Law enforcement has outdated legislation to work with. The global nature of the problem requires new forms of joined up intelligence-sharing and action. The only way to beat the fakers is to adopt their own successful strategies, which make it so hard to detect and deter them - although Internet offenders leave more tracks than they realise, if you approach the problem using sophisticated 'virtual' tools to combat this virtual criminality.
There is a genuine difficulty here, because technology has escaped across the reality border into a dimension which isn't regulated or 'police-able' in the way a physical market can be dealt with.
The worst offenders, generating the most problems, are just a handful of serious criminals, who are smart, well-funded, professionally advised, and technologically advanced. Taking down the little guys, the end-sellers who are easy to find and target, solves nothing. Finding the Mr Bigs must be the priority.
But an effective action in one place still displaces the criminals elsewhere.
This is why the strategy needs to be global, and should be adopted by as many rights owners and law enforcement agencies as possible, with involvement at the most senior level within each company, and commitment at the highest levels of government. The ISPs and internet traders must also take more effective action to police their sites and services and stamp out illegal activity of all kinds.
More useful guidance for brand owners can be found here:
Link to MarkMonitor Guide
eBay is a useful example of the challenges facing brand owners, being the biggest of the internet auction sites - though it prefers to be known as a 'trading platform' or 'venue'. Legitimate industry is under constant attack from counterfeiters on its site. Rather than address the issue, and embed effective protection in its systems from the start, eBay has spent a great deal of time and money on PR and lobbying campaigns, which have escalated as more court cases are brought against eBay, and public and user opinion has become less approving.
The threat to consumer safety posed by fake products is an equally important problem, and eBay does now carry an anti-counterfeiting message in its Safety Centre.
Link to eBay againstcounterfeits
But eBay's buyer protection programme is of limited help when an innocent consumer wishes to return a fake.
eBay claims immunity from liability for IP crime committed on its site, arguing that it simply provides the means for transactions to take place between other parties. It takes commission on all sales but states that it refunds all commissions shown to result from illegal transactions.
The brands take up arms against eBay
The current legal situation is quite complex (and beyond the scope of our remit) but it is clearly important to establish whether existing law is adequate to protect rights-holders and consumers in this new and threatening environment. Many stakeholders would certainly like to see eBay held liable for failing to do enough to combat IP crime on its sites worldwide.
Several major pieces of litigation have been in progress against eBay around the world, brought by brand owners whose products are under attack by fakes on the auction site, after years of trying to negotiate practical solutions.
Overall, eBay is winning more cases than it's losing because courts have ruled that its procedures for fighting fakes are adequate. Louis Vuitton, Hermès, L'Oréal and Rolex have all taken action in Europe, as has Tiffany in the US. So far, Louis Vuitton and Hermès have succeeded in France, while L'Oréal's French and English litigation found eBay was not jointly liable with individual sellers, but referred various important questions to the European Court of Justice (see end of judgement and the actual questions via links below). The High Court judge also listed numerous things which eBay could do better by way of enforcement in para 277 of the judgment.
Link to L'Oreal-v-eBay High court judgment
Link to questions referred to ECJ
Tiffany is appealing in the US, while eBay is appealing against the French results and we now await the ECJ's ruling in the L'Oréal case. So the legal position is still unclear, to say the least!
Whilst every effort has been made to ensure the accuracy of this briefing, no responsibility can be accepted for errors and appropriate professional advice should be sought in all cases.
