Protecting a Brand in Cyberspace

by Jeffrey D. Knowles, Marcella Ballard, and Justin E. Pierce on Sep 23, 2016 12:00:00 AM Advocacy, Digital Marketing, e-Commerce

Protecting_a_Brand_in_Cyberspace-436437-edited.jpgProtecting one’s brand today requires more foresight and vigilance than ever. The Internet and cutting-edge technologies enable individual infringers to attain wide distribution of counterfeits with decreased chances of detection. Whether creating multiple accounts to sell counterfeit goods on popular e-commerce platforms or dealing in trade secrets and stolen intellectual property through the anonymity of the “dark web,” infringers have multiple ways to maximize profits while minimizing manufacturing costs and the risk of getting caught. Here are some trends worth noting in intellectual property and brand protection for 2016.

Combating Infringement on E-Commerce Platforms, Social Media, and ISPs

In a recent action, one marketer sought to prohibit an online retailer from offering products for sale based on a trademark search for a product they do not carry. Multi Time Machine, Inc., asked the U.S. Supreme Court to review a 2-1 panel decision by the U.S. Court of Appeals for the Ninth Circuit that a popular e-commerce marketplace did not create a likelihood of consumer confusion by offering competitors’ products when consumers entered search terms for its “Special Ops”-branded military- style watches.

Users of the marketplace who search for “MTM Special Ops” are presented with a list of competing products, and according to the Multi Time Machine’s petition for certiorari, “At no time or place on [the marketplace’s] display does it acknowledge that MTM’s watches (by the specific trademark or otherwise) are simply not available on [the marketplace’s] website.”

On the social media front, a recent survey of more than 1,000 advertisements appearing on a popular social media platform found that while many of the ads appeared to be genuine, some of the linked sites used the logos and trademarks of the brands’ owners to deceive consumers into believing that they could purchase authentic goods at the sites. The sales that ultimately result from these counterfeit links can cause financial damage to a company through lost sales of the genuine article, damage the brand’s reputation, and potentially pose a danger to consumers.

Unsuspecting brand owners often find that regulatory actions and resulting consumer complaints or injuries are the result of consumers purchasing counterfeit versions of the brand’s product. For these reasons, brand owners should monitor advertisements for counterfeit goods on social media platforms and police against infringing domain names through the proper channels.

Policing Dark Web Marketplaces

The dark web is a collection of websites that provide anonymous browsing by hiding the IP addresses of the servers running the sites. The overwhelming majority of dark websites use the anonymity software Tor—an acronym for the name of the original, multi­layered anonymity software, The Onion Router. Tor enables users to route web traffic through several other computers in its network, so that the party on the other end of the connection can’t trace traffic back to that user.

Consumer data, counterfeit goods, and trade secrets are often sold on dark web markets, yet many corporate executives and managers responsible for corporate security or brand protection lack operational knowledge of the network or policies for enforcing intellectual property rights against its denizens.

Companies can combat these cyberthreats by expanding online monitoring efforts to include intelligence gathering and enforcement activities that cover dark web markets; using digital watermarking and other track-and-trace technologies to better understand how content or unauthorized products are distributed; disrupting or disincentivizing the illegal market for content and information; and working with dark web-knowledgeable legal counsel and cyberinvestigators.

While the explosion in e-commerce and online marketplaces has been a blessing for electronic retailers seeking another path to reach consumers as the effectiveness of direct response television declines, it has not been without a new set of problems that can keep marketers awake at night. Brand protection in the e-commerce age requires tenacity, technical know-how, and global reach. Marketers should confer with experienced counsel who understand DR and the many facets of the counterfeiting threat.

Photo by cooldesign/FreeDigitalPhotos.net

Jeffrey D. Knowles chairs Venable LLP’s Advertising, Marketing and New Media practice group, and Marcella Ballard and Justin E. Pierce are partners in the firm’s Advertising and Marketing Litigation practice group.

The above originally appeared in the May-June 2016 issue of ER magazine.

Jeffrey D. Knowles, Marcella Ballard, and Justin E. Pierce's blog
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