Termites in the basement

It is no secret that corporate brands attract the attention of internet profiteers. Like termites gnawing away at a building’s foundation, these profiteers pose a significant and growing threat to brands across the commercial spectrum. Spammers, phishers, cybersquatters and other bad actors are growing in number and developing ever more sophisticated schemes to profit at the expense of corporate brands. Because the need for law firms to provide anti-profiteering services is likely to grow as the threat of online exploitation becomes more severe, this article offers some thoughts on developing programs to meet that need.

The tasks required of an online enforcement program are not substantially different from those required of any other form of intellectual property enforcement. These include:

• efficiently searching for and identifying infringements that match the client’s enforcement priorities;
• evaluating the search results to identify infringers who will be appropriate targets for enforcement;
• investigating targets using public records and appropriate discovery tools;
• assessing whether targeted infringers remain appropriate targets of the program as new information becomes available; and
• recommending and executing appropriate enforcement actions against infringers whose identities are discovered.

Notwithstanding the relevance of these tasks to all IP enforcement activities, several issues pose unique challenges in the online enforcement context. Online enforcement programs require seamless international networks to facilitate investigations and assessment of targets. They must have the routines and personnel in place to quickly analyse massive amounts of data and identify appropriate targets. Solicitors must be able to conduct fast-paced discovery to identify anonymous infringers, and carry out enforcement actions in a large number of jurisdictions. Programs must also account for new legal and technological developments, which occur much more quickly in this context than in most others.

Global reach

Internet profiteers can be found in every jurisdiction on the globe.

This makes the geographic reach of a firm’s investigation and enforcement services particularly important. Solicitors should consider which jurisdictions are most important to their programs, based on several factors, including the scope of the firm’s existing international footprint or existing partnerships with other firms; available data on the jurisdictions where infringers tend to be concentrated; and the jurisdictions of most interest to the firm’s current and/or potential clients.

In most cases, infringers will be savvy enough to hide their identities in some way. When an infringer cannot be positively identified based on public records, the adviser will need to do some sleuthing, and may need to obtain information from third parties in other jurisdictions.

If solicitors have fast access to analysis of the relevant law and discovery tools available in those jurisdictions, they can quickly determine whether it is possible and cost-effective to follow up on a particular lead.

Furthermore, in cases where the investigation involves jurisdictions with disparate privacy and human rights laws, they must ensure that evidence that was legally collected in one jurisdiction does not poison the action if its use in another jurisdiction would be unlawful. International networks can prevent the need for a new round of expensive and time-consuming research into relevant privacy and human rights laws every time an investigation crosses a border.

Jurisdictions also vary significantly in terms of the claims that can be asserted against an online infringer, the remedies available for such infringement, and the enforceability of judgments. When an investigation confirms that an infringer is located in a particular jurisdiction, an international network can enable the firm quickly to provide the client with relevant information on enforcement in that jurisdiction, so that the client can decide whether the case is worth pursuing.

Target practice

In order to identify infringers for potential enforcement action, an adviser must first scour the internet for illicit occurrences of the client’s intellectual property, and then analyse the data to present the client with useful recommendations about which cases to pursue. In most cases, it is useful to retain a third party web crawling service to conduct the initial research. Such services often identify hundreds or thousands of potential infringements to be analysed.

As this targeting data begins to flow in, those managing the program must be prepared to evaluate it quickly in order to advise the client on where best to focus its enforcement efforts. Experienced personnel can usually accomplish this analysis relatively quickly with respect to individual targets. When there are hundreds or thousands of targets, however, the task can still be overwhelming. Solicitors should think very carefully about what kinds of systems and resources will be necessary to process incoming data accurately and efficiently.

Publicly-available documents can provide a wealth of information about an infringer. The Whois database (available at www.domaintools.com, among other places) contains a wealth of information about domain names and websites, including personal and contact information about the domain name registrant (though this information is unverified and is sometimes blocked by privacy protection services); the location of the host on whose servers the website files that appear at that domain name are stored; other domain names hosted on the same IP address; and the registration and IP history of the domain name. Other resources such as the Way Back Machine at www.archive.org provide access to content that used to appear on a website but has since been removed. The source code of a website can also yield helpful clues. Finally, popular search engines can provide a great deal of information when the investigator locates an email address, handle, or other piece of information that the infringer may be using elsewhere.

Wheat from the chaff

When an infringer’s identity and/or location is not available from public records, solicitors should be able quickly to finalise an investigative discovery plan to obtain that information. Discovery rules will vary from jurisdiction to jurisdiction, and the program’s international network will be particularly valuable in crafting a practical investigative roadmap. As is always the case in discovery, not every lead will be worthwhile, and it is important for the case manager to develop a keen sense of which leads are likely to yield good information, and which should be discarded.

Investigative discovery must move quickly. In many cases, third parties such as internet service providers (whose records can be invaluable) regularly overwrite old system data with new data. Solicitors must quickly identify such short-lived leads and act promptly to preserve and obtain the relevant data. This is another area in which the program should have sufficient international resources to ensure that the managing solicitor does not lose valuable time researching the laws or procedure of discovery in foreign jurisdictions.

Beware the PR disaster

As information about an infringer’s identity begins to emerge, the adviser should develop and maintain an up-to-date composite of the infringer in order to ensure that pursuing the case remains consistent with the client’s enforcement priorities. Miscalculations about an infringer can create significant legal headaches, as well as massive public relations problems for the client. The Recording Industry Association of America has repeatedly found itself in hot water for aggressively pursuing innocent or sympathetic defendants. Microsoft Corporation had a similar problem in the infamous “Mike Rowe Soft” case. In some instances, the client may decide to pursue an infringer despite such risks. But a client that stumbles into a legal or public relations crisis because it received incomplete or inaccurate information about an infringer will quickly lose faith in both the program and the firm.

Finally, when an investigation runs into a dead end – as many will – the adviser should not hesitate to recommend that the client stop pursuing it.

Dealing with the devious

The law of the internet remains highly fluid in every major jurisdiction. Some enforcement mechanisms, such as the Uniform Domain Name Dispute Resolution Policy, or “UDRP” (see www.icann.org/udrp/udrp.htm), are established and reasonably stable. Others, including those prescribed by national statutes, are changing rapidly. In common law jurisdictions, courts continue to struggle with vague or anachronistic statutes to provide appropriate protection to brand owners without unnecessarily restricting free expression and other forms of fair use.

Solicitors tasked with enforcement must remain up to date on these new developments. Changes or significant decisions in one jurisdiction should be made known to advisers in other jurisdictions, and should quickly be accounted for in the program’s analysis and operations. The size, scope and speed of large online enforcement programs makes this a very challenging task, but one that remains essential while the relevant law continues to fluctuate.

In addition to legal fluctuations, solicitors must also cope with new technologies and the evolving tactics of internet profiteers. Many profiteers are legally savvy, using a variety of tactics to lend their schemes a façade of legitimacy. New schemes appear regularly, often building on previous schemes with new twists intended to maximise profit and minimise the chances of legal liability. Numerous online forums exist where profiteers openly discuss the best ways to avoid legal recriminations for their activities, and compare notes on new schemes. Solicitors must remain abreast of these new developments in order to counsel and serve their clients effectively.

    Christopher Varas is an intellectual property and technology lawyer from the United States who previously practised in Seattle, Washington. He is currently completing an LLM in Law and Technology at the University of Edinburgh. e: ctvaras@yahoo.co.uk

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THE CHALLENGE OF HOW TO BILL

Lawyers should bear in mind that online enforcement cases rarely result in recovery of any significant amount of damages, or even legal fees. Negotiated settlements also tend to be paltry, because the defenders are often individuals who lack the resources to offer the kind of settlements that corporate IP litigation generally entails. It should not come as a surprise when a client objects to paying standard commercial litigation rates for 20 multi-jurisdictional matters that are unlikely to yield any appreciable financial return. The issue is complicated further by the fact that it can be difficult to convince a corporate decision-maker that small-time individual infringers pose a threat significant enough to warrant the commitment of significant resources.

As a result, firms may need to develop some creative billing schemes to make investment in online enforcement more appealing to their clients. Firms that can offer creative solutions to maximise value for investment may have an advantage when it comes to selling their online enforcement services, and potentially other services as well.