This article has been written by Aavieral Malik pursuing a Diploma in International Contract Negotiation, Drafting and Enforcement course from LawSikho.

This article has been edited and published by Shashwat Kaushik.

Introduction

The problem of counterfeiting is one of those crimes that has existed in this world since time immemorial. Even before the advent of the digital era, counterfeiting was extensively practised by fraudulent persons and entities when goods and products were sold physically, but post introduction and expansion of the internet, wherein market places evolved and shifted from the physical realm to being online, the bane of counterfeiting grew evermore rampant without any territorial or geographical limitations whatsoever.

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Problem of counterfeit listings

Counterfeiting is a serious threat to the genuine owner, wherein the perpetrator passes off its merchandise in a deceptively similar way to that of the original, and such passing off can be of the goods and products as well as of the intellectual property (IP) of the owner, such as copyrights, trademarks, industrial designs, etc.

While each digital marketplace has its own grievance redressal mechanism, and some are expeditious in the removal of the infringing content, there are also those who’re not very proactive and steadfast when it comes to the removal of a counterfeit listing on their platform if a complaint is raised by the owner. In such a scenario, the aggrieved owner of the IP has to opt for other legal alternatives so as to compel the marketplace to comply with such a complaint and remove the infringing content quickly.

Although many countries in the jurisdiction of which these marketplaces operate also have their own specific laws to deal with this problem, in this article, I would confine myself to stipulating and discussing those mechanisms that are not country-specific and can be used by an aggrieved IP owner before and sometimes without knocking on the doors of the court, and not being subject to any territorial limitations, which are as stated below.

Take down mechanisms for of counterfeit listings

Cease and desist notice

  • This is quite similar to sending a formal complaint to the alleged infringer, wherein a formal notice is sent as a pre-litigation recourse so as to call out to the infringer to stop the infringing activity and take down the counterfeit listing from the marketplace.
  • This notice also acts as quintessential evidence to prove that the infringer was duly apprised about the rightful claim of the IP owner, nonetheless didn’t remove the listing and continued with the guilty knowledge of the same, which gives more weight to the claim of the rightful IP owner as and when it decides to initiate legal proceedings against the infringer.
  • However, it’s pertinent to mention that since this notice is not statutorily enforceable in nature, thereby doesn’t carry that much of a deterrent effect, but more of an evidentiary value.

 DMCA takedown notice

  • A DMCA Takedown Notice gets its force from the Digital Millennium Copyright Act of 1998, which is a federal law enacted in United States so as to combat and protect copyright holders from online theft, and is in tandem with the principles and requirements laid down by the World Intellectual Property Organisation (WIPO), of which United States is also a member.
  • Under this statute, civil as well as criminal penalties can be levied against an infringer when found guilty of copyright infringement.
  • This statute is enforced by sending a takedown notice or DMCA takedown notice to the website-owner or internet service provider (ISP) for the removal of the infringing counterfeit listing.
  • Generally, the website-owner or ISP is protected by safe harbour since they are not the ones responsible for posting the counterfeit listing and it becomes very onerous and, more often than not, impossible to keep track of such listings in the ocean of myriad data. However, if the ISPs don’t remove the counterfeit listing even after sending a valid DMCA notice to them, then they are also liable to face penalties as per the statute.
  • Also, if the website is not willing to comply with the DMCA Notice and remove the counterfeit listing, then the notice can also be sent to the web host provider that is hosting the website on which the counterfeit listing is present, since they house the data on the website and oversee its management and data transfer.
  • If, however, the infringer files a counter-notice against the DMCA Notice, then a court order may be required by the claimant so as to ensure that such a counterfeit listing is removed for perpetuity.
  • The advantages of sending a DMCA takedown notice is that it’s more authoritative than a cease and desist notice since it has statutory backing, while the disadvantage of it is that the ambit of the enforceability of this notice is mostly limited to those infringements which occur within United States, and sending this notice as regards for an infringement occurring outside the borders of United States won’t guarantee complete compliance for removal of the counterfeit listing, even if the subject-matter which is being infringed has although originated in United States, but the infringement is occurring in some other jurisdiction, reason being that since many countries have their own laws to protect copyrights, so they would definitely give precedence to them over a DMCA Notice for the removal of the infringing counterfeit listing.
  • Lastly, even though a DMCA Notice is used to deal with the removal of copyright infringement, the law also aids with the removal of a counterfeit listing that is infringing the trademark of the rightful owner through its additional takedown services. 

Google’s safety mechanism

  • Google has its own grievance redressal mechanism to cater to and remove IP infringement.
  • While approaching Google for the removal of infringing counterfeit listings won’t ensure that the source or website where such listings are present will be taken down, it would definitely aid the owner to get such a website delisted from the search engine so that in future it doesn’t appear in the search results.
  • Also, a court order may be required in certain instances by Google to substantiate the claim of the owner of the IP, such as if such complaint is contested by the opposite party, i.e., the alleged infringer, or if the local laws of the jurisdiction where the cause of action has arisen may mandate a court order for certain specific types of content removal.
  • The Legal Troubleshooter Tool of Google acts as the platform wherein a counterfeit notice can be filed by the owner of IP to apprise Google about those sites that host the counterfeit listing, which is then de-indexed from the search engine after carefully reviewing the veracity of the counterfeit notice filed by removing its visibility.
  • The counterfeit notice can be filed by following these steps:
  • Selecting the relevant Google product where the counterfeit content is believed to appear,
  • Selecting the legal reasons to report content,
  • Selecting the intellectual property,
  • Selecting counterfeit.
  • Also, the notice has to be properly substantiated by attaching the relevant URLs where such a counterfeit listing is present/displayed, official documentation signifying proof of rightful ownership of IP, photos or screenshots and copies of original work.
  • Since the best way to show proof of ownership for something is for it to be registered, it’s highly recommended that the owner of IP do the same, so as to increase the evidentiary value of the IP and to make the overall process of de-indexing and removal of the counterfeit listing by Google from its search engine hassle-free.

ICANN grievance redressal

  • The Internet Corporation for Assigned Names and Numbers (ICANN) is an institution that is responsible for accrediting domain name registrars (DNRs), who in turn manage the domain names of websites and assign internet protocol addresses to them.
  • The majority of the countries, for the purposes of bringing uniformity in their respective IP laws with each other, abide by directives and rules laid down by ICANN, as a result of which the countries have adopted the World Intellectual Property Organisation (WIPO) as their dispute resolution service provider under the Uniform Domain Name Dispute Resolution Policy (UDRP) and Uniform Rapid Suspension (URS).
  • Registry –Registrar Agreement
  • ICANN prescribes minimum standards for performance of such DNRs, which are accredited by it.
  • As per ICANN guidelines, the DNRs accredited by it have to incorporate a mandatory provision in the Registry–Registrar Agreement wherein the registrars/DNRs would prohibit the registrants, i.e., the website-owners from distributing malware, botnet operation, phishing, piracy, trademark or copyright infringement, fraudulent or deceptive practices, counterfeiting or otherwise engaging in activity contrary to applicable law, and provide (consistent with applicable law and any related procedures) consequences for such activities, including suspension of the domain name of the registrant, i.e., the website-owner.
  • If, however, the registrar doesn’t honour the terms and conditions of the agreement, then the owner can resort to UDRP and URS.
  • UDRP and URS
  • Earlier, UDRP, which was introduced in 1999 by ICANN, only covered disputes pertaining to infringing domain names, but with passage of time, it also started covering those disputes whose subject-matter involves the display of counterfeit listings on their website.
  • In 2019, ICANN further introduced and added the Uniform Rapid Suspension System (URS) so as to further expedite the above mentioned process in a more cost effective way.
  • This method of approaching UDRP or URS is beneficial because the aggrieved party is saved from approaching the court of the jurisdiction where the cause of action arose, which is a cumbersome and slow process, often entailing huge costs for the aggrieved owner of IP.
  • UDRP and URS enable the owner of IP to not only recover their domain names but also remove counterfeit listings by getting those websites shut down that use domain names that are identical or confusingly similar to the genuine owner of such domain name, as well as those websites on which such counterfeit listings are displayed.
  • However, URS requires a higher and stronger standard of proof in the form of clear and cogent evidence that there should not be any dispute whatsoever as regards the claim of who’s the genuine owner of IP, after which a successful proceeding ensues in the freezing of the concerned domain name.

Payment providers

  • Another effective remedy for the aggrieved IP owners to prevent the unauthorised and illegal sale of goods and products sold as a result of these counterfeit listings is to coordinate with the payment providers, since an effective blockage of the payment accounts of these fraudulent sellers who post such infringing counterfeit listings would be a huge blow to such sellers.
  • An initiative in 2012 was launched by the Indo-American Chamber of Commerce (IACC) called the Rogue Block Program,[15] a portal to facilitate nexus between the rights holders of the IP, enforcement agencies and the payment provider companies for the purposes of sharing information.
  • This initiative has been really helpful in the closure of the accounts of such fraudulent sellers, which are linked to numerous websites for the purposes of collecting payment, thus stopping the sale of these counterfeit products and goods.

Impact of counterfeiting

While there are a lot of stakeholders who are harmed as a consequence of counterfeiting, such as the purchasers of these goods, the overall economy of a nation, the biggest and most detrimental effect of this problem is on two particular entities, which are the marketplaces and the genuine owner of the IP. 

The sale of goods as a result of these counterfeit listings is a direct blow to the owner of IP, since it causes immense loss of revenue to them and reduces the goodwill of these brands in the minds of the customers who inadvertently purchase such products, assuming these fakes are original.

Also, such counterfeit listings negatively impact the marketplaces, especially if it’s repeatedly observed that such marketplaces don’t remove these listings from their platform despite being sent multiple takedown notices to them, since it erodes the trust of the genuine brands who are the owners of IP. 

As an example, IP and brand protection company IncoPro found that 52% of consumers lost trust in a brand after purchasing a fake good online, while 64% lost trust in online marketplaces. This actually led Nike to stop selling its products on Amazon.

Conclusion

Although the above mentioned redressal mechanisms are very effective in removing counterfeit listings and thereto curbing the sale of goods and products ensuing from these listings by fraudulent sellers, these mechanisms are per se not exhaustive since the domain of intellectual property, its infringement, and protection is a very dynamic field wherein infringers find new and innovative ways to misuse the IP of their owner, and the law, in its best efforts, evolves to control and eradicate this misuse and protect the rights of the genuine owner.

While the domestic laws of many countries provide for safeguarding the rights of the owner of IP by providing remedies like the granting of “dynamic injunctions” from courts, availing of these remedies is a struggle in itself of effort and costs, especially if the aggrieved party doesn’t belong to the same jurisdiction where the cause of action arose.

Also, by the time the aggrieved owner would get such remedies from the competent court, quite some time would have elapsed, as a result of which the owner of IP would have suffered an exorbitant quantum of financial loss due to such counterfeit listings by the fraudulent infringer.

So remedies and mechanisms that provide quick, cross-border and inexpensive relief to the genuine owner of IP are the need of the hour today

References

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