October 23, 2018

Don’t Wait for SOPA, You Can Act Now!

In an important and little noticed development, owners of brand products have successfully been able to take action against websites selling counterfeit items, even as the Stop Online Piracy Act (SOPA) is stuck in committee. A number of federal courts have recently issued remedies under existing trademark laws that are very similar to those remedies contained in SOPA. These cases may provide a good test of whether SOPA is truly needed or whether existing laws are sufficient to protect trademark owners. In any event, it is unlikely to result in the end of the Internet as some opponents of SOPA shrilly warned.

SOPA included provisions allowing courts to issue orders to bar advertising networks and payment facilities from conducting business with infringing websites and required Internet Service Providers to block access to such sites. Opponents of the bill claimed that it would end the Internet as we know it by closing popular Web sites. Wikipedia went dark for a day to protest SOPA. The bill has been dormant since a mid-December, 2011, Judiciary Committee markup.

A recent National Law Journal Article, “Counterfeit_battles_heat_up_on_Web,” reports that a number of courts have been regularly issuing orders as contemplated by SOPA. According to the article, so far this year, at least 18 orders affecting alleged infringers and domain-name registries, payment processors, search engines and ISPS have been issued by courts in the Northern District of Illinois, Southern District of Florida and Southern District of New York.

The orders issued by the courts go far beyond simply ordering domain registries to disable the domain names used to sell the counterfeits, but have required financial organizations, including PayPal, to stop the defendants from transferring or disposing of money and other assets. The orders further required a wide range of third parties to turn over records about the defendants.

For example, Adidas sued a number of individuals and partnerships, all believed to be based in China, in the Southern District of Florida. The complaint claimed the defendants were counterfeiting sports clothing and shoes, eyeglasses and sunglasses, watches, bags and a wide range of casual clothing and accessories. The court issued a TRO requiring unnamed domain-name registrars to transfer domain names to Adidas’s lawyer for the redistricting process. It also requires Western Union Financial Services, Inc. to hold money transfers to the named defendant and provide records of all past money transfers to the defendant.

Companies that have brought cases resulting in orders against third parties this year include Adidas, Gucci America, Inc., and Hermes International.

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