Preventing Counterfeit Trademarks – Part 5: Fight Internet Sales

The internet makes it easier than ever for counterfeiters to promote their wares around the world. They don’t have to operate a brick-and-mortar storefront or even appear anywhere physically. Instead, they can hide behind the anonymity that the net provides.

Fortunately for trademark owners, the internet can also be a powerful tool in fighting counterfeit trademarks, and many of the remedies it provides can be used in conjunction with and even support civil litigation or criminal enforcement.

There are three main groups you can contact to stop the counterfeiter’s ability to make internet sales.

Hosts and Internet Service Providers (ISPs)

Under US trademark and copyright law, hosts and internet service providers face potential liability for contributory infringement if they knowingly facilitate sales of counterfeit items.

However, ISPs can gain safe harbor from liability if they have a process for handling complaints about counterfeiting and removing those items in a timely manner. To be eligible for this safe harbor, they cannot:

  • ignore counterfeiting activities that are brought to their attention;
  • receive direct financial benefit from those activities; or
  • be involved with supporting or creating the website of the counterfeiter.

The Digital Millennium Copyright Act also provides a special subpoena, which you can serve with a takedown notice and without filing a complaint in court. (However, the subpoena must be processed by the clerk of the court at the ISP’s location.)

This subpoena requires the ISP to provide information about the counterfeiter, such as:

  • name;
  • physical address;
  • email;
  • phone number; and
  • any other identifying information.

It is important to note that it will be hard to take advantage of these remedies if the host or ISP is outside of and without significant ties to the United States.

Doman Name Registrants

You can also dispute the validity of the counterfeiter’s domain name registration under the Uniform Domain Name Dispute Resolution Policy (UDRP).

The UDRP allows you to cancel or transfer the domain name used by the counterfeiter. To do so, you must prove that the domain name:

  • is identical or confusingly similar to your trademark or service mark;
  • was registered and used in bad faith; and
  • is being used by a domain name holder who has no legitimate right or interest to it.

Arbitration panels in UDRP proceedings usually find that a registrant’s use of domains to sell counterfeit goods does not constitute bona fide offerings of goods or a legitimate fair use.

If the domain name is not counterfeit but being used as a notorious website to sell counterfeit goods, the Department of Justice can then seize the domain name to stop the operation. The website’s owners typically have 60 days to challenge this seizure, but in the vast majority of cases, the owners do not make a challenge.

Payment Processors

The payment industry, along with the International Anti-counterfeiting Coalition (IACC), created the RogueBlock program, which uses a secure online portal to facilitate communication between trademark owners, enforcement agencies, and credit card companies.

PayPal, MasterCard, Visa, American Express, and Discover all participate, and as a result the program has terminated the merchant accounts of over 5,000 counterfeiters and over 200,000 websites.

Need Help Combating Counterfeit Trademarks?

In the final part of this blog series, we’ll look at how you can prevent the counterfeit goods from being created in the first place. If you need guidance for your particular situation, we encourage you to reach out to the Marks Gray IP team at 904-807-2180. We can walk you through the best courses of action to monitor and protect your trademarks.