A research report run by the EUIPO has found that counterfeit organisations are infringing brand owners intellectual property rights (IPR) through the use of domain names. 

The EUIPO (European Union Intellectual Property Office) has released a research report (PDF) which focuses on the problem of domain name re-registration as a business model for infringing brand owners’ IPR.

The phenomenon

Under the business model identified by the EUIPO, counterfeit organisations systematically re-register domain names which were once registered by commercial businesses, news outlets, famous people and foreign embassies. These domain names are then used to sell infringing goods to the public. Often, the previous use of the domain name has no connection with the suspected infringing use.

The infringing e-shop is set up in this way so that it can benefit from the popularity of the previous domain name, e.g. through search engine indexation, reviews of products or services and any third party websites linking to the website (without realising the change in use).

The findings

In the UK, the research detected 14,182 e-shops which were suspected of marketing trade mark infringing goods. Of those suspected infringing e-shops, 71 per cent were connected to a domain name which was previously registered under the name of a different organisation. In other countries this percentage was even higher. The problem is more extensive than was estimated by the EUIPO and is likely to extend across Europe and beyond.

This report builds on the EUIPO’s first phase research (PDF) research which generally looked more at business models for IPR infringement. The first phase identified that the domain name re-registration model was taking place in Denmark. This second phase report makes it clear that this business model is being used more widely throughout Europe, by carrying out research into the practice in Sweden, Germany, Spain and the UK.

The study identified almost 28,000 e-shops were suspected of selling counterfeit goods in these countries. Of these, it is indicated that a large proportion may in fact be related to and run by only one, or a few, businesses as there are a number of common traits in the set-up of these suspected infringing e-shops. Common traits include:

  • the products sold on them are primarily shoes and clothes (67.5 per cent and 20.6 per cent respectively)
  • nearly 95 per cent of the e-shops use the same specific e-commerce software
  • 41 per cent of the suspected e-shops were registered through the same registrar (in the UK and Swedish e-shops).

Conclusion

This report provides a timely reminder for any organisations with registered domain names to keep track of their registrations so that the domain name can be renewed on time. If a domain name is due to expire but it is no longer required, brand owners should consider renewing it on a protective basis given the low costs involved.