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Courts weigh online practices

Courts weigh online practices

Two landmark court decisions — one in the US and the other in France — argued the integrity of intellectual property. Both deal with the protection of the brands and, more importantly, with current online business models.

On June 30, the French court handed down a ruling that holds eBay accountable to pay for counterfeit items sold on its Web site, In the United States, a different law holds trademark owners responsible for establishing whether goods are indeed counterfeit. This was the issue brought forth by Tiffany & Co in 2004 and ended successfully in eBay’s favor on July 14.

Recent studies found at least 7% of the world trade value is compromised by counterfeit products. That equals a reported $119 billion in knockoff goods online in 2007, up from approximately $84 billion in 2006.

eBay combats counterfeits through VeRO, verified rights owners, a program in place since 1998 to help companies prevent fake goods from being sold on its site. In 2007, eBay removed more than 2 million potentially counterfeit listings, and suspended more than 50,000 sellers who were believed to have been attempting to sell fake goods.

In the home decor, furniture, outdoor furniture and accessories markets, counterfeits are a common element manufacturers deal with every day. To fight this, some manufacturers stipulate in their bylaws that retailers and resellers are not allowed to sell their products online. What they’re discovering is this has a detrimental effect on their profits. The internet is the first place consumers research when buying, and when competitors offer this option consumers buy theirs instead. The July 14 victory for eBay keeps the burden squarely on the manufacturer, but how can a company successfully fight counterfeit products online?

  1. Use anti-counterfeit technology like MarkMonitor to find and shut down these Web sites immediately.

  2. Ask resellers if they’ve been approached to sell your products by someone other than yourself. Have them become your eyes and ears both online and offline.

  3. Educate your target market. Most people want the real goods and will pay extra for them, but are unable to spot counterfeits on their own. Supply a page on your Web site instructing what to look for and what to do if they accidentally buy a counterfeit product.

  4. Reel in your retailers and resellers and educate the people who work in the stores and manage their Web sites. Offer them incentives to sell the real products through loyalty programs and substantially discounted merchandise. They, in turn, will work for the greater good of your brand.

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