Online shopping has become the go-to for both consumers and businesses seeking speed and convenience. According to the latest report from the Office for National Statistics, e-commerce sales in 2016 were made up of £236 billion in website sales and £274 billion in electronic data interchange (EDI) sales or business-to-business sales.
The BBC recently reported on the growth of the online fashion retailer Boohoo. Boohoo saw their revenues jump by 53% in the three months to the end of May, with UK revenues up by 49% and US revenues up by 75%. In a previous report in March, the company stated that pre-tax profit had risen by 40% to £181.3 million.
The success of the online-only retailer is a stark contrast to the many household names making the headlines in recent weeks as retail brands continue to struggle in the market. Businesses that have dominated the high street for decades are being forced to announce store closures and job losses as they face difficult times. While it cannot be said that the growth in online shopping is the sole cause of the current problems facing the high street, it can be assumed that it is a contributing factor.
For many businesses, an e-commerce presence is now a necessity, enabling them to reach a far greater percentage of potential buyers. It is important, however, that brands considering the benefits of e-commerce are prepared for the risks that operating online can bring, especially from a legal perspective.
Businesses that are in the process of launching e-commerce platforms need to consider the actions that they need to implement to protect their brand. Copyright or trademark infringements that take place online can be more difficult to take action against.
How is copyright and trademark infringement different online?
The difference between the Internet and the "real world" is that the Internet allows people their anonymity. If someone really wants to hide their identity online they can, and in most cases, they do so very easily.
If a copyright or trademark infringement were to happen away from the Internet then you can take action against the infringer because you know who they are. You are able to get a court order to prevent them from doing it again, and hopefully a damages payment and your costs covered. This process does not work on the Internet. Infringements online can be difficult to take action against because you may not be able to identify the infringer and they could be anywhere in the world.
Even if you are able to narrow down the infringer's whereabouts to a specific country then there are other issues you will need to consider. You may not be able to prove that the infringement has occurred in that jurisdiction. You may also not be able to take action because you do not have intellectual property protection in that country. You would also need to consider things like where the infringer's servers are based. If they're in another country then you may have difficulty proving the infringement. You would also need to consider the countries that the goods are being sent from and where the customers that have bought them are based.
The issue with infringements online is that even if you do manage to take action against the infringer they can always set up another website elsewhere and still reach the same customers.
In a lot of cases, infringers can often be identified, tackled at the source and their infringement stopped. The problem is that sellers of counterfeit goods are often serial infringers and they can be evasive.
Due to the nature of how infringement occurs online, it's a good idea to be aware of techniques that you can utilise to protect your brand and make infringement more difficult.
How do domain complaints work?
One approach to help protect your brand online is "domain name complaints". A domain name is the address that is used to access your website, e.g. Gowling WLG's domain name is "gowlingwlg.com". Domain names attract the people you want to sell to and give credibility to the websites that use them.
For example, if you come across a domain name such as "guccioutletstore.com" you may think that discount handbags are genuinely on sale when they could just be counterfeits sold by anyone who has the ability to set up a website. It is common for domain names to be used in this way to commit fraud. To make sure that these domain names are not available to be used in such a way you are able to take action and have them transferred to you. For example, as Gucci's brand name is being used in the domain name then they would be able to request for the domain to be transferred to them.
If asking for the transfer of a domain name does not work then it is possible to have them forcibly transferred to you through a domain complaint. When you register for a domain name, you have to agree to a contract with the registrar. The fine print of the contract will state a number of mandatory terms. For example, the person registering the domain will need to agree to not register or use the domain name in a way that will infringe anyone else's intellectual property rights.
Domain name contracts also state that if there is a dispute concerning a domain name it has to be dealt with under a standard dispute resolution policy. There are several different dispute resolution policies that are dependent on the different domain extensions such as .com or .co.uk. While there are different policies in place, the basic premise is that the owner of a brand can take action and make a complaint and, if successful, can have the domain name transferred to them.
How do payment method blocks work?
If you do experience some form of copyright or trademark infringement that is having a negative impact on your business you can stop the perpetrator from gaining money from the activity by blocking the payment methods on their website. This is where you ask the payment processor (such as PayPal or Visa) to stop processing payments if websites are selling counterfeit versions of your product or services. While the infringer could move to a different processor, you are making the process of gaining money from selling your goods more difficult.
To put a payment method block in place you can either contact the specific payment processor directly or use the International AntiCounterfeiting Coalition's (IACC) Rogueblock reporting tool which covers several different processors.
How do you protect your brand online?
If you are considering e-commerce, or have a platform already in place, you need to be confident that you are able to protect your brand online from copyright or trademark infringement. Even businesses who do not operate using an e-commerce platform should consider how copyright infringement online can damage your brand and relationships with potential customers. A business with a website used only for marketing purposes can still be a victim of copyright or trademark infringement.
Our Insights and Resources are recommended for businesses considering e-commerce or concerned about protecting their copyright or trademarks online. We will update you regularly with information from our legal experts on intellectual property law, as well as other sectors and services you may be interested in.