Featuring: Roxanne Elings, Ryan Tucker · 2020. 9. 3. · • Increased brand protection costs ... Sweeping Strategy To Combat Online Counterfeiting. 2010 March 1st Rogue Action --

New Strategies for Shutting Down Rogue Websites

© 2013 MarkMonitor Inc.

Featuring:

Roxanne Elings, Davis Wright Tremaine LLP

Ryan Tucker, MarkMonitor Inc.

April 24, 2013

Hosted by:

New Strategies for Shutting Down Rogue Websites

� Moderator

Michael McDonald

Manager, Government Relations

American Apparel and Footwear Association

� Featured Speakers

Roxanne Elings

Partner,Davis Wright Tremaine LLP

Ryan Tucker

Client Engagement Manager,MarkMonitor Inc.

Agenda

� The Origin and Evolution of Rogue Site Litigation

� Identification and Grouping of Rogue Websites

� Embracing Technology to Scale Enforcement

The Origin and Evolution of Rogue Site Litigation

Impact On Business

• Traffic is diverted from legitimate distribution channels to counterfeiters with very competitive pricing

• Marketing costs rise when illicit sellers bid up paid advertising costs and/or erode legitimate SEO

• Increased brand protection costs

• Increased costs to handle increased consumer complaints

Counterfeiting Does Affect Your Business

Multinational brand owners lose

approximately 10% of their top-line

revenue to counterfeiters.

-- Secretrary-General International Chamber of Commerce

Impact On Brand Value

� Perceived brand value plummets when counterfeits become or appear to be plentiful

� Quality problems with fake goods affect the legitimate brand’s customer base

� Product safety issues arise with unregulated production

Counterfeiting Also Affects Your Consumers

Legal Remedies Available to Brand Owners

� Government Action

� Uniform Dispute Resolution Proceedings before ICANN or ACPA actions (in the US)

� Cooperation with third parties

• Take down procedures on trade boards/auction websites

• Stopbadware (Google, AOL, Facebook, Twitter, and the Interactive Advertising Bureau work to take down paid ads)

• IACC Portal Program (as of October 2012, 906 individual

merchant accounts were terminated under this program)

� Rogue Website Litigation

You Have Legal Options To Fight Against Counterfeiting & E-crime

March 2010 – North Face/Polo Vs. Fujian

Largest Federal Lawsuit Targets Counterfeit Network With 6,500 Domains

September 2010 – North Face/Polo Win Case

$78M Awarded In Statutory Damages, Over $1M Transferred To Plaintiff

Judicial Reception

December 2010

“The concern I have is that the

defendants are going to be

quicker than the plaintiffs. The

defendants have the ability,

limited only by imagination… to

create [new domains], to evade

any process of this Court.”

~ Judge Hellerstein

Judicial Concern And Awareness That Continued To Evolve

June 13, 2010

“My injunction, once served on Public Interest Registry, should have alerted it to no longer play its role in allowing customers to connect to defendant counterfeiters’

websites, for Public Interest registry would, by continuing to do so, commit an unlawful act, by aiding and abetting in defendants’ unlawful counterfeiting activities in violation of United States law. Furthermore, Public Interest Registry should no longer have accepted transmissions of registration information from registrars who had

received defendants’ orders for domain name registrations and registration

renewals because my injunction advised that defendants’ domain names had been used to advertise and sell counterfeits of

plaintiffs’ goods.”

~ Judge Hellerstein

Tools to Address Concerns

� Cost-effective & efficient way to provide notice to defendants in China (via email)

� Can continue to shut down related rogue websites and collect monies using the same action

� Authorizes restraint of payment processor accounts tied to defendant websites, even where website is not selling targeted goods

� Registries required to disable newly located domains and then transfer the domains to brand owners

� Third-party service providers must also cease providing services to defendants within 2 days of receiving notice of the order

• ISPs, back-end service providers, web designers, sponsoredsearch engine/ad-word providers and any parties delegating IP addresses

Sweeping Strategy To Combat Online Counterfeiting

2010

March 1st Rogue Action -- The North Face & Polo

September COICA introduced $78 million judgment in 1st Rogue Action

November COICA dead

December 1st Rogue Action - Contempt entered; Burberry files Rogue Action

2011

May PIPA introduced

June 1st Rogue Action finds Registries must disable websites or risk contempt

October SOPA introduced

December OPEN introduced

* NFL, Gucci, Chanel, Michael Kors, Levi Strauss & Klipsch file Rogue Actions

2012

January SOPA & PIPA dead

* A&F, Coach, Deckers, Hermes, Richemont file Rogue Actions

Rogue Litigation = Powerful Anti-Counterfeiting Tool

� More cost-effective, efficient than ad hoc UDRP or take-down letters to ISPs

� Ability to take down websites that can’t be taken down through UDRP/ACPA (alone) or letters to ISPs

� Takes down websites en masse, disrupts revenue flow to counterfeiters and delists in search engines with one action

� Requires third parties to take action to shut off services to websites

� Identifies key parties; tracks business methods in a highly dynamic environment sufficient to keep efforts relevant

� Ability to recoup some costs of enforcement

� Decrease visibility of counterfeiting on the Internet

� Tackle websites in the US, Europe & elsewhere in one action

Rogue Litigation Offers Exciting Benefits To Fighting Counterfeit Activity

Identification and Grouping of Rogue Websites

Identification and Grouping of Rogue Websites

� Consumer Complaints

� Investigative Work and Controlled Buys

� Technology as a Multiplier

Counterfeit Detection Technology

Crawl Detect Augment Analyze &Report

Unprecedented, In-Depth Intelligence On Rogue Websites

Examples of two websites from the same operator

Website A Website C

Machine Clustering Yields Results Not Obvious vs. Manual Clustering

Automated Clustering

Example: Rogue Site Clusters

Ability to Group Sites by Operators

*Note: 10 clusters represent 331 rogue sites

Number near each cluster represents # of rogue

websites in cluster

Embracing Technology to Scale Enforcement

Winning Combination for Effective & Scalable Enforcement

Iterative Process To Reap Rewards Of Ongoing Enforcement Mechanism

� Identify targets for investigation & litigation

� Make connections among rogue sites

� Gain admissions/info through undercover conversations

� Conduct controlled purchases

� Prepare/file lawsuit

� Notify Payment Processors, Registries

� Freeze assets

� Service on defendants via email

� Post judgment, work with Registries & Payment

Processors to disable sites & collect monies

Law Firm

Technology

Investigative

Firm

Average Per-Site Litigation Costs

Without

Technology

With

Technology

Time

Co

st

0%

100%1. Substantially reduce

costs associated with keeping down rogue websites

2. Increase yield of detected rogue websites

3. Systematically monitor

progress against your enforcement efforts

Up to 90% Per-Site Cost Reduction for Rogue Website Takedowns

Summary of Legal Action

10,000 5001,800

4,000

2,000

1,700

83% Reduction in Rogue Sites

Q&A

� Moderator

Michael McDonaldManager, Government Relations

American Apparel and Footwear Association

� Featured Speakers

Roxanne ElingsPartner,Davis Wright Tremaine [email protected]

Ryan TuckerClient Engagement Manager,MarkMonitor Inc.

[email protected]

Thank You!

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