IP Investigations: Policing Online Auctions

Intellectual Property Investigations, Policing Online Auctions, Continental Enterprises

Question: We saw our product for sale online. We did not authorize this. How can we stop it?

The power of the Internet to organize individuals and provide them with increased market share for their products and ideas has had some downsides for intellectual property ("IP") owners. Nowhere are these downsides more obvious than online auction websites and e-commerce sites on which user generated designs make up the product base. IP owners cannot ignore these sites because they play an important role in giving birth to new infringements and providing an anonymous dumping ground for illegal products. Continental Enterprises (“Continental”) has developed a comprehensive brand protection strategy that effectively and efficiently addresses such sites through routine monitoring and taking immediate action against infringements.

The popularity of online auction sites is unquestionable. From an IP protection standpoint, these sites merit attention for four major reasons.

  • They are dumping grounds for unlicensed and counterfeit goods. Reducing the availability of counterfeit products requires shutting down online auctions for those products.
  • They provide a trend-spotting function by acting as a microcosm of the marketplace as a whole. If you want to know how infringers are abusing your IP and to what extent, online auction sites provide insight into those issues.
  • They are more than just an “online yard sale.” Sophisticated online businesses that carry substantial inventories and generate significant income are now as common on these sites as the casual sellers. Identifying and taking action against these businesses can have a real impact on the counterfeit market.
  • They can reveal the true source of infringements. Casual sellers on these sites are often conduits to larger, more organized sources of counterfeit products. Taking action against these sellers can provide valuable leads into larger counterfeiting networks.

Similar to how online auction sites act as a central clearinghouse for counterfeit and unlicensed products, e-commerce sites that create products based on individual ideas and designs provide a central "location" for infringing designs to take root. Such sites allow users to easily create, upload and display designs with complete disregard for your IP. Typically, the products bearing infringing designs are manufactured and shipped once an order is placed, a business model that is problematic for IP owners because it eliminates all financial risk associated with bringing a product to market. Consequently, considerations of infringement, good taste, and common decency do not act as barriers to market entry in the same way they do with a more traditional business.

To address IP problems associated with online auctions and user-generated designs, Continental has established monitoring programs that significantly reduce levels of infringement and counterfeiting. When available, we work with preexisting policing methods in order to have the infringing sales shut down. In situations where the sites do not have policing procedures or their procedures are inadequate, we communicate directly with site management to remove infringing content. When appropriate, we conduct individual investigations into infringers on these sites and use more aggressive enforcement tactics to remedy the issues. By monitoring these sites and regularly taking action against violations, we have been extraordinarily successful in eliminating infringements from the marketplace.