After a series of one-sided hearings, luxury goods maker Chanel has won recent court orders against hundreds of websites trafficking in counterfeit luxury goods. A federal judge in Nevada has agreed that Chanel can seize the domain names in question and transfer them all to US-based registrar GoDaddy. The judge also ordered “all Internet search engines” and “all social media websites”—explicitly naming Facebook, Twitter, Google+, Bing, Yahoo, and Google—to “de-index” the domain names and to remove them from any search results.
The case has been a remarkable one. Concerned about counterfeiting, Chanel has filed a joint suit in Nevada against nearly 700 domain names that appear to have nothing in common. When Chanel finds more names, it simply uses the same case and files new requests for more seizures. (A recent November 14 order went after an additional 228 sites; none had a chance to contest the request until after it was approved and the names had been seized.)
How were the sites investigated? For the most recent batch of names, Chanel hired a Nevada investigator to order from three of the 228 sites in question. When the orders arrived, they were reviewed by a Chanel official and declared counterfeit. The other 225 sites were seized based on a Chanel anti-counterfeiting specialist browsing the Web.
That was good enough for Judge Kent Dawson to order the names seized and transferred to GoDaddy, where they would all redirect to a page serving notice of the seizure. In addition, a total ban on search engine indexing was ordered, one which neither Bing nor Google appears to have complied with yet.
Missing from the ruling is any discussion of the Internet’s global nature; the judge shows no awareness that the domains in question might not even be registered in this country, for instance, and his ban on search engine and social media indexing apparently extends to the entire world. (And, when applied to US-based companies like Twitter, apparently compels them to censor the links globally rather than only when accessed by people in the US.) Indeed, a cursory search through the list of offending domains turns up poshmoda.ws, a site registered in Germany. The German registrar has not yet complied with the US court order, though most other domain names on the list are .com or .net names and have been seized.
The US government has made similar domain name seizures through Operation In Our Sites, grabbing US-based domains that end in .com and .net even when the sites are located abroad. Such moves by themselves would seem to do little to stop piracy in the long-term; they simply teach would-be miscreants to register future domain names in other countries.
Why wait for SOPA?
Law professor Venkat Balasubramani, writing about the case yesterday, sums it up eloquently: “Wow.”
“I’m sympathetic to the ‘whack-a-mole’ problem rights owners face, but this relief is just extraordinarily broad and is on shaky procedural grounds,” he writes. “I’m not sure how this court can direct a registry to change a domain name’s registrar of record or Google to de-list a site, but the court does so anyway. This is probably the most problematic aspect of the court’s orders.”
Rightsholders have asked Congress to write these provisions (and a few more) into law, and they have pushed for government seizures like those from Operation In Our Sites (which just seized another batch of new domains this last weekend). But as Balasubramani points out, cases like Chanel’s show that rightsholders can already get what they want from judges, and they can go after far more sites more quickly than the government.
“The fight against SOPA [the Stop Online Piracy Act] may be a red herring in some ways,” he notes, “since IP plaintiffs are fashioning very similar remedies in court irrespective of the legislation. Thus, even if SOPA is defeated, it may turn out to be a Pyrrhic victory—opponents may win the battle but may not have gained much as a result.”
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5 comments:
Hmmm. I also have strong concerns about the legality of the ability of Chanel to seize domain names. While there are certainly many complex issues associated with the legal case, I think that the result is infringing on the right to free speech. I would imagine that the case for Chanel is predicated on the idea that the websites in question are solely for the purposes of selling counterfeit goods. I believe a significant problem arises when a customer would have visited the website and not purchased anything. If the illegal action that is happening is the sale of the counterfeit product, than the act of visiting the site is not illegal and it is not illegal for the webpage to exist. I don’t know if there is a way to simply block the transactions but not the act of visiting the website, but I think this is the action that needs to be enforced. Imagine a blog that pokes fun at Chanel and might sell a questionable product also. What if it were “Disappeared”. Is this ok?
I don’t see this as a free speech issue. People who are stealing other people’s IP do not have a right to benefit from the Internet.
I do see this a benefit for many companies. For one thing, no one wants to see their work counterfeitd pawned off to consumers for cut prices, so this is great for companies to maintain a quality brand image while enforcing patents, copyright, etc. Additionally, it helps the market by offering an incentive for companies to sell products (including luxury brands online). The downside, of course, is that many brands can cross a line as I see Chanel starting to do. Onlines stores could genuinely not know that the product they are selling is a counterfeit due to either ignorance, stupidity, or simple lack of investigation. I just think it's ultimately up to consumers to determine reputable websites to purchase from and brands to educate their consumers on where to purchase from. Let the market work this out---not the courts.
I agree with Jason. The existence of a website should not be terminated on the grounds of the sale of counterfeit items. As Jason mentions, companies might not be aware of the fact that they are selling counterfeit items online and this might be a compliance or quality control issue. If counterfeit items are proved to be sold from a company's website, the company should first be warned and allowed to do an internal investigation. It should be provided an opportunity to rectify the mistakes committed by some of its employees rather than the whole website being seized. Needless to say other companies have the right to their premium luxury product being protected under law, companies selling counterfeit items (possibly unknowingly) should be given a chance to undo the happenings. Chanel should not have the right to simply seize the domains instantly.
I find this article fascinating, and the fact that no one has picked up on the fact that a US courthouse issued an order that would need to be carried out internationally. I agree with Jason about the repercussions that should be taken. But the bigger issue is how is the court order served or if that kind of order should even be allowed to be issued.
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