ICE seizes domain names and money associated with online sale of fake goods

United States of America

The US government occasionally seizes domain names used to point to online content that is contrary to US law, for example involving child pornography, copyright infringement or counterfeit goods. The domain names are then usually redirected to display a seizure notice. Such seizures are frequently part of a US government operation known as ‘In Our Sites’ which began in June 2010. To date, this operation has led to the seizure of 761 domain names.

In November 2011 US authorities initiated the largest round of domain names seizures by seizing more than 150 domain names associated with the sale of counterfeit goods, an operation that coincided with the Monday after Thanksgiving, traditionally one of the biggest online shopping days of the year in the United States, and frequently referred to as ‘Cyber Monday’.

More recently, in April and May 2012, US Immigration and Customs Enforcement (ICE) seized 10 domain names, as well as over $2.4 million associated with the online sale of counterfeit sportswear. An investigation by federal law enforcement agents revealed that several Chinese individuals whose domain names had been seized in a November 2010 ‘In Our Sites’ operation were continuing to sell counterfeit goods using new domain names. Law enforcement agents made numerous undercover purchases from the websites associated with the new domain names and, after the goods were confirmed to be counterfeit or infringing, seizure warrants for certain domain names used to sell infringing goods were obtained from a US magistrate judge in the US District Court for the District of Columbia. Most of the proceeds were seized by ICE agents from accounts held by Chinese banks in the United States. 

Controversy often surrounds such US government seizures of domain names as a result of the lack of due process. Such seizures are often conducted ex parte, with only the government agent presenting evidence supporting a seizure warrant. This issue was hotly debated at the end of 2011 and at the beginning of 2012 when the Stop Online Piracy Act bill was introduced as, if passed, the bill would have expanded the means allocated to the fight against online trafficking in copyrighted intellectual property and counterfeit goods. The bill originally proposed would have allowed not only the US Department of Justice, but also copyright holders to seek court orders against websites or domain names potentially being used to enable or facilitate copyright infringement, regardless of whether such websites or domain names were located within the United States. Although this bill was finally not enacted after the White House announced its opposition further to a vigorous protest by many internet actors and associations, the issues remain topical considering the regular domain name seizures by US law enforcement agencies.

David Taylor and Sarah Taieb, Hogan Lovells LLP, Paris

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