Dan Seymour – BCGuardian

Internet Intermediaries as an Effective Enforcement Tactic

A common enforcement tactic regarding websites offering copyright or trademark infringing content involves preparing a formal Cease and Desist notice to the site explaining that they are infringing and detailing the specific instances of infringement found on the site. This tactic can and does work in many cases. But what happens when that notice goes unanswered and the site continues to infringe? This is particularly true of sites operated by individuals in jurisdictions that may not respect the laws of the country in which the content owner operates and from which the notice is sent. It seems that litigation may be the only recourse.

But litigation is expensive, time consuming, and does not always result in the complete cessation of infringement. Fortunately, another tactic exists that rightsholders can use: Go after the intermediaries (or 3^rd parties) that are supporting the operation of the site. And by “go after” we mean send them notices that their customer is using their service(s) to infringe your rights, and request that they stop allowing this. Of course, successfully convincing intermediaries to cease doing business with a customer does not necessarily mean that customer can’t find other intermediaries. But the point is to make it as difficult as possible for recalcitrant operators of infringing websites to continue to infringe.

So, who are these intermediaries? An answer to that question will, no doubt, vary from site to site but, generally speaking, intermediaries include the following:

Hosting Providers

Websites are typically hosted by 3^rd parties whose business is built, in part, upon the revenue generated from the hosting services provided to their customers. Without some kind of hosting provider, websites would not be accessible to Internet users. Thus, hosting providers offer crucial services and serve as a single point of failure for website operators. That is, if they lose their host, they lose their ability to continue to infringe.

Payment Processors

Websites whose business model consists of selling pirated goods, such as infringing eBooks, movies, music, software and/or games, typically do so using some kind of payment processor. These comprise 3^rd parties who process payments on behalf of their customers’ ecommerce sites generally in exchange for a percentage of each transaction. Convincing them to cease doing business with the infringers removes an essential part of their business, i.e., the ability to collect payments for the sale of their infringing goods.

Search Engines

Websites commonly generate more revenue when they generate more traffic. And more traffic comes with increased visibility. Search engines have long been a vital resource for operators to increase the chances that users will visit their websites. This is also true for the operators of infringing websites. Fortunately, most of the well-established search engines will remove listings from their indexes when provided with sufficient evidence establishing that the listings lead to infringing content.

Advertising Providers

Generally, infringing websites generate their revenue in two distinct ways: By placing advertisements on their sites for which advertisers compensate them and/or by placing advertisements on 3^rd party sites seeking to drive traffic to their site. In either situation, 3^rd parties support the activity and are generally amenable to processing notices of infringement.

Domain Name Registrars

While domain name registrars truly count as 3^rd party intermediaries, their liability is somewhat limited when it comes to the content of websites. On the other hand, if there is a trademark dispute regarding a domain name, content owners may use the Uniform Domain-Name Dispute-Resolution Policy (commonly known as the UDRP) to force registrars to turn over the infringing domain name to the content owner. While this will not force the website itself offline, it will take away its domain name, which is a key ingredient in advertising, search engine optimization and, to an extent, payment processing.

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Visibility of Infringing Content on the Internet

Dan Seymour

In our post about Illegal eCommerce Websites, we saw how visibility is crucial to the operation of certain infringing eBook sites. Online ads, search results, backlinks and page rank all play a role in driving traffic. While limiting visibility to illegal sites by effective enforcement is not a total solution, it is a necessary component to any online protection program.

We tend to divide up the content-consuming Internet public into three broad buckets:

Those looking to acquire content legally
Those looking to acquire content wherever they can find it
Those looking to acquire content for free, no matter what

At the end of the day, the issue of visibility really only goes to the first two. Content consumers in the third bucket typically already know where to get their content for free. In any event, it is important to note that consumers in the third bucket are not customers. They will not spend money on your content.

And this raises an important point: consumers in the first two buckets will spend money on your content. This means that each sale of infringing content to one of them corresponds more or less directly to a lost sale of legitimate content.

So, the issue of the visibility of infringing content really boils down to this: We don’t want people who are looking to acquire content by purchasing it to be exposed to illegal sites in the first place. Period. Taking down infringing search results at search engines and disabling advertisements for infringing product across the various ad networks is a crucial component to any enforcement program.

Thinking of this component of an enforcement program in this context helps understand why search engine and ad network monitoring and takedown are so important.

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Illegal eCommerce Websites

Dan Seymour

Unlike typical copyright infringing websites that provide content for free and are supported by advertising revenue, infringing eCommerce sites are supported by the sale of infringing goods. When those infringing goods are digital – such as eBooks – the cost of acquisition is far less than for traditional hard goods counterfeits. The operator only needs to acquire a single copy of the infringing content from which free copies are made to fulfill subsequent sales.

A further damaging aspect of illegal eCommerce sites lies in the fact that they cater to the buying consumer, as opposed to the consumer on the hunt for free content (more on that in an upcoming post). This means loss analyses are much more straightforward, as each sale arguably represents more of a lost sale of the legitimate product.

Infringing eBook eCommerce sites typically sell illegally copied DRM-free PDFs (we have also seen some providing EPUB and Mobi formats as well). Traditionally, these sites take two forms:

Standalone websites that either deliver content directly or from a third party hosting provider and
Marketplace storefronts set up on eBay, Bonanza, or others, that may also directly deliver content or use third party hosts.

Each has its advantages and disadvantages for the operator. While setting up a standalone website in a recalcitrant jurisdiction provides insulation from being shut down, the challenge of drawing the consuming public to the site remains. On the other hand, using an established marketplace such as eBay offers plenty of eyeballs (and an air of legitimacy), but at the increased risk of being shut down.

Recently, we’ve begun seeing an uptick in a sort of hybrid of the two, sites seeking to solve the dilemma of stability vs. visibility. Some sites now use Google Ads (formerly Google AdWords) for visibility and the air of legitimacy. In fact, the construction of some of these sites includes no native search or browse function, so search engines cannot effectively index them, meaning that traditional SEO is out the window. But these sites don’t need SEO, as long as the ads appear above organic search results.

One component of an effective enforcement strategy against these sites, therefore, must include the collection of the URLs for the infringing ads for subsequent referral to Google. Once that groundwork is laid, approaching Google to help address the problem more globally will be much easier.

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