Category

Internet / eCommerce

Dec 02

Black-Out Monday: 706 Web Sites Selling Counterfeit Merchandise Seized

By copyright, Customs IP Enforcement, Export, Import, Intellectual Property, International IP, Internet / eCommerce, News, Technology Transactions

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI) teamed with 10 foreign law enforcement agencies to seize hundreds of domain names that were illegally selling counterfeit merchandise online to unsuspecting consumers. Seizures come as US consumers flock to the Web for Cyber Monday shopping deals.

The 706 domain names seized were set up to dupe consumers into unknowingly buying counterfeit goods as part of the holiday shopping season. The operations were coordinated by the HSI-led National Intellectual Property Rights Coordination Center (IPR Center) in Washington, D.C.

An iteration of “Operation In Our Sites,” Project Cyber Monday IV resulted in the seizure of 297 domain names from undercover operations conducted by HSI offices around the country. This is the fourth year that the IPR Center has targeted websites selling counterfeit products online in conjunction with Cyber Monday. Due to the global nature of Internet crime, the IPR Center partnered with Europol who, through its member countries, seized 393 foreign-based top-level domains as part of Project Transatlantic III. Additionally, Hong Kong Customs coordinated the seizure of 16 foreign-based top-level domains hosted in Hong Kong, enlisting the assistance of the web-hosting companies to suspend the service of related websites.

“Working with our international partners on operations like this shows the true global impact of IP crime,” said ICE Acting Director John Sandweg. “Counterfeiters take advantage of the holiday season and sell cheap fakes to unsuspecting consumers everywhere. Consumers need to protect themselves, their families, and their personal financial information from the criminal networks operating these bogus sites.”

During the weeks leading up to the end of the year, the market is flooded with counterfeit products being sold at stores, on street corners, and online, according to law enforcement officials, not only ripping off the consumer with shoddy products, but also putting their personal financial information at risk. The most popular counterfeit products seized each year include headphones, sports jerseys, personal care products, shoes, toys, luxury goods, cell phones and electronic accessories, according to the IPR Center.

“This operation is another good example of how transatlantic law enforcement cooperation works. It sends a signal to criminals that they should not feel safe anywhere,” said Rob Wainwright, director of Europol. “Unfortunately the economic downturn has meant that disposable income has gone down, which may tempt more people to buy products for prices that are too good to be true. Consumers should realize that, by buying these products, they risk supporting organized crime.”

During the last few weeks, the IPR Center and its international partners received leads from trademark holders regarding the infringing websites. Those leads were disseminated to HSI offices in Denver, Dallas, El Paso, Houston and Salt Lake City as well as the Belgium Economic Inspection, Belgium Customs, Denmark Police, Hungarian Customs, French Gendarmerie, French Customs, Romanian Police, Spanish Guardia Civil, City of London Police, and Hong Kong Customs and Excise Department.

The domain names seized are now in the custody of the governments involved in these operations. Visitors typing those domain names into their Web browsers will now find a banner that notifies them of the seizure and educates them about the federal crime of willful copyright infringement.

During this operation, federal law enforcement officers made undercover purchases of a host of products including professional sports jerseys and equipment, DVD sets and a variety of clothing, jewelry and luxury goods from online retailers who were suspected of selling counterfeit products. Upon confirmation by the trademark or copyright holders that the purchased products were counterfeit or otherwise illegal, law enforcement officers obtained seizure orders for the domain names of the websites that sold these goods.

Operation In Our Sites is a sustained law enforcement initiative that began more than three years ago to protect consumers by targeting the sale of counterfeit merchandise on the Internet. The 297 domain names seized under Project Cyber Monday IV bring the total number of In Our Sites domain names seized to 2,550 since the operation began in June 2010. In that time, the seizure banner has received more than 122 million individual views.

U.S. Attorney’s Offices in the District of Utah, Western District of Texas, Southern District of Texas, Northern District of Texas, and the District of Colorado issued the warrants for U.S. seizures. Significant assistance was provided by the Department of Justice’s Computer Crime and Intellectual Property Section.

The HSI-led IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting and piracy. Working in close coordination with the Department of Justice Task Force on Intellectual Property, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to intellectual property theft. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety and the U.S. economy.

SOURCE:  U.S. ICE (www.iprcenter.gov)

 

Jul 04

CHESTER pllc Declares Independence

By Innovation, Internet / eCommerce, News

In keeping with the spirit of July 4th, Dallas-based business & innovation law firm CHESTER pllc is “declaring independence … from paper.”

The Dallas-based global business & innovation law firm of CHESTER pllc is pleased to announce that it will begin to exclusively (to the extent possible) use e-signatures starting July 4, 2013.   These e-signatures will be used on all firm documents.

For the past several months, the firm has been beta testing various services, and chose July 4th to formally adopt an e-signature based system.

The firm has been low-paper since its inception, and has evaluated new paperless technologies once they have become available and been proven reliable.  Hosted servers, scan and shred policies, paperless invoicing, and other similar paper-free options have been adopted over the years.  Using e-signatures will further transform the way the company handles documents that need to be signed and move it one step closer to become a truly “paperless” law firm.

Jim Chester, CHESTER pllc’s CEO and founding principal, says, “The practice of law is constantly changing, and we are proud to be pioneers in that regard. We seek to offer an alternative to large, expensive firms by providing quality legal services for the core legal issues faced by technology and innovation-based clients at a reasonable cost. Adopting state-of-the-art technology maximizes the quality of service that we can provide to our clients and helps us cut costs, which translate into savings that are passed onto our clients.”

“Going paperless helps us reduce costs, space, and our environmental footprint, while creating a document control system that is reliable, searchable, and scalable” said the attorney.

In addition to its adoption of cutting-edge paper-reduction technologies, CHESTER pllc also utilizes cloud-based servers, hosted phone service, AppleTV based presentation screens that can beam wirelessly from Macbook Airs. Breaking from traditional law practices, CHESTER pllc keeps all client records in a digital format, which makes files easy to sort and search, and ultimately maximizes efficiency.

This step towards becoming a ‘paperless’ law firm reinforces the CHESTER pllc mantra of being ‘innovative legal counsel for innovative companies,” Chester adds.

CHESTER pllc is a Dallas, Texas law firm providing comprehensive legal services to innovation-based companies doing business in the US, around the world, and on the web.  Its mission (and passion) is helping entrepreneurs and emerging companies solve problems and protect their interests. CHESTER pllc delivers value by providing business-savvy, cost-effective solutions to legal challenges.  The firm offers a wide array of business legal solutions, such as business entity formation (LLCs, corporations, etc.), trademarks and other intellectual property, technology transactions, contracts, ecommerce and dispute resolution.  Additional information about the firm and its attorneys may be found at www.chester-law.com.

Jun 03

One of World’s Largest Digital Currency Companies Charged with Money Laundering

By Internet / eCommerce, Technology Transactions

U.S. attorney and representatives from several law enforcement agencies announced an indictment charging Liberty Reserve, one of the world’s largest digital currency companies, and seven of its principals and employees with money laundering and operating an unlicensed money transmitting business. The charges stem from an investigation by the Global Illicit Financial Team which consists of U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), the U.S. Secret Service and the Internal Revenue Service’s (IRS) Criminal Investigations Division.

Law enforcement officials arrested five defendants. Arthur Budovsky, 39, the principal and founder of Liberty Reserve, and Azzeddine El Amine, 46, a manager of Liberty Reserve’s financial account, were both arrested in Spain. Vladimir Kats, 41, the cofounder of Liberty Reserve, was arrested in Brooklyn. Mark Marmilev, 33, and Maxim Chukharev, 27, both who helped design and maintain Liberty Reserve’s technological infrastructure, were arrested in Brooklyn and Costa Rica, respectively.

The defendants are each charged with one count of conspiracy to commit money laundering, which carries a maximum term of 20 years in prison, one count of conspiracy to operate an unlicensed money transmitting business, which carries a maximum term of five years in prison, and operation of an unlicensed money transmitting business, which carries a maximum term of five years in prison.

Two other defendants, Ahmed Yassine Abdelghani (“Yassine”) and Allan Esteban Hidalgo Jimenez (“Hidalgo”) are at large in Costa Rica.

The defendants are accused of structuring Liberty Reserve as a criminal bank-payment processor, designed to help users conduct transactions anonymously and launder the proceeds of their crimes. Liberty Reserve is alleged to have had more than one million users worldwide, including more than 200,000 users in the United States, who conducted approximately 55 million transactions – virtually all of which were illegal. Law enforcement officials believe that more than $6 billion in suspected criminal proceeds have been laundered via Liberty Reserve because it provided an infrastructure that enabled cyber criminals around the world to conduct anonymous and untraceable financial transactions.

The defendants also protected the criminal infrastructure of Liberty Reserve by, among other things, lying to anti-money laundering authorities in Costa Rica and pretending to shut down the company after learning it was being investigated by U.S. law enforcement. They continued operating the business through a set of shell companies, moving millions of dollars through shell company accounts maintained in Cyprus, Russia, China, Hong Kong, Morocco, Spain, Australia and elsewhere.

In addition to the criminal charges brought in the indictment, law enforcement seized the Liberty Reserve domain name and the domain names of four exchanger websites that were controlled by one or more of the defendants. They also restrained or seized 45 bank accounts. Prosecutors filed a civil action against 35 exchanger websites seeking the forfeiture of the exchangers’ domain names because the websites were used to facilitate the Liberty Reserve money laundering conspiracy and constitute property involved in money laundering.

The U.S. Department of the Treasury and its Financial Crimes Enforcement Network also named Liberty Reserve as a financial institution of primary money laundering concern under Section 311 of the Patriot Act.

“The actions of the U.S. Secret Service, IRS and HSI in dismantling the Liberty Reserve operation are critical because transnational criminal organizations can succeed only so long as they can funnel their illicit proceeds freely and without detection,” said HSI New York Special Agent in Charge James T. Hayes Jr. “HSI is proud of its partnership through the Global Illicit Financial Team and will continue to aggressively target financial institutions that deliberately enable businesses and individuals to evade global financial systems in furtherance of criminal schemes.”

The investigation and takedown involved law enforcement action in 17 countries, including: Costa Rica, the Netherlands, Spain, Morocco, Sweden, Switzerland, Cyprus, Australia, China, Norway, Latvia, Luxembourg, the United Kingdom, Russia, Canada and the United States.

Several international law enforcement agencies also participated in the investigation, including: the Judicial Investigation Organization in Costa Rica, the National High Tech Crime Unit in the Netherlands, the Spanish National Police, the Swedish National Bureau of Investigation’s Financial and Economic Crime Unit and Cyber Crime Unit, and the Swiss Federal Prosecutor’s Office.

SOURCE: ICE

May 23

Legislation for Internet Sales Tax

By Internet / eCommerce

Congress is deciding on a bill that requires internet sellers with annual sales of $1 million or more of annual sales outside of their home states to collect all the states’ sales tax. The legislation passed the Senate earlier this month on a 69-27 vote, and the House will vote on it in the near future.

According to the Wall Street Journal, although the bill has not passed yet, Maryland and Virginia have both passed transportation bills that are counting on the extra revenue that would come in from internet sales. If more states follow their lead, this could be a way to force Congress to vote a certain way. If the legislation doesn’t pass, the wholesale gas price in Virginia could jump up over 2% in two years and Maryland drivers may have to pay an extra 7 cents per gallon in taxes in two years. The District of Columbia is considering the option of spending the $49 million it would collect from the tax on housing the homeless. The National Conference of State Legislatures estimates that states lost a collective $23 billion in uncollected taxes from online shopping that occurred in 2012.

Small business owners oppose the legislation, arguing that it is a huge burden to comply with the rules in so many different tax jurisdictions. The Senate legislation addresses this issue by requiring the states to adopt standards and exempting businesses with annual revenue that is less than $1 million.

 

Jan 31

Operation Red Zone: Keeping Super Bowl Merchandise Honest

By Customs IP Enforcement, Intellectual Property, Internet / eCommerce

Speaking at a National Football League (NFL) news conference Thursday, U.S. Immigration and Customs Enforcement (ICE) Director John Morton and NFL Vice President for Legal Affairs Anastasia Danias announced the record-breaking results of a nationwide enforcement operation. The initiative, dubbed ‘Operation Red Zone,’ commenced Sept. 1, 2012, and targeted international shipments of counterfeit merchandise as it entered the United States. Authorities targeted warehouses, stores, flea markets, online vendors and street vendors selling counterfeit game-related sportswear and tickets throughout the country.

Fake jerseys, ball caps, T-shirts, jackets and other souvenirs are among the counterfeit merchandise and clothing confiscated by teams of special agents and officers from ICE’s Homeland Security Investigations (HSI), U.S. Customs and Border Protection (CBP), U.S. Postal Inspection Service, and state and local police departments around the country — all in partnership with the NFL and other major sports leagues.

“The Super Bowl is one of the nation’s most exciting events. Organized criminals are preying on that excitement, ripping consumers off with counterfeit merchandise and stealing from the American businesses who have worked hard to build a trusted brand,” said Morton. “The sale of counterfeit jerseys and other sports items undermines the legitimate economy, takes jobs away from Americans and fuels crime overseas. No good comes of counterfeiting American products — whether NFL jerseys, airbags, or pharmaceuticals — and we must go after the criminals behind it.”

‘”Hard Goods” Seizures

Special agents from HSI and officers with CBP operated in multiple teams with the NFL and law enforcement agencies throughout the nation to identify illegal shipments imported into the U.S., as well as stores and vendors selling counterfeit trademarked items. With three days left before Super Bowl XLVII, these teams have already seized more than 160,000 items of phony Super Bowl-related memorabilia along with other counterfeit items for a total take of more than $13.6 million. Due to the increased activity of counterfeiting operations around the world, this year the operation began Sept. 1, 2012, and will continue through Feb. 6, 2013.

“We’re delighted to once again partner with federal law enforcement to help combat the influx of counterfeit merchandise,” said Danias. “We are grateful for their tireless efforts to keep counterfeiters from illegally profiting off of the fans’ enthusiasm for their team and the Super Bowl and from hurting the local businesses that play by the rules.”

“In collaboration with the NFL and our Department of Homeland Security partners, we are providing critical support in the effort to protect consumers from counterfeit goods,” said Robert C. Gomez, director of field operations in Atlanta and New Orleans for CBP. “The enforcement of iintellectual property rights is a national agency priority, and our CBP officers and import specialists are actively working to intercept these products. Counterfeit merchandise hurts our economy and, in many cases, presents safety issues. It is a potential source of funding illegal activities that present a threat to our national security.”

Arrests

In September 2012, HSI Boston — assisted by HSI Providence — executed a search warrant at a residence in Warwick, R.I. HSI seized 226 boxes of counterfeit goods containing 4,016 sports jerseys with a manufacturer’s suggested retail price (MSRP) of $724,340 and approximately $477,000 worth of additional counterfeit goods, as well as $130,057 in U.S. currency and checks. The owner of the home was subsequently arrested and is currently facing federal charges of trafficking in counterfeit goods and smuggling.

In November 2012, HSI Indianapolis special agents responded to a call from Indiana State Fairgrounds Security that an individual at the Indianapolis International Fest was selling items suspected to be counterfeit. Upon arriving at the festival, the special agents were able to verify the goods to be counterfeit and seized 1,319 counterfeit sports ball caps from the individual with an MSRP of $30,095 and approximately $7,600 worth of additional counterfeit goods. HSI arrested the man for illegally trafficking in counterfeit merchandise.

Twenty-one other individuals were arrested in partnership with state and local law enforcement agencies on state charges at locations around the country.

Website Seizures

Furthering HSI’s efforts to combat the international counterfeiting supply chain and piracy online, special agents seized a total of 313 websites identified to be selling counterfeit merchandise.

The website seizures during Operation Red Zone are the next iteration of Operation In Our Sites, a long term law enforcement initiative targeting counterfeiting and piracy on the Internet. The 313 websites have been seized by law enforcement, and are now in the custody of the federal government. Visitors to these websites will find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them that willful copyright infringement is a federal crime. Since the launch of Operation In Our Sites in June 2010, the HSI-led Intellectual Property Rights (IPR) Center has seized a total of 2,061 domain names.

HSI has continued to work closely with payment processor PayPal to identify bank accounts being used to facilitate the transfer of money to these illegal operations. To date, PayPal and HSI have identified and seized more than $66,000 in assets in these accounts.

“PayPal and eBay Inc. pride ourselves in going above and beyond in the fight against the illegal online trafficking of counterfeit goods by partnering with law enforcement and rights owners globally, and as part of providing safe and trusted payments and commerce platforms,” said Tod Cohen, eBay’s vice president and deputy general counsel of government relations.

Operation Red Zone Continues

Operation Red Zone will continue this weekend at the Super Bowl, throughout the New Orleans-area and around the nation.

The operation was spearheaded by the IPR Center in coordination with the Department of Justice’s Computer Crime and Intellectual Property Section and five U.S. Attorneys’ offices, including the District of Maryland, District of New Jersey, District of Colorado, Eastern District of Louisiana and the District of Utah.

SOURCE: ICE

Oct 16

Homeland Security Seizes 686 Websites Selling Counterfeit Medicine

By Customs IP Enforcement, Intellectual Property, International IP, Internet / eCommerce

In the largest operation of its kind, 100 countries took part in an international week of action targeting the online sale of counterfeit and illegal medicines. U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI), in coordination with the Department of Justice, seized 686 websites this week that were illegally selling counterfeit pharmaceuticals. The seizures were part of Project Bitter Pill, the current effort under of Operation In Our Sites (IOS). Bitter Pill was part of the INTERPOL-led Operation Pangea V.

A global enforcement effort, Pangea is an annual operation aimed at disrupting the organized crime networks behind the illicit online sale of fake drugs. Worldwide, preliminary results show Pangea has accounted for 79 arrests and the seizure of 3.7 million doses of potentially life-threatening counterfeit medicines worth an estimated value of $10.5 million. Additionally, approximately 18,000 websites engaged in illegal sale of counterfeit drugs were taken down.

During Pangea V, which ran from Sept. 25 to Oct. 2, operations were conducted in Europe and throughout the United States at websites linked to the illegal Internet supply of medicines. U.S. Customs and Border Protection (CBP) intercepted packages that were believed to contain fake or illicit drugs. Various payment processing companies supported the operation by identifying and blocking payments connected to illicit online pharmacies, identifying individuals responsible for sending spam emails and identifying abuse of electronic payment systems.

“These international partnerships are essential in the global fight against the trafficking of counterfeit drugs,” said ICE Director John Morton. “Instead of taking potentially life-saving medicines, customers are duped into purchasing drugs that are fake or untested and could ultimately do them more harm than good.”

Pangea is coordinated by INTERPOL, the World Customs Organization, the Permanent Forum of International Pharmaceutical Crime, the Heads of Medicines Agencies Working Group of Enforcement Officers, Pharmaceutical Security Institute, and Europol. For the first time, Pangea was also supported by the Center for Safe Internet Pharmacies which brings together 12 of the world’s leading Internet and e-commerce companies.

“When someone is sick, can’t afford to purchase expensive medicine or is just trying to save money, they are more likely to take a chance and buy medicines online, making themselves vulnerable to purchasing fake, illicit or spurious medical products and thus harming themselves,” said INTERPOL Secretary General Ronald K. Noble. “Organized, sophisticated criminals and rogue pharmacies are unfortunately using the Internet to defraud innocent consumers, to place them in harm’s way, to steal their identities and to engage in credit card fraud.”

The goals of this operation were to disrupt the illegal distribution of medicines and to raise public awareness about the significant health risks associated with buying medicines online and the increased risk of becoming a victim of identity and credit card fraud.

Bitter Pill, the U.S. operation, was managed by the National Intellectual Property Rights Coordination Center (IPR Center), including HSI Baltimore, CBP, the U.S. Attorney for the District of Maryland, and the Computer Crime Intellectual Property Section of the Department of Justice Criminal Division. The Food and Drug Administration, Office of Criminal Investigations and the Federal Bureau of Investigation also participated in Pangea and supported Bitter Pill.

“Interdiction of illegal pharmaceuticals is one of CBP’s top priorities,” said CBP Deputy Commissioner David V. Aguilar. “The rise of Internet pharmaceutical sale sites has resulted in increases of imported packages containing illegal medications, which is a risk to U.S. consumers. CBP is proud to be a part of this effort.”

IOS is a sustained law enforcement initiative that began two years ago to protect consumers by targeting the sale of counterfeit merchandise on the Internet. Those websites are now shut down and their domain names are in the custody of the federal government. Visitors to the websites will find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them about the federal crime of trafficking in counterfeit goods. The 686 domain names seized during Bitter Pill bring the total number of IOS domain names seized in the last two years to 1,525. The domain names are subject to forfeiture under federal laws that afford individuals who have an interest in the seized domain names a period of time after the “Notice of Seizure” to file a petition with a federal court and additional time after the “Notice of Forfeiture” to contest the forfeiture. If no petitions or claims are filed, the domain names become property of the U.S. government.

During this project, HSI special agents made undercover purchases of counterfeit drugs from multiple websites. The counterfeit drugs seized during Bitter Pill included anti-cancer medication, antibiotics and erectile dysfunction pills as well as weight loss and food supplements. Investigations are ongoing as special agents continue to connect shipments and websites with organized criminal networks.

The IPR Center is one of the U.S. government’s key weapons in the fight against criminal counterfeiting, piracy and commercial fraud. As a task force, the IPR Center uses the expertise of its 21-member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft and commercial fraud. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and our war fighters. For more information on the IPR Center please visit www.IPRCenter.gov.

SOURCE: ICE

Sep 14

What Controls: Online Terms or a Written Contract?

By Blog, Internet / eCommerce, News, Technology Transactions

In the case of Fadal Machining Centers, LLC  v. Compumachine, Inc., the Ninth Circuit decided that the arbitration clause found in the terms and conditions on a company website was binding on the parties.

Fadal Machining Centers (“Fadal”) manufactures machines and Compumachine is one of Fadal’s exclusive distributors. The two parties had a distribution agreement that included a forum selection provision. Including this provision meant that the parties agreed to bring suits against each other in a previously agreed upon forum. This implies that the parties could sue each other under the contract. However, when Fadal sued Compumachine over unpaid invoices, the district court dismissed the case because each of Fadal’s invoices referred to Fadal’s website for terms and conditions of sale and those online terms said that non-payment claims had to be submitted to arbitration. Fadal appealed, but the Ninth Circuit Court of Appeals affirmed the district court’s decision.

The lesson for companies is this: be careful about what terms and conditions you post online. Although these online terms and conditions may never be officially entered into by a contract in writing, they can still be binding when they are incorporated by reference.

Read the case in its entirety here.

SOURCE: United States Court of Appeals for the Ninth Circuit

Aug 30

U.S. Sanctions Ban Iranian Players’ Access to War of Warcraft

By Blog, Internet / eCommerce, OFAC / Sanctions

Mists of Pandaria, a new update of War of Warcraft that is coming out later this year, is now unlikely to be accessible to players in Iran. (Photo by Blizzard Entertainment)

The Guardian reports that last week, Blizzard Entertainment’s online message board started receiving messages from Iranian players complaining that they could not access the War of Warcraft’s servers. The War of Warcraft is a massively multiplayer online role-playing game which is tremendously popular.

Since then, the company posted a statement on the message board stating, “What we can tell you is that United States trade restrictions and economic sanction laws prohibit Blizzard from doing business with residents of certain nations, including Iran. [. . .] This week, Blizzard tightened up its procedures to ensure compliance with these laws, and players connecting from the affected nations are restricted from access to Blizzard games and services.”

The statement further explained that U.S. sanctions also prevent Blizzard from providing any refunds, credits, transfers, or other service options to accounts in other countries that have similar sanctions.

The Guardian explains that “World of Warcraft is the world’s largest subscription-based online multiplayer game, with around 10 million users. Participants pay a monthly fee to explore its vast landscapes, engaging in quests and upgrading their in-game characters.”

According to Public Radio International, War of Warcraft fans in Cuba, Libya, North Korea and Syria are in the same boat. U.S. sanctions restrict residents in these countries from playing War of Warcraft as well.

Aug 04

PRACTICAL TIP: Top ROI for Your Legal Dollars

By Blog, Customs IP Enforcement, Export, FCPA, Foreign Trade Zones (FTZ), Grab Bag, Import, Intellectual Property, International Business, International IP, Internet / eCommerce, ITAR, News

Based on our experience, some of the best uses of resources on legal advice and assistance for businesses and entrepreneurs (from a “bang for your buck” perspective) are:

  • Succession Planning. This includes buy-sell and similar provisions in company documents to deal with death, divorces, and other departures of co-owners, and also includes an updated estate plan such as a will and advance directives to ensure your legacy.

The benefits one can obtain from these legal mechanisms and protections, which generally cost less than $2,000, can pay for themselves many times over.

 

Jul 12

ICE seizes 70 Websites Offering Counterfeit Merchandise

By Customs IP Enforcement, Intellectual Property, Internet / eCommerce

U.S. Immigration and Customs Enforcement’s (ICE) Homeland Security Investigations (HSI)-led National Intellectual Property Rights Coordination Center (IPR Center) recently seized 70 websites that were illegally selling counterfeit merchandise.

The 70 websites seized are part of Project Copy Cat, an iteration of Operation In Our Sites (IOS), and closely mimicked legitimate websites selling authentic merchandise and duped consumers into unknowingly buying counterfeit goods. Many of the websites so closely resembled the legitimate websites that it would be difficult for even the most discerning consumer to tell the difference.

The websites are now shut down and their domain names are in the custody of the federal government. Visitors to these websites will find a seizure banner that notifies them that the domain name has been seized by federal authorities and educates them about the federal crime of willful copyright infringement.

“This operation targeted criminals making a buck by trying to trick consumers into believing they were buying name brand products from legitimate websites when in fact they were buying counterfeits from illegal but sophisticated imposter sites located overseas,” said ICE Director John Morton. “The imposter sites were simply a fraud from start to finish and served no purpose other than to defraud and dupe unwary shoppers.”

A new twist in the websites seized in Project Copy Cat involved the appearance of Secure Sockets Layer (SSL) certificates. SSL certificates provide authentication for financial information, meaning consumers should be able to trust that they are sending information to the intended server and not to a criminal’s server. Trusted SSL providers should only issue SSL certificates to verified companies that have gone through several identity checks. In addition to providing authentication, SSL certificates also provide encryption, enhancing the security of credit card numbers, usernames, passwords and other sensitive information. These websites, however, displayed SSL certificates, further duping the consumer into thinking they were shopping on a legitimate website, potentially putting customers’ financial information at risk.

During this operation, federal law enforcement officers made undercover purchases of a host of products, including baby carriers, professional sports jerseys, language and fitness DVD sets, and a variety of clothing, jewelry and luxury goods from online retailers who were suspected of selling counterfeit products. In most cases, the goods were shipped directly into the United States from suppliers in other countries. If the copyright holders confirmed that the purchased products were counterfeit or otherwise illegal, seizure orders for the domain names of the websites that sold the goods were obtained from federal magistrate judges.

“Every day the U.S. economy and American jobs are negatively impacted by criminal organizations engaged in the sale of counterfeit merchandise through rogue websites. Even more importantly, consumer’s health and safety can be threatened when they unknowingly purchase counterfeit products,” said IPR Center Director Lev Kubiak. “Our goal at the IPR Center is to protect the public’s safety and economic welfare through robust intellectual property enforcement and we hope that today’s enforcement actions raise the public’s awareness to this pervasive crime.”

This operation was the next phase of IOS, a sustained law enforcement initiative that began two years ago to protect consumers by targeting the sale of counterfeit merchandise on the Internet. These 70 domain name seizures bring the total number of IOS domain names seized in the last two years to 839. This enforcement action coincides with the two-year anniversary of the 2010 launch of IOS. Since then, the seizure banner has received more than 103 million individual views.

Of the 769 previous domain names seized, 229 have now been forfeited to the U.S. government. The federal forfeiture process affords individuals who have an interest in seized domain names a period of time after a “Notice of Seizure” to file a petition with a federal court and additional time after a “Notice of Forfeiture” to contest the forfeiture. If no petitions or claims are filed, the domain names become the property of the U.S. government. Additionally, a public service announcement, launched in April 2011, is linked from the seizure banner on each of the 229 forfeited websites. This video educates the public about the economic impact of counterfeiting.

The operation was spearheaded by the IPR Center in coordination with HSI field offices in Denver, El Paso, Houston, Newark and Salt Lake City. U.S. Attorney’s Offices in the Western District of Texas, Southern District of Texas, District of New Jersey, District of Colorado and the District of Utah issued the warrants for the seizures. The IPR Center is one of the U.S. government’s key weapons in the fight against counterfeiting and piracy. The IPR Center uses the expertise of its 21 member agencies to share information, develop initiatives, coordinate enforcement actions and conduct investigations related to IP theft. Through this strategic interagency partnership, the IPR Center protects the public’s health and safety, the U.S. economy and the war fighters.

During the first phase of IOS in 2010, the IPR Center received information from the Motion Picture Association of America that a website, www.ninjavideo.net (Ninja Video), was illegally distributing pirated copies of motion pictures and other audiovisual works. Ninja Video provided its millions of visitors the ability to illegally download high quality copies of copyrighted movies including movies that were currently in theaters or not yet released.

Following the seizure of the website, search warrants were executed at the residences of the primary suspects in the United States and funds were seized from 15 separate financial accounts. To date, the Ninja Video investigation has resulted in the arrest and conviction of five of the six co-conspirators with sentences ranging from 22 months in federal prison to three years of probation with a combined restitution exceeding $470,000 to the victims. A sixth co-conspirator remains a fugitive. In addition to Ninja Video, IOS phase one also targeted eight other websites selling counterfeit merchandise in New York.

 

SOURCE:   U.S CUSTOMS & BORDER PROTECTION / IMMIGRATION & CUSTOMS ENFORCEMENT