit consumers
at a brand owner’s expense, it is even more imperative brand
owners take proactive measures to monitor domain name registrations
in order to stop infringers before they have an opportunity to
start. One example is Brand Monitor, offered through DomainTools.³ For less than $1,000 per year,
Brand Monitor will allow a brand owner to monitor domain
registrations for brand names and common variants. CheckMark
Network offers similar domain monitoring services that include
identical or confusingly similar domain names, prefix, suffix, or
mid-word occurrences, and uses a typo-squatting algorithm to
maximize monitoring.

While a brand owner can go after an infringing domain name using
the Uniform Dispute Resolution Policy (“UDRP”), the UDRP
does not have a mechanism to immediately take down a counterfeit
website.⁴ In cases where a counterfeit
website needs to be brought down immediately, the brand owner
should consider filing a cybersquatting lawsuit in federal court
and seek an immediate ex parte temporary restraining order
requiring the domain name registry or registrar to disconnect the
website from the domain name.

Using Copyright Law to Fight Fakes

Copyright law also provides an avenue of protection for brand
owners. Oftentimes, infringers and/or counterfeiters will steal
images from the brand owner’s website and then use those images
to promote and sell counterfeit goods. These images are generally
high quality and a great representation of the brand, which is why
they are used by infringers and counterfeiters. Moreover, the
images can be used to “pass off” oneself as being
legitimately connected to, affiliated with, or endorsed by the
brand owner when they are not. By tracking its own images across
the internet, the brand owner has a more targeted approach as
opposed to simply trying to manually input search terms in a search
engine. There are several free or low-cost software available to
reverse search images on the internet. For example, YouTube has a
fairly robust free copyright infringement monitoring program called
Content ID.⁵ These tools can be invaluable.
And, where feasible, brand owners may want to consider hiring a
person(s) whose sole purpose is to employ these tools to scour the
internet for infringements.⁶

The advantage of
employing an online copyright search for brand images is that a
copyright registration is not required. Ownership in copyrights
vests upon creation of the work.⁷ Therefore, the mark owner can
pursue enforcement without the need to fulfill an extra step. The
Digital Millennium Copyright Act (“DMCA”) requires
website owners to create an ability for a brand owner to petition
the site to take down an infringing work in order to avoid
liability for the same.⁸ Most websites and online market
platforms have online dedicated DMCA take-down forms/submissions to
make it easier on the brand owner. The brand owner then needs only
make an affirmative sworn statement that the image belongs to it
and it is being used by the infringer or counterfeiter without
permission. DMCA take-down notices can be fairly effective and
removing infringing content quickly. The DMCA is best used in cases
of a clear-cut obvious case of copying – where the image is
identical to and lifted from the mark owner’s website.

Additionally, in lieu
of pursuing full-blown federal copyright litigation, the recently
enacted Copyright Alternative in Small-Claims Enforcement Act of
2019 (“CASE Act”), which becomes effective December 27,
2021, offers a great alternative.⁹ The CASE Act established the
Copyright Claims Board (“CCB”) – a voluntary
administrative body, akin to the Trademark Trial and Appeal Board,
but less formal. The CCB is intended to be a vehicle for minimizing
fees and costs generally associated with litigation, and has the
express goal of expediting resolution. Unlike federal court, there
is no requirement for the brand owner to obtain a copyright
registration before instituting a CCB proceeding. Further, the
Rules of Evidence do not apply, and filing fees are a fraction of
federal court fees. Indeed, the Act limits the amount of damages to
a maximum of $30,000 as compared to maximum damages under the
Copyright Act of $150,000 per work. While participation is
voluntary, a proceeding in front of the CCB works on an
“opt-out” basis rather than an “opt-in” basis.
What this means, practically speaking, is that once a rights holder
initiates a claim in front of the CCB, the responding party must
affirmatively disagree with proceeding in front of the CCB.¹⁰ While opponents of the CASE Act
criticize this opt-out scheme as being unconstitutional based on
due process considerations, the CCB is intended to provide an
alternative solution to the rights owners. And, it offers the
benefit that if the defendant fails to appear, the brand owner can
obtain a default judgment and enforce it in federal court.¹¹

Given the increase in counterfeit websites, which are often
accompanied by a domain name similar to an established brand, brand
owners face increased harm to their goodwill and reputation. 
Brand owners should increase monitoring and vigilance in protecting
their intellectual property rights. They should also take advantage
of free services offered by some larger companies, such as Amazon
and Facebook, and engage dedicated companies and/or employees to
monitor individual websites and marketplaces for counterfeits and
other infringements. 

Footnotes

1 https://brandservices.amazon.com/?ld=BRUSNF
(last visited Oct. 13, 2021).

2
https://www.facebook.com/help/contact/423912757973851 (last visited
Oct. 13, 2021).

3 Neither the authors nor their firm has received
any financial incentive for identifying any product or service in
this article.

4 A complainant’s remedies are limited to
cancellation or transfer of the domain name.

5
https://support.google.com/youtube/answer/2797370?hl=en#zippy=%2Cwhat-options-are-available-to-copyright-owners
(last visited Oct. 15, 2021).

6 Design Basics, LLC v. Signature Constr.,
Inc., 994 F.3d 879, 882 (7th Cir. 2021) (noting plaintiff had
“employees trawl the Internet in search of targets for
strategic infringement suits”).

7 17 U.S.C. § 201

8 17 U.S.C. § 1201

9 H.R. 2426 – CASE Act of 2019

10 The implementing procedures for the CCB are
going through the proposed rulemaking and public comment phase. For
the most current status of CCB rulemaking, visit
https://www.copyright.gov/about/small-claims/related-rulemakings.html
(last visited Oct. 13, 2021).

11 H.R. 2426 – CASE Act of 2019, §
1508.