Recent legal rulings in the US and France are raising questions for brand owners. Alina Halloran, vice president, Online Brand Protection for OpSec Security discusses some of the issues with IDL.

IDL: What do the recent rulings of Tiffany v eBay (US) and LVMH v eBay (France) mean for brand owners?

AH: “Companies will need to be more proactive in understanding the scope of their online brand abuse, and then quantify the negative effects on their business. While the US ruling may set a precedent in putting the onus on the brand owner to monitor the Internet, there is still uncertainty across the web because of its blurred boundaries.  We believe that these rulings, while divergent, will require brand owners to better understand their exposure on key eCommerce platforms and develop an ongoing strategy to combat illicit sales.

“Statistics show Internet retail sales are projected to climb by 17% in 2008. There are countless ecommerce platforms on the web, but companies will likely focus on those which have higher traffic volumes and which have rights owners programs in place to allow them to take action.  Since eBay is one of the top ten most visited sites on the Internet, it tends to be a key focus for brand owners who wish to protect their interests.” 

 IDL: What are your views on the rulings?

AH: “We are not surprised by the ruling in favour of LVMH in France, as French law has historically been more supportive of brand owners. In Europe, rulings have gone both ways in the past: in favour and against eBay, so we feel the there is still no clear precedent in Europe.  That said, we are not terribly surprised that the US courts ruled in favour of eBay, since well-established US precedent holds that the obligation to enforce trademark rests with the trademark holder.  If this case does actually set a precedent in the US, it will be very discouraging for brand owners.”

IDL: What can brand owners do to protect their brands on eBay and other platforms?

AH: “They need to understand the risks: Companies need to understand the scope of their online brand abuse, and then quantify the negative effects on their business. Brand owners do not have an unlimited budget to monitor all eCommerce platforms worldwide, so they must understand key risks and focus their resources to target areas of greatest exposure.

“They should also implement a strategy of proactive enforcement: Companies need to combat counterfeiting with a proactive strategy encompassing eCommerce monitoring, field investigations, and legal enforcement. A commitment to a proactive enforcement program sends a clear message to perpetrators that their illegal activities will not be tolerated.

“Educating consumers is also key. Brand owners need to work with industry associations and collaborate with other brand owners in promoting consumer awareness. They should provide resources to educate consumers on safe buying practices and how to identify genuine goods. Your reputation is damaged when loyal consumers unknowingly buy counterfeit or substandard products and the stakes are much higher when illegitimate product poses health and safety threats to consumers.

“They should also work directly with ecommerce platforms or a third party service provider to develop policies to monitor, identify, and remove counterfeit products and unauthorised sales on such platforms.  Educate platform operators on the dangerous and negative effects of counterfeiting on their own reputation, their legitimate sellers and their customers.  The brand owner can present quantitative data to uncover patterns and support preemptive actions to reduce negative exposure. 

“Finally, they could join forces with industry leaders to collectively lobby for new laws and regulations.  The global trade in counterfeiting is estimated at US$600 billion.  This black market hurts our economy and companies can lobby lawmakers to put a stop to illicit trade.”

IDL: How can consumers avoid buying counterfeit goods?

AH:          “1.      Buy from the original manufactures’ websites or from authorised resellers so you can guarantee the source.

2.      Check to make sure you have the option to return the goods for your money back before making your purchase.

3.      Compare product pictures to the manufacturer’s corporate website and look for inconsistencies.

4.  Do your homework on pricing and if the pricing is exceptionally low or ´too good to be true,´ it´s likely to be counterfeit  

5.      If you are in any doubt as to the authenticity of the item, check with the original brand manufacturer. If it is counterfeit, make sure you report this to the brand manufacturer and the site where you purchased the goods from so they can take action.”