02 | 11 | 2017

Research on Online Business Models Infringing Intellectual Property Rights – Phase Two

Illustration: Freeimages.com/Svilen Milev

The European Observatory on Infringements of Intellectual Property Rights at the EUIPO published the results of the second phase of research concerning online business models infringing intellectual property, originally titled “Research on Online Business Models Infringing Intellectual Property Rights – Phase 2”.

Unlike the first phase of this research published in July 2016, which was qualitative in nature i.e. contained an overview of different business models used to infringe intellectual property rights online, the second phase is quantitative in nature and it comprises detailed research of one or several business models and strategies and frequency of their use in individual countries. A starting point of this study was research work conducted on the Danish national top level domain .dk, which showed that e-shops suspected to market trade mark infringing goods were being registered by using domain names previously used for other, various purposes.

National top level domains in Sweden (.se), Germany (.de), United Kingdom (.uk) and Spain (.es), were selected for this research in the period from December 2016 to January 2017, and the research conducted confirmed that the practice identified in Denmark is applied the mentioned by infringers in other European countries as well. The research in the mentioned countries covering this period detected 27 870 e-shops suspected of marketing trade mark infringing goods; it was found that 21 001 of these e-shops (or 73.35%) were detected using domain names that had previously been used to direct internet traffic to websites that have no relation to their prior use.

Furthermore, during the research, 40 e-shops were analysed in depth and the conclusion was made that there was no correlation between the previous use of the domain name and the current sales of products found in any of the 40 case studies that were carried out. Even if the domain was previously used for the marketing of goods, the current e-shops were marketing a different type of product.

The study also seems to indicate that what on the surface seems like a large number of unrelated e-shops is likely to be a few businesses marketing suspected trade mark infringing goods to European consumers.

The conclusion of the study is that the only reason to re-register domain names was the idea to take advantage of the popularity of such domain names, and the findings indicate that the same practice also exists in other European countries with well-developed sectors of e-shops.

The study is available at the following link.