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Court Finds SEO Firm Responsible For Online Sales of Counterfeit Goods
engine




msg:4282479
 3:11 pm on Mar 16, 2011 (gmt 0)

Court Finds SEO Firm Responsible For Online Sales of Counterfeit Goods [internetretailer.com]
A federal court has ruled that a firm that provided marketing and web hosting services was financially responsible for the sale of counterfeit golf clubs by a client e-retailer.

A federal judge in South Carolina entered a judgment against Bright Builders Inc. on counts of contributory trademark infringement and unfair trade practices for allegedly assisting in the construction and hosting of the e-commerce site CopyCatClubs.com. Judge Margaret B. Seymour of the U.S. District Court for South Carolina ordered Bright Builders to pay $770,750 in statutory damages and Christopher Prince, owner of the web site, $28,250, according to lawyers for the plaintiff, Cleveland Golf Company Inc.

“For Internet Intermediaries like SEOs and web hosts, this should be a cautionary warning," says Christopher Finnerty, one of the lawyers for Cleveland Golf. “The jury found that web hosts and SEO's cannot rely solely on third parties to police their web sites and provide actual notice of counterfeit sales from the brand owners. Even prior to notification from a third party, Internet intermediaries must be proactive to stop infringing sales when they knew or should have known that these illegal sales were occurring through one of the web sites they host."



I find this is quite scary.

Do you know what your clients are selling? Is it couterfeit, or is it the real deal? I know i've never even asked that question.

 

pageoneresults




msg:4282515
 3:56 pm on Mar 16, 2011 (gmt 0)

Wouldn't this be classified as a "Precedent Setting Case"?

They were doomed from the moment they chose CopyCatClubs as a domain. You know, put a sign on your back that reads "Kick Me!".

The article goes on to say...

CopyCatClubs.com no longer seems to be operational. But in 2009 the site’s home page stated that it offered “the newest clubs from brands such as: Callaway Golf, Ping Golf, Nike Golf, Taylor Made Golf, Titleist Golf, Cobra Golf, Mizuno Golf, Cleveland Golf, Yes and Odyssey Putters.” The home page also declared, “Along with our exceptional customer service, we are your one stop shop for the best copied golf equipment on the Internet.


Everyone knew what they were doing. As they say, it comes with the territory.

LifeinAsia




msg:4282517
 4:04 pm on Mar 16, 2011 (gmt 0)

That's stretching it a bit to me. Go down the slippery slope a bit more and sue:
- the web hosting company's Internet backbone provider for providing the conduit for people to access the site
- the web hosting company's electric company for providing the electricity to run the site
- Google, Yahoo, and Bing for sending people to the site
- the company's merchant processor for processing the transactions (especially since THEY definitely should have known about the products being sold)

[edited by: LifeinAsia at 4:07 pm (utc) on Mar 16, 2011]

engine




msg:4282521
 4:05 pm on Mar 16, 2011 (gmt 0)

Yeah, that one was very obvious.

pageoneresults




msg:4282528
 4:26 pm on Mar 16, 2011 (gmt 0)

But in 2009 the site’s home page stated that it offered “the newest clubs from brands such as...


Still on topic, there is one reference to CopyCatClubs in Archive.org, just one! That place is like an Evidence Locker.

Those folks would have never considered to block ia_archiver. Many are oblivious to the potential downfalls of archived content like that. Same applies to cache! Ghosts in the Closet. Junk in the Trunk. Excess Baggage. Whatever you want to call it. ;)

Demaestro




msg:4282542
 4:34 pm on Mar 16, 2011 (gmt 0)

LIA I agree totally.

What about the building owner of where the site was hosted? He allowed the server to live in his building.

This ruling borders on the ridiculous. Doesn't pass the straight face test at all.

mademetop




msg:4282545
 4:37 pm on Mar 16, 2011 (gmt 0)

Yes - could be scary stuff!

I've certainly never really looked at what a client was actually selling - though with a domain like that one maybe one would be ultra stupid not to realise that they were selling copies!

However, I always drew the line on promoting sites I personally felt were promoting something I disagreed with and/or knew were blatantly illegal. But that was just after having a cursory look at the business involved.

This ruling seems to indicate that you need to look in-depth at the products being offered - or, perhaps, at least have in your contract that the customer undertakes that no products or services infringe copyrights as some level of protection for the SEO.

Strapworks




msg:4282554
 4:45 pm on Mar 16, 2011 (gmt 0)

I don't think this is stretching it. They sued and won against the two parties that clearly knew this site wasn't fully legit.
If you are willfully involved in the promotion and/or sales of counterfeit goods then you deserve to be prosecuted.
If Bright Builders had not been involved in directly building the site and marketing it then I might give them the benefit of the doubt, but somebody at some point had to have questioned the validity of the site but decided to ignore it.
You shouldn't be allowed to claim stupidity to get away with it.
Greed always leads to problems.

piatkow




msg:4282561
 4:50 pm on Mar 16, 2011 (gmt 0)


This ruling seems to indicate that you need to look in-depth at the products being offered

In the case in question there was a clear statement on the home page that the items on sale were copies. I think the judge expects an SEO to be aware of explicit statements on their clients' web sites.

It would probably be a different matter if they were simply selling "branded" products at an remarkably low price. The lawyer's comment about web hosts was just hot air.

Demaestro




msg:4282581
 5:18 pm on Mar 16, 2011 (gmt 0)

I thought there was a distinction in the law between selling obvious fakes and selling counterfeits and as long as you weren't representing yourself as an authentic version then you were ok.

For example look at all the so called "no name" brands of cereal. There are "Fruit Loops" and there are "Fruity Hoops"

Maybe I am missing why this case is different but judging by the name of the site and the fact that there was a "clear statement on the home page that the items on sale were copies" I fail to see why they were charged with counterfeiting. The Trademark infringement case may have been stronger but I would have to see the logos and marks they were using on their "copycat clubs"

pageoneresults




msg:4282586
 5:22 pm on Mar 16, 2011 (gmt 0)

The Trademark infringement case may have been stronger but I would have to see the logos and marks they were using on their "copycat clubs"


It appears they copied most of the BIG names...

[Replay.WaybackMachine.org...]

ergophobe




msg:4282588
 5:30 pm on Mar 16, 2011 (gmt 0)

Unfortunately, every article on the web included the one linked inthe first post seem to be nothing more than reprinted press releases from the winning attorneys.

I'm guessing that they are trying to stake out ground painting the judgement in the broadest possible light with an eye to attracting new clients and making their version of the judgement (especially the part about all intermediaries being put on notice, which has the potential implications noted by LIA above) appear to be settled law.

I'd like to see the actual ruling and basis for it, though since it's a jury trial that might be a little hard to decipher. If I were the prosecutor, I would have gone for a jury trial too. Slam dunk.

Demaestro




msg:4282589
 5:31 pm on Mar 16, 2011 (gmt 0)

p1r, IT definitely looks like they are using the names and marks to market their copycats. I can see a case of Trademark infringement sticking, but I have a hard time calling them counterfeits when they are clearly being sold as replicas.

In a few of the malls where I live they have stores that sell copycat fragrances. The bottles all use the brand name of the the scent they are mimicking. They say "If you like scent X you'll love XY"

Perhaps there is a reason they get away with that but I don't see much of a difference.

Imagine the mall getting sued for renovating and leasing a space to one of these stores and for marketing the store in the mall directory and on the mall website.

JohnRoy




msg:4282595
 5:54 pm on Mar 16, 2011 (gmt 0)

wikipedia: A counterfeit is an imitation, usually one that is made with the intent of fraudulently passing it off as genuine. Counterfeit products are often produced with the intent to take advantage of the superior value of the imitated product.

You and I wrote a nice original own brain hand-crafted article and posted it online. Here came that scraper and imitated it, producing a counterfeit product (data) to take advantage of the superior value of the imitated product.

Furthermore, in many cases the content was originally blocked from the scrapers ip. They got a hold of it by using SE cache.

As LifeinAsia states:
[sue] Google, Yahoo, and Bing for sending people to the site

g1smd




msg:4282654
 7:47 pm on Mar 16, 2011 (gmt 0)

Who manufactured the server? Who wrote the OS software? Who wrote the e-com software? Who built the building the server was in? Who made the bricks? Who supplies the electricity to the building?

How far do you want to take this?

Korrd




msg:4282655
 7:47 pm on Mar 16, 2011 (gmt 0)

@ergophobe
I'd like to see the actual ruling and basis for it, though since it's a jury trial that might be a little hard to decipher. If I were the prosecutor, I would have gone for a jury trial too. Slam dunk.


First, this was a civil case, not criminal, so no prosecutor but rather an attorney for the plaintiff.

Second, you're right to be suspicious of the plaintiff's PR spin and regurgitating blogs. I haven't been able to find the final judgment but the text of a previous ruling in this case indicates it's about a lot more than simple SEO and hosting. It looks as if 1) the SEO company failed to defend against the claims, and 2) the SEO company had much more involvement than indicated in the form of having supplied CopyCatClubs.com owner's business model and hooking them up with their backend fullfillment dropshippers.

[iplitigationupdate.com ]

The jury probably got it right in terms of how far simple justice and the apportionment of damages goes.

Edge




msg:4282725
 10:24 pm on Mar 16, 2011 (gmt 0)

Ahem,did you read?

The home page also declared, “Along with our exceptional customer service, we are your one stop shop for the best copied golf equipment on the Internet.”

The key words here are "best copied golf equipment".

If the SEO organization built the website, optimized, etc, they would qualify as complicit to me.

ergophobe




msg:4282731
 10:43 pm on Mar 16, 2011 (gmt 0)

no prosecutor but rather an attorney for the plaintiff.


Thought I had the terminology correct.

Thanks for the other info. This really is not about just going after a hosting company that simply hosts a site or an SEO that helps someone rank for "buy golf equipment".

koan




msg:4282766
 1:34 am on Mar 17, 2011 (gmt 0)

How far do you want to take this?


No need to go very far. Just the people that you can prove knew about it and were willingly involved.

TheMadScientist




msg:4282939
 1:46 pm on Mar 17, 2011 (gmt 0)

How far do you want to take this?

Only to these quotes right here: (emphasis mine in all quotes)
A federal judge in South Carolina entered a judgment against Bright Builders Inc. on counts of contributory trademark infringement and unfair trade practices for allegedly assisting in the construction and hosting of the e-commerce site CopyCatClubs.com.

Trademark Infringement ... I think we can all get that easily, they probably got too close to the 'real thing' or even used the 'real thing' or something like that ... Simple.

Assisting in the Construction & Hosting. They didn't go get the host separately ... Bright Builder's Inc. was involved in BOTH. The HOST and the SEO should have both known, because they were BOTH Bright Builder's Inc. That's why the suit is only against Bright Builder's Inc.

I know it wasn't in Mass, but:
Both Massachusetts and United States laws prohibit the use of "unfair or deceptive" practices by businesses. These practices are regulated by the Federal Trade Commission at the federal level and by the Attorney General's Office of Consumer Protection at the state level.

Both the federal and state laws prohibit a series of specific practices and, in addition, prohibit any other practice that is determined to be unfair or deceptive to the consumer.

[masslegalhelp.org...]

the newest clubs from brands such as: Callaway Golf, Ping Golf, Nike Golf, Taylor Made Golf, Titleist Golf, Cobra Golf, Mizuno Golf, Cleveland Golf, Yes and Odyssey Putters.
[PageOneResults - Nice Find!]

Now, what's DECEPTIVE to the CONSUMER about the preceding quote when the company sells COPIES?

rogerd




msg:4282946
 2:11 pm on Mar 17, 2011 (gmt 0)

This is pretty amazing. Designer fakes sold as such are common and apparently legal. You can, for example, go into any major chain store (who presumably has good legal advice) and buy fragrances that mimic popular designer products and even name the product they are supposed to resemble.

To sort out whether golf club copies that are clearly marketed as such actually infringe on another firm's intellectual property is way beyond the ability of any SEO firm, web host, or small business attorney. In fact, I'd guess if an SEO firm consulted an intellectual property attorney they'd get a less than clear-cut answer (after spending a few thousand dollars).

The phrase, "the newest clubs from brands such as: Callaway Golf, Ping Golf..." does sound a bit ambiguous, but I guess you'd need to see the whole page as displayed to users to understand whether any misrepresentation was taking place.

TheMadScientist




msg:4283055
 3:47 pm on Mar 17, 2011 (gmt 0)

You can, for example, go into any major chain store (who presumably has good legal advice) and buy fragrances that mimic popular designer products and even name the product they are supposed to resemble.

I know exactly what you're talking about and they say 'Like Designer Fragrance' all over to avoid the issue ... They do not imply, as the quote P1R found does, what the person is buying is the designer fragrance ... There's a big difference imo ... If that quote had said 'LIKE the newest clubs from brands such as...' rather than 'the newest clubs from brands such as:' there may not have been a case ... That little word LIKE at the beginning of the sentence changes everything, and maybe they tried that and didn't sell as many? Who knows there ... When you're going to walk that close to the edge, you better be right on with your wording, imo, and they missed the word 'like' at the beginning of the quote from what I've seen.

ergophobe




msg:4283363
 11:04 pm on Mar 17, 2011 (gmt 0)

Yes but "we are your one stop shop for the best copied golf equipment on the Internet." It's pretty hard at that point to say "we didn't know."

Plus, as I say, every article seems to be just a press release for the attorney for the plaintiff and they are likely trying to make the precedent sound as broad as possible and this must be taken with a grain of salt.

Thought I had the terminology correct.


That is... I thought I had the terminology *incorrect* - sheesh... can't get anything right.

TheMadScientist




msg:4283493
 6:01 am on Mar 18, 2011 (gmt 0)

Thought I had the terminology correct.

That's probably what the Bright Builder's Attys were saying on the way out of the court room too ... lol ... 'Thought we had the terminology correct. Shakes head. Thought we had the terminology correct...'

nickreynolds




msg:4283865
 8:42 pm on Mar 18, 2011 (gmt 0)

What I particularly don't understand is that the seo company had to pay more in damages than the sellers of the counterfeit clubs!

exposure




msg:4283872
 9:02 pm on Mar 18, 2011 (gmt 0)

Really though, this isn't new or precedent setting. It's just the application of old false advertising laws to SEO. False advertising laws have applied to us all along.

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