COMMISSION STAFF WORKING DOCUMENT Overview of the functioning of the Memorandum of Understanding on the sale of counterfeit goods via the internet Accompanying document to the COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE A balanced IP enforcement system responding to today's societal challenges
Date: 2017-11-29
Institutions: Directorate-General for Internal Market, Industry, Entrepreneurship and SMEs, European Commission
Subjects: Internet, consumer protection, data collection, digital technology, electronic commerce, fraud, illicit trade, industrial counterfeiting, ownership

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 29.11.2017  SWD(2017) 430 final  COMMISSION STAFF WORKING DOCUMENT Overview of the functioning of the Memorandum of Understanding on the sale of counterfeit goods via the internet  Accompanying document to the  COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL AND THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE  A balanced IP enforcement system responding to today's societal challenges   {COM(2017) 707 final}  
 
 
1.  INTRODUCTION 

Counterfeiting  and  piracy  are  growing  problems.  Trade  in  counterfeit  and  pirated  goods 
amounted to up to 2.5 % of world trade in 2013 (compared with 1.9 % in 2009), and to up to 
5 % of imports (EUR 85 billion) in the EU context1. 

While  online  marketplaces  are  strong  drivers  of  innovation  and  growth  as  they  offer  new 
business opportunities, they are also increasingly used as a distribution channel for counterfeit 
and pirated goods2.  

As  part  of  its  overall  efforts  to  fight  intellectual  property  infringements,  the  Commission 
facilitates  stakeholder  dialogues  that  promote  collaborative  approaches  and  voluntary, 
practical  solutions  to  better  enforce  intellectual  property  rights  in  an  evolving  technological 
and commercial environment. In this context, to prevent the sale of counterfeit goods online, 
the  Commission  invited  internet  platforms,  rights  owners  and  associations  to  sign 
a Memorandum of Understanding on the Sale of Counterfeit Goods via the internet (‘MoU’). 

The  MoU  was  concluded  in  May  2011  and  brought  together  major  internet  platforms  and 
rights holders for products for which counterfeit and pirated versions are sold online (e.g. fast-
moving  consumer  goods,  consumer  electronics,  fashion  and  luxury  products,  sports  goods, 
films,  software,  games  and  toys),  operating  at  regional  and  global  level.  The  intellectual 
property rights covered by the scope of the MoU are registered trade marks, registered design 
rights and copyright set out in applicable Member State or EU law3. 

The  voluntary  agreement  has  been  the  basis  for  building  cooperation  and  trust  between 
signatories,  and  contributed  to preventing  offers  of Counterfeit  Goods4  from  appearing  in 
online  marketplaces.  The  first  report  on 
the  MoU  adopted 
by the Commission  in  20135  provided  a detailed  assessment  of  best  practices  and  practical 
measures  that  help  prevent  the  sale  of  Counterfeit  Goods  online,  and  therefore  protect 
consumers who are looking for genuine products on the digital internal market. It also showed 
that, when used alongside legislation, voluntary cooperation can usefully contribute to curbing 
online  counterfeiting  and  piracy.  It  can  also  provide  the  flexibility  to  quickly  adapt 
to technological developments and deliver efficient solutions. 

the  functioning  of 

However, this first report also underlined that more practical ways of measuring the effects of 
the  MoU  were  needed.  It  was  therefore  subsequently  agreed  that  a  set  of  key  performance 
indicators (‘KPIs’) would be used as an objective, reliable and transparent way of measuring 
the  MoU’s  effectiveness.  As  a  result,  a  set  of  KPIs  was  added  to  the  text  and  an updated 
version of the MoU was signed in June 2016. So far, this renewed version has been signed by 

1 ‘Trade in Counterfeit and Pirated Goods’, OECD-EUIPO, 2016. 
2 ‘Situation Report on Counterfeiting and Piracy in the European Union’, EUIPO and Europol, 2017. 
3 See paragraph 2 of the MoU. 
4 The terms in capital letters are terms that are defined in the MoU. For the purposes of the MoU ‘counterfeit 
goods’, are defined as non-original physical goods manufactured without the consent of the Rights Owner which 
infringe IPR, pursuant to applicable Member State or EU Law. 
5  Report  from  the  Commission  to  the  European  Parliament  and  the  Council  on  the  functioning 
of the Memorandum of Understanding on the Sale of Counterfeit Goods via the Internet, COM(2013) 209. 

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five  Internet  Platforms,6  eight  Rights  Owners7  and  six  associations  (‘Signatories’). 
The current list of Signatories is attached as Appendix 1. 

This document provides an overview of how the MoU functioned between 21 June 2016 and 
21 June 2017, in line with paragraph 41 of the MoU. The overview is based on: 

(i) results of two data collection exercises – data based on the KPIs collected every six months 
during two monthly data collection exercises; the data used for this overview comes from the 
first  two  such  exercises,  carried  out  from  15 November  to  15  December  2016  and  from 
15 May to 15 June 2017, and 

(ii) feedback provided by Signatories during the plenary meetings held on 26 October 2016, 
13 February 2017, 11 May 2017 and 16 October 2017, as well as feedback from a survey of 
Signatories in August/September 2017.    

This document aims to present a factual overview of experiences of the MoU so far, based on 
the information provided by the Signatories. It does not reflect any legal or policy views or 
intentions  of  the  Commission  in  respect  of  the  issues  under  consideration,  including  any 
possible further developments related to the MoU.    

2.  RESULTS OF THE DATA COLLECTION EXERCISES 

As  agreed  by  the  Signatories8,  data  based  on  the  KPIs  is  to  be  collected  every  six  months, 
during  two  monthly  periods  starting  on  15  November  and  15  May.  During  these  periods, 
the parties  collect  data  for  the  three  KPIs  and  subsequently  discuss  them  during  bilateral 
meetings and plenary meetings. 

In  order  to  ensure  the  confidentiality  of  individual  submissions  and  a neutral,  non-
discriminatory  evaluation  process,  the  data  are  then  sent  to  the  European  Observatory 
on Infringements  of  Intellectual  Property  Rights  (‘the  Observatory’).  The  Observatory 
aggregates and analyses the data reported by the Signatories, and then sends the results of this 
analysis to the Commission. 

For  the  two  data  collection  exercises  that  took  place  thus  far,  data  were  provided  by 
respectively eight and seven Rights Owners9 and five Internet Platforms. 

The  data  presented  in  this  assessment  have  been  collected  only  for  specific  categories  of 
products and in relation to a limited number of listings. It should therefore only be referenced 
in the context of the specific case studies presented in this document and should in no way be 
interpreted  as  general  results  nor  as  a  complete  overview  of  the Signatories’  work  to  tackle 
counterfeit and pirated goods online. 

6 For the purposes of the MoU ‘Internet Platform’ means any information society service provider whose service 
is used by third parties to initiate online the trading of physical goods, and which is operated by a signatory of 
the MoU, to the extent so indicated by the service provider. 
7 For the purposes of the MoU ‘Right Owner’ means signatory of the MoU who holds a registered trade mark, 
design right or copyright (hereinafter referred to as "IPR"), pursuant to applicable Member State or EU law, for 
goods covered by this MoU, including exclusive licensees of such IPR. 
8 See Annex I of the MoU. 
9 Luxottica Group Spa did not provide data during the 15 May to 15 June 2017 data collection due to internal 
restructuring. 

2 

 
 
                                                            
2.1.  Case study: KPI No. 1 – Amount of offers of alleged Counterfeit Goods 

The  first  KPI  measures  the  number  of  search  results  that  link  to  an  Offer10  of  alleged 
Counterfeit  Goods  appearing  within  the  first  100  unique  listings  per  platform  per  country 
obtained for a limited number of categories of product per brand, as specified in Annex I of 
the MoU. The search criteria determined should make sure that those products that will still 
be present on the market in a few years’ time are included11, as these are the most vulnerable 
products, most affected by counterfeiting. 

Rights Owners carry out these searches on the relevant Internet Platforms, for all EU Member 
States  in  which  these  Platforms  operate12.  They  first  analyse  one  hundred  ‘unique  listings’ 
that  appear  in  the  search  results.  In  cases  where  less  than  one  hundred  unique  listings  are 
found,  the  analysis  is  performed  on  the  number  of  listings  available13.  Subsequently, 
the Rights Owners determine how many of the listings include Offers of counterfeits of their 
original  products.  The  results  should  be  subsequently  discussed  and  agreed  between  the 
Rights  Owners  and  the  Platforms  prior  to  being  sent  to  the  Observatory,  where  all  data 
received are compiled for analysis. 

A new feature introduced in the second data collection period was the ‘unable to determine’ 
category, which was used by five out of seven Rights Owners to single out the listings where 
information was insufficient to ascertain a product’s authenticity.   

It should be noted that the division per category of product is not shown in this overview so as 
to respect the confidentiality of individual submissions. Therefore, the data are presented only 
for the total number of searches in all categories of product. 

Aggregate data for the first KPI are presented below for both data collection periods. 

Figure 1 — Results for KPI no.1 – Amount of offers of alleged Counterfeit Goods 

May — June 2017 

November — December 2016 

Total searches 

Alleged Counterfeit 
Goods 

Unable to 
determine 

Total searches 

Alleged 
Counterfeit Goods 

100 % 

14.3 % 

21.0 % 

100 % 

 12.3 % 

According to the results reported, the total number of searches carried out in the November-
December period is slightly higher compared to the total number of searches carried out in the 
May-June  period.  In the  May-June  period,  a  minor  increase  in  the  percentage  of  alleged 
Counterfeit Goods was observed (14.3 % compared to 12.3 % six months earlier). 

10 For the purposes of the MoU ‘Offer’, means a specific proposal for the sale of (a) good(s), entered by a seller 
on the system of the Internet Platform established in the EU/EEA. 
11  The  so-called ‘future proof’  product  categories,  for  example  ‘Adidas trainers’, ‘Nike  football shirts’, ‘Louis 
Vuitton handbags’. 
12  The  territorial  coverage  varies  between  the  Internet  Platforms.  Also,  while  some  Platforms  use  different 
domains for different Member States, others use a universal .com domain that is available throughout the EU. It 
was therefore decided that the territorial scope of the exercise should be decided based on bilateral arrangements 
between each Internet Platform and Right Owner. 
13 E.g. for a certain product on a certain platform there could be only 80 results/unique listings. 

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The  results  also  show  that  the  ‘unable  to  determine’  category  amounts  to  21 %  of  the  total 
number  of  searches,  which  is  higher  than  the  percentage  of  alleged  Counterfeit  Goods 
(14.3 %).  This reflects  the  difficulty  that  is  sometimes  encountered  when  assessing 
a product’s  authenticity.  Signatories  provided  further  feedback  on  the  ‘unable  to  determine’ 
category in their responses to the survey (section 3.6). 

The Rights Owners explained that the KPI no. 1 result showing 14.3 % of alleged Counterfeit 
Goods  in the May-June period should not be interpreted as the rest (85.7 %) being necessarily 
genuine  (i.e.  non-counterfeit)  products.  In  their  view,  this  is  because,  firstly,  21 %  of  total 
searches  in  this  time  period  fall  under  the  ‘unable  to  determine’  category,  meaning  that  the 
Rights  Owners  were  unable  to  determine  whether  the  product  is  genuine  or  counterfeit. 
Furthermore,  according  to  the  Right  Owners,  some  types  of  misleading  or  suspicious 
behaviour should also be taken into consideration. For instance, Rights Owners’ trade marks 
are  sometimes  used  by  sellers  on  online  platforms  in  order  to  advertise  products  not 
manufactured  by  the  Rights  Owner.  These  cases  can  be  examples  of  intellectual  property 
rights' infringement but, for the purposes of this exercise, they do not fall under the ‘alleged 
Counterfeit Goods’ category. Some Signatories have asked that such suspicious behaviour be 
taken  into  consideration  within  the  framework  of  this  MoU,  as  will  be  further  discussed  in 
section 3.6. 

2.2.  Case study: KPI No 2 – Amount of listings removed 

The second KPI quantifies the number of listings14 that were removed as a result of an alleged 
infringement  of  the  Right  Owners'  IPR.  Distinction  is  made  between  the  number  of  listings 
removed as a result of PPMs put in place by Internet Platforms (as defined in paragraphs 24-
27  of  the  MoU),  and the number  of listings  removed  as  a  result  of  notification  from  Rights 
Owners. 

Under  the  MoU,  Rights  Owners  can  send  justified  notices  concerning  Offers  they  firmly 
consider  to  be  counterfeit  to  the  Internet  Platforms  on  which  they  found  them;  the  Internet 
Platforms then take appropriate action (paragraphs 15-17 of the MoU). 

The aggregate data for the second KPI are presented below for both data collection periods. 

Figure 2 — Results for the KPI no.2 – Amount of listings removed 

May — June 2017 

November — December 2016 

Number of listings removed 
proactively by the Internet Platforms  

Number of listings removed as 
a result of notices sent by Rights 
Owners 

Total number of listings removed 

 97.4 % 

2.65 % 

100% 

86.3 % 

13.7 % 

100% 

14 Regarding the exact definition of a ‘listing’ it has been agreed that the distinction between a ‘private seller’ 
and a ‘business seller’ will not be taken into account for the purposes of the data collection exercise. 

4 

 
 
 
                                                            
In sheer numbers (not reflected in Figure 2), both the amount of listings removed as a result of 
measures taken by Internet Platforms and as a result of notices sent by Rights Owners have 
increased between December and June. It is worth noting that the number of listings removed 
as a result of PPMs taken by Internet Platforms increased almost tenfold.    

2.3.  Case study: KPI No 3 – Amount of seller restrictions imposed 

The third  KPI measures  the amount  of permanent  and temporary  seller restrictions imposed 
by  Internet Platforms.  The  seller  restrictions  being  measured  are  those linked to  the  alleged 
infringements  of  Rights  Owners’  IPRs  and  expressed  as  a  percentage  of  total  restrictions 
imposed by Internet Platforms for any alleged infringement of such rights. What is measured 
in  practice  is  the  number  of  actions  against  repeat  infringers15  initiated  by  Rights  Owners 
following the application of the MoU, against the total number of such actions. 

The  data  below  include  both  permanent  and  temporary  restrictions,  since  only  one  Internet 
Platform was able to provide separate data by type of restriction. 

The aggregate data for KPI no. 3 are presented below for both data collection periods. 

Figure 3 — Results for the KPI no.3 – Amount of seller restrictions imposed 

Total number of permanent and temporary 
seller restrictions linked to any alleged IPR 
infringement 

Number of permanent and temporary seller 
restrictions  linked  to  alleged  infringement 
of the IPR of an MoU Signatory 

May — June 2017 

November — December 
2016 

100 % 

 2.7 % 

100 % 

 4.5 % 

In  sheer  numbers  (not  reflected  in  Figure  3),  according  to  the  reported  results,  the  total 
number of restrictions has increased significantly, from December to June. The same trend – 
in absolute terms - can be observed for the restrictions linked to alleged infringement of the 
rights of a MoU Signatory. 

3.  RESULTS  OF  FEEDBACK  RECEIVED  THROUGH  REPLIES  TO  THE 

QUESTIONNAIRE 

Apart from the results of the two data collection exercises, the present assessment compiles 
the  Signatories’  responses  to  a  questionnaire  on  the  functioning  of  the  MoU,  circulated 
amongst them in August 2017. 

The  aim  of  the  survey  was  to  gather  feedback  from  Signatories  regarding  their  experiences 
with  the  application  of  the  MoU  provisions  and  their  functioning.  An  overview  of  different 
measures provided for by the MoU is presented below. It is based on the replies received.  

15 For the purposes of the MoU ‘repeat infringers’ are understood especially, but not limited to, as those selling 
high volumes, dangerous, pre-release or obvious Counterfeit Goods. 

5 

 
 
 
                                                            
3.1.  Notice and Take-Down procedures 

The  MoU  includes  a  number  of  commitments  on  Notice  and  Take-Down  procedures 
(‘NTD’)16. Most of the Signatories agreed that NTD procedures are an important tool in the 
fight  against  online  sale  of counterfeit  goods.  NTD  procedures  aim  to  remove  Offers  of 
Counterfeit  Goods  from  websites  in  a timely,  efficient  and  effective  way.  However,  in  the 
view of the Signatories, since their impact is by nature limited (they are applied only after the 
Offer  is  already  available  online),  they  should  be  complemented  by  strong  preventive 
measures.  

In the context of the MoU, as reported by the Signatories, NTD procedures make it possible 
for: 

a) Rights Owners to notify Internet Platforms about alleged Counterfeit Goods being offered 
on their sites, and 

b)  Internet  Platforms  to  remove  individual  offers  of  alleged  Counterfeit  Goods  from  their 
sites. 

Even though all Internet Platforms already had some NTD procedures in place before signing 
the  MoU,  Signatories  reported  that  they  noticed  an  improvement  in  the  use  of  these 
procedures since signing the MoU and believe that this has been an effective way of ensuring 
the swift removal of Offers of Counterfeit Goods.  

Most Signatories reported that all notifications concerning the Offer of Counterfeit Goods are 
being submitted through the established NTD procedures. However, some Rights Owners said 
that they do not always use the reporting tools created by Internet Platforms, because, in the 
Rights Owners' view, these are not adapted to report higher numbers of notifications. For this 
reason, some Rights Owners prefer to send a list of infringing URLs by email, or to use other 
automated solutions.  

The Signatories recognised that NTD procedures by nature can only have a limited impact as 
they are only used once the goods have been advertised online, reached customers and often 
even been sold several times. Even if enforcement is immediate, it is still too late since it does 
not  prevent  those  purchases  made  by  consumers  in  the  time  between  the  publication  of  the 
item and the removal of the listing. Furthermore, sometimes the listing has already expired by 
the time the NTD report is filed. All this causes harm to a brand’s reputation and uniqueness.   

Another  issue  that  came  up  in  the  questionnaire  responses  is  that  counterfeiters  are  now 
moving  to  different  internet  platforms,  in  respect  of  which  no  or  less  effective  NTD 
Procedures exist,  or  where  the requirements to  set up an account  and have  it suspended are 
more  flexible.  For  these  reasons,  the  Signatories  considered  that  it  is  important  to  work 
together to see how best to complement NTD procedures with strong preventive mechanisms, 
ensuring  that  Counterfeit  Goods  do  not  reach  the  market  place  in  the  first  place,  as  well  as 
with follow-up measures that prevent repeated infringements. It should however be noted that 
even though the Internet Platforms have tools and procedures in place that aim to prevent an 
Offer from  reaching  the  market in  the first place, it is  an objective very difficult to achieve 

16  For  the  purposes  of  the  MoU  ‘Notice  and  Take-Down  Procedures’  mean  any  procedure,  including  the 
associated  processes,  by  an  Internet  Platform,  that  enables  a  Rights  Owner  to  notify  efficiently  to  an  Internet 
Platform  any  relevant  Offer,  including  closed  Offers,  of  an  alleged  Counterfeit  Good  made  publicly  available 
using the relevant services of that Internet Platform, in order to allow the Internet Platform to take appropriate 
action,  including  making  the  Offer  unavailable  to  the  general  public  through  the  Internet  Platform.  See 
paragraphs 11-19 of the MoU. 

6 

 
 
                                                            
Also,  some  Platforms  have  underlined  that  such  technical  preventive  solutions  are  not  only 
very costly but could also result in too many false positives (i.e. identifying also many offers 
that could not be seen as infringing IPR).  

Furthermore,  although  the  Signatories  stated  that  NTD  procedures  have  helped  reduce  the 
visibility of Counterfeit Goods online, Rights Owners pointed out differences in the number 
of Counterfeit Goods on offer depending on whether the data collection exercise is ongoing or 
not.  

3.1.1.  Rights Owners’ experience with using Notice and Take-Down procedures 

All  Rights  Owners  mentioned  the  additional  expenditure  of  time  and  resources  associated 
with following the different NTD procedures required by each Internet Platform, especially in 
terms of different notification tools, language settings and reasoning obligations. The ability 
to report infringing content ‘in bulk’ seems to be the most important functionality for Rights 
Owners and most Internet Platforms already offer this possibility. Due to the amount of work 
required,  some  Rights  Owners  hire  an external  service  provider  to  monitor  and  take  down 
counterfeit listings from Internet Platforms. Some Rights Owners suggested that establishing 
a harmonised  NTD  reporting  system  for  all  Internet  Platforms  would  help.  However,  some 
Internet Platforms explained that standardising NTD procedures is not possible due to the fact 
that each platform is built based on different technical solutions. In addition, the effectiveness 
and the rapidity of dealing with the notifications is due to the standardized procedures in place 
therefore  a  harmonized  NTD  procedure  for  all  the  Platforms  would  not  be  an  efficient 
solution.  In  any  case,  Internet  Platforms  have  already  invested  in  developing  specific  tools  
that  make  it  possible  for  Rights  Owners  to  submit  multiple  notifications,  sometimes 
specifically in the context of the MoU.  

Rights Owners affirmed that most Internet Platforms make it possible to either report multiple 
offers  from  the  same  seller  or  multiple  sellers  of  the  same  product.  The  majority  of  Rights 
Owners  surveyed  estimated  that  the  percentage  of  cases  in  which  reporting  an  Offer  of 
Counterfeit Goods led to its takedown is often as close to 100 %.  

Under paragraph 18 of the MoU, Internet Platforms commit to handling notifications received 
from  Rights  Owners  in  an  efficient  and  comprehensive  way,  without  undue  delay.  They 
should  ensure  that  the  correct  reporting  of  Offers  of  Counterfeit  Goods  leads  to  the  Offer 
being  removed  or  disabled.  Rights  Owners  reported  that  Internet  Platforms  that  take  part  in 
the MoU generally deal with notifications without undue delay. However, they suggested that 
takedown periods should ideally be reduced further, to a few hours. This should not deprive 
Internet Platforms of the possibility to verify the content. 

Rights  Owners  reported  that  all  Internet  Platforms  usually  send  out  automatic  e-mails  in 
response to notifications, to either confirm the takedown or request more information before 
proceeding further. 

3.1.2. 

Internet Platforms’ experience with using Notice and Take-Down procedures 

Under  the  MoU,  Rights  Owners  commit  to  avoiding  unjustified,  unfounded  and  abusive 
allegations when notifying Internet Platforms of Offers of Counterfeit Goods. Some Internet 
Platforms have reported that they do receive such notifications and that these cases amount to 
approximately 5 % of the overall number of notifications.  

7 

 
 
While some Internet Platforms said that nearly all Rights Owners’ notifications they receive 
contain sufficiently clear information on the infringement, the Offer and the notifying party, 
others  have  reported  that  Rights  Owners  often  do  not  back  up  their  claims  of  counterfeit 
products with test purchases. Furthermore, Internet Platforms reported that they often have to 
ask for additional information to process the notification, for example in cases of ‘grey zone’ 
products where Rights Owners’ knowledge is necessary to determine whether the products are 
really counterfeit.   

According  to  the  Internet  Platforms,  some  of  the  most  common  issues  encountered  when 
dealing with a NTD request are (i) a mismatch between the listing notified and the intellectual 
property documents filed, (ii) insufficient evidence to demonstrate infringement, and (iii) lack 
of response from the brand’s representatives when additional information is required. 

Lack of evidence to prove the infringement is a particular issue for the Internet Platforms as 
some  have  contacted  certain  sellers  based  on  a  Rights  Owner’s  notification  and  the  Offers 
turned  out  to  be  genuine.  Internet  Platforms  stressed  that  such  unfounded  notices  have  a 
negative  impact  on  their  reputation  as  some  merchants  get  upset  when  their  integrity  is  in 
doubt.   

Internet Platforms also suggested that a better way for Rights Owners to back up their claims 
would be the introduction of tracking systems for genuine products, with electronic tags that 
would make it possible to identify fake items with more certainty. 

Pro-active and Preventive Measures 

3.2. 
The  MoU  includes  commitments  on  pro-active  and  preventive  measures17.  PPMs  enable 
Internet  Platforms  and  Rights  Owners  to prevent  illicit  offers  from  appearing  online  in  the 
first place or, if they do become available online, to take them down as soon as possible. 

In particular, as part of putting in place PPMs, Rights Owners commit to taking commercially 
reasonable  and  available  steps  to  effectively  fight  counterfeiting  at  its  source,  including  at 
points of manufacture and initial distribution, and to actively monitor Offers on the websites 
of Internet Platforms (paragraph 20 and 21 of the MoU). On the other hand, Internet Platforms 
commit to taking appropriate, commercially reasonable and technically feasible measures to 
pro-actively identify and/or prevent the sale of Counterfeit Goods, and to prevent such goods 
from being offered or sold through their services (paragraph 27 of the MoU). 

Signatories agree  that  NTD  procedures  are  by  nature reactive  measures  and  as  such  are  not 
sufficient  to  effectively  address  the  issue  of  counterfeit  goods  on  online  platforms.  This  is 
why the MoU also includes pro-active and preventive measures. 

General  feedback  showed  that  ongoing  active  cooperation  between  the  parties  is  crucial  for 
the effective use of PPMs. The practice of sharing monitoring methodology and information 
with the Internet Platforms has led to more counterfeit offers being taken down.  

Signatories  report  that  appropriate  technology,  such  as  filters,  and  monitoring  programmes 
have  been  put  in  place  to  detect  illegal  content.  In  a  fast  changing  digital  environment, 
technology needs to be able to adapt to new trends and counterfeiting tactics. Currently it still 
has shortcomings, for example, the fact that filter technologies often produce high numbers of 
false positives. 

17See paragraphs 20-27 of the MoU.  

8 

 
 
                                                            
Furthermore,  according  to  the  feedback  received,  all  of  the  Internet  Platforms  have  rights 
protection programmes in place, and these are used by many rights owners. 

Some  Rights  Owners  have  shared  their  monitoring  methodology  and  information  with  the 
Internet Platforms. This includes: lists of keywords commonly used by sellers of counterfeit 
products;  lists  of  monitored  platforms  and  current  trends  on  those  platforms;  commercial-
scale sellers identified based on the number of items advertised; repeat infringers; and URL 
listings.  Signatories  agree  that  when  Internet  Platforms  and  Right  Owners  work  together  in 
this way, it becomes easier to spot Counterfeit Goods being offered online.   

In parallel to these online monitoring activities, some Rights Owners organised trainings for 
Internet  Platforms  on  key  products  and  items  particularly  susceptible  to  counterfeiting 
in order to help them identify counterfeit items and to raise awareness of certain brands and 
their  specificities.  These  training  sessions  included  information  on  the  most  frequent 
counterfeited models, items that the Rights Owners never produced, specific details of certain 
products, and the security elements currently applied to certain items. 

Signatories have recognised that the MoU has facilitated closer bilateral relationships between 
Right  Owners  and  Internet  Platforms  and  opened  a  much-needed  dialogue  between  them. 
Since  the  Internet  Platforms  have  technical  tools,  expertise  and  relevant  background 
information  (seller's  location,  contact  details)  that  is  not  available to  the Right  Owners,  and 
the Right Owners have the necessary specialist knowledge of their brand that is essential in 
identifying  counterfeit  products,  the  efforts  undertaken  on  both  sides  through  a combination 
of NTD procedures and PPMs need to be complementary.  

However,  most  Rights  Owners  have  stated  that  it  is  difficult  for  them  to  monitor  the 
efficiency  of  PPMs  in  place  as  they  do  not  receive  appropriate  feedback  from  the  Internet 
Platforms. Consequently, Rights Owners suggested that more transparency in the criteria used 
for  these  measures  be  introduced,  to  enable  them  to  help  Internet  Platforms  improve  the 
measures they take. For example, Rights Owners consider that if they could revise the PPMs 
in place for each Internet Platform they would be able to evaluate the efficiency of the filters 
used and, where needed, improve them with their specific experience and knowledge. Some 
Rights Owners also suggested that a common system of pro-active and preventive measures 
be established; it would require a real identification of sellers by name, address, ID number 
and  bank  account  details.  They  believe  that  these  kinds  of  requirements  would  prevent  the 
creation  of  computer-generated  seller  accounts.  Furthermore,  Rights  Owners  stated  that 
obliging sellers to upload only real images of products would reduce the ‘unable to determine’ 
cases as a product’s authenticity could be identified with more certainty. 

Signatories  stated  that  despite  these  joint  efforts  counterfeit  listings  continue  to reappear  on 
most of the Internet Platforms. Further cooperation is therefore needed to improve the results. 

3.3.  Repeat Infringers 

Under the MoU, Internet Platforms and Rights Owners commit to working together to detect 
repeat  infringers  by  implementing  deterrent  repeat  infringer  policies  (paragraph  34  of  the 
MoU).  These  policies  can  include,  for  example,  temporary  or  permanent  suspension  of 
an account,  restriction  of seller  accounts,  imposing  a  ban  on  selling  activities  or  depriving 
sellers  of  their  special  account  status.  Some  Internet  Platforms  have  policies  which  allow 
sellers  to  open  only  one  store  (one  ID).  Therefore,  once  that  store  is  shut  down,  the  ID  is 
blocked from opening a new store. Also, once a seller is banned, they are put on a blacklist. 
Technical measures, such as putting in place certain keywords that would make it difficult for 

9 

 
 
an infringer to reappear with a different identity, aim to prevent infringers from opening new 
accounts on the same platform. 

However,  Internet  Platforms  have  reported  that  blocking  an  account  is  not  sufficient  as 
infringers often then register on another platform, and therefore legal action should follow. In 
view  of  the  Internet  Platforms,  Rights  Owners  normally  have  more  knowledge  on  repeat 
infringers  as  they  are  in  a  position  to  compare  various  sources  of information,  from  other 
platforms, custom seizures, court actions and law enforcement proceedings. 

All Right Owners identify repeat infringers mainly based on their own NTD request records 
as  well  as  public  information  they  collect  online  outside  of  the  NTD  procedures.  Based  on 
this,  Rights  Owners  usually  report  repeat  infringers  to  the  Internet  Platforms  and/or  take 
action  involving  law  enforcement  authorities.  However,  they  consider  this  monitoring 
procedure as very time-consuming and demanding, especially when one repeat infringer uses 
several  accounts  on  different  internet  platforms.  For  example,  some  Rights  Owners  have 
reported that certain repeat infringers have been seen to reappear during the second KPI data 
collection exercise even though they were identified and reported to Internet Platforms during 
the  first  one.  In  light  of  this  perceived  information  gap,  all  Rights  Owners  suggested  that 
Internet Platforms give more information  on repeat infringers, including IP addresses, email 
addresses, phone numbers and bank account details as Rights Owners do not have the access 
or capacity to obtain this information themselves. 

3.4.  Bilateral relations between Signatories 

Signatories  agree  that  the  MoU  has  made  it  easier  to  initiate  new  and  strengthen  existing 
cooperation between parties. This is important because issues such as online counterfeiting in 
a  fast  changing  digital  environment  require  constant  and  careful  attention,  trend  tracking, 
exchange of information and ongoing contact between Internet Platforms and Rights Owners. 
In  addition,  in  the  view  of  the  Signatories,  regular  meetings  with  counterparts  allowed  for 
fruitful  discussions,  which  made  it  possible  to  identify  common  issues  and  challenges,  and 
exchange best practices. 

Some  Signatories  reported  that,  although  excellent  partnerships  have  been  established  with 
most  Signatories,  there  are  still  some  who  do  not  take  part  in  the dialogue.  Some  Internet 
Platforms  reported  that  only  a few  Rights  Owners  have  contacted  them.  In  addition,  some 
Rights Owners did not provide listings of Offers under the first KPI for the purposes of data 
collection. 

Rights Owners stated that there is a need to clarify the data submitted by Internet Platforms 
and  to  frame  the  exchange  of  information  through  a  more  detailed  protocol.  One  Rights 
Owner pointed out that this constitutes the core of the current agreement as the MoU seeks to 
‘establish  a  code  of  practice  in  the  fight  against  the  sale  of  counterfeit  goods  over  the 
Internet …’18. 

Signatories  believe  that  the  efficiency  of  cooperation  and  bilateral  relations  between  Rights 
Owners  and  Internet  Platforms  can  only  be  properly  assessed  after  several  KPI  collection 
exercises, when the methodology applied by both parties has been shared and established, and 
the evolution of the visibility of counterfeit offers online over time has been confirmed. 

18 Recital of the MoU on the sale of counterfeit goods via the internet. 

10 

 
 
                                                            
3.5.  Consumer protection 

Signatories recognise that  consumers,  both  buyers  and  sellers,  are  active  parties  in  the  fight 
against  counterfeiting.  Therefore,  it  is  essential  that  they  are  provided  with  the  appropriate 
means that help them easily identify and report offers of counterfeit goods (paragraph 31). 

Rights Owners have repeatedly highlighted the fact that it is sometimes very difficult even for 
them to identify original products sold online with certainty, as sellers often post only a few 
pictures  of  the  product,  post  low-quality  pictures  or  hide  the  authentication  part  of 
the product. 

As a result, Right  Owners have developed dedicated services through which consumers can 
easily reach them to report suspected counterfeit listings or ask for assistance in determining 
whether  a  purchased  item  is  counterfeit  or  not.  In  addition,  some  Rights  Owners  have 
installed anti-counterfeiting labels on their items with a unique code that can be easily verified 
by the consumer. Also important are campaigns that promote anti-counterfeiting culture and 
create awareness of the negative impact that illegal market activity has on brands’ intellectual 
property and innovation. 

Similarly,  Internet  Platforms  have  enabled  a  ‘report’  button  on  the  page  of  each  listing  or 
contact form that allows consumers to report an offer that violates intellectual property rights 
or the Internet Platform’s policies. All Platforms have introduced a possibility for consumers 
who unintentionally purchased a counterfeit product to initiate a procedure to be compensated 
or refunded. Before deciding to purchase an item, buyers are also entitled to contact the seller 
and request more pictures or further information on the product, which often helps the buyer 
assess the  product’s  authenticity.  The  buyer  may  also  consult  the seller’s  feedback rating  in 
order to see their selling history. 

3.6. 

Suggestions for improvement 

Based on the responses received from the Signatories, the 2016 MoU has in their view clearly 
brought positive results regarding cooperation between Rights Owners and Internet Platforms. 
However,  it  also  appears  that  despite  the  increased  efforts  by  both  sides,  all  of  the  Internet 
Platforms still struggle with Offers of Counterfeit Goods on their sites. 

When  asked  about  suggestions  for  further  improving  the  MoU,  most  Signatories  underlined 
the  importance  of  involving  other  participants  of  the  e-commerce  ecosystem  in  the  MoU 
process,  including  social  media,  price-comparison  websites  and classified  websites.  In 
addition, Rights Owners stated that the Internet Platforms that are currently Signatories should 
join the MoU with all the platforms belonging to them. It was stressed that at the moment the 
MoU’s impact is limited due to the low number of Signatories. More parties should therefore 
join the initiative. 

Signatories agreed that it is important that the MoU is applied as agreed and that the balance 
of  commitments  between  Rights  Owners  and  Internet  Platforms  is  respected.  This  balance 
should be maintained even if there are any changes to the MoU. 

Furthermore, Signatories suggested that specific measures should be introduced to deal with 
situations where some Signatories do not cooperate, in order to make sure that all parties are 
fully  committed  to  applying  the MoU  provisions  in  the  fight  against  counterfeiting.  They 
consider that there should be an established system that would require those who do not wish 
to cooperate to leave the MoU. 

11 

 
 
Opinions  were  divided  on  whether  the  MoU  should  be  amended.  On the one  hand,  some 
Signatories believe that the MoU is functioning well and that at this stage there is no need to 
change  the  text.  On  the  other  hand,  other  Signatories  consider  that  the  MoU  would  benefit 
from amendments regarding certain issues. The reactions were similar as regards the need to 
introduce  procedural  provisions  in  the  MoU.  Half  of  the  respondents  considered  that 
procedural  issues  could  be  agreed  on  in  meetings  and  that  adding  them  to  the  current  text 
would be burdensome. The other half considered that, provisions on the accession procedure 
for  new  signatories  should  be  introduced,  more  clarification  on  the  data  to  be  submitted  to 
Internet Platforms is needed, and the bilateral exchange of information should be framed with 
a more detailed protocol. 

Overall,  Rights  Owners  have  called  for  more  transparency  of  data  collected  by  Internet 
Platforms, as part of PPMs and NTD procedures, as well as on the systems used to gather the 
data.  Most  Signatories  underlined  that  the  bilateral  exchange  of  information  needs  to  be 
framed  by a  more detailed protocol. One Rights  Owner suggested that an independent third 
party  (e.g.  the  Observatory)  should  analyse  and  compare  the  data  submitted  by  both  Rights 
Owners and Internet Platforms at the end of the monitoring period. In the view of Signatories 
this would make it possible to: (i) avoid duplication of efforts and notices which would result 
in  a  more  efficient  removal  process,  (ii)  evaluate  whether  a  better  use  of  data  gathered  is 
possible. 

As  mentioned  in  section  4.2.,  several  Rights  Owners  reported  that  there  is  not  enough 
transparency  as  regards  the  PPMs  implemented  by  Internet  Platforms  and  suggest  further 
harmonisation of these measures. Further to this, obliging sellers to upload only real, quality 
images  of  products  would  decrease  the  use  of  computer-generated  images  or  images  taken 
from  the  rights  owners’  image  banks  and  websites.  Computer-generated  images  make  it 
difficult  for  Rights  Owners  to  identify  and  report  certain  listings  as  the  indicators  are 
confusing or misleading; many listings therefore end up in the ‘unable to determine’ category. 

Rights  Owners  have  called  for  common  minimum  standards  for  account  suspension,  either 
temporary or permanent, to be applied by all Internet Platforms. 

Signatories agreed that a coherent application of KPIs is crucial for measuring effectiveness 
as different approaches could undermine KPI credibility. 

In this regard, some Signatories underlined that the MoU should cover only agreed counterfeit 
infringements  and  therefore  any  other  intellectual  property  rights  violations  should  not  be 
included  without  Signatories’  prior  discussion  and  unanimous  decision,  as  changing 
the methodology during the ongoing data collection process can impair results. 

Some Rights Owners have welcomed the introduction of the ‘unable to determine’ category 
which  has  allowed  them  to  cover  cases  where  they  don’t  have  sufficient  information  to 
ascertain an Offer’s authenticity. Some reported that they have  benefited from this category 
and  believe  it  should  be  officially  included  as  a  criterion  under  KPI  no.  1,  however  further 
clarification  is  needed  so  as  to  avoid  that  too  many  Offers  fall  within  the  ‘unable  to 
determine’  category.  According  to  some  Rights  Owners,  Internet  Platforms  could  establish 
specific  criteria  that  sellers  would  have  to  meet  in  order  to  upload  their  offers;  this  could 
include real product images and complete information. 

Several  Rights  Owners  pointed  out  that  it  would  be  useful  if  KPI  no.  1  would  not  only 
measure  counterfeit  listings  but  would  also  identify  other  listings  based  on  misleading 
behaviour.  Currently,  for  example,  among  the  counterfeit  products  measured  there  are  also 

12 

 
 
products  entirely  unrelated  to  the  Rights  Owner  or  products  advertised  with  the  Rights 
Owner’s trade mark. 

With regard to KPIs no. 2 and 3, almost all Right Owners have called for more transparency 
in  the  data  sharing  process.  They  consider  that  aggregate  data  is  not  useful  for 
the collaboration process the MoU aims to set up. For instance, it would be more efficient if 
data  for  KPI  no.  2  showed  a  more  detailed  and  complete breakdown  of  figures  per  Internet 
Platform and Rights Owner. In the Rights Owners' view efforts would be more targeted and 
overlaps  would  be  avoided  if  listings  proactively  removed  by  Internet  Platforms  would  be 
shared and discussed with Rights Owners during bilateral consultations. 

With regard to KPI no. 3, most Rights Owners considered that information on the criteria used 
to  determine  a  temporary  or  permanent  suspension  should  be  shared  with  them.  Further  to 
this, Rights Owners requested that Internet Platforms share with them details such as name, 
IP address  and  bank  account  for  repeat,  suspended  and  banned  infringers  during  bilateral 
negotiations. This would improve their monitoring activities and help them identify infringers. 

An initial discussion on the issues presented in this document took place during the plenary 
meeting  with  signatories  on  16  October  2017.  Such  discussions  are  expected  to  continue  in 
upcoming meetings. 

13 

 
 
 
 
 
APPENDIX 1 — MoU SIGNATORIES (as on 16 October 2017) 

Rights Owners 

1.  Adidas International Marketing BV 
2.  Chanel SAS 
3.  Gant AB 
4.  Lacoste SA 
5.  Luxottica Group Spa 
6.  Moncler Spa 
7.  Nike Inc. 
8.  Procter & Gamble 

Internet Platforms 

1.  Alibaba Group Inc. 
2.  Amazon Services Europe Sarl. 
3.  eBay 
4.  Priceminister Rakuten 
5.  Grupa Allegro sp. z o.o 

Associations 

1.  ACG UK 
2.  AIM European Brands Association 
3.  BASCAP — Business Action to Stop Counterfeiting and Piracy 
4.  Federation of the European Sporting Goods Industry — FESI 
5. 
6.  Toy Industries of Europe 

International Video Federation — IVF 

14