‘Luxury brands are driving this’: reaction to the Facebook, Gucci collab

A new era has dawned in the war against counterfeiters, as luxury brands increasingly join forces with social media platforms and e-commerce companies to safeguard their IP. Lawyers tell WIPR why the IP world should expect to see more of these collaborations in the future.

Last week, Gucci and Facebook filed a joint lawsuit in California against a Russian resident who allegedly used the social media platform to sell the fashion label’s designer products. The move is a first for Facebook and follows similar actions by Amazon, which has filed similar lawsuits over the past year with luxury brands  Valentino and Ferragamo.

This represents a U-turn by fashion houses, which in the past had frequently sued online platforms for failing to adequately police their channels against counterfeiters.

But it seems that collaboration, rather than confrontation, is the guiding force behind an ambitious new strategy.

WIPR asked lawyers what this means for brands...

Mark Kramer, partner,  Potter Clarkson

Luxury goods manufacturers (and retailers) are fiercely protective of their trading channels due to the significant value held in the cachet of their brands. That is why it isn’t at all surprising to see them leading the way in new and innovative anti-counterfeiting initiatives.

We only need to go back to the relatively recent past to see what happened in relation to online marketplaces, such as eBay, when the online sale of counterfeit designer goods first became widespread. Despite the resistance from such platforms, it was the persistence of luxury brands to tackle counterfeiters that ultimately led to the enforcement of the now well-established takedown system.

Social media is evolving into a pseudo-online marketplace and consumers are bombarded with sales messaging in this environment. Having seen what happened with the first wave of online marketplaces, social media sites are more alive to their responsibilities around counterfeiting and are likely to diplomatically go down the route of collaboration with luxury brands, rather than dig their heels in and deny any culpability.

What’s more, social media platforms have a commercial imperative to stay in the good graces of luxury brands given the potentially significant advertising revenues in play.

John Ferdinand, partner,  Marks & Clerk

This kind of joined-up action is rare and historically it is often the luxury brands who have taken online retail or social media platforms and search engine providers to task for not doing more to police the sale of counterfeit goods.

Clearly with the enormous recent shift in consumer behaviour to online retail activity platforms are keen to secure a greater share of the market rather than pushing luxury brands towards their own more exclusive own-branded online retail/distribution channels.

Likewise from a luxury brand perspective, the challenge in online brand enforcement is knowing more about the origin of the goods and identity of the sellers and given the unique position of online retail platforms to use their data to focus enforcement activities, there are clear upsides to the partnership for the brands themselves too.

I think we’re likely to see more collaborative actions being taken. A general concern could be the risk of online retail becoming a ‘closed shop’ putting free and fair competition at risk and limiting consumer choice if rules are applied to rigidly and, while not so much of an issue now, it will be interesting to see if things go too far the other way in future.

Rosie Burbidge, partner,  Gunnerbrooke

This is a perennial issue for luxury goods owners who are very particular about the presentation of their goods online. Some, like Chanel, go so far as to not permit any online sales. The key for these brands is to preserve the ‘aura of luxury’. Clearly, sales of counterfeit goods on Facebook groups significantly undermines this aura.

It’s great to see the social media brands directly engaging with the problem but unfortunately taking action against a few major problem infringers, while helpful, is only the tip of a very deep counterfeiting iceberg.

It will be interesting to see how this trend develops and whether social media platforms (and e-commerce in general) will require an authentication process to be completed before any goods are listed in the future. This is a feature of some existing resale sites and is a trend I expect to see grow in coming years.

Nicholas Buckland, managing associate,  Lewis Silkin

Clearly there needs to be agreement between the rightsholder and social media company regarding which users to take action against, and how any action will be handled; any disagreements could cause issues and, if for example, Facebook is not supportive of filing a claim, the rightsholder may still want access to the information Facebook holds about the user/s. The IP world will have a particular interest in the number and scope of these collaborations.

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