Anti-counterfeiting and brand protection in the age of apps and social media

It seems old news to continue to use superlatives about the growth of internet users and the different types of content available. However, there is no other way to describe the fact that the Internet continues to evolve at a most extraordinary rate. By the end of 2013, there were over 2.8 billion internet users worldwide. More people from more countries have more access to more content than ever before. Traditional methods of online content delivery have become interwoven into our everyday lives, while new types of content and platforms appear at an ever-increasing rate.

Our appetite for information, games, online shopping and sharing the events of our everyday lives is insatiable, particularly in emerging economies. The numbers are impressive – Facebook has well over 1 billion unique monthly users; the number of users on Pinterest has overtaken Twitter; there are over 1.3 million android apps on Google Play alone.

The continued growth of these online channels represents both an opportunity and a threat for brand owners and trademark professionals. Any brand protection policy should include robust strategic policies to understand, prioritise and take action against online infringements. NetNames’ own research shows that 93% of executives think that protecting online assets will become more important or remain just as important over the next year. The same research reveals that 60% of businesses have no system in place to protect intellectual property online.

Vast and fast-moving social networks

Social media environments pose a unique set of concerns for brand owners and trademark professionals. With such an enormous amount of relatively unregulated content moving at such a fast pace, understanding the threats that this environment presents is key to deciding on a strategic policy to mitigate potential brand and trademark infringements.

Putting reputation management concerns to one side, common issues affecting brand owners include:

• the registration of user names, profiles, handles or avatars that contain brands or trademarks;
• the registration of user names, profiles, handles or avatars that include logos or copyrighted images;
• the inclusion of brands or trademarks in content; and
• the inclusion of logos or copyrighted images in content.

In much the same way as infringers register domain names which contain brands or trademarks for their own use, social media users will use similar tactics with either registration profiles or content. Some of the common reasons for this are outlined below.

The use of brands, trademarks, logos and copyrighted materials in user registration data or content is prolific and follows similar patterns to other types of infringement that are found in other types of internet content. Brands and trademarks are used to drive traffic to specific content, to advertise counterfeit goods for sale and to lead users to content extraneous to a particular social media platform, to impersonate an authorised distributor for fraudulent purposes and to legitimise third-party content

Some brand owners have commented that social media platforms are the world’s biggest free advertising networks. If this is the case, and the advertising is used for illegitimate activities, then brand owners need to understand this ever-growing landscape.

Mobile apps – explosive adoption by consumers

According to Comscore, in January 2014 “mobile devices accounted for 55% of Internet usage in the United States” and “apps made up 47% of Internet traffic”. For the first time, internet access from mobile devices outstripped that from fixed internet access points such as PCs. Canalys found that China remains the world’s largest smartphone market, accounting for 37% of global shipments or 108.5 million units in the second quarter of 2014 alone.

Everything from banking to shopping, gaming and entertainment is now offered through apps. Consumer downloads of apps show no signs of abating, with tens of thousands of apps added to the leading app stores on a monthly basis. The growth of this point of access to legitimate and illegitimate content demands attention. Specific infringements that have been seen on mobile app sites include:

• the inclusion of brands or trademarks to legitimise unauthorised apps and sales;
• financial services apps that include malware intended to defraud the user;
• apps that impersonate brands to offer counterfeit goods to consumers or businesses;
• apps that offer software to access third-party security systems illegitimately; and
• entertainment content that is illegally streamed through branded apps.

The challenges for brand and trademarks owners are similar to those for social media platforms. Understanding the landscape of app stores, monitoring these stores for IP infringements and prioritising appropriate action all apply in equal measure. If almost half of internet traffic derives from apps, brand and trademark owners need to understand what threats are ranged against them.

Strategic planning for online brand protection

Formulating an online brand protection strategy can be challenging, particularly if your organisation has not previously had such a policy in place. Key considerations for brand and trademark owners can involve the sheer scale of the issue – understanding what to do and when to do it. Rights holders also need to consider the consequences of doing nothing. They then need to ask themselves whether monitoring and enforcement should be conducted in-house or outsourced to a third party. What budget should be allocated and where should this come from? Finally, what will the return on investment be and how should this be shared with the business?

It is often advisable to start this process with a clear understanding of the online environment and how this affects key brands and trademarks. This can be achieved through an initial audit of activity on social media platforms and mobile app stores. The audit should focus on the key issues that are most likely to affect the individual brands and trademarks. For example, a luxury goods brand could focus on activity that promotes the distribution of counterfeit goods; while an entertainment company could focus on the distribution of content via unauthorised apps which lead to content being streamed.

A prioritisation system can be adopted, with a scoring system specific to the most important brands and infringements. This allows for strategic decisions to be taken based on activity that is seen in real time and will enable your organisation to focus on the enforcement that really matters.

Part of the counterfeit food chain

Evidence confirms that social media platforms and mobile app stores are an important part of the online distribution network for counterfeit goods. In general, counterfeiters targeting average consumers rely on advertising their products and much of this is done online.

Social media sites are used as networks to target specific products at consumers in specific territories, with many brands blatantly exploited to lend legitimacy to such activity. Much of this content directs consumers to content outside these platforms, where counterfeit goods are sold using brands or trademarks in domain names. Due to the efforts of brand owners and their representatives, many thousands of brand and trademark infringements are removed from these platforms on an ongoing basis.

Infringers also exploit mobile app stores as an ideal shopfront for apps that are used to divert consumers to content selling counterfeit goods. Brands and trademarks are used in a similar fashion to the activity on social media sites, with evidence of mobile apps leading to unauthorised third-party content. Initial research shows that mobile app users are less likely to question app legitimacy and this presents a further challenge to the consumer.

Remedial measures

In much the same way as many unregulated domain name suffixes, many social media sites operate a first come, first served registration policy. In addition, mobile app stores allow developers to upload apps with few checks, leading to a proliferation of infringing and unauthorised apps.

In the eyes of social media platforms and mobile app stores, it is therefore the brand owner’s responsibility to detect and prioritise action against individual infringements. A number of remedies are available to brand owners for the removal or disruption of infringing material from social media platforms, including:

• using the platform’s own reporting mechanism for IP infringements to request suspension of the account and/or content;
• using search engine mechanisms to remove links, thus disrupting traffic to the content; and
• contacting the user directly to request that it remove the infringing content.

These remedies can be used in combination, much in the same way as remedies for domain name infringements, in order to achieve the desired outcome in the most efficient way.

The development of rights holder programmes within social media platforms and mobile apps stores is still patchy. The main platforms, much like online marketplaces, now have effective measures in place and are responsive to requests that follow their individual stated procedures. Emerging markets and unregulated app sources do not have such programmes in place and therefore present more of a challenge. Experience suggests that lobbying from brand owners and their representatives has a positive effect on the policies of individual sites.

Proving return on investment

It is also advisable to understand what potential return on investment can be realised from an online brand protection strategy. Common measures of success for brand protection strategies include:

• reduced consumer opportunities to buy counterfeit goods;
• reduced number of brand infringements over time, which suggests that actions are having a long-term deterrent effect;
• increased number of successful enforcement actions;
• a rise in sales through legitimate channels; and
• an increase in online traffic quality – and quantity – to legitimate sites.

The criteria for measuring return on investment should be discussed and agreed with the wider business. If sales, marketing, PR or other parts of the business have a stake in the success of online brand protection, they will support and promote those brand protection activities.

Return on investment can also be monetised, which can go a long way towards proving the success of the online brand protection strategy. For example, if a domain name is recovered which subsequently drives legitimate traffic to an authorised channel, the traffic and sales resulting from that traffic can be measured and a value assigned to that domain.

A word of caution

Social media sites and mobile app stores present many threats to brand and trademark owners. This article describes the risks that brand and trademark owners should understand and use to formulate anti-counterfeiting and brand protection strategies that directly address these platforms.

However, these environments also provide unprecedented opportunities for brand and trademark owners to engage with wider audiences in order to increase brand loyalty and sales. When formulating a strategy to address online infringements, it is important to engage with social media, PR or marketing colleagues to understand their goals concerning social media and mobile apps. Quite often, the line between an infringer and an over-zealous fan can be blurred. There are many cases of brands being seen to be too heavy handed in these environments and the negative association with actions that are deemed unjustified by the internet community can be damaging and long lasting.

As a result, it is recommended that any enforcement actions tie in with wider company efforts to harness the power of the social media and mobile app environments. A joined-up approach is more often more powerful than trying to take on the internet world on your own.

Conclusion

The online world is constantly changing and these changes generate a constant stream of challenges for brand and trademark owners. Social media platforms and mobile app stores are at the forefront of these changes and it is important that brand and trademark owners formulate an appropriate strategy to deal with online infringements, including the distribution of counterfeit goods. A holistic approach is recommended, with the following points being emphasised:

• Understand the online environment and how it affects brand and trademarks;
• Devise a strategy based on actual online activity and threats;
• Prioritise actions to be taken;
• Involve other parts of the organisation; and
• Prove return on investment based on agreed criteria.

While each brand and trademark owner should evaluate the merits of online brand protection on a case-by-case basis, there can be little doubt that new internet environments such as social media sites and mobile app stores should be included in any strategic consideration.

NetNames

241 Borough High Street

London, SE1 1GA

United Kingdom

Tel +44 20 7015 9200

Web www.netnames.com

Haydn Simpson

Product director, brand protection

[email protected]

 

Haydn Simpson is product director for brand protection at NetNames. He is responsible for NetNames’ brand protection services and has led the company’s growth in this area over the last seven years. Mr Simpson has a broad range of product development, commercial and operational experience, and is currently focusing on aligning NetNames’ current and future capabilities with the strategic requirements of its global client base. Previously, he worked in internet advertising and domain name management.

Mr Simpson is based at NetNames’ brand protection global headquarters in Cambridge. NetNames specialises in being the strategic partner of choice to help ambitious brands to be present, protected and prosperous on the Internet.