Brand Protection: The Fourth Pillar of Online Sales Control

In the final installment of our Four Pillars of Online Sales Control series, we address brand protection. Brand protection encompasses various tactics to combat counterfeit products, online marketplace policy violations and more traditional trademark and copyright violations. For many brands, these issues will be of less commercial concern than those addressed in our posts on the first three pillars of online sales control, channel management, unauthorized sellers and pricing and promotional strategies, but the applicable tactics can be useful in the appropriate circumstances. The key is to incorporate these tactics as part of a more holistic strategy to drive commercial returns through control, rather than standalone measures. Brands (often through external “brand protection” or marketplace “enforcement” vendors) often make the mistake of relying on these tactics alone in their efforts to exert more control over online sales. This invariably results in “whack-a-mole,” which is ineffective and not a viable long-term strategy.

Brand Registry & Other Marketplace Reporting Tools - Useful in Certain Defined Circumstances

As an initial matter, it is important for brands to understand when marketplace-facilitated violation reporting and “takedown” processes - like Amazon’s Brand Registry and eBay’s Vero - can be used appropriately and, conversely, how their misuse can lead to problems for brands. Many vendors improperly leverage Brand Registry and other marketplace reporting tools to try and force the removal of unauthorized sellers and MAP violators. These tools are not intended for use against unauthorized sellers or MAP violations. Marketplaces will not police unauthorized sales or pricing issues for your brand and do not want their tools being used for these purposes.

There are, however, instances where marketplace tools can be of benefit to your brand and, as such, these tools and tactics should be a part of your integrated online sales control strategy. Where, for example, sellers are:

• Creating rogue ASINs
• Operating multiple storefronts
• Selling true counterfeit products
• Creating unauthorized bundles
• Improperly using your trademarks or copyrighted images
• Using tactics to improperly manipulate your content
• Engaging in other behaviors that are actually prohibited by marketplace policy

Then, these tools can provide a convenient path for addressing them. And, they can be effective when other measures are not.

Identifying and reporting legitimate violations to the marketplace may catch a seller’s attention because marketplaces may suspend or permanently terminate seller accounts that are regular rule breakers. For this reason, most professional online sellers are mindful of their account health and often reach out to those that report legitimate violations to negotiate a retraction. This provides a brand with the opportunity to negotiate with a seller that may otherwise have ignored them. In addition, even when a seller doesn’t communicate, receiving a bunch of marketplace violation reports related to a particular brand may dissuade a seller from continuing to offer that brand’s products. The key here is that the seller has actually committed a clear marketplace policy violation, not simply that they are an unauthorized seller. Brands should get counsel before embarking on this strategy to ensure that they are not misusing marketplace reporting tools.

Anti-Counterfeiting – Moving Away From Whack-A-Mole & Towards a Comprehensive, Commercially Focused Strategy

Online marketplaces are fertile ground for counterfeit sellers. In addition to the obvious consumer and brand reputation harms, counterfeiters can cause serious disruption to your online marketplace business by siphoning away material amounts of sales, dramatically swaying marketplace pricing algorithms and causing a wave of negative reviews to plague your listings.

The following table shows some common red flags potentially indicative of counterfeiting issues:

Most brands faced with counterfeiting challenges do not have a comprehensive strategy in place to address these issues. Rather, they rely primarily on some form of monitoring tool with automated takedown requests and hope for the best. This, like many other “brand protection” based tactics, typically ends in an endless game of whack-a-mole, as opposed to an actual improved business outcome. Rather than focusing on “take-downs” and other purely reactive measures, brands should employ a more strategic approach focused on long-term commercial goals. In particular, for ongoing counterfeiting issues, the brand should seek additional help from the marketplace to proactively prevent future counterfeit listings. The chart below shows the relevant steps in Vorys eControl’s anti-counterfeiting solution, which is focused on helping to achieve better business outcomes – namely, marketplace-implemented product restrictions.

Consideration is given to the following in each of these steps as brands work towards their desired goals:

Step 1: Initial Analysis, Documentation, Insights and Strategy

• Document evidence of counterfeiting
• Investigate other listings and marketplaces
• Conduct test buys of suspected counterfeit products and confirm if, in fact, counterfeiting exists

Step 2: Brand Anti-Counterfeiting Strategy Consultation

• Determine size and scope of counterfeiting problem
• Analyze and define potential consumer harm
• Align internally on action plan

Step 3: Implement Immediate Response

• Submit marketplace report for all impacted listings
• Contact counterfeit seller or associated entities if possible
• Log marketplace submissions

Step 4: Implement Long-Term Marketplace Strategy

• Contact marketplace and submit evidence of ongoing counterfeit issues
• Emphasize scope of problem and consumer harm
• Elevate to marketplace legal department contacts as appropriate
• Drive towards goal of marketplace implemented product restrictions

Conclusion

Brand protection will always be an important component of brand integrity. However, the size and scope of online marketplaces has made traditional brand protection tactics less effective and more likely to end in endless whack-a-mole rather than increased online sales control. Moreover, many brand protection companies use very general tactics that are not focused on marketplace strategy. Brands facing issues that can be addressed through brand protection measures, like counterfeiting and marketplace policy violations, must ensure that they are employing holistic strategies. As stated, these strategies leverage the right combination of technology, data and law to drive real commercial outcomes rather than largely meaningless vanity metrics.

Vorys eControl’s brand protection team – comprised of experienced technologists, data scientists, data analysts and attorneys – focuses on designing, implementing and executing brand protection solutions that complement brands’ efforts at driving overall online sales control and growth. If your brand is facing counterfeit sales, has bad actors ripping off your valuable trademarks or imagery, or if you simply feel like you could be doing better in combatting these issues than you currently are, please contact Adam Sherman at acsherman@vorys.com.