COVID-19 and trademark-driven scams

Eversheds Sutherland (US) LLP

Eversheds Sutherland (US) LLPStrong brands are prime targets for trademark scams in times of crisis like the COVID-19 pandemic because of the trust and goodwill they have built with the consuming public. Brands in the medical products sphere should be on particularly high alert because brand-pirates have strong incentives to capitalize on public concern and fear relating to the spread of the virus. Scammers and fraudsters will use well-known trademarks to impersonate the brand, or to imply that there is a trusted relationship, like a sponsorship or affiliation, all to divert business or information that was intended for the brand.

Know your scams!

Impersonation methods can be active or passive. Active measures involve affirmative efforts to obtain personal identifying information or the payment of money. This generally takes the form of conveying false offers, impersonating customer support, and general phishing attacks. Fraudsters will often use false accounts on Facebook, Twitter, and LinkedIn to lure customers into providing their sign-on credentials or signing-up for bogus support services. Scammers will even apply to register identical or similar trademarks to make their actions look more legitimate.

Passive methods, like cybersquatting and unauthorized co-branding, can cause lost sales and significant harm to a brand’s reputation. Cybersquatting is one of the most common methods used to hijack goodwill because it is nearly impossible to control every possible variation of a brand’s official domain name. Opportunists will find unused top-level domains, like .net instead of .com, purchase domains with common typos, or simply add words on to the brand’s domain name. Once they own the domain, the brand-pirate may park the domain name and profit by hosting ads, or offer counterfeit products. Counterfeits pose a real public threat because they are generally inferior to the genuine product, sometimes to the point of being dangerous.

Hunt down the pirates!

A brand’s best resource to spot these pirates are its own business people. The brand’s employees will have the most knowledge about brand usage standards and those that are, or are not, authorized to use the brand’s marks. Consider offering a “bounty” program to reward employees for spotting and reporting potential trademark infringements.

If you have elected not to use a watch service, you might reconsider. Scammers work fast, and even the most attentive employees can’t be everywhere at once. Because trademark rights are territorial, watch services can keep a watchful eye in foreign jurisdictions where the brand may be well-known, even though it lacks local operations or distribution relationships in the area. Watch services provide reliable notice of brand-pirates’ efforts to secure trademark rights and domain names, so the brand can intervene before losing the rights to its trademark. Watch services also can patrol social media and online marketplaces for copycats. Enlisting outside counsel to secure a watch service can have significant cost benefits versus handling in-house because law firms can take advantage of bulk discounts on behalf of their large client bases.

How to respond?

It is not always clear cut whether potentially infringing activity will warrant legal proceedings, but potential harm to the public and the business should be the most important considerations in this decision making process. Depending on the situation, especially if it involves a wayward partner or an overzealous fan, consider having a business person (with the oversight and assistance of counsel) make the first communication with the offending party. Not only is this an economical approach; it also might open up a dialogue that can guide later formal legal action, if it becomes necessary.

If initial requests to cease the infringing activity are not honored, then there are a wide array of tools available, including domain name arbitration, ecommerce and social media take down processes, and as a last resort, civil litigation. Some trade associations can help, such as the International Anti-Counterfeiting Coalition (IACC), which has special ecommerce and customs-level enforcement programs for qualifying members. If you suspect criminal activity, the National Intellectual Property Rights Coordination Center is a good place to start seeking government help.

Of these, domain name disputes have a variety of enforcement options. Brand owners can rely on host terms of service requests, Uniform Domain-Name Dispute Resolution Proceedings (UDRP), Uniform Rapid Suspension (URS) for new gTLDs, Public Interest Commitment Dispute Resolution Procedure (PICDRP), Trademark Post-Delegation Dispute Resolution Procedure (PDDRP), Sunrise Dispute Resolution Procedure (SDRP), and the United States Anti-cybersquatting Consumer Protection Act (ACPA).

Register those brands!

There are many different avenues to guard against opportunistic brand-pirates, but having registered intellectual property rights in all your key markets is often a prerequisite to enforcement programs. For example, ecommerce platforms like require proof of your rights for any take down action. Without registered rights, it is also difficult to persuade infringers to cease their harmful conduct. Luckily, electronic filing is available with the USPTO, ICANN, WIPO, and many other intellectual property organizations, which is helpful in tumultuous times like these because services are available even if the physical offices are closed.

[View source.]

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Eversheds Sutherland (US) LLP | Attorney Advertising

Written by:

Eversheds Sutherland (US) LLP

Eversheds Sutherland (US) LLP on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide