Taking a stand: tackling online infringement

Online intellectual property infringement is generally accepted to be getting worse. This is reflected in the flurry of activity throughout 2011 and early in 2012: legislation was mooted (the Stop Online Piracy Act), and in some cases passed (the Anti-Counterfeiting Trade Agreement), to help tackle it, and websites such as Megaupload were closed, its domains seized and its owner Kim Dotcom arrested in a bid to stop it.

While legislators and enforcement agencies do their part, businesses should be acting decisively to protect and enforce their IP online.

Understanding the Internet and its many components can go a long way to helping IP owners identify the best methods available to them. The unprecedented access to consumers that the Internet provides has pushed businesses into online advertising. Consumer trends, including viewing habits, can be quantified and documented, and the ‘click’ allows advertisers to interact with consumers in a way that they never have before.

Online advertising has led to new ways of infringing IP. The keyword advertising cases are a good example of this. Competitors often buy each others’ trademarks as searchable keywords in a bid to top search result lists. Online ads can use copyrighted or trademarked copy easily, and counterfeiters can buy ads themselves to market their products.

But online advertising can also be the reason for infringing IP. Websites that host pirated content attract huge numbers of users, and if they host third party advertising, they can make money without selling the content themselves.

A bootlegged video of a recent NCAA men’s basketball game was uploaded to an online video hosting site. In a bid to help users access more content, the online video service suggested content that users might want to watch in a list that was positioned to the right of the video.

Among these suggestions were not only a sponsored video that was labelled ‘ad’, but also an official trailer for an upcoming movie from a major US movie studio. If the video secured enough hits, its owner would also get the opportunity to earn revenue from pop-up ads.

This example highlights how infringing content can earn revenue from advertising. It also shows how closely adverts can be positioned to infringing content, which opens up the possibility of the adverts, and by extension the advertisers, being associated with the infringing content.

This is a minor example of a major problem, according to Latham & Watkins LLP partner Perry J. Viscounty. Online advertising providers have networks of websites that host advertisements. Businesses are able to use these networks to target many users at once or specific groups of users. Infringing websites that attract millions of users serve as excellent vehicles for adverts and it is a business model that is increasingly being used.

“WEBSITES THAT HOST PIRATED CONTENT ATTRACT HUGE NUMBERS OF USERS, AND IF THEY HOST THIRD PARTY ADVERTISING, THEY CAN MAKE MONEY WITHOUT SELLING THE CONTENT THEMSELVES.”

IP owners should realise that advertising-funded online IP infringement is a “significant problem”, happening on wide scale, he says. “Some have argued that online advertising is helping to fund some of these unauthorised sites,” says Viscounty. “What’s become popular is for these websites to give away their content for free, which attracts millions of users. When advertising then becomes a revenue model, it’s very easy to start up a website with very little capital.”

Going it alone

IP owners should take the lead when tackling online IP infringement on these websites. When it comes to enforcing their IP, owners have to adopt an approach that adapts to each situation, says Viscounty. “Many IP owners are still contacting the websites directly and trying to get them to comply, but obviously they get frustrated because the websites often don’t do anything or ignore them,” he explains.

Instead, issuing take down notices under the US Digital Millennium Copyright Act can be “quite effective”, he says. “It’s inexpensive and effcient to send take down notices—we do them every day. Some IP owners send screen shots of the infringing content to the advertisers directly, and request that they help get the infringing content taken down or stop advertising on the site.”

This can be every effective because website owners do not want to lose their advertising revenue. Contacting advertising providers in combination with issuing take down notices is an effective strategy for tackling websites that infringe IP.

“We often start with cease and desist letters and take down notices but we occasionally open a dialogue with advertising providers, particularly when the IP owner concerned is also a customer of the advertising provider. IP owners are often huge advertisers,” says Viscounty.

“When trademark owners contact an advertising provider, they will o en say ‘not only have we sent a take down notice, but we are also a customer’. Thus, IP owners can proceed not only through the legal department on the take down notice, but through the advertising department as well. Often we reach a business resolution with the advertising department more quickly than we do with the legal department. The advertising providers don’t want to make trademark owners unhappy.”

Another effective technique, says Viscounty, is contacting the advertisers directly. Making advertisers aware that their adverts are being displayed next to, or near, infringing content can make them blush. “They’re embarrassed by it,” explains Viscounty. “Whether it’s pornography, trademark or copyright infringement, or defamation, many of them will stop advertising on the site if the offensive content is not taken down promptly.”

Nature of the beast

Advertising providers are aware of advertising-funded websites that infringe IP and they are taking steps to remove them from their networks. Mike Zaneis, senior vice president and general counsel for trade association the Interactive Advertising Bureau (IAB), which represents online publishers such as Microso and Google, says that the IAB and its members “care deeply” about protecting IP rights.

“For advertising’s sake, content is still king,” he explains. “If there isn’t quality content available to consumers, then there won’t be the eyeballs and there won’t be the need for advertising. We know that pirates and counterfeiters don’t care about the quality of the content and the economic engine that creates that content. We really have to have a partnership with IP owners because it’s a symbiotic relationship that makes the digital space and ecosystem stronger, with the better content that’s out there.”

Online advertisers do seem to be making a stand against bad advertisers and websites. Online advertising provider Google, which declined to comment, recently issued a blog post on how it is making “ads better for everyone”.

In the post, it said: “Like all other Internet companies, we’re fighting a war against a huge number of bad actors—from websites selling counterfeit goods and fraudulent tickets to underground international operations trying to spread malware and spyware.

"We must remain vigilant because scammers will always try to find new ways to abuse our systems. Given the number of searches on Google and the number of legitimate businesses who rely on this system to reach users, our work to remove bad ads must be precise and at scale.”

Real-time advertising technology provider AppNexus recently launched an initiative that will crack down on IP-infringing websites that host advertising. AppNexus will actively monitor tra c and refuse to allow clients to run ads on sites that are found to feature pirated IP. The IAB and Microsoft, which offers similar advertising services to Google, have endorsed this initiative.

In a statement, AppNexus chief executive officer Brian O’Kelley said: “AppNexus maintains that advertising has a higher purpose as the lifeblood of the free Internet. It’s time for the advertising industry to take a strong stand and to stop putting money in the pockets of those facilitating piracy.”

Advertising providers use legal and technological mechanisms to ensure that the websites in their networks do not infringe the IP rights of others. Zaneis says that the advertising industry has invested time, effort and resources in making sure that they “are not helping criminals to profit from their activity”.

“Advertising networks, especially the large ones, spend millions of dollars and devote lots of resources to basically filtering their network,” he says. “They enter into a financial relationship and contractual agreement with a website, and in the contract it says that the website must accurately represent the content that it provides and that isn’t infringing material.

“Then they will also use technological means as well as real eyeballs to make sure the content is legitimate before the agreement is  nalised and adverts are served into that site. So there is a legal instrument, in the contract that is signed, and then the operational mechanism to have real people actually reviewing the content, as well as a continuous monitoring programme that will scan for illegitimate content.”

The Internet is a brave new world that continues to test legal, technological and social norms. IP owners need to come to terms with this so they can protect and enforce their rights as effectively as possible, but others, including online advertising providers, are also playing their part, which is essential if online IP infringement is going to be reined in.