Fighting piracy and counterfeiting in the light of the

Fighting piracy and counterfeiting in the light of
the European principles of eCommerce –
The eBay strategy and experience
GRUR meets Brussels: Enforcement of IP rights in the digital environment
Dr. Wolf Osthaus, Legislative Counsel Europe
7 March 2007
Topics
1. What is special about the digital world – the eBay
marketplace as a case in point
2. eBay‘s approach to fight pirated and counterfeited goods
3. Strengths and weaknesses of the eCommerce directive
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The evolution of marketplaces
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A global footprint – distance becomes less important
eBay site or majority investment
Minority investment
33 localized
sites
Asia/Pacific
Australia
South Korea
New Zealand
Taiwan
China
Singapore
Hong Kong
India
Philippines
Malaysia
Americas
USA
Canada
Argentina*
Brazil*
Chile*
Colombia*
Ecuador*
Mexico*
Peru*
Uruguay*
Venezuela*
*MercadoLibre sites
Members
from more
than 150
countries
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Europe
Austria
France
Ireland
Netherlands
Switzerland
UK
Belgium
Germany
Italy
Spain
Sweden
Poland
4
Still trading of tangible goods, but at a much higher speed
… a piece of clothing every second
… a book every 4 seconds
… a car every 2 minutes
… a notebook every 2 minutes
… a painting every 3 minutes
… a sofa every 4 minutes
… a fridge every 11 minutes
… and 13 excavators daily!
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New dimensions thanks to automated procedures
> 222 mio
registered users
globally,
> 20 mio in DE
1998
1999
2000
2001
More than 170.000 people
in Europe earn a relevant part
of their living by selling
on eBay; 1,3 mill. globally.
2002
2003
2004
2005
52,4 bill. $
Gross Merchandise
Volume 2006
globally
Globally approx.
105 mio. listings
at any given time.
1998
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1999
2000
2001
2002
2003
2004
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2005
The rise of technological intermediaries
User level
1. Create a listing
The seller
2. Search for an item
3. Conclusion of the contract
The buyer
Transaction
level
4. Payment
5. Shipping
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Topics
1. What is special about the digital world – the eBay
marketplace as a case in point
2. eBay‘s approach to fight pirated and counterfeited goods
3. Strengths and weaknesses of the eCommerce directive
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Fighting counterfeits and piracy
Challenges with counterfeits / piracy
• Global trend (both offline and online)
• Fighting counterfeits / piracy is an arms race
• Counterfeits & piracy are damaging eBay and our Community of users
• Over 50,000 categories on eBay -- Internet traffic is enormous
Joint cooperation with rights owners and law enforcement
is key to success.
We need a shared responsibility.
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Self-regulating market: Feedback system
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How eBay itself is fighting counterfeits
1. We allocate significant resources
• People – more than 2,000 people dedicated to Trust and Safety on eBay
• Systems – significant investments in technology
2. We educate our users and create awareness on counterfeiting
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How eBay itself is fighting counterfeits and piracy
3. We fight bad listings (i.e. counterfeits)
• Daily key word searches for blatantly, i.e. obviously infringing material
• Fast takedowns of detected infringing material
• Specific requirements and restrictions in areas of high risk for IP infringements:
– Stronger verification requirements
– Ban of 1- and 3-day auctions
– Limitations to cross-border-listings
4. We fight bad sellers (i.e. counterfeiters)
• Enforcement of violations through warnings and suspensions
• Complex technology for the detection of previously suspended users
• Strong level of cooperation with law enforcement: data sharing to allow effective
prosecution
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How eBay is fighting counterfeits
5. Anti-piracy solutions offered to rights owners (‘VeRO Program’)
• Advanced online detection and reporting tools
– One of the first Notice and Takedown procedures in the industry (º 1998)
– Further technological improvements: Bulk VeRO reporting tools, VeRO API
www.ebay.co.uk/vero
• The relevant advantage for ROs: We just trust their assessment.
• Policies that enable us to share contact information of reported infringers with
rights owners who participate in our program
• Rights owners can communicate their policies directly on eBay pages
• To date, more than 18,000 participating rights owners
6. Close cooperation with Law Enforcement (Data disclosure etc.)
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Topics
1. What is special about the digital world – the eBay
marketplace as a case in point
2. eBay‘s approach to fight pirated and counterfeited goods
3. Strengths and weaknesses of the eCommerce directive
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Liability regime of the eCommerce directive
Content Provider:
Full liability for
own illegal content
Host Provider:
Obligation to block or
delete illegal content upon
knowledge, but no general
monitoring obligation
Access Provider:
Generally well-working system,
but uncertainties about exact
obligations of host providers
General no liability for
transmitted content
and lack of regulation regarding
links and search engines
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The challenge at stake: Host provider as a judge?
 Factual uncertainties
 Legal uncertainties:
Original or Counterfeit?
e.g. Perfume-“tester“ or perfume
without outer wrapping –
Trademark infringement or not?
Host Provider has neither the factual nor the institutional competence to
answer these questions.
 Risk of false decisions
 Risk to be liable for damages
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Suggestions for balanced EU legal framework
Suggestions for shaping balanced regulatory framework for
eCommerce service providers
1. Clarify the concept of actual knowledge (Art 14.3 ECD)

The central notion of “actual knowledge” needs to be defined on the base of a set of
requirements.
2. Clarify the “no general obligation to monitor” principle

Article 15 of the eCommerce Directive seems to be clear

But conflicting interpretations by national courts in Member States
3. Need for “Good Samaritan” provision in Europe

Appropriate legal protection is required for online intermediaries that voluntary take
action
4. EU-wide benchmarks for a notice and take-down procedure

Introduction of uniform, minimum standards

Formalities for ‘Notice’ and ‘Counter-notice’: seamless process
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Notice-and-Takedown-procedure – first phase
1. RO gives notice
of infringing content
/ listing XY, asking
to take it down
and/or to disclose
the data of the
content owner.
Rights
Owner
(RO)
Host
Provider
(HP)
Content XY
2. HP blocks/takes down
content/listing on a
preliminary basis – trusting
the RO’s notice – and/or
discloses data, if asked for.
3. HP informs CP about
measures taken and
about the identity of
complaining RO
Content
Owner
(CO)*
Further discussion / litigation to be held directly
between Rights Owner and Content Provider
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* e.g. eBay seller
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N&T-procedure: Potential second phase
Only in case, the Content Provider gives counternotice.
5. HP informs RO
about counternotice.
Now it‘s up to the RO
to start legal action
within a statutorily
defined time-limit.
Host
Provider
(HP)
4. CP gives
counternotice.
Content XY
Rights
Owner
(RO)
Choice of the RO
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6a. RO starts legal action against CP
and informs HP about it within the legal
time-line.
 Content/listings remains blocked.
Content
Provider
(CP)
6b. RO refrains from starting legal action or
informing the HP within the legal time-line.
 It‘s allowed to relist / reinstall the content.
Content XY
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Win-Win-Win in the World-Wide-Web
Advantages for the different players:
Rights Owner:
• Immediate ending of infringement without need to prove its illegality
• Guaranteed service levels (24/7 availability etc.)
• Thus ending threat for IPR and in most cases preventing any economic
damage (e.g. no actual sale of the counterfeit)
Host Provider:
• Legal certainty
• No other legal actions
• Not in the position of a judge
Content Provider:
• Counternotice ensures, that content provider does not have to carry the
burden to take legal action in cases of abuse (like unfair competition etc.)
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Thanks for your attention!
Contact:
Dr. Wolf Osthaus
Legislative Counsel Europe
eBay GmbH
wolf.osthaus @ ebay.de
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