With the exponential growth of online commerce, challenges arise to protect intellectual property rights (IPRs) in this digital and globalised environment. In this blog, we will give you guidelines on what to do if you find that your IP rights are being infringed. We will also analyse the issues raised by the enforcement mechanisms of online marketplaces and offer options to overcome them and protect the intellectual property rights of small European SMEs and entrepreneurs who use these platforms to offer and sell their products.
- What to do when seeing that someone is infringing on your intellectual property rights on e-commerce platforms?
If you find that someone infringes on your IPRs on e-commerce platforms, you should take swift and effective measures to enforce your rights. First, it is important to understand what an infringement is in this context. The most common types of IP infringements which take place on e-commerce platforms involve copyright and trade mark, which is why we will focus on those here.
First things first, what counts as infringement?
Intellectual property rights grant certain exclusive rights over intangible assets (works of art, texts, brands, inventions, etc.) to their owner, including the right to use, copy and commercialise these assets or elements which include these assets.
o Copyright
As you may know, copyright is the legal protection that is automatically granted to works, including original texts, images, music, video and even software, giving the creator the exclusive right to reproduce, distribute and publicly reproduce them.
Copyright infringement can take many forms, including the unauthorised sale of products or the misuse of copyrighted images in advertisem*nts or product descriptions.For instance, a T-shirt seller on Amazon using a copyrighted image without permission to print designs on its products and sell them on an online platform amounts to copyright infringement. Another common case is the use of images and descriptions of a product already for sale to sell a copy or counterfeit of the product (this might also involve trade mark infringement issues, more on this below!).
In most countries, copyright is automatically granted at the moment of fixation, and there is no need to comply with any legal or administrative formalities to be able to enforce it against illegal copies. However, keep in mind that the US is a notable exception: while copyright is also automatic in that country, it is necessary to have the copyright registered with the IP office to take enforcement measures against infringers! But we will come back to this issue later.
o Trade marks
Trade marks are the distinctive symbols, logos, names or slogans that identify a company's products or services and distinguish them from those of other companies. Whether you have a unique product that can't be found anywhere else, or you sell a similar product to others on the market, your trade mark is what sets you apart from everyone else and allows customers and potential customers to find and identify you.
Trade mark protection is essential in e-commerce: it is the main item through which potential or loyal customers can find you and your products and therefore buy them. A strong mark not only helps your business stand out in a crowded online marketplace, but it also builds consumer confidence by assuring them of the quality and reliability of your products, as when they buy a product bearing a particular mark they already know, they know what to expect.
Trade marks are registered rights: you should therefore make sure that you register the key elements of your brand as trade marks with the relevant trade mark office (national, or regional such as the EUIPO for full protection throughout the EU). Without a registered trade mark, stopping others from copying your products can prove more difficult as taking action against third parties copying your trade name or logo (or using a confusingly similar one) is much easier when a registered trade mark can be used as basis for enforcement measures.
Trade mark infringements occur when a third party uses a registered trade mark to market goods and services without the trade mark owner's permission. This may include selling counterfeit goods, advertising goods or services under a trademark without authorisation, or altering a mark in a way that causes confusion about the authenticity of the product or its source.
What can you do after seeing infringement on a platform?
Once an infringement has been identified, you need to take action. Platforms often have specific mechanisms to facilitate IP enforcement.
Platforms have mechanisms to facilitate IP enforcement, use them! Some of the tools offered include:
- Notification systems that allow users and IPR holders to notify the platform that infringing products are being sold on the platform;
- Internal IP protection programmes, managed by the e-commerce platforms themselves, through which IPR holders can benefit from simplified infringement detection and notification mechanisms;
- Contact points to which problems encountered by sellers on the platform, whether IP-related or not, can be reported through a designated reporting system or by ordinary e-mail.
For instance, Amazon offers aBrand Registry for sellers to register their trade marks, which helps to identify and report brand infringements. However, it requires a registered trade mark or pending application, otherwise actions may be delayed. Alongside this registry is Amazon’s Project Zero, a tool that proactively detects and removes counterfeits.
Likewise, eBay'sVerified Rights Owner Programoffers similar benefits, but also requires a registered trade mark. On the other hand, we should not forget that social media platforms such as Facebook and Instagram have become shopping hubs with their own IP enforcement mechanisms (here andhere).
The platforms where original content is shared have specific copyright protection tools. For instance, Meta’s Rights Manager for Facebook and Instagram allows you to register works, identify infringing content and obtain usage information. YouTube Copyright Match Tool detects similarities between uploaded videos and copyrighted content.
- Issue with enforcement mechanisms of the online marketplaces
Despite these mechanisms, issues can still arise, when a platform fails to take action against an alleged infringer even after the IP right holder has notified of the infringement.
The first step to take in these cases is to ensure that you have used the correct notification mechanism dedicated to IP infringement cases (which is often different from the general contact form that these platforms have for other issues) and followed the instructions correctly when filling it. For example, Tik Tok specifies that it requires certain documents to be provided when an infringement claim is made, and without those documents, it will not take action. Failing to follow the instructions and bring forward the necessary documentation is a common reason for the rejection of IP infringement claims.
Sometimes, despite having followed the instructions and bringing forward the necessary documentation, platform sellers or users see that no action is being taken. A question that is often raised in relation to these situations is whether they can directly take action against the platforms themselves for failing to remove IP infringing content.
E-commerce market places and online platforms are normally not liable for infringements that occur on their platform, except within certain limits set by EU law. Under theE-Commerce Directive and theDigital Services Act, e-commerce platforms are obliged to do their best efforts to prevent and deal with infringements, but, generally, are not directly liable for these infringements. If the platform is aware of the infringement but fails to take appropriate action, it could be held liable. However, if it lacks actual knowledge of the infringement, it is generally not held liable. While this can prove highly frustrating to creators and small shops who use these platforms, it means that often little can be done against these online platforms when repeated infringement acts are spotted. However, it should be noted that in 2022, the Court of Justice of the European Union (CJEU) set a precedent that might change this trend. In the case ofLouboutin v Amazon, the CJEU found that Amazon could be directly liable for such infringement because the platform itself had promoted third-party products under Amazon’s own logo as if they were its own sales offers, making it difficult for consumers to distinguish the source of the offers.
The platforms’ best-efforts obligation is the reason most of them have implemented IP enforcement mechanisms on their platforms: to make sure that IP right holders have the possibility to inform them of infringements taking place on their platform – and thereby act upon it as is expected of them.
One added difficulty however is that most of these platforms are based in the US and therefore follow US IP enforcement rules, which can prove a severe complication for European small sellers at the time of enforcing their copyright against online infringements taking place on these platforms. The US Digital Millennium Copyright Act (DMCA) regulates copyright in the digital environment and allows copyright holders to submit infringement notices to online platforms. However, the DMCA also includes a procedure for a counter-notice process, which presents challenges. When a seller receives a notice of infringement, it can file a counter-notice to dispute the claim. If the copyright owner does not file a lawsuit within a certain time period, the counter-notice prevails and the allegedly infringing content is restored, with no possibility for the copyright holder to do anything else directly on the platform. The main problem is that in order to take legal action in the US, the copyright holder must have its work registered with the US Copyright Office. In addition, although US law generally recognises foreign copyrights without registration, registration is generally required to enforce a DMCA notice.
The United States, as a member of the Berne Convention, automatically grants copyright protection to works created by authors from other member countries. This means registration in the U.S. is in principle not necessary for foreign authors to obtain copyright protection and file an infringement lawsuit. However, the “automatic” enforcement mechanisms on US-based platform which use the DMCA notice and counter-notice approach may not work in the absence of US copyright registration. In addition to this, without registration foreign copyright holders will have to face their own legal costs and have no possibility of claiming damages and to have their attorney fees covered by the copyright infringer even in case they win.
An illustrative example of this problem is the case of Etsy, an online commerce platform that allows users to sell handmade, vintage and unique products. When a user files a DMCA Infringement Notice against a product, the affected seller has the opportunity to file a counter-notice if they believe it was a mistake or misidentification. If the platform confirms that the counter-notice is valid, it will provide a copy to the user who submitted the original notice. If the complaining party does not take legal action against the infringer within 10 working days of receipt of the counter-notice, the seller may reactivate the product in question.
- How to counteract these difficulties?
In the light of these difficulties, there are a few tips which European small sellers using these online platforms can follow:
- IPR holders must actively monitor online marketplaces and social media platforms to identify counterfeit products and quickly take appropriate action, such as issuing takedown notices, sending warning letters or notifying relevant authorities to remove infringing items.
- Given the importance of the US copyright registration to take enforcement actions in the US – and on US-based e-commerce platforms – as well as the relatively low cost of Copyright registration in the US (which can be done online and without the involvement of a US attorney or representative), it might be useful for some to consider the possibility of registering the copyright over their works in the US when they need to have as strong a position as possible to enforce their intellectual property against counterfeit resellers and copycats on online platforms.
