The BCGuardian Blog

On April 3^rd, President Trump released a memorandum (see Memorandum on Combating Trafficking in Counterfeit and Pirated Goods) calling for improved efforts by government agencies and a coordinated approach between government and private industry in the fight against counterfeit and pirated goods.

Pointing specifically to third-party marketplaces, the memorandum asserts that existing efforts are to be expanded to address the scale, scope, and consequences associated with the sale of counterfeit goods. However, a lack of comprehensive data regarding the trafficking of counterfeit goods on such third-party marketplaces is cited as an obstacle to overcome.

The memorandum issues a call for the Secretary of Homeland Security and the Secretary of Commerce to consult with IP rightsholders, third-party intermediaries, and other stakeholders to collect such data in order to develop a deeper understanding of how third-party marketplaces contribute to and benefit from the sale of counterfeit goods. Further, the Administration seeks to learn what controls and methods have been successfully implemented by third-party marketplaces to curb the trafficking of counterfeit goods.

This data is to be utilized in the development of a report to be issued to the Administration within 210 day of the memorandum’s issuance – a deadline of October 30^th, 2019.

To learn how BCGuardian may be able to help your firm collect and/or analyze data responsive to the Trump Administration’s request for data regarding the trafficking of counterfeit and pirated copies of your goods, please contact Michael Candore at m.candore@bcguardian.com.

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.