April 01, 2020 Feature

Combating Online Infringement: Real-World Solutions for an Evolving Digital World

Erica D. Klein and Anna K. Robinson

©2020. Published in Landslide, Vol. 12, No. 4, March/April 2020, by the American Bar Association. Reproduced with permission. All rights reserved. This information or any portion thereof may not be copied or disseminated in any form or by any means or stored in an electronic database or retrieval system without the express written consent of the American Bar Association or the copyright holder.

From hashtags to memes to evaporating text messages, the platforms through which a brand’s valuable trademarks, copyrights, and other reputational identifiers can be used—or misused—seem endless. While the rapid evolution of internet-based technology over the past decade has introduced unprecedented opportunities for business growth, so too has it created new possibilities for competitors, brand enthusiasts, unscrupulous entrepreneurs, and even nonhumans to infringe or otherwise violate a company’s intellectual property (IP) rights. Formulating and implementing a multifaceted online enforcement strategy is integral for maintaining strong IP rights, which ultimately reinforce the reputational integrity of a brand.

What Is Online Infringement?

Understanding online infringement is a brand owner’s first line of defense. To develop an effective strategy for combating online infringement, a brand owner must first recognize and define the problem as it is presented in the context of such brand owner’s specific business.

In the physical world, infringement has traditionally been easy to recognize. Walking into a store or through a market provides a clear picture of activity that may be infringing a brand’s IP rights. The brand owner may need to investigate the extent of distribution, the reach of advertising, or similar details, but seeing and touching products or interacting with their corresponding promotional materials directly communicates at least an outline of the issues presented.

In the online world, making such an assessment can be much harder. Nonetheless, infringement is rampant in the digital universe, so it is incumbent upon brand owners to be diligent in their online enforcement. Legally, trademark owners have an affirmative duty to monitor and take action against unauthorized use of their marks. If a trademark owner does not exercise vigilance in policing the proper use of its trademarks, its rights could be compromised and even lost entirely under theories of naked licensing1 or genericide.2 At the very least, a trademark owner may be required to tolerate certain third-party uses that might have been actionable were the trademark owner to have more strictly enforced its rights against less similar previous third parties.

Online infringement may take many different forms. Examples include:

  • Sales of counterfeit or infringing products through direct sites or counterfeit sites;
  • Use of the same or similar marks in advertisements or promotions;
  • Integration of trademarks in domain names or social media handles;
  • Impersonation of a brand owner’s website or social media pages;
  • Impersonation of a company’s personnel; and
  • Use of proprietary images or content.

When considering whether to take action against these types of violations, as well as what action to take, a brand owner must consider not only the nature of the violation but also the legal framework against which the violation would be considered, available remedies, the resources needed to reach a satisfactory resolution, and reasonably foreseeable business or public relations consequences of taking or not taking action.

The Legal Landscape of Online Infringement

Whether infringement happens online or offline, there are similarities between how it must be addressed, such as the applicable legal regime, methods of response, and demands on resources. There are also important differences, such as the means by which brand owners can identify infringement, the global and ubiquitous nature of the problem, and the speed at which infringement can both occur and become known to the public.

One of the biggest challenges brand owners face is knowing how to proceed with online enforcement once they uncover IP rights violations. At its most basic, brand owners are forced to grapple with a 21st-century problem within a 20th-century legal framework. Brand owners assessing their options, lawyers undertaking enforcement actions, and judges tasked with rendering decisions must understand not only the statutory and case law framework but also how emerging technologies operate, how consumers interact with them, and what various parties’ roles are in any alleged infringement.

For example, the Lanham Act requires infringement by a “person.”3 What constitutes a person in the online world? Is an act that would otherwise be considered infringement actionable under the Lanham Act if it is directed by an artificial intelligence–driven algorithm as opposed to a human being? The current legal landscape is not geared toward producing easy answers to these questions. Our laws lag behind the reality of today’s fast pace of technological innovation.

The lack of clarity and uniformity found in our IP statutes poses big challenges for businesses and IP practitioners because instances of online infringement continue to grow each year. According to a 2017 survey conducted by CompuMark, 74 percent of brands experienced infringement in the previous 12 months.4 Due to the pervasiveness of the problem, businesses must accept that they are unlikely to stop every instance of infringement. Rather than aiming to extinguish all infringement, brand owners would be well-served to develop a strategy that is focused on protecting their most important, and most publicly recognized, IP assets.

Develop a Tailored Approach for Online Enforcement

An effective online enforcement strategy is contextualized for the current legal, business, and technological environment, and customized based on a brand owner’s goals, objectives, and resources. Paying close attention to the many ways online infringement occurs in general, as well as how it affects a brand specifically, permits the brand owner to cut through the proverbial weeds and focus efforts on targeted solutions to real-world problems. Every brand owner and business with IP to protect should establish a multidimensional IP enforcement strategy that incorporates a range of prevention, detection, and response procedures, and rigorously enforce it across the organization and across the internet.

A good starting point is using existing governmental and quasi-governmental registration frameworks. This way, the brand owner places the world on notice that it is serious about protecting its IP rights. Brand owners should take care to properly register and apply for protections related to IP assets that could be counterfeited, infringed, or otherwise exploited by other entities or individuals, including:

  • Trademarks and service marks;
  • Trade dress;
  • Copyright, including logos and product packaging;
  • Domain names; and
  • Social media handles.

In an ideal world, brand owners would register every word, slogan, character name, and other source identifier associated with their brand as a trademark, copyright, domain name, email address, or social media handle. In reality, however, limitations on resources render this impossible. In determining which assets to register, and which registrations to pursue, a brand owner should consider the risks it faces and balance these risks against the costs and other resources that registration and maintenance of such registrations require. Directing resources to trademarks and copyrights that are central to the brand, as well as those that are the subject of elevated publicity even if not economically central, is a good starting point. These assets are most likely to be copied, imitated, and widely published or discussed by third parties, which heightens the attention they deserve within an online enforcement strategy. From this perspective, a “key” asset may be not only a best-selling product but also a phrase, slogan, or even a hashtag that is associated with a brand. Courts have found a likelihood of confusion based on the unauthorized use of a trademark within a hashtag,5 as well as based on use of a competitor’s name in a hashtag on social media that could deceive customers and give rise to a false advertising claim.6 Controlling these assets makes it less likely that a third party will do so, and gives a brand owner more leverage to avoid confusion.

Spotting Online Infringement

Brand owners should take into account a number of factors when deciding what to do when they spot online infringement. First, they should consider the source. Many brands have fans and loyalists who form online communities through blogs, social media groups, and other online platforms. These fans can create considerable buzz around a brand’s products and services by sharing tips, news, and opinions that create brand awareness. In the process, they also may infringe or otherwise violate a brand owner’s trademarks or copyrights.

Before firing off a cease and desist letter in response to every instance of infringement encountered on Facebook or Instagram, brand owners should take into account the context in which the infringement occurred, and respond appropriately. A heavy-handed letter directed to the organizer of a fan club may generate more buzz on social media, but not the type the brand owner is looking for. On the other hand, a clever, carefully crafted demand, or even an informal, positively structured request, can serve the purpose of stopping the infringing activity and also generate goodwill. Innovative efforts may even lead to positive media attention, thereby not only resolving the infringement issue but also providing positive publicity for the brand and reiterating the brand’s protection efforts. For example, in 2018, Netflix sent the operators of a bar modeled after Netflix’s hit show Stranger Things a creative cease and desist demand that included quirky pop culture references from the show. Netflix got what it wanted, didn’t alienate its fanbase in the process, and may have even recruited new viewers who learned about the show based on the positive publicity that Netflix’s unique enforcement efforts received.

Intercompany enforcement efforts may also lead to unintended consequences, particularly when the action taken is perceived by the Twitterverse as inequitable. For example, in 2011, one of America’s most popular craft beer brewers, Bell’s Brewery Inc., sent a cease and desist letter to a small homebrew supplier who Bell’s alleged was infringing Bell’s popular TWO HEARTED ALE trademark. Bell’s letter was posted online, and a social media firestorm ensued. In this very public forum, the merits of Bell’s trademark claim took a far back seat to consumers’ perception that Bell’s was an unfavored “Goliath,” picking on the little guy.

At a time when information and documents can be posted to the internet in seconds and quickly go “viral,” these situations demand a tailored approach that integrates both legal and marketing considerations.

The Case of the Faceless, Nameless Infringer

The internet is a powerful tool for brand owners to discover infringement. With a few clicks, a brand owner can unearth a copycat website, fake social media page, or counterfeit product listing on platforms like Amazon and eBay. However, the internet also makes it easy for infringers to conceal their identities, often rendering it difficult for rights holders to identify the infringing party, name a defendant in a lawsuit, or even effectively deliver a cease and desist demand.

Brands are not without remedies in such instances. One of the most common is to initiate a “John Doe” lawsuit, which is permitted under Rule 20 of the Federal Rules of Civil Procedure. By initiating such a lawsuit, a rights holder can then conduct discovery, including issuing subpoenas to internet service providers (ISPs), online marketplace platforms, and other parties, in order to cause disclosure of the alleged infringer’s identity. To the extent the infringement involves copyright issues, the Digital Millennium Copyright Act (DMCA) permits a copyright owner to issue a subpoena to an ISP for “information sufficient to identify the alleged infringer” before a lawsuit is filed.7

Another effective remedy is to seek injunctive relief against third parties in order to disrupt an infringer’s ability to operate. For example, if a brand owner cannot specifically identify an infringer but knows where and how such infringement is occurring online, the brand owner can seek an injunction against payment processors such as PayPal or Venmo to require that accounts associated with the infringer be frozen.

Moreover, if an infringer is identified but appears to be out of jurisdictional reach, there may be alternative avenues for pursuing action against other players within the commercial chain. Pursuing action against a website host, server, or marketing partner in a more favorable jurisdiction may offer an indirect road to resolving the infringing activity at issue.

The Best Offense Is a Good Defense

As with most legal issues, when it comes to online enforcement the best litigation strategy is to avoid litigation altogether through implementing proactive measures. By taking the steps necessary to develop a comprehensive online IP protection strategy, brands can avoid much of the expense and frustration associated with after-the-fact enforcement efforts.

An easy, cost-effective (i.e., free!) place to start is by engaging with site-specific support options made available by widely trafficked online marketplaces such as Amazon, eBay, and Alibaba. Support tools offered by these platforms include:

  • Amazon Brand Registry, which, according to Amazon, allows brands to “[s]earch for content using images, keywords, or a list of ASINs in bulk and report suspected violations through a simple, guided workflow.”8
  • Amazon Project Zero, through which, according to Amazon, “automated protections continuously scan our stores and proactively remove suspected counterfeits.”9
  • eBay Verified Rights Owner Program, which, according to eBay, “allows owners of intellectual property (IP) rights and their authorized representatives to report eBay listings that may infringe on those rights.”10
  • Alibaba Intellectual Property Protection Platform, which, according to Alibaba, is meant to “facilitate rights holder[s] on intellectual property right protection in a cooperative manner over various Websites under the Alibaba Group.”11

Social media sites also provide tools that allow brands to protect their identities and content. As an initial step, brands should secure account names or “vanity URLs” across multiple social media platforms, including for marks or names that constitute variable spellings, combined terms, and product characteristics associated with a key product or brand. Where possible, brands should also seek “verification” (indicated by a checkmark on Facebook, Instagram, and Twitter) for their accounts so that users can have confidence that the brand owner’s page is authentic.

Most social media platforms also have procedures in place to help address allegations of copyright infringement, trademark infringement, rights of publicity violations, impersonation, and other misuse of intangible rights. Twitter, for example, allows rights holders to submit allegations of trademark infringement through an online form. A user’s account may be suspended or terminated if he or she is found to violate Twitter’s trademark policy.

While site-specific tools and remedies across selling platforms and social media websites are not foolproof, they offer brands opportunities to gain remedies without incurring the expense of litigation. They are particularly useful to address obvious, less sophisticated instances of infringement—an easily accessible tool to rid of undesirable, readily identifiable, low-hanging infringement fruit.

Besides reduced costs of enforcement, other benefits of utilizing site-specific support tools to address IP infringement include the ability to facilitate faster takedown responses, and to obtain customer support through the site at issue to provide proactive assistance in identifying infringements. While resistance is occasionally incurred, personnel managing takedown requests on behalf of online retailers and ISPs are often knowledgeable and cooperative, providing valuable support for a brand’s enforcement efforts. Even in an online world, the benefits of a human connection are often incomparable.

Notwithstanding the benefits of several site-specific enforcement tools, it’s important to keep in mind that some have onerous eligibility requirements, are “invitation only,” and/or are labor-intensive to establish. These tools also may not address “gray market” goods, and may not be applicable to, or effective for, certain business models.

In order to be proactive, rather than reactive, brand owners should consider some creative ways to uncover infringement on the internet. One way to do so is through a “keep your friends close but your enemies closer” approach that involves joining online industry-related groups and enthusiast clubs to monitor potentially infringing activities. Another is to follow competitors and known infringers on social media. Technological solutions, such as the monitoring platforms operated by Yellow Brand Protection and BrandShield, may also be useful, particularly to brand owners within business sectors that sell extensively online, such as fashion, electronics, and consumer goods. Brands can also gather evidence of infringement by signing up for newsletters and making online purchases of goods. All of these types of monitoring activities, however, should be conducted in a reasonable manner. Neither a brand nor an individual representing a brand (such as a lawyer) should ever impersonate another entity or individual while investigating instances of online infringement. Following relevant ethical guidelines is a must. A brand owner or its representative should refrain from undertaking any action that he or she would not feel comfortable publicly defending.

Train the Team and Track Records

A brand owner’s ability to stop online infringement does not rise to the strength of its brand. It falls to the levels of the systems it uses to track and enforce its IP. One of the most important steps any business managing its brands can take to ensure effective online enforcement is to train its workforce on its rights, policies, and procedures. By doing so, employees will be knowledgeable about spotting infringement, and will also be less likely to infringe the IP of others. Employees, particularly those who are tasked with spotting infringement, should be trained to appreciate key legal principles related to trademarks, copyrights, and other IP rights relevant to the company’s products and services. Knowing a business’s rights, as well as its responsibilities, can help employees better protect their employer’s IP assets and avoid their taking actions that could lead to negative legal consequences.

For example, in Lenz v. Universal Music Corp.,12 the U.S. Court of Appeals for the Ninth Circuit affirmed a decision by the district court that copyright holders must consider fair use in good faith before issuing a copyright takedown notice for content posted on the internet. Failure to do so could result in damages for misrepresentation of a DMCA claim. This decision underscores the importance of using powerful internet takedown and infringement reporting tools correctly, and verifying that content is truly infringing—and not just inconvenient—before taking action. Accordingly, employee policies and training for employees tasked with online enforcement responsibilities should emphasize that a careful evaluation must be conducted before any takedown notice is submitted. By informing employees of these and other nuances of the law related to online enforcement, businesses can protect their IP assets more effectively through appropriate enforcement action, consequently protecting themselves in the process.

Employees across the organization should also be trained on the importance of tracking the business’s IP assets and compiling records that help facilitate online enforcement efforts. This includes having registration numbers and other details related to trademark registrations, copyright registrations, and other IP assets on hand, as well as listings of URLs for the company’s products as sold online, social media handles, and other records that might be used to support a takedown request readily accessible.

In addition, records should be maintained for products and marks that are frequently infringed. For each instance of infringement, information detailing an entity’s or individual’s name, relevant accounts, email addresses, and platforms on which infringement is occurring should be documented. Screenshots capturing examples of infringement should be saved before offending pages or entire websites are taken down. Relevant dates should be preserved, URLs tracked, and repeat infringers identified. Having these records readily available will place the brand owner in a strong position to move swiftly when a takedown is necessary.

Most significantly, brand owners may benefit greatly by creating redundancies in their business’s recordkeeping systems. Never put a single employee in complete control of records related to IP assets and/or instances of infringement. If only one person knows everything, the business may be unable to access important records in critical situations.

Putting the Pieces Together

As with any important initiative, brand owners should establish realistic goals to guide their online enforcement efforts. Once goals are defined, the proper budget and staffing can be allocated, results can be measured, and tweaks can be made as needed. The actions required to protect the brand’s valuable IP rights will come at a cost—but then again, it is the brand’s valuable IP rights that are the subject of the protection. Enforcement costs should be considered an investment in safeguarding brand equity. Strategic planning and implementation of a successful online enforcement initiative must be done with management buy-in, so as to ensure appropriate funding and organization-wide support. Achieving success starts at the top.

In the ever-evolving digital landscape, protecting IP rights is a perpetual endeavor. When a brand owner successfully enforces its rights, it should announce its success to internal and external stakeholders. Employees, suppliers, and even customers—as well as those persons or entities that may be inclined to infringe the brand’s IP rights—need to know that the brand owner is serious about protecting its valuable assets. Through strategic planning, constant vigilance, swift action, and effective messaging, it is possible to leverage IP enforcement into business growth, even in the untamed marketplaces of the rapidly traveled information superhighway.

Endnotes

1. See FreecycleSunnyvale v. Freecycle Network, 626 F.3d 509 (9th Cir. 2010) (holding that a defense of naked licensing avoids a finding of trademark infringement as a matter of law).

2. Google recently avoided a finding that the term “google” has become synonymous with “search the internet,” despite the plaintiff’s efforts to show widespread third-party use of “google” as a verb. See Elliott v. Google, Inc., No. 15-15809, 2017 WL 2112311 (9th Cir. May 16, 2017).

3. 15 U.S.C. § 1125(a).

4. CompuMark, The Trademark Ecosystem: Insights from Intellectual Property Professionals around the World 7 (2018), http://www.compumark.com/wp-content/uploads/dlm_uploads/2018/01/2018-trademark-ecosystem.pdf.

5. TWTB, Inc. v. Rampick, 152 F. Supp. 3d 549, 565 (E.D. La. 2016).

6. Fraternity Collection, LLC v. Fargnoli, No. 3:13-CV-664-CWR-FKB, 2015 WL 1486375, at *1–2 (S.D. Miss. Mar. 31, 2015).

7. 17 U.S.C. § 512(h).

8. Amazon Brand Registry, https://brandservices.amazon.com (last visited Feb. 14, 2020).

9. Amazon Project Zero, https://brandservices.amazon.com/projectzero (last visited Feb. 14, 2020).

10. Verified Rights Owner Program, eBay, https://pages.ebay.com/seller-center/listing-and-marketing/verified-rights-owner-program.html (last visited Feb. 14, 2020).

11. Alibaba Group IP Protection Platform, https://ipp.alibabagroup.com/index.htm?language=en_US (last visited Feb. 14, 2020).

12. 801 F.3d 1126 (9th Cir. 2015).

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Erica D. Klein is a shareholder at Brooks Kushman, an intellectual property and technology firm located in Southfield, Michigan. She counsels clients concerning brand development, protection, enforcement, and licensing.

Anna K. Robinson is a shareholder at Brooks Kushman in Southfield, Michigan. She specializes in trademark and copyright law.