Originally posted 2014-01-13 14:58:32.

By Sindy Wenjin Ding | amdlawgroup.com

            Although it has long been said the imitation may be the sincerest form of flattery, in fashion business, unauthorized “imitations” cost companies immeasurable sums in lost sales and damage to the reputation.[i] Most fashion companies don’t welcome, even fear this kind of flattering, when counterfeiters imitates and squat in websites that bear valuable intellectual property of companies or individuals without their permissions. Like a Whack-A-Mole game, infringers keep popping up and plus the information is transmitted so quickly to a large number of people, online counterfeiting activities have proven to be a problem of unprecedented proportions for intellectual property owners.

1.        What Are They

1)         Cybersquatting

     In cyberspace, the practice of inhabiting someone else’s property without their permission can be visualized as cyber squatting. Cybersquatting, generally speaking, is the registration and use of a domain name, which usually a company name or a person name, with the bad faith intent to profit from the goodwill of another’s trademark.[ii]

          Some scholars called Cybersquatting as a new age form of blackmail. From its basic forms and running methods, this seems straightforward on the surface. From traditional cybersquatting means to newly emerging means that is New Generic Top-Level Domain (gTLDs), actually and potentially, raise a lot of new problems related to Cybersquatting and corresponding enforcement approaches.

           Traditional Cybersquatting Means

            a. Brand Abuse Online

       This could cause the most serious harm to the reputation of fashion brands. Cyber squatters use variations on trademarked names to attract visitors to their sites. However, those sites may seemingly legitimate but actually contain offensive or pornographic content, or pay-by-click ads. Some are automatically converted to some websites that create false association with the trademark owner to sell counterfeits or competing products.

            b. Namejacking

    Fashion designers who establish their lines by using their names suffer great deal from namejacking activities. As some name-jacked domains are set up using non-trademarked names yet very similar to the trademarked ones, and their purpose is to sell back to the individuals who wants to own back that similar domain name.

            c. Identity theft

       Internet domain name registrations are for a fixed period of time. If the owner of a domain name doesn’t re-register the name with an Internet registrar prior to the domain’s expiration date, then the domain name can be purchased by anybody else after it expires. At this point the registration is considered lapsed. A cybersquatter may use automated software tools to register the lapsed name the instant it is lapsed.[iii]

            d. Typo squatting

       One example would be, the registration and use of Wallmart.com (with two l’s) for a merchandise retail website, selling goods to those who are confused and think the site is associated with Wal-Mart Stores, Inc. [iv] The cybersquatter will reserve some English words of brands with goodwill and purchase the domain names, targeting consumer misspelled names and didn’t realize the websites that they enter are not the authentic ones. Also, they will wait for some brands to purchase these domain names back and profit from that.[v]

          Newly emerging Fashion: the New Generic Top-Level Domain (gTLDs)

     As stated above, many trademark owners register common misspellings or derivations of their trademarks, to be more thorough in protecting their brands, trademarks owners will be also encouraged to register the same second-level domain names (that is, everything to the left of the dot in a domain name) and the top level (everything to the right of the dot in a domain name, namely generic Top-Level Domain (gTLDs), for example, .com, .net, .biz, etc.[vi]

       The Internet Corporation for Assigned Names and Numbers (ICANN) approved and accepted applications for new gTLDs from Jan. 12, 2012, through April 12, 2012.[vii] For example, a company could apply for a gTLD that consists of the company’s — or someone else’s - corporate name, brand, product name, or some key industry terms, product category, or other desirable generic terms, opening the possibilities of new domain names ending with .ford or .shoes, .art, .book, .museum for example.

        As a unique kind of existing, its impact brought on cybersquatting varies. On one hand, new gTLDs flood the domain names market, fashion brands have more targets to monitor, and the cost of doing that will simply increase; On the other, some scholars also hold that while enforcement costs will increase, new gTLDs may not lead to exponentially-increased cybersquatting. Based on two observations, one is the nature and types of new gTLDs could dilute effect of cybersquatting, the other is because opening the space after the dot (to a URL) could give birth to more and more innovative business model. [viii] To me, even though the right side of the dot is occupied by generic terms, which basically dilute the distinction of certain brand, it controversially raises to a higher level for brand owners to claim the potential infringement. Besides, in the process of litigation, how to introduce the evidence of infringement and the burden of proof could also be the questions that the new fashion of gTLDs possibly brings out.

 2)      Illegal Use of Trademarks

          For fashion brands and designers, the easiest path to identify the illegal use of any of their trademarks is to check the auctions and listings websites like eBay, Craigslist, Amazon, etc. These websites have become a digital flea market for the sale of counterfeit merchandises. [ix] In the big poor of counterfeiting goods on those sites, illegal use of marks can be reflected as: the knock-off versions of trademarks, trade dress, colors, etc. of fashion brands, such as the counterfeit goods bearing mis-aligned Signature C marks (owned by Coach, Inc.), double C (owned by Chanel, Inc.) with different configuration, Hermes (owned by Hermes, Inc.) with weird fonts, Horse and Carriage logo (owned by Coach, Inc.) with only one horse, etc. Even if the infringers can make an exactly same logos as them owned by brands, but manufacture or use them in an unauthorized way, which constitutes illegal use of trademarks as well.[x]

3)       Illegal Use of Copyright

       Similarly, first major source of illegal use of copyright is auction website as well. Since it is a virtual platform, pictures are all what the sellers are displaying (and playing as well). What the sellers typically do to fool consumers is to steal the copyrighted pictures that owned by fashion brands from their authorized websites, and then insert the copied links to their pictures. Some are a bit smarter, and they will alter the background, or shadow in the copyrighted pictures to avoid being identified as copyright infringement, but the remaining items, the color, the angle, the way they look, are as exactly same as the way how the original pictures show. Both ways are illegal use of copyright. As the sellers become more and more sophisticated nowadays, more advanced technologies will be used to protect the images, to decipher those copyright pirated doings, in order to effectively detect and then better manage their very owned copyrights.

[i] Jeremy D. Richardson, Protect your brand from cybersquatters, Phillips Nizer LLP, http://www.phillipsnizer.com/publications/articles/ProtectBrandCyberSquat_art.cfm

[ii] 53 Advocate 25 (2010) Make room for Trademark: What you should know about the New Global Domain Names; Schierman, Elizebeth Herbst.

[iii] Internet Threat – Cybersquatting, All about patents, http://patentsind.blogspot.com/2011/08/internet-threat-cybersquatting.html

[iv] Wal-Mart has been smart enough to register wallmart.com itself.

[v] Take the well-known American Fashion brand Coach, Inc. for an example, many typo squatting websites seem a lot like “Coach”. The cybersquatter are like playing a word game, permutation and combination. There are hundreds of thousands of domain names such as “coachamerica.com” “fashioncoachbag.com” “GOACHBAGS.com” “coachonlinebags.net” “2012coachoutlet.com” etc. And you have to admit, that some are really polished shopping sites, and purchasers can be easily deceived to make orders online.

[vi] 58 Fed. Law 16 (2011) New Generic Top-Level Domains Will Bring New Threats to Trademark Owners; Levere, T. Earl, Amy R.

[vii] Id.

[viii] Prof. Mary Wong, University of New Hampshire, presentation on “Trademark Protections In An Expanded Internet Domain Name System”, 21st Annual Intellectual Property Law & Policy Conference, Session of the New gTLDs, Fordham Law School, April 4 2013.

[ix] Fashion Law: A guide for designers fashion executives and attorneys, Guillermo C. Jimenez, Barbara Kolsun, 2010, p128

[x] To spot illegal use of trademarks, brand maintainers and infringement reporters need to be very familiar with the products, the different versions of the trademarks owned by the brands. The illegal use can be identified by not only one indicators, but some other indicators as well, such as texture, lining, buckles, stitches, story patches, etc. Each one should be protected by a registered mark, or trade dress in certain classes.

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