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Client Alert - Protection of IP Rights in the Murky Zone of Online Auctions

04.25.2005

With the increasing popularity of online auction sites, it has become easier, faster and less costly to sell goods. For a small transaction fee, online auction users are able to offer their items to millions of other online users and to sell those items to the highest bidder.

Unfortunately, online auctions are being used for trafficking in counterfeit goods that infringe copyright and trademark rights. Online auction companies have adopted policies that prohibit the sale of counterfeit and infringing items and have created special programs designed to deal with intellectual property rights violations. We have helped clients enroll in these special programs, and have been successful in taking down counterfeit and infringing items from these auction sites.

eBay

eBay has adopted a Brand Name Misuse Policy and has established a Verified Rights Owner (VeRO) program to help ensure that the items listed on eBay do not infringe intellectual property rights. eBay's Brand Name Misuse Policy prohibits eBay users, with limited exceptions, from including any brand names or company logos in their listings other than those used by the company that manufactured or produced the item listed. eBay's VeRO program facilitates cooperation between eBay and intellectual property (IP) owners who can request removal of infringing eBay listings, monitor potentially infringing listings and request personal information about alleged infringers. VeRO also encourages IP owners to create an "About Me" page to educate eBay users about their products and legal positions before taking more aggressive legal action. eBay also actively searches its web site daily for listings which appear to be offering infringing or unauthorized items and refers them to the appropriate IP rights owner. In addition, companies with a particular counterfeiting problem can monitor eBay, as well as other online auctions and Internet web sites, by having their employees, paralegals or students search those auctions and the Internet for counterfeit and infringing products.

To become a VeRO participant, an IP owner is required to set up a user account with eBay, submit a Notice of Infringement form providing contact information and the names of individuals having authority to sign future Notices of Infringement, and submit an Addendum to the Notice of Infringement listing allegedly infringing listings or materials and the works or rights allegedly infringed. Although the first Notice of Infringement form must be signed and mailed to VeRO, future notices may be sent to eBay by email by an authorized person. When eBay receives a notice requesting removal of one or more infringing listings, eBay reviews and removes such listings, and notifies the seller and bidders of this fact. eBay also provides the seller of the removed listing with the IP owner's email address to allow the seller to contact the IP owner with any questions concerning the rights his or her listings violated.

VeRO participants may also be able to obtain a particular seller's personal information by submitting to the VeRO program by fax and by mail a completed Personal Information Agreement with a request for an eBay user's contact information. The Personal Information Agreement form is available upon request from the VeRO program.

Yahoo!

Yahoo!, the operator of another popular online auction, Yahoo! Auctions, has adopted different guidelines and procedures to deal with infringing auction listings. Yahoo!'s "Additional Terms," which are additional to Yahoo!'s Terms of Service, provide that Yahoo! has the right to modify, suspend and terminate any listings and accounts in its sole discretion if Yahoo! determines that a user has violated or attempted to violate the rights of others. Yahoo! Auctions Guidelines, which are incorporated by reference in the Additional Terms, describe various items that may not be listed or sold through Yahoo! Auctions, including "any item that infringes the rights of a third party, including items that violate copyrights, trademarks, publicity or privacy rights of third parties," and "any item that is counterfeit or stolen."

If an auction item on Yahoo! violates its guidelines, Yahoo! allows users to report the auction listing by using a special feedback form. In addition, Yahoo! has established a Copyright and Intellectual Property Agent for Notice who can be contacted by an IP owner to lodge a complaint against a seller for a violation of IP rights. Yahoo!'s auction policy and infringement notification procedures appear to be less formal than eBay's VeRO program. Nor does Yahoo! appear to have a formal procedure by which IP owners can request personal information.

We at Cowan, Liebowitz & Latman have successfully taken actions against sellers of counterfeit and infringing goods on auction sites to protect our clients' intellectual property.

For more information, please contact:

 

Anastasia Zhadina        (212) 790-9286
   

Attorneys

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