Counterfeit Goods Still Plague Online Marketplaces, Copyright Holders Tell USTR
Online counterfeit operations continue to inflict more harm on the fashion industry than traditional open-air marketplaces globally, and enforcement efforts against the rogue websites are failing to scale back counterfeit sales, said the American Apparel and Footwear Association in comments filed on Oct. 24 to the Office of the U.S. Trade Representative (here). USTR asked for industry comments on Sept. 25 to help craft its 2014 Special 301 Review of Notorious Markets (see 14092518).
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The most active counterfeit operations in the fashion industry are through www.DHgate.com, www.Taobao.com and www.Alibaba.com, said AAFA. “We are encouraged by the cooperation of some financial institutions to stop payments to known counterfeit transactions as well as the communication and cooperation that some sites have had with industry,” said the AAFA comments. “We are also disappointed by the lack of cooperation or results by various search engines and internet service providers who continue to connect consumers to these malicious sites.”
More than two-thirds of the counterfeit apparel and footwear products CBP seized in 2013 originated in China, said AAFA, while pinpointing 14 physical markets in the country that deal in counterfeit goods. AAFA also identified a number of counterfeit markets in Mexico, Uruguay, Thailand, Ukraine, Peru, Ecuador, Venezuela and Russia. The majority of the markets sold counterfeit products in “general apparel and footwear,” as opposed to specific styles or other qualities.
Other copyright holders, including the Entertainment Software Association (ESA), Motion Picture Association of America (MPAA) and the Recording Industry Association of America (RIAA), said cyberlockers, peer-to-peer (P2P) networks and BitTorrent portals in Asia, Europe and North America are serious challenges to their industries. MPAA and RIAA both cited a September report on cyberlockers, which are centralized file hosting sites for user-uploaded content and often used to infringe copyrighted material. Online security company NetNames wrote the report, which was commissioned by the Digital Citizens Alliance (DCA), a consumer-oriented coalition focusing on the sale of drugs online and pirating of creative digital content. The report analyzed 30 cyberlocker sites -- split evenly between streaming and direct download cyberlockers -- saying they collected nearly $100 million in revenue in the past year.
Cyberlockers, P2P networks and various physical locations across the globe are havens for piracy and copyright infringement, said MPAA in comments. “Online content theft poses a significant and ever-evolving challenge,” it said. “Content thieves are taking advantage of a wide constellation of easy-to-use, consumer-friendly online technologies such as direct download and streaming cyberlockers, which, in turn, have given rise to a lucrative form of secondary infringement on the part of ‘linking sites’ that index stolen movie and television content hosted on other sites,” said MPAA. RIAA cited many of the same cyberlockers and other sites as MPAA in comments.
ESA said it was surprised by the removal of Australia’s warez-bb.org, a linking site, from the USTR 2013 list. That site is “unwilling to comply with requests to remove infringing content identified in notices of infringement” and “continues to take steps to evade enforcement by changing Internet Service Providers,” said ESA in comments. Alibaba-owned Taobao, a Chinese e-commerce company, said it removed 99.23 million allegedly infringing website listings between Jan. 1 and Sept. 30, in comments. Almost 94 percent of those takedowns were done “proactively,” it said. More than 33 percent of the takedowns were a result of a “special” campaign between Taobao and 1,208 copyright holders in the U.S., it said. That campaign resulted in penalties for more than 200,000 Taobao merchants, it said.