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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.
Thank You!
� For information on MarkMonitor solutions, services and complimentary educational events:
• Contact via email:
• Visit our website at:
www.markmonitor.com
• Contact via phone:
US: 1 (800) 745 9229
Europe: +44 (0) 203 206 2220