The European Union Intellectual Property Office (EUIPO) recently published a report based on its study titled “Research on Online Business Models Infringing Intellectual Property Rights – Phase 2”. In the study, the EUIPO investigates suspected trademark infringing e-shops utilizing previously used domain names.
Phase 1 of the study was qualitative and was published on July 12, 2016. It provided an overview of the different business models used to infringe IPR online. The study was carried out in Denmark and focused on a detected pattern of a specific use of the domain name system (DNS) taking place on the Danish country code top level domain (ccTLD) .dk.
The study arose from suggestions made in the media about e-shops suspected of infringing trademarks that were emerging online, but seen as individual and unaffiliated e-shops. The aim of the Danish study was to identify if there was a pattern or structure behind the setting up of these e-shops. By analyzing re-registration of previously used domain names, it was possible to determine that e-shops suspected of marketing trademark infringing goods were being set up using domain names that had previously been used to various online purposes. The research from Phase 1 indicated it was likely that the same activity was also applied by suspected trade mark infringers in other European countries.
Phase 2 of the study is quantitative and focused on four European countries with large e-commerce sectors – Sweden, Germany, Spain and the United Kingdom.
The phenomenon of re-registering expired famous domains was first reported by a Danish cybercrime expert who found that a large number of previously used domain names under the Danish domain .dk were being systematically re-registered by suspected infringers of trademarks to take advantage of the popularity of the domain names to attract traffic to new e-shops marketing suspected trademark infringing goods.
Study reveals that this practice, as identified in Denmark, also exists in the four selected countries and to an even higher degree than expected.
“The research detected 27 870 e-shops suspected of marketing trade mark infringing goods in Sweden, Germany, the United Kingdom and Spain. It was found that 21 001 of these e-shops (75.35 %) were detected using domain names that had previously been used to direct internet traffic to websites that have no relation to their prior use.
Based on the research, it must be considered likely that the same also occurs in other European countries with well-developed e-commerce sectors. The analysis of the 27 870 e-shops suspected of marketing trade mark infringing goods in Sweden, Germany, the United Kingdom and Spain has identified a number of patterns in the set-up of the e-shops.
- product category: shoes are the product category mainly affected in 67.5 % of the suspected e-shops and clothes are the product category mainly affected in 20.6 %;
- main brand affected: the brand most harmed was detected as the brand mainly affected on 18 % of the suspected e-shops, while the second most harmed was detected as the brand mainly affected on 11.9 % of the suspected e-shops;
- software used: 94.6 % of the detected suspected e-shops used the same specific e-commerce software;
- registrars: 40.78 % of the detected suspected e-shops in Sweden and the United Kingdom were registered through the same registrar;
- name servers: 21.3 % of the detected suspected e-shops used the same name server;
- hosting country: 25.9 % of the suspected e-shops had the hosting provider located in Turkey, 19.3 % in the Netherlands, and 18.3 % in the United States.
The findings of the report are interesting for the law enforcement community and internet intermediaries as well as trade mark holders and consumers, to understand the scale and the traits of this business model applied in a number of EU Member States.
Click here to view the full report