Posted March 3rd, 2009

“Domain names, auctions, replica sites, keyword advertising, email”…to an in-house counsel team dealing with counterfeits on the Web, these terms often are read instead as “cybersquatting, distribution of counterfeits, counterfeit site, improper use of trademarks, spam.”

All of these Internet and Web platforms compete for our time and resources as in-house counsel and can make one believe that there is little on the Web that is not primarily used to help defraud or scam consumers and brands alike.  While we know this is not true - that the vast majority of uses are legitimate (okay, excepting replica sites, where the reverse is generally true) - it is easy nonetheless to become jaded and distrustful.

While I would love to say that there is an easy way to remove that jaded feeling and see the rest of the Web for what it is, I am instead going to introduce a new term to the list for many in-house counsel:  Web 2.0.  I say the term is new because many in-house counsel do not look at Web 2.0 – which has been around for as long as the World Wide Web in one way or another – and think that there is much in the way of counterfeits represented in this environment.  And this is exactly what the counterfeiters and fraudsters are hoping for.

We all know it took many companies a lot of time to realize the opportunities offered by the Web and its role as a legitimate platform for commerce (and believe it or not there are some CEOs and brand representatives out there that are still not fully convinced).  But while companies went through this process, cybersquatters, fraudsters, and counterfeiters were well ahead of them and developed e-commerce platforms.  They understood the power of the Internet and the Web to reach out to hundreds of thousands and, now, millions of people on a daily basis.   And we have been trying to catch up ever since.

The entire business plan of these fraudsters is to distribute their counterfeit and fraudulent goods through as many platforms as possible.  And they have taken advantage, and will continue to take advantage, of any new platforms that connect them with potential customers – particularly where they have control of the content.  As a result it is imperative that brands at least have a working knowledge of what these platforms are so that they can monitor and process what is going on in the field and perhaps prioritize where to spend their resources.

By Web 2.0 I am referring to the myriad of sites and platforms that are based around the concept of user generated content and/or user interaction with content (versus purely static sites).  Some examples of categories of Web 2.0 platforms that consumers are more familiar with – and thus those that counterfeiters advertise and sell their goods on – are as follows:

• Marketplaces: marketplaces are similar to a giant online classified advertising site or community board.  Examples:  Craig’s List; TradeKey (B2B)

• Image Networks: a network made up of user generated content in the form of photographs or video (generally); also uses folksonomy methods of tagging.  Examples:  YouTube; Flickr

• Social Networks:  a network of users who also act as the content generators.  Social networks use user-generated content to network people all over the globe.  Examples:  Facebook; MySpace

• Blogs: online journals or commentary sites providing news and/or updates; can be written or in visual format.  Examples:  NameSmash; Perezhilton.com

• Folksonomies: a site that delivers content on the basis of collective categorizing (tagging).  It is analogous to a user generated search engine that crawls tags versus site content.  Examples:  Flickr; Delicious

• Wikis:  a site that allows anyone with access to it to contribute to or modify content found on the Website.  Examples:  Wikipedia; Scholarpedia

• Virtual Worlds:  online worlds where users navigate through avatars; users often can create items in-world and sell them to others for money or trade.  Examples:  Second Life; IMVU

In all of the platforms listed above (and many, though not all, of the examples) counterfeits can and have been found.  And the audience they have access to is huge:  150 million people worldwide actively use Facebook; Wikipedia had 684 million visitors to its site in 2008; Second Life currently boasts 16,778,029 users (of which 522,526 have logged in within the last seven days).

And it does not stop here.  Counterfeiters and fraudsters have started to learn how to take advantage of certain convergence platforms (for example, applications combining mobile, Web tools and traditional bricks and mortar) and optimize their sites and products to reach an ever-growing audience.

It is difficult to really understand all the different sites out there. It is also important to start using these tools and learning how users navigate them.  Understand how to navigate within these sites, how to search, and how to approach a particular community (a typical cease and desist letter may sometimes result in more harm than good if an otherwise legitimate community feels attacked).

Visit sites like Facebook and Twitter and make sure that third parties are not using your brand names as user IDs or running a page that appears to be coming from the brand.  Find other Web 2.0 sites by using search engines such as Go2Web20.net.  And take advantage of the take down mechanisms offered by many of these sites and, where possible, work with these sites to make such mechanisms more effective.

If brand owners turn a blind eye on Web 2.0 sites, by the time they are a day-to-day part of our ecommerce experience we will once again be left playing catch up with the crooks – who likely will have already moved on to the next “best” thing.

[Stacey King is a US lawyer practicing in London for one of the world’s largest luxury goods companies.  She focuses on IP, data protection, and emerging technologies. ]