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 on online auction websites and sites whose products are based on user-generated designs.

The popularity of online auction sites is unquestionable. From an IP protection standpoint, these sites merit attention for four major reasons. First, these sites are dumping grounds for unlicensed and counterfeit goods. Reducing the availability of counterfeit products means shutting down online auctions for those products. Second, these sites provide a trend-spotting function by acting as a microcosm of the marketplace as a whole. If you want to know how your IP is being abused and to what extent, online auction sites provide insight into those issues. Third, sophisticated online businesses that carry substantial inventories and generate significant income are now as common place as the casual seller. Identifying and taking action against these businesses can have a real impact on the counterfeit market. Finally, 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.

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