Vendor accounts on third party trading platforms : research on online business models infringing intellectual property rights : phase 4.
Date: 2021-10-25
Institutions: European Union Intellectual Property Office
Subjects: application of the law, business model, computer crime, data-processing law, electronic commerce, goods and services, industrial counterfeiting, industrial research, information security, infringement of EU law, intellectual property, international cooperation, raw material, report, shipping policy, software, supplier, supply chain, theory of marketing, trade agreement

VENDOR ACCOUNTS ON THIRD PARTY TRADING 
PLATFORMS 

RESEARCH ON ONLINE BUSINESS MODELS INFRINGING 
INTELLECTUAL PROPERTY RIGHTS – PHASE 4 

Report 

October 2021 

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ISBN 978-92-9156-298-5 doi:10.2814/279240 TB-09-21-391-EN-N  
© European Union Intellectual Property Office, 2021 

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Contents 

FOREWORD .................................................................................................................................... 6 

EXECUTIVE SUMMARY .................................................................................................................. 8 

INTRODUCTION AND METHODOLOGY ....................................................................................... 19 

1.  ONLINE IP INFRINGEMENT ON THIRD PARTY TRADING PLATFORMS ............................ 21 

1.1  DEFINING THE PROBLEM .............................................................................................. 21 

The global counterfeit market and its impact on EU economy .................................... 21 

  Online enforcement and international cooperation ..................................................... 26 

  Risks to consumers ................................................................................................... 26 

Liaisons with other criminal activities ......................................................................... 27 

Emerging trends ........................................................................................................ 29 

1.2  BUSINESS MODEL ANALYSIS ........................................................................................ 32 

Infringing goods ......................................................................................................... 33 

  Online marketplaces .................................................................................................. 41 

  Darknet marketplaces ................................................................................................ 45 

  Marketplace types and categories of infringing goods ................................................ 46 

1.3 

THE IP INFRINGEMENT SUPPLY CHAIN ....................................................................... 48 

Introduction ................................................................................................................ 48 

  Raw material supply .................................................................................................. 51 

Production ................................................................................................................. 52 

Storage and inventory ................................................................................................ 53 

  Online offer of sale ..................................................................................................... 55 

  Marketing ................................................................................................................... 57 

Sales ......................................................................................................................... 60 

Shipping .................................................................................................................... 62 

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2.  ENFORCEMENT  AGAINST  INTELLECTUAL  PROPERTY  INFRINGEMENTS  ON  THIRD 

PARTY TRADING PLATFORMS .................................................................................................... 64 

2.1  MEASURES, POLICIES AND TACTICS ........................................................................... 64 

Proactive measures ................................................................................................... 64 

  Reactive measures .................................................................................................... 69 

Investigation and enforcement ................................................................................... 74 

2.2  VENDORS’ LIABILITY: SELECTED CASE-LAW FROM EU MEMBER STATES .............. 84 

Sale of pirated software on an auction marketplace ................................................... 85 

Sale of counterfeit spare parts and pirated diagnostic software on an auction 

marketplace ............................................................................................................................ 88 

Sale of counterfeit clothing on an auction marketplace .............................................. 89 

Sale of counterfeit luxury goods from an online shop ................................................. 91 

Sale of pirated design articles on an auction marketplace .......................................... 92 

2.3 

INJUNCTIONS AGAINST INTERMEDIARIES .................................................................. 94 

Legal basis for injunctions against intermediaries ...................................................... 95 

Primary and secondary liability for trade mark infringement ....................................... 97 

e-commerce exemptions from liability ........................................................................ 99 

Injunctions to prevent further infringements ............................................................. 103 

Allocations of costs of injunctions ............................................................................ 105 

2.4 

JURISDICTION OF IP INFRINGEMENT CASES ............................................................ 106 

  Conflict of law in online infringement of national trade marks ................................... 109 

  Conflict of law in online infringement of EU trade marks .......................................... 110 

  Conflict of law in online infringement of copyright and related rights ........................ 112 

  Conflict of law in online infringement of Community designs .................................... 113 

International disputes with undertakings domiciled in non-EU Member States ......... 114 

  Recognition and enforcement of foreign judgments ................................................. 116 

  Criminal jurisdiction .................................................................................................. 119 

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Conclusion .................................................................................................................................... 120 

APPENDIX: Case studies ............................................................................................................. 123 

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FOREWORD 

Today, shopping online is an everyday task. Online trading platforms are used by billions of users, 

large and small businesses around the world, to make all kind of products available for purchase at a 

click  of  a  button.  They  have  opened  up  new  market  opportunities  and  brought  e-commerce  within 

easy reach for everyone. 

However, platforms can be misused by vendors who use their services to import, sell and distribute 

goods that infringe intellectual property. The market for counterfeit and pirated goods is on the rise 

too, following the same pattern as global commerce and shifting from physical to online distribution. 

With the rise of the darknet, new means of infringing intellectual property have emerged. 

In 2011, the European Commission facilitated a Memorandum of Understanding (MoU) to hinder the 

sale of counterfeit goods on online marketplaces. Under this voluntary agreement, revised in 2016, 

rights owners, internet platforms and associations defined a series of joint practices to prevent offers 

of counterfeit goods from appearing on online marketplaces. 

To give full effect to such voluntary practices, as well as to customs controls, law enforcement actions 

and  criminal  prosecutions,  a  methodical  knowledge  of  the  ‘business  models’  underlying  IP 

infringements is needed. 

The  EUIPO  is  working  with  IP  stakeholders  and  a  number  of  platforms  to  improve  trade  mark 

protection in online marketplaces, and to combat counterfeiting generally. However, this is a complex 

area requiring a detailed understanding of the tactics, techniques and procedures used by vendors of 

counterfeit and pirated goods via vendor accounts. 

This report fills a gap in the knowledge of the tactics, techniques and procedures used by vendors on 

third-party  trading  platforms.  It  provides  a  systematic  understanding  of  the  various  stages  of  the 

‘supply chain’ of infringing goods online, and of the enforcement actions that can be deployed at each 

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stage. It also unveils emerging forms of marketing of IP-infringing goods through social media and live 

streaming, which pose new challenges to investigators and law enforcers. 

The research clarifies that the supply of counterfeit and pirated products via online marketplaces is a 

lucrative and highly organised activity that can only be tackled through global cooperation, and if it is 

a  focus  priority  of  law  enforcement  actions.  The  research  casts  light  into  a  hidden  dimension  of 

international  e-commerce  which  endangers  economic  operators  and  consumers  alike,  and  should 

help raise awareness among EU and third-country citizens, businesses, authorities and policy makers. 

The report comes at a very pertinent moment as the Council of the EU recently adopted conclusions 

setting  the  2022-2025  EU  priorities  for  the  fight  against  serious  and  organised  crime  through  the 

European Multidisciplinary Platform against Criminal Threats (EMPACT) that will include intellectual 

property crime. 

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EXECUTIVE SUMMARY 

Background 

In 2020, the European Union Intellectual Property Office (EUIPO), through the European Observatory 

on  Infringements  of  Intellectual  Property  Rights,  commissioned  a  research  study  on  intellectual 

property (IP) infringement through vendor accounts on third-party trading platforms. The purpose of 

the research was to enhance the level of understanding about the ways in which IP infringers misuse 

online trading platforms to market goods and services infringing IP rights, how the business models 

adopted  by  IP  infringers  work,  and  thereby  provide  new  knowledge  to  tackle  the  challenge  of  this 

phenomenon more effectively. 

The research study was commissioned to the Centre for Intellectual Property Policy and Management 

(CIPPM)  of  Bournemouth  University,  which  set  up  a  team  of  researchers  in  law  and  computer 

science (1). The research team was assisted by a group of experts including representatives of rights 

holders,  online  trading  platforms,  shipping  and  payment  companies,  law  enforcement,  judiciary, 

private investigation services and digital security. 

This report was carried out as a study into the legal, technical and logistical aspects of the supply of 

IP-infringing goods and services on online trading platforms. It reviews the existing literature and policy 

initiatives, the legislative framework and case-law and provides a qualitative analysis of the existing 

business models and the available enforcement options to respond to them. 

(1) Bournemouth University research team was led by Professor Maurizio Borghi and Professor Vasilis Katos, and included 

Dr Dimitrios Koukiadis, Dr Cagatay Yucel, Mr Panagiotis Bellonias, Mr Ioannis Chalkias and Mr Dukki Hong. 

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Methodology 

The business models analysis was developed through a series of structured interviews with domain 

experts and an independent investigation leveraging cybersecurity techniques. A series of structured 

interviews  was  carried  out  with  experts  representing  brand  owners,  rights  holders,  online 

marketplaces, customs, courier services, payment service providers, judiciary and law enforcement. 

Independent research was carried out using cybersecurity investigation approaches and practices in 

the domain of digital forensics and incident response. Such an approach allowed the identification of 

the so-called tactics, techniques and procedures (TTPs) used by the infringers. The TTPs were then 

developed  in  the  business  case  descriptions  and formed  the  basis  of  the  analysis  of  the  business 

models (2). 

The context of the study: IP infringement in a changing internet environment 

In  2019,  the  value  of  counterfeit  and  pirated  goods  imported  in  the  EU  was  estimated to  be  up to 

EUR 119 billion, or 5.8 % of all EU imports (3). Internet transactions account for a major share of 

this value. The huge market penetration of online trading platforms makes them a sought-after channel 

for the sale of those goods. As highlighted by the EUIPO and Europol in 2019, the misuse of these 

platforms  has  become  ‘an  important  source  of  income  for  criminal  groups  engaged  in  the  sale  of 

counterfeit and pirated goods’ (4). 

While the sale of infringing goods on online marketplaces is not new, some emerging trends hamper 

IP enforcement efforts. 

• 

Multiple  vendor  accounts.  Organised  crime  groups  (OCG)  systematically  misuse  trading 

platforms by opening multiple accounts under different names on the same platforms and across 

different media. 

(2) A selection of 13 case studies is presented in Appendix to this report. 

(3) OECD/EUIPO (2021) Global Trade in Fakes: A Worrying Threat, OECD Publishing, Paris 2021, p. 3 and 58. 

(4) EUIPO/Europol (2019) Intellectual Property Crime Threat Assessment 2019, p. 11. 

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• 

Online advertising. Vendors manipulate online advertising services by associating their illicit 

activity with brands, and place adverts on legitimate websites or social media platforms to direct 

traffic to external websites or to online marketplaces’ listings offering IP-infringing goods. 

• 

Social media presence. Vendors can misuse multiple functionalities of social media platforms 

to reach  a  high  number  of  consumers (5).  For  example,  they  can  advertise  counterfeit  goods 

through posts and messages via public, private or selected group communication, or through 

live-streaming sales, and then direct customers to illegal sales, either on external platforms or 

on the social media e-commerce facilities. 

Mapping IP infringements on online trading platforms 

IP-infringing  activities  occurring  on  online  marketplaces  involve  primarily  the  sale  of  counterfeit  or 

pirated goods.  Counterfeit  and pirated goods  are defined  in  various  legal  instruments  and  national 

legislations. These definitions may vary significantly. For the purpose of this study, counterfeit refers 

to  a  blatant  form  of  trade  mark  infringement,  where  goods  bear  a  sign  that  is  either  identical  or 

otherwise indistinguishable from  a  registered  trade  mark.  Counterfeit goods  range from  low-quality 

imitations (‘fakes’) to copies that are closer to the appearance of branded products (‘replicas’). Piracy 

is the sale of goods that infringe copyright or design rights, and it applies to both physical and digital 

goods. 

Other forms  of  IP  infringement  involve the  use  of  signs  that  are confusingly  similar to those  of  the 

legitimate trade mark owner, or that cause harm to a trade mark’s reputation. These less blatant forms 

of  infringement  encompass  both  simple  and  very  complex  cases,  which  may  require  ad  hoc 

examination.  Furthermore,  IP  infringement  may  involve  the  sale  of  ‘grey  market’  products,  namely 

authentic products that are imported and sold without the authorisation of the IP owner. 

(5)  EUIPO  (2021)  Monitoring  and  analysing  social  media  in  relation  to  IP  infringement;  EUIPO  (2021)  Social  Media  – 

Discussion Paper. New and existing trends in using social media for IP infringement activities and good practices to address 

them, June 2021. 

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For  the  purposes  of  the  present  study,  the  descriptions  as  appear  in the  following  table  are  used. 

These descriptions may differ from the purely legal definitions in some jurisdictions, but the  idea is 

that all the activities or goods covered violate IPRs in a way or another. 

INFRINGING GOODS: EXAMPLES 

Physical 

Digital 

Counterfeit 

•  Fakes (low-quality imitations) 
•  Replica (same-appearance copies) 

•  Computer  Aided-Design  (CAD) 

files for 3D printing 

Piracy 

Confusion 

Brand exploitation 

Grey market 

•  Copies of copyright content on 
physical support (CD, DVD) 

•  Replica design objects 
•  TPM circumvention devices 
•  TV decoder smartcards 
•  Fully-loaded set-top boxes or sticks 

•  Look-alike brand name, logo or 
packaging on similar goods 

•  Use of famous brands on unrelated 

goods 

•  Parallel imports 
•  Overruns 
•  Rejects 

•  Software copies 
•  Activation keys for software, 
video games or databases 
•  Hacked accounts for streaming 

services 

•  Computer  Aided-Design  (CAD)  

files 

•  Look-alike brand name and/or 

logo on similar digital goods, e.g. 
software, video games or apps 
•  Use of famous brands in virtual 

worlds or on non-fungible tokens 

n/a 

The IP infringers’ choice of the online platform is highly dependent on the kind of good or service that 

is  offered  for  sale,  the  target  audience  and  whether  the  infringer  is  an  ‘occasional’  or  ‘systematic’ 

vendor. Alongside ‘general’ wholesale and auction marketplaces there are ‘specialised’ marketplaces, 

such as marketplaces for handcrafted goods, independent retailers, digital goods (e.g. video games 

and  software  licences)  and  non-fungible  tokens  (NFT).  An  increasingly  important  role  is  played  by 

‘social commerce’, namely C2C and B2C sales through social media. Major social media platforms 

have developed their own e-commerce functionalities. A growing trend is the use of social media live-

streaming facilities to market and demonstrate the product to buyers. 

Systematic  counterfeit  sellers  may  also  use  illegal  marketplaces  operating  in  the  darknet,  where 

transactions are carried out anonymously and using cryptocurrencies. 

The  table  below  illustrates  indicatively  the  destination  marketplaces  for  each  category  of  IP-

infringing  goods,  in  terms  of  likelihood  that  a  given  product  is  detected  on  a  certain  type  of 

marketplace. 

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A supply-chain approach to investigation and enforcement 

The process underlying IP infringements via vendor accounts on third-party trading platforms consists 

of  a  seven-stage  supply  chain,  from  the  production  to  the  delivery  of  the  infringing  good.  It  is  a 

continuous process through a flow of information, physical items and money that involves a number 

of intermediaries. From an enforcement perspective, the visibility of the illegal activity is expected to 

decrease as we travel back along the supply chain (from right to left) and to increase as we approach 

the customer (shipping, at the far right). 

Raw 
material 
supply

Production

Storage 
and 
inventory

Online offer 
for sale

Marketing

Selling

Shipping

Along the supply chain, infringers use a number of techniques to elude enforcement actions, such 

as techniques to elude detection, takedown, seizure or confiscation of goods. This informs the actions 

that  can  be  taken  by  enforcement  actors  at  each  stage  of  the  chain.  These  actions  include 

investigation and law enforcement, as well as self-regulatory enforcement measures. 

The  table  below  summarises  the  key  enforcement  actions  available  to  law  enforcers,  online 

platforms and IP owners at each stage of the supply chain: 

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ENFORCEMENT ACTIONS 

•  Monitoring of materials: identification of hotspots where the materials 

are produced or originate from and maintaining a database of locations. 

•  Custom checks: leverage historical information from countries of origin 

and/or known hotspots and information on custom declaration forms. 

•  Blocking the bank accounts of the producers. 

•  Following trends and seasonal events that affect the production of 

goods (e.g. beginning of sport events, release of popular products). 

•  Confiscation/seizure of goods: raiding the inventory of IP infringers 

and taking control of the infringing items. 

•  Detection of the vendors of the illicit items that are hosted, unknowingly, 

by the trading platform. 

•  Activation of notice-and-takedown procedures: taking down listings 

and vendor accounts. 

•  Following flags: alert indicators for a marketplace, such as offers that 

are: ‘too good to be true’ and/or receive an inflated amount of positive 

feedback in a short time. 

•  Monitor communication: follow online communications from social 

media platforms, peer-to-peer communication and ad applications. 

•  Advertisement takedowns: takedowns of ad keywords, de-listing 

results on search engines, removal of a product or vendor account. 

•  Liaison with banks/financial authorities to detect and identify the 

entities behind financial transactions and block bank accounts. 

•  Liaison with payment service providers to block transactions in the 

6. Sales

case of identified illicit vendors. 

• 

‘Follow-the-money’ investigations: create a full profile of the vendors 

by analysing the financial transactions under investigation. 

•  Test purchases: purchasing of IP-infringing products to collect the 

evidence required to build a case against an illicit vendor. 

•  Liaison with couriers/postal services to prevent the distribution of 

counterfeit products and/or identify the distributors’ addresses. 

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•  Liaison with customs to activate procedures for seizure and forfeiture 

of infringing goods and request data after goods are destroyed. 

•  Seizure of goods at customs or postal services. 

•  Monitoring routes to discover the origin of the product, distributors and 

vendors and how the products are transferred to the buyers. 

•  Monitoring suspects who receive unusual amounts of unexpected 

orders from regular routes. 

Measures, policies and strategies for effective enforcement 

Tackling IP infringements on third-party trading platforms involves a number of measures, policies and 

tactics. These include enforcement actions and voluntary measures taken as part of the collaboration 

between all stakeholders involved. In the EU, the MoU, signed in 2011 and revised in 2016, provides 

the  general  framework  for  these  voluntary  measures ( 6).  Good  practices  under  the  MoU  include 

proactive  measures  aimed  at  preventing  infringing  activities  before  they  occur,  and  reactive 

measures aimed at repressing or limiting the effect of those activities once they occur. 

• 

Voluntary proactive and preventive measures (PPM). The legal basis for these measures is 

provided by the contractual obligations deriving from the acceptance of the Terms & Conditions 

(T&C) of online marketplaces, which prohibit the sale of goods that infringe third parties’ rights. 

These measures, developed in collaboration with IP owners, include the following. 

(i)  Repeat  offenders  policies:  users  that  repeatedly  violate  the  T&C  may  have  their 

accounts suspended or disabled. 

(ii) 

Identity  verification:  to  ensure  effectiveness  of  policies  against  repeat  infringements, 

platforms  require  users  to  provide  valid  identification,  such  as  proof  of  identity  or  an 

( 6 )  European  Commission  (2016)  Memorandum  of  understanding  on  the  sale  of  counterfeit  goods  on  the  internet, 

https://ec.europa.eu/growth/industry/policy/intellectual-property/enforcement/memorandum-understanding-sale-counterfeit-

goods-internet_en. 

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address, as a condition for opening an account. Trading platforms may also require proof 

of a business licence and may restrict the use of certain keywords in profile names. 

(iii)  Traceability of products: major trading platforms have introduced traceability schemes 

in which each item is provided with a unique code to verify its authenticity before it reaches 

the customer. 

(iv)  Other  technological  prevention  measures:  trading  platforms  and  social  media  apply 

keyword  filtering,  content  moderation  and  image  recognition  technology  to  detect 

infringing listings before the sale can be finalised. 

• 

Notice-and-takedown (NTD): NTD procedures represent the key voluntary reactive measures 

to streamline the process of notification and removal of infringing content that is made available 

online. According to the good practices developed in the framework of the MoU, effective NTD 

procedures include the following. 

(i) 

information  package  for  rights  holders,  with  detailed  instructions  on  the  information 

that must be submitted to activate the notification. 

(ii) 

tools to manage multiple notifications, or ‘in-bulk’ requests, enabling rights holders to 

include multiple infringing listings in a single takedown request. 

(iii) 

‘trusted flaggers’ programmes, with fast-track, privileged channels for notifications and 

more  expeditious  removal  for  ‘trusted’  rights  holders  with  specialised  expertise  and 

dedicated technology for the detection and identification of infringing content. 

(iv)  search  and report tools,  to facilitate  the  process  of searching for  potentially  infringing 

content on the platform, by means of image recognition and other technologies. 

(v) 

information for users on the reason for the removal and the potential consequences of 

repeated infringements, as well as easily accessible information on the right to appeal or 

counter-notice procedure to challenge the notice of the IP owner. 

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• 

Automated  detection  measures.  Detection  systems  based  on  artificial  intelligence  and 

machine learning play an increasing role in both proactive and reactive measures. 

Along with the voluntary measures developed in collaboration with online marketplaces, rights holders 

and  law  enforcement  agencies  adopt  investigative  and  enforcement  measures  that  are  broader  in 

scope and span across the whole supply chain. 

• 

Follow-the-money  investigation.  A  ‘follow-the-money’  approach  consists  in  monitoring  and 

extracting  information  from  the  financial  transactions  involved  in  an  illicit  activity,  with  the 

purpose of collecting evidence and/or disrupting the activity. The approach requires cooperation 

between the different stakeholders involved, most importantly the payment services, and has 

been adopted in proceedings against IP infringers. 

• 

Customs  and  border  checks.  EU  customs  authorities  adopt  streamlined  procedures  and 

condensed time frames to destroy suspected IP-infringing goods in small packages, and provide 

data to rights holders on request. 

• 

Darknet  enforcement.  Given  the  anonymity  of  online  providers  and  possible  affiliates, 

enforcement  in  the  darknet  marketplaces  presents  specific  challenges.  Global  cooperation 

between law enforcement authorities has led to the shutdown of darknet marketplaces. 

Vendors prosecution 

Legal  actions  can  be  taken  against  vendors  for  importation,  offer  for  sale  and  distribution  of  IP-

infringing goods. Proceedings can be brought by IP owners or by operators of online marketplaces, 

or jointly by both. While civil liability for IP infringement is broadly harmonised at EU level, at least as 

far  as  direct  infringement  is  concerned,  criminal  liability  remains  the  competence  of  national 

legislators. In most EU Member States, the infringement of trade marks or copyright and related rights 

attracts criminal sanctions when the infringer acts with mens rea or wilful intent and on a commercial 

scale. However, these criteria are not construed uniformly across Member States. 

There is limited evidence of legal proceedings against individual vendors in the EU-27. The available 

case-law suggests that wilful intent can be established based on objective factors, such as a lack of 

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express  authorisation  from  the  trade  mark  owner  or  constructive  knowledge  that  the  products  are 

counterfeit. The criterion of ‘commercial scale’ is less clear, and heavily dependent on the volume 

of transactions. Evidence of activity such as receiving orders and shipping is crucial to determine the 

volume required by national jurisdictions to trigger criminal sanctions. 

Injunctions against intermediaries 

Together  with  legal  actions  against  vendors,  IP  owners  may  seek  remedies  from  the  operators  of 

online  marketplaces  and  other  intermediaries  along  the  supply  chain.  These  include,  in  particular, 

warehouses,  advertising  platforms,  payment  services  and  shipping  services.  The  judicial  remedies 

available consist of injunctive relief, which may be granted by the judicial authority even when the 

intermediary is not liable for the infringement or is exempt from liability. 

Injunctions against intermediaries can aim not only at terminating existing infringements but also at 

preventing  further  infringements.  This  requires  the  implementation  of  some  proactive  monitoring 

duties.  The  scope  of  such  monitoring  duties  under  EU  law  is  limited  by  the  provisions  of  the  e-

Commerce  Directive ( 7)  and  can  be  derived  from  the  ‘double  identity’  approach  suggested  by 

Advocate  General  Jääskinen  in  the  ‘L’Oréal  v  eBay’  case:  ‘the  infringing  third  party  should  be  the 

same and that the trade mark infringed should be the same in the cases concerned’ (8). 

The issue of jurisdiction 

Due to the transnational nature of IP infringements committed through vendor accounts on third-party 

marketplaces,  the  issue  of  jurisdiction  is  a  crucial  aspect  for  effective  enforcement.  Claimants  are 

generally obliged to bring a case before the courts where the defendant is domiciled, but it is also 

possible to start proceedings in the place where the damage occurred, where the event that caused 

the damage took place, or where the infringement was committed. 

(7) Directive 2000/31/EC of the European Parliament and of the Council of 8 June 2000 on certain legal aspects of information 

society services, in particular electronic commerce, in the Internal Market ('Directive on electronic commerce'), Article 15(1). 

(8) Opinion of AG Jääskinen (12/07/2011, C-324/09, L’Oréal SA-eBay, EU:C:2010:757, § 182). 

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In relation to the allocation of jurisdiction in civil proceedings, a key factor to consider is whether the 

infringers targeted the EU (in the case of pan-EU IP rights) or a specific Member State. If the target 

is established, IP owners may bring proceedings before the courts of the targeted jurisdiction. 

IP RIGHTS 

LEGAL BASIS TO ESTABLISH JURISDICTION IN 

INTERNATIONAL (PAN-EU) IP DISPUTES 

EU trade marks 

EUTM Regulation No 2017/1001 (9), Article 125 

Community designs 

Community Designs Regulation No 6/2002 (10), Article 82 

National IP rights (national 

trade marks, copyright and 

Brussels I Regulation (recast) (11) 

related rights, patents, etc.) 

Recognition  and  enforcement  of  foreign  judgments  between  EU  Member  States  is  uniformly 

provided by the Brussels I Regulation (recast), whilst enforcing judgments in jurisdictions other than 

EU Member States can be extremely challenging due to the discrepancies in national laws. 

Jurisdiction in criminal law matters is generally based on the principle of territoriality. Currently, 

there are no binding instruments under EU law to resolve conflicts of jurisdiction in criminal matters. 

However, the Council of Europe Cybercrime Convention 2001 (12) represents an important instrument 

of  international  law  that  assists  in  determining  adjudication  in  criminal  proceedings  against  online 

copyright infringers (13). 

(9) Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union trade 

mark, OJ L 154, 16.6.2017, p. 1. 

(10) Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs, as amended, OJ L 386, 29.12.2006, 
p. 14. 
(11)  Regulation  (EU) 1215/2012  of  the  European  Parliament  and  of  the  Council  on  jurisdiction  and  the  recognition  and 

enforcement of judgments in civil and commercial matters (recast), OJ L 351, 20.12.2012, p. 1. 

(12) Convention on Cybercrime, European Treaty Series No 185. 

(13) EUIPO (2021) International judicial cooperation in intellectual property cases, March 2021, p. 33. 

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INTRODUCTION AND METHODOLOGY 

This report surveys the legal and logistical aspects of Intellectual Property (IP) infringement through 

misuse of legitimate services offered by online trading platforms. It covers IP infringements involving 

both  physical  and  digital  products  offered  for  sale  through  vendor  accounts  on  a  range  of  online 

platforms and provides a structural analysis of existing business models and available enforcement 

actions for the entire ‘supply chain’ for those products. The business model analysis ranges from well-

known forms of sale via accounts on marketplace platforms, to emerging techniques featuring social 

media presence and live-streaming sales. 

For the purpose of this report, the following definitions are adopted. 

• 

Third-party  trading  platforms  are  online  platforms  where  registered  users  and  businesses 

offer goods or services for sale to other users or businesses. E-commerce stand-alone websites 

are not included here. The study covers platforms operating both on the surface web and the 

darknet (14). 

• 

Vendor  accounts  are user  accounts created  on  trading  platforms  and  social  media with the 

purpose of offering goods or services for sale. They include business-to-consumer (b2c) as well 

as consumer-to-consumer (c2c) and business-to-business (b2b) illegal activities. 

• 

IP infringement includes any use of IP rights not authorised by the rights holder or covered by 

statutory exemptions (such as exhaustion of rights). Accordingly, the study covers the sale of 

counterfeit and pirated goods and of confusingly similar infringing goods, as well as the sale of 

authentic goods without the rights holder’s authorisation (15). Other illegal activities that may be 

(14) section 1.2.2 and 1.2.3. 

(15) section 1.2.1. 

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perpetrated by third parties misusing online trading platforms, such as scams, fraud and ID theft, 

are outside the scope of the study. 

Methodology 

The  study  applied  desk-based  research  and  comparative  legal  analysis,  coupled  with  qualitative 

interviews  with  experts  and  independent  research  of  selected  business  case  studies  using  cyber 

security investigation techniques. 

The study is based on an extensive review of the existing literature, initiatives and resources relevant 

to the object of the study. In addition, the study applied comparative analysis of the key legal issues 

in  relation  to  IP  infringement  through  online  trading  platforms,  namely  liability,  jurisdiction  and 

enforcement.  While  the  focus  of  the  analysis  is  the  EU-27,  the  study  also  considers,  from  a 

comparative perspective, the approaches in other non-EU jurisdictions. A selection of case-law on IP 

infringement through the misuse of online trading platforms has also been included. 

The approach adopted for the research on the business cases in this report was informed by two main 

activities. First, a series of structured interviews were conducted with domain experts. These experts 

covered all aspects of the supply chain (brand holders and other rights owners, courier services, and 

the marketplaces themselves) as well as independent investigators, legal experts, law enforcement 

officers  and  members  of  the  judiciary.  Second,  the  analysis  leveraged  cybersecurity  investigation 

approaches  and  practices,  particularly  those  used  in  the  domain  of  digital  forensics  and  incident 

response. This approach allowed the identification of the infringers’ so-called Tactics, Techniques and 

Procedures (TTPs). The TTPs were then elaborated in the business case descriptions and informed 

the analysis of business models. 

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1. ONLINE  IP  INFRINGEMENT  ON  THIRD  PARTY 
TRADING PLATFORMS 

1.1 

DEFINING THE PROBLEM 

  The global counterfeit market and its impact on EU economy 

In an innovation-driven global economy, infringements of intellectual property rights (IPR) – in particular 

commercial-scale counterfeiting  and  piracy  –  pose a major  problem for  the global  economy  and  the 

European  Union  (EU)  in  particular.  IP  infringements  cause  high  financial  losses  for  European  rights 

holders and sustainable IP-based business models. The EU has a particular interest in IP enforcement, 

given  that  European  companies  are  leading  providers  of  IP-protected  goods  and  services  in  third 

countries’ markets (16). 

The  ways  in  which  consumers  enjoy  physical  products  –  such  as  clothing,  cosmetics,  accessories, 

electronic devices, pharmaceutical products – and digital content – such as music, films, e-books and 

video games  –  have changed  drastically  over  the  past  15 years. The  internet  has  become  the main 

means  of  distribution,  not  only  for  digital  content  but  also,  increasingly,  for  physical  goods,  with  e-

commerce  sales  steadily  rising  compared  to  ‘bricks-and-mortar’  sales (17).  Counterfeiting  and  piracy 

have followed the same pattern, and have shifted from physical to online distribution (18). Moreover, the 

data shows that small shipments and parcels tend to dominate numerous trade routes, reflecting the 

shrinking  costs  of  postal  and  courier  shipments  and  the  increasing  importance  of  internet  and  e-

commerce  in  international  trade.  In  2017  it  was  estimated  that  shipments  with fewer  than  ten  items 

(16) IPR-intensive industries and economic performance in the European Union, EPO/EUIPO, third edition, September 2019. 

(17) In the EU-27, the enterprise turnover generated from e-sales increased by 7 % in nine years, namely from 13 % in 2010 

to  20 %  in  2019  (E-commerce  statistics  explained,  Eurostat,  01/03/2021,  https://ec.europa.eu/eurostat/statistics-

explained/pdfscache/14386.pdf) 

(18) The legal definition of counterfeit and piracy is discussed in section 1.2.1. 

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accounted for about 43 % of all shipments, on average (19). Data also shows that, between 2014 and 

2016, a large majority (57%) of seizures of counterfeit and pirated goods worldwide concerned postal 

parcels. However, in terms of value of those customs seizures, over a half (56%) concerned maritime 

shipments via containers (20). 

Over the years, a variety of private and public organisations have attempted to estimate the size and 

value  of  the  international  market  for  counterfeit  goods  from  an  international  and  comparative 

perspective.  A  study  commissioned  by  the  U.S.  Patent  and  Trademark  Office found  figures  ranging 

from USD 200 billion (EUR 165 billion) in 2008 to USD 509 billion (EUR 420 billion) in 2019 (21). As of 

2018, counterfeiting was the largest criminal enterprise in the world, with domestic and international 

sales of counterfeit and pirated goods totalling between an estimated USD 1.7 trillion (EUR 1.4 trillion) 

and USD 4.5 trillion (EUR 3.7 trillion) a year – higher than either drugs or human trafficking (22). Around 

(19) OECD/EUIPO (2017) Mapping the Real Routes of Trade in Fake Goods, OECD Publishing, Paris 2017, available at 

http://dx.doi.org/10.1787/9789264278349-en. 

(20) OECD/EUIPO (2021) Misuse of Containerized Maritime Shipping in the Global Trade of Counterfeits, OECD Publishing, 

Paris 2021, available at https://doi.org/10.1787/26175835, p. 40-41. 

(21) U.S. Intellectual Property and Counterfeit Goods, Landscape Review of Existing/Emerging Research, A Report Prepared 

by the Federal Research Division, Library of Congress, under an Interagency Agreement with the U.S. Patent and Trademark 

Office, U.S. Department of Commerce, April 2020. 

(22) U.S. Intellectual Property and Counterfeit Goods, Landscape Review of Existing/Emerging Research, A Report Prepared 

by the Federal Research Division, Library of Congress, under an Interagency Agreement with the U.S. Patent and Trademark 

Office, U.S. Department of Commerce, April 2020. 

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80 % of these goods are produced in China,  and 60 % to 80 % of those products are purchased by 

American citizens (23). 

In April 2016, the EUIPO and the Organisation for Economic Co-operation and Development (OECD) 

jointly published the report Trade in Counterfeit and Pirated Goods: Mapping the Economic Impact (24). 

The report was based on seizure data from the World Customs Organisation, DG TAXUD (Directorate-

General for Taxation and Customs Union) and the US Customs and Border Patrol. According to the 

report,  in  2013,  international  trade  in  counterfeit  products  represented  up  to  2.5 %  of  world  trade, 

equivalent to up to USD 461 billion (EUR 338 billion) (25). This constituted an increase compared to the 

first such study carried out by the OECD in 2008 and updated in 2009, which showed global trade in 

counterfeits  of up  to  USD 250 billion  (EUR 200 billion),  or  1.9 %  of  world trade.  However,  it must be 

acknowledged that the 2016 study reflects significant improvements in the methodology and data used, 

so care must be taken when comparing the two figures. Subsequent updates to the report showed a 

sustained level of trade in counterfeit and pirated goods globally, with an estimate of up to 3.3% of world 

trade in 2016, or USD 509 billion (EUR 373 billion) (26), and up to 2.5 % of world trade in 2019, or USD 

464 billion (EUR 340 billion) (27). 

Size of global trade in counterfeit and pirated goods in 2019 

Up to USD 464 billion (EUR 340 billion) 

2.5 % of world trade 

(23) U.S. Intellectual Property and Counterfeit Goods, Landscape Review of Existing/Emerging Research, A Report Prepared 

by the Federal Research Division, Library of Congress, under an Interagency Agreement with the U.S. Patent and Trademark 

Office, U.S. Department of Commerce, April 2020. 

(24) OECD/EUIPO (2016) Trade in Counterfeit and Pirated Goods. Mapping the Economic Impact, OECD Publishing, Paris 

2016, p. 11. 

(25) OECD/EUIPO (2016) Trade in Counterfeit and Pirated Goods. Mapping the Economic Impact, OECD Publishing, Paris 

2016, p. 11 and 76. 

(26) OECD/EUIPO (2019) Trends in Trade in Counterfeit and Pirated Goods, OECD Publishing, Paris 2019, p. 11 and 45-

46. 

(27) OECD/EUIPO (2021) Global Trade in Fakes: A Worrying Threat, OECD Publishing, Paris 2021, p. 8 and 52-53. 

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More specifically, the value of counterfeit and pirated goods imported into the EU in 2013 was estimated 

to amount to as much as EUR 85 billion, or 5 % of total imports: a relative impact on imports which was 

twice  as  high  as  on  a  world  scale.  Applying  the  same  methodology,  the  follow-on  report  of  2019, 

estimated that the value of counterfeit and pirated imports in the EU rose to up to EUR 121 billion in 

2016,  corresponding  to  6.8 %  of  all  EU  imports ( 28 ).  The  latest  follow-on  report  of  2021  shows 

substantially similar figures for 2019, with up to EUR 119 billion or 5.8% of all EU imports (29). 

Figure 1 – Estimated value of imports of counterfeit and pirated goods in the EU, and percentage of 

total EU imports 

This phenomenon has both direct and indirect impact on the EU economy as a whole. In a study carried 

out  in  partnership  with  the  European  Patent  Office  (EPO),  the  EUIPO  estimated  that  the  total 

contribution  of  IPR-intensive  industries  to  the  EU  economy  in  the  years  2014-2016  accounted  for 

approximately 45 % of GDP (EUR 6.6 trillion annually) and 29 % of employment (plus another 10 % in 

(28) OECD/EUIPO (2019) Trends in Trade in Counterfeit and Pirated Goods, OECD Publishing, Paris 2019, p. 14 and 57. 

(29) OECD/EUIPO (2021) Global Trade in Fakes: A Worrying Threat, OECD Publishing, Paris 2021, p. 3 and 58. 

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indirect  employment  effects  in  non-IPR  intensive  sectors) (30).  Those  sectors  also  generate  a  trade 

surplus of  approximately  EUR 166 billion  in  the  rest  of  the  world  and  pay  their  workers  47 %  higher 

salaries than other sectors (31). 

IPR-intensive industries in the EU 

45 % GDP (EUR 6.6 trillion annually) 

29 % of employment 

Given these numbers, and the consequent high value associated with IPR, it is plain to see why the 

online sale of counterfeit and pirated products has become such a lucrative criminal activity, generating 

significant costs, not only for the rights owners, but also for the economy in general. The EUIPO has 

considered lost sales in 11 sectors to the value of over EUR 83 billion per year (32). 

Furthermore, it was revealed that whilst 97 % of Europeans surveyed believed that IP was important in 

protecting the rights of inventors and creators, 10 % had purchased counterfeit goods, and a similar 

proportion admitted to having intentionally downloaded or streamed content from illegal online sources 

during the previous 12 months (33). This shows that both the price and the availability of these goods 

and services play a crucial part in the decision-making process. 

(30) EPO/EUIPO (2019) IPR-intensive industries and economic performance in the European Union, third edition, September 

2019. 

(31) EPO/EUIPO (2019) IPR-intensive industries and economic performance in the European Union, third edition, September 

2019, p. 4. 

(32) EUIPO (2020) Status Report on IPR Infringement, June 2020. 

(33) EUIPO (2017) European Citizens and Intellectual Property: Perception, Awareness, and Behaviour, March 2017, p. 7 

and 11. 

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  Online enforcement and international cooperation 

The abovementioned numbers show that the online sale of counterfeit and pirated goods is important 

for  enforcement  and  police  authorities  worldwide,  and  features  in  the  crime  areas  of  EU  and 

international cooperation agencies such as Europol, Eurojust and Interpol (34). In its role as a forum in 

which governments can work together to share experiences and seek solutions to common problems, 

the OECD has published several reports on counterfeiting and piracy, focussing globally and on national 

economies (35).  The  EU  Taxation  and  Customs  Union  facilitates  collaboration  with  national  customs 

authorities in the fight against counterfeiting in the European Union (36). Another network involved in this 

area is the Consumer Protection Cooperation (CPC) Network. This network was also created by the 

European  Commission,  and  it  comprises  authorities  that  can  act  on  infringements  of  consumer 

legislation.  They  carried  out  a  major  sweep  in  2014,  checking  websites  that  were  active  on  EU 

territory (37). 

A review of the enforcement measures available in relation to the sale of IP-infringing goods through 

online marketplaces is presented in part 2 (38). 

  Risks to consumers 

In  March  2017,  the  European  Consumer  Centre  (ECC-Net)  published  the  report  The  impact  of 

counterfeiting on online consumer rights in Europe (39), focusing on the risks of buying counterfeits on 

the internet, and giving tips for consumers in Europe who want to avoid unpleasant surprises due to 

(34)  ‘Intellectual  property  crime’,  Europol  (https://www.europol.europa.eu/crime-areas-and-trends/crime-areas/intellectual-

property-crime); ‘Illicit goods’, Interpol (https://www.interpol.int/Crimes/Illicit-goods). 

(35) EUIPO/OECD series Illicit trades (https://www.oecd-ilibrary.org/governance/illicit-trade_26175835).  

(36) www.ec.europa.eu/taxation_customs/home_en. 

( 37 )www.ec.europa.eu/internal_market/scoreboard/performance_by_governance_tool/consumer_protection_cooperation_n

etwork/index_en.htm#maincontentSec3. 

(38) section 2.1. 

(39) European Consumer Centre Ireland (2017) The impact of counterfeiting on online consumer rights in Europe. The risks 

of buying counterfeits on the Internet, and tips from the ECC-Net for consumers in Europe who want to avoid unpleasant 

surprises due to these products, March 2017, available at https://www.eccireland.ie. 

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buying counterfeit products. Moreover, the report deals with the impact of counterfeiting on individual 

consumers who shop online, and who may encounter counterfeit goods in this way. 

The relationship between counterfeit and dangerous or unsafe goods has been investigated by the 

EUIPO in the Qualitative study on risks posed by counterfeits to consumers, published in June 2019. 

The study reviews the data from the European Commission’s “Rapid Alert System for dangerous non-

food products” (RAPEX), that is the online system used by EU market surveillance authorities to report 

unsafe  products  found  on  the  internal  market (40).  The  analysis  of  RAPEX  alerts  over  seven  years 

shows that 97% of reported dangerous counterfeit products were assessed as posing “serious risk”, 

with  the  most  common  dangers  related  to  exposure  to  hazardous  chemicals  and  toxins,  poorly 

constructed products, and use of inferior supplies and components (41). 

The EUIPO-Europol 2020 Status Report on IPR Infringement (42) highlights the considerable lack of 

controls and certification processes during the manufacturing of counterfeit products that leads to the 

consequent risks  to  consumer  welfare. The  spectrum  of  industries affected  by  such  scant  controls 

covers  multiple  industries,  such  as  clothing,  food,  pharmaceutical,  electronics,  cosmetics,  and 

accessories. These industries carry significant consequences regarding health dangers in connection 

to  substandard  (flammable)  clothing,  dangerous  toys,  inferior  sports  shoes  or  sunglasses. 

Furthermore, environmental consequences are also in the forefront (e.g. counterfeit pesticides often 

contain toxic substances that may contaminate soil, water and food). 

  Liaisons with other criminal activities 

The involvement of organised crime groups (OCG) in counterfeiting and piracy is documented by two 

joint reports by Europol and EUIPO (43). The reports highlight the liaisons between IP crimes and other  

(40) https://ec.europa.eu/safety-gate-alerts/screen/webReport. 

(41) EUIPO (2019) Qualitative study on risks posed by counterfeit to consumers, June 2019. 

(42) EUIPO-Europol (2020) Status Report on IPR Infringement, June 2020.  

(43) EUIPO-Europol (2019) Intellectual Property Crime Threat Assessment 2019, and EUIPO-Europol (2020) IP crime and 

its link to other serious crimes. Focus on Poly-Criminality, June 2020. 

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other types of crime such as money laundering, food fraud, excise fraud, human trafficking and forced 

labour. The linkage can occur in two ways, with one criminal activity supporting the other, or as parallel 

activities carried out by the same OCG. These ways can intertwin in many respect. For example, OCG 

can  produce  fraudulent  transit  documents  and  use  the  same  route  or  shipping  method  for  the 

trafficking of counterfeit goods and other illicit products. They can then use cash-intensive business 

to launder money generated by the sale of those goods. In turn, these revenues can be used to support 

other types of serious and organised crime such as drug trafficking (44).  

Regarding the multiple faces of criminal activity, the cases presented in the Europol-EUIPO reports 

are indicative of  a vicious circle established in the EU territory. This includes EU-based criminal gangs 

and  manufacturers  of  counterfeit  products  based  in  third  countries,  who  organise  the  importation, 

transport, storage and distribution of the counterfeit goods within the EU. 

In  the  same  spirit,  the  2017  Internet  Organised  Crime  Threat  Assessment  (IOCTA)  prepared  by 

Europol (45) reaffirmed the liaison between digital piracy and more general online criminal activity, and 

the important threat this liaison poses for our society at large. Cybercrime, distribution of destructive 

malware, and the sale of counterfeit goods in online marketplaces are strongly intertwined. 

(44) EUIPO-Europol (2020) IP crime and its link to other serious crimes. Focus on Poly-Criminality, June 2020. 

(45) Europol (2017) Internet Organised Crime Threat Assessment (IOCTA). 

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The sale of counterfeit goods and products via vendor accounts on third party platforms, as well as 

the application and enforcement of IP rights, both within the EU and globally, are two issues addressed 

in  the  Communication  on  a  balanced  IP  enforcement  system  responding  to  today's  societal 

challenges, published in November 2017 (46). An important aspect of this Communication is its dual 

goal, that is to say, the improvement of IP enforcement within the EU and the strengthening of customs 

authorities at the border on one hand, and the initiatives and efforts to confront IP infringement globally 

on the other. The European Commission takes specific actions to confront online infringement of IP 

with  this  Communication,  namely  the  preparation  of  a  ‘Watch  List’  of  the  most  problematic  online 

marketplaces situated outside the EU that are reported to engage in or facilitate IP infringements (47). 

  Emerging trends 

Counterfeit and pirated goods are sold online either on stand-alone websites or on third-party platforms. 

In this study we focus specifically on online sales through third-party platforms. These platforms have 

made it easier for both businesses and individuals to market any kind of product on a global scale. The 

misuse of these platforms to advertise, sell and distribute IP-infringing goods ‘has become an important 

source of income for criminal groups engaged in the sale of counterfeit and pirated goods’ (48). 

While the sale of counterfeit goods on online marketplaces is not new, there are some emerging trends 

that have important implications for IP enforcement. 

1.1.5.1  Multiple vendor accounts 

Vendors of IP-infringing goods may be ‘occasional’ or ‘systematic’ offenders, the latter being part of a 

larger network of organised crime. Vendors make use of the infrastructure of the online trading platforms 

( 46 )  Communication  on  a  balanced 

IP  enforcement  system 

responding 

to 

today's  societal  challenges 

https://ec.europa.eu/transparency/regdoc/rep/1/2017/EN/COM-2017-707-F1-EN-MAIN-PART-1.PDF. 

(47) Commission staff working document: Counterfeit and Piracy Watch List, Brussels 14.12.2020 SWD(2020) 360 final, p. 

35-41. 

(48) EUIPO-Europol (2019) Intellectual Property Crime Threat Assessment, p. 11. 

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to take orders, process payments and communicate with customers (providing shipment details, guiding 

customers  throughout  the  payment  process,  etc.).  While  most  platforms  have  measures  in  place  to 

verify the identity of the vendor, accounts may be opened under different names for several product 

ranges whilst operated by the same organisation. These accounts can be subject to take-down requests 

under the  policies  of  online  trading  platforms,  but the  organisation may  continue to  operate  under  a 

different account or network of vendors. 

1.1.5.2  Online advertising 

Vendors of IP-infringing goods can manipulate and exploit online advertising services by associating 

their illicit activity with brands. Infringers can buy and place ads on legitimate websites or social media 

platforms, to direct traffic to external websites selling IP-infringing goods. Typically, these ads target 

customers with offers of high discounts on branded products. For example, a vendor of counterfeit 

trainers can falsely advertise a branded shoe on recognised retail sites, diverting traffic from legitimate 

sales to an illicit, and possibly cheaper, version (49). 

In 2017, EUIPO commissioned a report examining the extent and structure of digital advertising on 

websites suspected of infringing IP rights. The study concluded that there was a diversity of advertising 

on suspected IP-infringing websites, and that 46 % of advertising found on the suspected IP-infringing 

websites was mainstream in nature (50). 

(49) See appendix, case 8. 

(50) See appendix, case 8. More than 1 400 web pages and 180 000 adverts from 280 suspected infringing websites were 

analysed. The advertisement online ecosystem functions in such a way that makes it susceptive to legitimate products to be 

advertised,  possibly  as  a  result  of  the  ‘…complex  structure  of  the  online  advertisement  market  and  the  performance 

incentives of its brokers and agents wishing to maximise the use of adverts across the online advertisement ecosystem...’ 

(Id.).  See  also  EUIPO  (2017)  Research  on  Online  Business  Models  Infringing  Intellectual  Property  Rights  –  Phase 2, 

Suspected trade mark infringing e-shops utilising previously used domain names, October 2017. 

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1.1.5.3  Social media presence 

Social media plays an increasingly important role in the strategies adopted by vendors of IP-infringing 

goods. Vendors can misuse multiple functionalities that social media platforms offer, to reach a high 

number  of  consumers.  For  example,  they  can  advertise  counterfeit  goods  through  posts  and 

messages via public, private or selected group communication, and then direct customers to illegal 

websites  using  specific  URLs .  In  addition,  social  media  platforms  have  developed  their  own  e-

commerce facilities or marketplaces, which can be misused to offer IP-infringing goods (51). 

The integration of social media facilities with online marketplaces, both across platforms and within 

the same platform, presents new challenges for IP enforcement online. In June 2019, a large operation 

run by Europol and the Italian Guardia di Finanza, with the cooperation of law enforcement agencies 

from 13 other countries, led to the closure of over 16 400 social media accounts and 3 400 websites, 

belonging to two organised criminal groups. The vendors were selling ‘a large variety of counterfeit 

items  including  clothes  and  accessories,  sports  equipment,  illegal  IPTV  set-top  boxes,  medicines, 

spare  car  parts,  mobile  phones,  miscellaneous  electronic  devices  and  components,  perfumes  and 

cosmetics’ (52). 

A further challenge associated with social media is the use of live-streaming sales with ‘influencers’ 

to reach, in particular, young customers. It has been reported that videos promoting counterfeit goods 

on popular social media platforms can receive tens of millions of views: ‘… a 20-year-old influencer 

with over 60 000 followers – has less than 10 000 views on most videos, except those that promote 

‘dupe’  items. Those  videos  often  attract more than  100 000  views …’ (53). In these kinds  of  videos, 

(51)  EUIPO  (2021)  Monitoring  and  analysing  social  media  in  relation  to  IP  infringement;  EUIPO  (2021)  Social  Media  – 

Discussion Paper. New and existing trends in using social media for IP infringement activities and good practices to address 

them, June 2021; EUIPO-Europol (2019) Intellectual Property Crime Threat Assessment, p. 37. 

(52) Europol Press Release ‘Counterfeit crackdown hits two organized criminal groups with more than 30 suspects arrested’, 

13 June 2019 https://www.europol.europa.eu/newsroom. 

(53) ‘Dupe culture grows on TikTok; why this helps counterfeiters and harms brands’’, Tim Lince, World Trademark Review, 

November 2020. 

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many counterfeit clothing and footwear products, offered at the lowest prices, are advertised. These 

offers encompass some of the most famous brands of the fashion industry (54). 

The phenomenon of ‘dupe’ counterfeit goods and products is mainly based on the popularity of these 

products with young audiences. On the social network platforms that target younger consumers, online 

users are looking for ‘influencers’ who promote fake goods. The more online consumers follow these 

‘influencers’, the more successful is the business of the producers of counterfeit goods. According to 

the review, a crucial factor in the combat against ‘dupe’ counterfeit products would be the increase of 

consumer awareness regarding the potential dangers and low quality of such products. 

1.2 

BUSINESS MODEL ANALYSIS 

In  Phase 1  of  the  Research  on  Online  Business  Models  Infringing  Intellectual  Property  Rights, 

commissioned by the EUIPO in 2016 (55), an analysis was made on the general structure of business 

models for online IP infringement. More specifically, the study found that, irrespective of the concrete 

online business model and its revenue sources, there was a high level of dependence of the operators 

of IPR-infringing businesses on users and customers who visit their websites or notice their listings 

on online marketplaces. Therefore, the application by these operators of generally available online 

businesses  tools,  such  as  search  engine  optimisation,  marketing  and  advertising  on  social  media 

platforms, is a common phenomenon. Many of the vendors engaged in IPR-infringing activities have 

also designed apparently well-functioning user interfaces, and ‘… some vendors even appear to offer 

the same customer services and use the same customer incentives as legitimate businesses, such 

as return policies and discounts …’ (56). 

(54) ‘Dupe culture grows on TikTok; why this helps counterfeiters and harms brands’, Tim Lince, World Trademark Review, 

November 2020. See also case 5 in appendix. 

(55) EUIPO (2016) Research on Online Business Models Infringing Intellectual Property Rights  – Phase 1 Establishing an 

overview of online business models infringing intellectual property, July 2016. 

(56) EUIPO (2016) Research on Online Business Models Infringing Intellectual Property Rights – Phase 1 Establishing an 

overview of online business models infringing intellectual property, July 2016). The phenomenon has been observed and 

analysed particularly in relation to IPTV piracy: see EUIPO (2019) Research on Online Business Models Infringing Intellectual 

Property Rights – Phase 3 Illegal IPTV in the European Union, November 2019. 

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Most of the business models analysed in the 2016 report were operated via an internet site controlled 

by the infringer, which means that the infringing entity is the registrant of the domain name and that 

the content on the website is made available by the infringer (57). However, operators behind the IPR-

infringing  activities  often  either  conceal  their  identities  by  using  privacy  shield  services  for  the 

registration  of  their  domain  names,  or  provide  inadequate,  false  or  otherwise  misleading  contact 

details on the website, thereby hampering, or even precluding, enforcement actions. 

Based on the previous research on online business models infringing IP rights, this section analyses 

the key elements of the business models used to sell IP-infringing goods through vendor accounts on 

online trading platforms, starting with the legal definition and classification of infringing goods (58). 

  Infringing goods 

IP infringements committed through vendor accounts on third-party trading platforms consist primarily 

in the sale of counterfeit or pirated goods. However, in order to give a full account of the business 

models  involved,  other  IP  infringements  will  be  included  in  the  analysis.  These  include  the  sale of 

products that are confusingly similar on various grounds to those of legitimate IP owners, or that cause 

(57) EUIPO (2017) Research on Online Business Models Infringing Intellectual Property Rights – Phase 2, Suspected trade 

mark infringing e-shops utilising previously used domain names, October 2017. 

(58) A selection of business model case studies is available in the appendix. 

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harm  to  a  trade  mark’s  reputation.  The  analysis  also  extends  to  the  sale  of  grey-market  products, 

namely authentic products that are imported and sold without the authorisation of the IP owner. 

Figure 2 – Overview of IP infringements 

IP infringing goods are defined in various legal instruments and national legislations. These definitions 

may vary significantly. For the purposes of the present study, a description based on the three broad 

categories in Figure 2 is used. The aim is to provide a correct representation of the IP infringing goods 

potentially available on online marketplaces. 

From a legal perspective, the sale of counterfeit and pirated goods represents the most blatant form 

of infringement and, in many cases, the most visible and easily identifiable. In contrast, confusion and 

brand  exploitation  encompass  both  simple  and  very  complex  cases,  which  may  require  ad  hoc 

examination (59). Grey market goods are the most difficult to identify since they are not different from 

legally imported goods. 

(59)  ‘Impact  Assessment’  accompanying  the  Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council 

concerning customs enforcement of intellectual property rights, European Commission, SEC(2011) 597 final, p. 29-30. 

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The  key  EU  legislative  instruments  to  tackle  IP  infringements  are  the  Enforcement  Directive 

(2004/48/EC) and the Customs Enforcement Regulation (608/2013). This latter leaves grey market 

goods  outside  of  its  scope,  and  some  of  its  provisions  apply  specifically  to counterfeit  and  pirated 

goods to the exclusion of other IP-infringing goods (60). 

1.2.1.1  Counterfeit goods: fakes and replicas 

Although  there  is  no  consensus  among  legal  scholars  and  legislators  as  to  the  exact  scope  of the 

concepts  of  ‘counterfeit’  and  ‘piracy’,  it  is  usually  acknowledged  that  the  first  denotes  goods  that 

infringe trade marks and the latter is generally applied to goods produced by infringing copyright and 

related rights (61). 

The Customs Enforcement Regulation (608/2013) provides some guidance in the legal interpretation 

of  those  concepts.  Article 2(5)  defines  ‘counterfeit  goods’  as  goods  bearing  a  sign  that  is  either 

‘identical’ to a trade mark that is registered for the same type of goods, or it ‘cannot be distinguished 

in its essential aspects’ from such a trade mark (62). This definition also encompasses goods infringing 

geographical  indications ( 63 )  and  extends  to  ‘any  packaging,  label,  sticker,  brochure,  operating 

instructions, warranty document or other similar item’ that bear such identical or essentially identical 

signs (64). 

While the concept of ‘identical or which cannot be distinguished in its essential aspects’ is meant to 

cover only blatant forms of trade mark or geographical indication infringements, it does not necessarily 

require that a counterfeit product bears a sign which is an exact reproduction, in all its components, 

(60) Regulation (EU) No 608/2013 Concerning Customs Enforcement of Intellectual Property Rights, Olivier Vrins (Kluwer 

Law International, 2018). 

(61) TRIPs Agreement, Article 61. 

(62)  Regulation (EU) No 608/2013  of  the  European  Parliament  and  of  the  Council  of  12 June  2013  concerning  customs 

enforcement of intellectual property rights and repealing Council Regulation (EC) No 1383/2003, Article 2(5)(a). 

(63)  Regulation (EU) No 608/2013  of  the  European  Parliament  and  of  the  Council  of  12 June  2013  concerning  customs 

enforcement of intellectual property rights and repealing Council Regulation (EC) No 1383/2003, Article 2(5)(b). 

(64)  Regulation (EU) No 608/2013  of  the  European  Parliament  and  of  the  Council  of  12 June  2013  concerning  customs 

enforcement of intellectual property rights and repealing Council Regulation (EC) No 1383/2003, Article 2(5)(c). 

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to a protected trade mark (65). For instance, when goods or services are identical, even a sign that 

juxtaposes  a  registered  trade  mark  with  other  spurious  elements  can  be  considered  as  ‘non 

distinguishable  in  its  essential  aspects’,  provided  the  protected  trade mark  retains  an  independent 

distinctive role (66). 

Infringing  products  falling  within  the  umbrella  definition  of  counterfeit  goods  can  be  either  ‘fake 

products’ or ‘replica products’: 

• 

‘Fakes’ are counterfeit goods that closely imitate, but are not identical to, products marketed by 

the  brand  owner.  A  broad  range  of  physical  products  fall  into  this  category.  They  may  be 

imitations of products bearing a brand, but sold under either another brand or no brand at all. 

Alternatively, they may be products related, but not identical, to those of the brand owner and 

sold under its trade mark and logos. An example of the latter are bags bearing a famous brand 

but having no similarity with any actual bag marketed by the brand owner. Fakes are usually 

cheaper, substandard quality and are presented to the consumer as non-original products. They 

fall squarely within the definition of ‘counterfeit goods’ and are relatively easy to identify. 

• 

‘Replicas’ are counterfeit goods that are closer to the appearance of branded products. Unlike 

fakes, replicas are intended to deceive, and appear genuine. They are more difficult to identify, 

and consumers may be misled into believing they are buying an authentic product. 

1.2.1.2  Pirated goods 

The Customs Enforcement Regulation defines ‘pirated goods’ more generally as goods resulting from 

an infringement of copyright and related rights, or design rights (67). Copyright-infringing goods include 

(65) Regulation (EU) No 608/2013 Concerning Customs Enforcement of Intellectual Property Rights, Olivier Vrins (Kluwer 

Law International, 2018), § 275.  

(66) Regulation (EU) No 608/2013 Concerning Customs Enforcement of Intellectual Property Rights, Olivier Vrins, (Kluwer 

Law  International,  2018),  27/09/2007,  C-208/06  and  C-209/06,  Canon  Deutschland  GmbH  v  Hauptzollant  Krefeld, 

EU:C:2007:553. 

(67) Regulation (EU) No 608/2013, Article 2(6). 

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not  only  unauthorised  copies  of  copyright  works  or  design  articles,  but  also  devices  to  circumvent 

technological protection measures (such as mod-chips and game-copiers) (68), as well as devices to 

give access to protected broadcasts (decoder smartcards) (69) or to enable illegal IPTV (set-top-boxes 

and sticks) (70). 

Examples of design-infringing goods are replica furniture, lighting, rugs, accessories and other design 

objects. 

A  particular  category  of  pirated  goods  is  that  of  illegal  software  licenses.  Unlike  other  copyrighted 

digital content, software is subject to the rule of exhaustion of the distribution right after the first sale, 

and the resale of second-hand software is a legitimate form of trade (71). However, the CJEU has also 

clarified that the rule of exhaustion does not apply to back-up copies of computer programs (72). This 

means that, unlike ‘used’ software licenses, back-up copies that are offered for sale to third parties 

should be considered fully-fledged pirated products. 

Other examples of pirated digital goods include activation keys for software and video games, and 

hacked access accounts to online streaming services or databases. The market for these goods or 

services has progressively superseded the sale of illegal copies of copyrighted content on physical 

support (CD, DVD, etc.). Finally, an emerging area of digital piracy is the sale of  Computer Aided-

Design (CAD) files to enable 3D printing of objects protected by design rights or other IP rights (73). 

(68) Directive 2001/29/EC on the harmonisation of certain aspects of copyright and related rights in the information society, 

Article 6. 

(69) Directive 98/84/EC on the legal protection of services based on, or consisting of, conditional access, Article 2(e). 

(70) Stichting Brein v Jack Frederik Wullems (Filmspeler) (26/4/2017, C-527/15, ECLI:EU:C:2017:300). 

(71) The concept of “sale” for the purpose of exhaustion includes licence agreements (UsedSoft GmbH v Oracle International, 

3/7/2012, C-128/11, ECLI:EU:C:2012:407, § 48-49). 

(72) Ranks and Vasiļevičs v Microsoft (12/10/2016, C-166/15, EU:C:2016:762, § 43). Also, section 2.2.1 for a discussion of 

this case. The business model is presented in the appendix as case 11. 

(73)  The  Intellectual  Property  Implications  of  the  Development  of  Industrial  3D  Printing,  Dinusha  Mendis  et  al.  European 

Commission (2020). 

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1.2.1.3  Confusingly similar goods 

Confusion occurs when a brand name, logo, colours, packaging and/or advertising themes are used 

on a related product in a way that tricks or confuses the consumer. This confusion can be achieved in 

a number of ways, such as by using a similar name or logo on products that are the same or similar 

to those of  the trade  mark  owner.  Under  EU  law,  trade mark  infringement  occurs  when the  use  in 

question causes a ‘likelihood of confusion’, including a ‘likelihood of association’, between the sign 

and the registered trade mark (74). 

Apart from  causing  confusion  in  relation  to the  sign or  logo,  a  product may  mislead consumers  by 

using similar packaging colours and shapes. While this may not amount to trade mark infringement, 

some  of  the  techniques  used  by  vendors  to  cause  customer  confusion  may  amount  to  unfair 

competition under national laws or, potentially, a ‘misleading commercial practice’ under Article 6(2) 

of  the  Unfair  Commercial  Practice  Directive.  This  is  defined  as  practice  that,  in  a  certain  factual 

context, ‘causes or is likely to cause the average consumer to take a transactional decision that he 

would  not  have  taken  otherwise’,  and  it  includes,  inter  alia,  ‘any  marketing  of  a  product […]  which 

creates  confusion  with  any  products,  trade  marks,  trade  names  or  other  distinguishing  marks  of  a 

competitor’ and ‘any marketing of a good, in one Member State, as being identical to a good marketed 

in  other  Member  States,  while  that  good  has  significantly  different  composition  or  characteristics, 

unless justified by legitimate and objective factors’ (75). Rightsholders may seek civil remedies under 

the laws of EU Member States on unfair competition. 

1.2.1.4  Brand exploitation 

This category comprises the unauthorised use of brands on products that have little or no relation to 

those of the trade mark owner. Typically, famous and instantly-recognisable brand names and/or logos 

(74)  Regulation (EU) No 2017/1001  of  the  European  Parliament  and  of  the  Council  on  the  European  Union  trade  mark 

(codification), Article 9(2)(b). 

(75) Directive 2005/29/EC of the European Parliament and of the Council of 11 May 2005 concerning unfair business-to-

consumer commercial practices in the internal market (Unfair Commercial Practices Directive), OJ L 149 11.6.2005, p. 22. 

The application od Article 6(2) to the sale of confusingly similar goods has yet to be confirmed by case law.   

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are placed on goods that are unrelated to those produced by the brand owner. Common examples 

are the use of luxury brands on mobile phone cases or accessories. However, brand exploitation may 

take many forms and is not limited to physical goods. An interesting case is provided by the emerging 

ecosystem of so-called Non-Fungible Tokens (NTF). These are digital objects such as a drawing or 

an animation, with a unique certificate of authenticity created by blockchain technology. They are sold 

online in specialised marketplaces as art, using cryptocurrencies, and can reach exorbitant prices (76). 

The sale of an NTF bearing a famous luxury brand is described in appendix A, case 2. 

Products  falling  within  this  category  are  IP  infringing  to  the  extent  that  a) the  trade  mark  has  a 

reputation in the EU, and b) the use of the sign takes unfair advantage of, or is detrimental to, the 

distinctive character or repute of the trade mark (77) A case-by-case determination is required to assess 

whether these conditions are met. 

1.2.1.5  Grey-market goods 

This category includes authentic goods that are marketed without the permission of the intellectual 

property owner, such as branded products imported from outside the European Economic Area (so-

called  ‘parallel  imports’) (78)  or  other  authentic  goods  produced  and/or  marketed  by  an  authorised 

licensee  in  violation  of  the  terms  of  the  licence.  Not  all  of  these  goods  constitute  trade  mark 

infringement. When the licence violation concerns only quantitative aspects, as in the case of goods 

manufactured in excess of the quantities agreed with the IP owner (so-called ‘overruns’), the goods 

are not trade mark infringing, but may be subject to contractual sanctions (79). However, trade mark 

infringement may arise when the goods are produced in violation of qualitative aspects of the licence, 

as is for instance the case with goods produced by an authorised manufacturer but then rejected by 

the IP owner because of their poor quality (so-called ‘rejects’). 

(76) ‘Non-fungible tokens are revolutionising the art world – and art theft’, The Guardian, 12 March 2021. ‘Niftygateway’ is an 

example of marketplace offering NFTs for sale: https://niftygateway.com/. Case 2 in appendix. 

(77) Regulation (EU) No 2017/1001 on the EU Trade Mark, Article 9(2)(c). 

(78) ‘Trademark Exhaustion And The Internet Of Resold Things’, Yvette Joy Liebesman and Benjamin Wilson, in: Research 

Handbook On Intellectual Property Exhaustion And Parallel Imports, Irene Calboli and Ed Lee (Eds.), (Elgar, 2016). 

(79) European Trade Mark Law, Annette Kur and Martin Senftleben (Oxford University Press, 2017), 7.47. 

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Grey-market goods are excluded from the scope of application of Regulation No 608/2013, and they 

may  not  be  subject  to  custom  enforcement  measures ( 80 ).  They  are  typically  presented  to  the 

consumer as lawful transactions. 

The  table  below  summarises  the  examples  of  physical  and  digital  goods  in  the  five  categories  of 

infringing goods as defined for the purpose of this study. 

INFRINGING GOODS: EXAMPLES 

Physical 

Digital 

Counterfeit 

•  Fakes (low-quality imitations) 

• Computer  Aided-Design  (CAD) files for 

•  Replica (exact-copy counterfeits) 

3D printing. 

Piracy 

•  Copies of copyright content on 

•  Software copies 

physical support (CD, DVD) 

•  Activation keys for software, video 

•  Replica design objects 

games or databases 

•  TPM circumvention devices 

•  Hacked accounts for streaming 

•  TV decoder smartcards 

services 

•  Fully-loaded set-top-boxes or sticks 

•  Computer  Aided-Design  (CAD)  Files 

Confusion 

•  Look-alike brand name, logo or 

packaging on similar goods 

•  Look-alike brand name and/or logo on 

similar digital goods, e.g. software, 

video games or apps 

Brand exploitation 

Grey market 

•  Use of famous brands on unrelated 

•  Use of famous brands in virtual worlds 

goods 

•  Parallel imports 

•  Overruns 

•  Rejects 

or on Non-Fungible Tokens 

n.a. 

( 80)  Regulation (EU) No 608/2013,  Article 1(5).  See  Regulation (EU) No 608/2013  Concerning  Customs  Enforcement  of 

Intellectual Property Rights, Olivier Vrins (Kluwer Law International, 2018), par. 119-120. 

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  Online marketplaces 

This report focuses on the enforcement of intellectual property rights vis-à-vis the sale of counterfeit 

and pirated goods, and products involving other forms of IP infringement, through online marketplaces. 

These are broadly defined as sales platforms where goods (physical or digital) are provided by multiple 

third parties, and include Business-to-Business (B2B), Business-to-Consumer (B2C), Consumer-to-

Consumer (C2C) and auction websites. At the time of writing, it is estimated that there are over 50 

major online marketplaces available from EU Member states, with the leading presence being that of 

the  global  players  Amazon  (with  dedicated  and  localised  websites  in  France,  Germany,  Italy,  the 

Netherlands, Spain and Sweden), eBay (with individual sites in most EU countries), AliExpress and 

Rakuten. Alongside these tech giants are a number of large and very large platforms with a presence 

extending  across  various  EU  countries  or  with a  leading  country-specific  presence. There  are  also 

platforms  specialising  in  certain  categories  of  products  (e.g.  fashion,  food,  technology),  in  second-

hand goods, or on specific types of sales (e.g. handicraft products or small brands). In the same vein, 

some marketplaces specialise in digital goods (e.g. videogames and software licences) or services. 

Finally,  an  increasingly  important role is  played  by  ‘social  commerce’,  namely  C2C  and  B2C  sales 

through  social  media  platforms.  Platforms  that  have  developed  e-commerce  functionalities  include 

Facebook Marketplace, Instagram Shopping and, more recently, TikTok (81). 

Apart from their size and market share in the EU, online marketplaces are differentiated in terms of 

types, origin and conditions of products sold, as well as the type of vendors hosted, and customer 

profiles.  In  addition,  marketplaces  differ  in  terms  of  vendor  registration  (on-boarding)  and  the 

processes in place to report IP infringements. The available enforcement actions depend largely on 

which / what kind of marketplace is being used, for what type of infringing activity and by which kind 

of vendor. 

It is crucial to note that the sale of IP-infringing goods on these online marketplaces, is not only an 

infringement of the rights holder’s IP rights, but also a violation of the contractual terms and conditions 

of the  marketplaces,  which explicitly  forbid  activities that  infringe third  parties’  rights (82).  Moreover, 

(81) ‘TikTok takes on Facebook with US ecommerce push’, Financial Times, 7 February 2021. 

( 82 )  For  example,  Intellectual  Property  Rights  Protection  Handbook,  Alibaba  Group,  September  2019,  available  at 

https://ipp.alibabagroup.com/. 

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marketplaces implement deterrent policies against repeat infringers, whereby vendors of counterfeit 

goods may be permanently suspended from the service (83). 

1.2.2.1  Wholesale comprehensive marketplaces 

These marketplaces contain a large number of categories and range of products. In most cases, the 

marketplace offers a range of services to vendors, including advertising, marketing and other customer 

engagement tools, as well as payment solutions, storage and shipping. Marketplaces must comply 

with regulations to prevent misuse of their services, for example with anti-money laundering laws in 

relation  to  payment  services ( 84 ).  Instead  of  storage  facilities,  some  marketplaces  adopt  a 

‘dropshipping’ model, whereby the seller does not keep products in stock, but purchases items from 

a third party and ships them directly to the customer. As a result, vendors do not have to handle the 

product directly, and in most instances they would simply select it from another website. 

On-boarding  these  marketplaces  normally  entails  strict  registration  and  identification  processes. 

Operating the shops, and conducting business through them, requires some degree of expertise in 

business and e-sales. The IP-infringing goods that are potentially introduced in these marketplaces 

may be considered the result of systematic and ‘professional’ counterfeit-selling activities. 

1.2.2.2  Marketplaces for auctions and second-hand goods 

Like wholesale marketplaces, auction platforms cover a broad range of products and offer additional 

services like payment  and  marketing  solutions. They  are  used both for C2C  transactions  (second-

hand goods) and B2C transactions. In this respect, one of the challenges with auction marketplaces 

is to understand whether a product is an infringing one or a legitimate second-hand product. Some 

auction marketplaces act as intermediaries for the shipping and require the vendor to post the goods 

for  authenticity  checks.  This  service  is  optionally  available,  and  only  on  limited  items  on  the 

(83) Memorandum Of Understanding On The Sale Of Counterfeit Goods On The Internet, Brussels, 21 June 2016, section 6. 

(84) Understanding Financial Crime Risks in E-Commerce, Anton Moiseienko, RUSI Occasional Paper, January 2020. 

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marketplace, which marks the respective listing with an ‘Authenticity’ icon. These marketplaces may 

be misused by both systematic and occasional IP infringers. 

1.2.2.3  Marketplaces for independent retailers, and handicraft and art products 

These  are  marketplaces  that  specifically  target  owners  of  non-mainstream  brands,  as  well  as 

independent retailers, free-lance creators (e.g. artists, craftsmen, designers and fashion designers) 

and hobby enthusiasts. They provide an opportunity for individuals and small businesses to reach a 

wide  global  audience  and  sell  their  own  handmade  products  or  ‘fringe’  products,  such  as  vintage 

clothing, bags and accessories. The vendors on these websites may infringe third parties’ rights by 

offering for sale products that imitate or exploit products protected by copyright, design and trade mark 

rights, although not necessarily counterfeit or pirated goods. 

1.2.2.4  Social media marketplaces and stand-alone websites with social media presence 

Social media are widely used to promote products that are offered for sale through other e-commerce 

platforms or stand-alone websites. However, social media platforms are now integrating specific e-

commerce functionalities and are rapidly becoming major players as online marketplaces themselves. 

In  this  respect,  social  media  can  be  misused  both  to  infringe  IP  rights  directly,  and  to  support  IP-

infringing activities occurring through other channels. For example, vendors of counterfeit goods can 

use sponsored advertising on social media to target customers with deceitful offers of discounts or 

low prices on branded products offered for sale on external websites. It is very common to have these 

individual websites in a collection. For example, the same e-commerce platform may be opened under 

different  names  for  a  variety  of  products,  and  possibly  be  operated  by  the  same  organisation. 

Furthermore, ‘burner accounts’ and ‘scam accounts’ that make use of well-known brands can also be 

used to generate IP-infringing traffic and to spread information about how to get counterfeit products. 

A technique used by IP infringers is to share a code on social media, so that when a customer places 

an order from a certain vendor on a marketplace listing an ‘innocent’ item (such a white t-shirt) and 

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enters the code, they actually receive a counterfeit product (85). A further emerging trend is the use of 

social media live-streaming facilities to promote counterfeit products. Orders are received either via 

links and/or codes shared during the streaming or directly from the stream’s live-chat. 

Social  media marketplaces  offer  additional  services, comparable to those  provided by  other  online 

marketplaces, including payment solutions, storage and shipping services. IP infringers can misuse 

those marketplaces to market IP-infringing goods, taking payments, communicating with customers, 

and shipping orders. 

1.2.2.5  Marketplaces for labour and services 

These  marketplaces  are  generally  used  for  providing  freelance  work  such  as  elements  of  graphic 

design, or software development. These services can be misused indirectly to engage in IP-infringing 

activities, such as web design, packaging and logo design, circumvention of technical measures of 

protection  on  videogame  and  software,  or  hacking  accounts  of  popular  online  streaming  services. 

Note that many hacked account details are also sold on marketplaces operating on the Darknet (86). 

1.2.2.6  Marketplaces for digital goods 

The goods marketed in this category of marketplaces are grouped in two broad classes. In the first 

class, the digital goods are mainly commercial software for which the vendor provides an illicit license. 

The main techniques and approaches for selling and reselling software activation keys are: 

• 

• 

• 

selling keys from third countries or countries where licences are cheaper than in the country of 

the customer; 

keys provided to select entities, e.g. to the press, where they will use one key and sell the rest; 

through agreements with education partners, e.g. university staff and student accounts; 

(85) case 5 in appendix. 

(86) section 1.2.3. 

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• 

through volume licensing, where a key can be used from multiple users and/or more than one 

number of computers. 

Users can buy keys to activate downloaded commercial software (87). 

The second category refers to the emerging marketplaces of blockchain-certified digital art, namely 

visual images and short animations that can only exist in a digital form, and which are accompanied 

by proof of ownership guaranteed by blockchain technology. All transactions relating to these digital 

art  objects  are  recorded  using  so-called  non-fungible  tokens  (NFT),  which  are  essentially 

cryptographic tokens that are unique and not mutually interchangeable. Having ownership information 

on the blockchain makes an illegal sale of a copy virtually impossible. 

  Darknet marketplaces 

Darknet marketplaces  include  a vast  area  within the  internet  ecosystem that  is  dedicated  to  illegal 

conduct,  sales  and  services  taking  place  below  the  surface  of  the  ‘visible’  internet ( 88).  Darknet 

marketplaces  facilitate  transactions  of  a  wide  range  of  counterfeit  products,  normally  by  means  of 

cryptocurrencies. In July 2017, two of the largest darknet marketplaces (AlphaBay and Hansa) were 

taken down during an international operation led by the US Federal Bureau of Investigations (FBI) 

and the Dutch police, with the support of Europol. As reported by Europol: 

Prior  to  its  takedown,  AlphaBay,  the  largest  market,  reached  over  200 000  users  and 

40 000 vendors. There were over 250 000 listings for illegal drugs and toxic chemicals, 

and  over  100 000  listings  for  stolen  and  fraudulent  identification  documents  (IDs), 

counterfeit goods, malware and other computer hacking tools, firearms, and fraudulent 

services. Since its creation in 2014, transactions concluded in the market were estimated 

(87) cases 12 and 13 in appendix. 

(88) Inside The Deep & The Dark Web, Cyber Security Intelligence, News Analysis, published 22 June 2020, available at 

https://www.cybersecurityintelligence.com. For a further analysis on enforcement strategies in the Darknet see section 2.1.3. 

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to have netted USD 1 billion. Hansa was the third largest criminal marketplace on the 

Darknet, trading similarly high volumes of illicit drugs and other commodities (89). 

In January 2021, DarkMarket, allegedly the world’s largest darknet marketplace, was taken down in 

an international operation led by Germany with the support of Europol (90). 

In  spite  of  the  governments’  enforcement  actions,  darknet  marketplaces  adapt  very  quickly  to 

shutdowns and adopt new ways to circumvent restrictions. Products of luxury brands from the clothing, 

accessories, footwear,  and  cosmetics  industry  are to be found  in  these marketplaces,  where  there 

can be discounts of up to 90 % of the authentic product’s price (91). From a technical point of view, all 

the  consumers  have  to  do  is  to  download  the  encrypted  browser  Tor,  which  allows  access  to 

anonymous black-market vendors. 

Most Dark Web marketplaces attempt to moderate and arbitrate the transaction between the vendor 

and the buyer, through the use of escrow accounts. For example, a vendor on a Darknet marketplace 

sold over 200 items advertised as a ‘high-end replica’ of a famous brand’s t-shirt. The vendor used IP 

address  anonymisation  (The  Onion  Routing  protocol)  to  hide  the  location  of  the  marketplace  and 

shipped the items from Hong Kong (92). 

  Marketplace types and categories of infringing goods 

The sale of IP-infringing goods can be differentiated by the following broad features: 

• 

marketplace type (see descriptions in sections 1.2.2 and 1.2.3); 

(89) Intellectual Property Crime on the Darknet, Europol, 2017, https://www.europol.europa.eu/publications-documents/  

( 90)  DarkMarket:  world’s  largest  illegal  dark  web  marketplace  taken  down,  Europol  Press  Release,  21  January  2021. 

https://www.europol.europa.eu/newsroom. 

(91)  The  Darknet  Counterfeit  Gift  Guide:  Chanel,  Rolex  and  Louis  Vuitton,  Molly  Fitzpatrick  with  Gordon  Bottomley,  22 

December, 2014, available at https://www.vocativ.com. 

(92) Case 9 in appendix. 

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• 

• 

category of infringing goods (counterfeit, piracy, confusion, exploitation and grey market – see 

section 5.1); 

whether the seller is hiding or declaring the fact that their product is non authentic (e.g. if they 

are attempting to trick the customer into believing that they are buying a genuine product at a 

discounted or low price). 

The five categories of IP-infringing goods are not uniformly distributed in the different marketplaces. 

The following figure is indicative of the likelihood of detecting a particular kind of infringing good in 

each type of marketplace. 

Figure 3 – Marketplace types against categories of infringing goods 

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1.3 

THE IP INFRINGEMENT SUPPLY CHAIN 

  Introduction 

This section presents a view of the supply chain for the process underlying IP infringement via vendor 

accounts  on  third-party  trading  platforms.  In  accordance  with  most  supply  chain  approaches,  the 

different stages of the chain should be read as part of a continuous process from the supply of raw 

material for the production of the counterfeit product to the delivery of the product to the end consumer, 

through a flow of information, physical items and money that involves a number of intermediaries. 

There are seven stages identified in the supply chain. From an enforcement perspective, it can be 

expected  that  the  visibility  is  reduced  as  we  traverse  back  the  supply  chain  (right  to  left)  and  is 

increased as we approach the customer (shipping, far right). 

raw 
material 
supply

production

storage / 
inventory

online offer 
of sale

marketing

sales

shipping

Figure 4 – The Counterfeit supply chain 

Every activity in the chain is represented with an action card placed into one or more of the echelons 

accordingly. These action cards illustrate the activities relevant to each specific stage of the supply 

chain  –  both  for  the  infringers  and  for  the  investigators  or  preventers.  The  activities  can  be 

conducted  in  the  physical  world,  cyberspace,  or  both.  However,  an  activity  may  be  performed 

exclusively by either an infringer or a law (or self-regulatory) enforcement entity. For every infringing 

activity, we attempt to describe a matching investigative or law enforcement action. 

• 

On the infringer’s side, the supply chain illustrates the activities that are required to produce, 

store, distribute, promote, sell and ship the counterfeited product, along with the techniques that 

are used to elude enforcement actions, for example techniques to evade detection, take-down, 

confiscation or seizure of goods. 

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• 

On the investigator’s or preventer’s side, the scheme illustrates the actions that can be taken by 

enforcement  actors  at  each  stage  of  the  chain.  These  actions  include  investigation,  law 

enforcement, and self-regulatory measures of enforcement. 

The seven stages are depicted in the high-level supply chain diagram in Figure 4. 

The following observations and points accompany the counterfeit supply chain. 

• 

The stages of the chain do not always follow the prescribed order (i.e., the shipping process can 

occur between other stages too, especially in the cases where there is an established network 

or customer base). 

• 

Occasionally,  some  of  the  stages  may  be  omitted  (or  may  not  be  possible)  during  an 

enforcement action, as visibility is expected to drop as the chain is traversed from right to left. 

• 

The geo-socio-political aspects may affect the effectiveness and delivery of an investigation and 

associated actions. For example, attempting to take down and interfere with the production in a 

particular country may trigger events with the local society and authorities (e.g. the take-down 

of a production factory that employs thousands of workers in a third world country). 

• 

Investigating  some  stages  might  be  of  less  value  in  some  use  cases  but  can  be  considered 

critical in cases where human life and safety is under threat (e.g. when investigating the raw 

material supply for the production of counterfeit pharmaceutical products). 

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In the following series of tables, the corresponding activities for the respective stages are described. 

The labels describe the kind of activity involved at each stage of the chain. 

Physical:  this  label  means  that  the  activity  is  conducted  by  means  of 

physical interactions. 

Cyber: the activity occurs on the internet. 

Law Enforcement: the activity is mainly performed by law enforcement agencies. 

Self-regulatory Enforcement: the activity is conducted by the rights holders or 

by  third-party  companies,  such  as  online  marketplaces,  payment  services  or 

shipment companies. 

Infringer: This label shows that the activity is an infringing activity used by the 

perpetrator. 

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  Raw material supply 

1. raw material 
supply

The supply of raw materials can involve the same sources as the original 

products,  or  even,  in  some  cases,  refer  to  semi-completed  products, 

where the infringers have managed to tap into the original production line. 

Activity 

Scope  Description 

Supply of potentially 

This  is  the  main  activity  of  the  infringer.  In  some 

dangerous materials (PDM) 

cases  (e.g.  pharma),  there  may  be  health  and 

/ uncertified materials 

Monitoring of specific 

materials 

safety consequences to the consumer/public. 

Identification  of  hotspots  where  the  materials  are 

produced  or  originate  from  has  the  potential  to 

significantly disrupt the supply chain. Maintaining a 

database of locations for specific products can be 

achieve by consolidating information from previous 

cases,  and  in  cooperation  with  brand/IP  holders 

(where applicable). 

Customs checks 

Leverage of historical information from countries of 

origin  /  known  hotspots  and  information  on  the 

declaration forms (e.g. Bill of Lading). This activity 

would  be  greatly 

improved  by  streamlined 

collaboration 

between  Customs 

and 

law 

enforcement agencies. 

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  Production 

2. Production

The  production  of  counterfeit  products  can  take  place  on  various 

occasions and scales; ranging from businesses run by a single person or 

a  small  team,  to  small/medium  factories  and  large  factories  that  employ  thousands  of 

people. 

Activity 

Scope  Description 

Facility take-downs 

By closing the facilities that produce the illicit items, 

law enforcement agencies can interrupt the supply 

decisively,  at  its  beginning,  before  the  items  are 

distributed 

to  vendors.  The  process  can  be 

considered delicate, and requires cooperation with 

local authorities. 

Block bank accounts 

Blocking  the  producer’s  bank  accounts  deprives 

them  of  the  assets  that  finance  production  of  the 

illicit items. 

Follow trends 

Seasonal events (e.g. beginning of sporting events, 

music concerts, release of popular products) affect 

the production of goods. This is increased for items 

that are relevant to them. 

Production by demand 

The  production  of  illicit  products  can  be  based on 

an agreement between the production facility and a 

vendor  that  requires  a  specific  item  that  may  be 

popular  in  a  specific  market  (e.g.  a specific  t-shirt 

that is popular among the citizens of a country) or 

during a specific season (e.g. football events). 

Continuous production 

Some  products  are  constantly  produced  illicitly, 

because the demand for them is constant, and the 

product  remains  unchanged  within  time  (e.g.  a 

shampoo or a product that fights flu symptoms). 

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Use of hazardous materials 

Often, the producer of the illicit items, for a variety 

of  reasons  (e.g.  availability  of  materials,  low  cost 

etc.),  uses  substitutes  or  material  that  can  be 

proven  hazardous.  In these  cases,  the  cost  is  not 

only  financial,  but may  also include effects  on the 

consumer’s health, safety, or the environment. 

Part-by-part production 

The production of an item can be done in parts so 

that  the 

item  remains  undetected  and  avoid 

recognition as an illicit item (e.g. the logo of a shoe 

is  produced  by  another  unit  from  the  rest  of  the 

shoe, for assembly near the selling point/stage). 

  Storage and inventory 

3. Storage & 
Inventory

Before the distribution to the market, or even before sending directly to 

the  buyers,  the  products  are  stored  in  locations  that  may  not  be  the 

production units. These include fulfilment centres operated by online marketplaces. These 

locations can differ in size, and belong to the producers, the vendors or even a third party 

that acts as the relay agent between the two ends. 

Activity 

Scope  Description 

Confiscation/seizure 

Raiding the IP infringers’ inventory and seizing the 

infringing items. This action is accomplished by law 

enforcement agencies and is considered a physical 

action.  

Bulk storage 

The storage of infringing goods ,in a large quantity, 

in  a  dedicated  depot/spot  by  the  counterfeiters. 

Depending on the type and nature of the counterfeit 

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Local storage 

The storage of the infringing goods in separate local 

goods, bulk storage locations may be areas such as 

industrial zones, etc. 

depots/spots  by  the  counterfeiters.  Local  storage 

means that the storage spot is close to where the 

counterfeit  products  are  being  sold  and/or  being 

shipped.  These  may  include  high-street  market 

shops. 

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  Online offer of sale 

4. Online offer 
of sale

The infringers take advantage of the capabilities offered by the internet to 

offer the counterfeit products to people, far exceeding their geographical 

radius. While trying to evade detection, they can either use already existing platforms or rely 

on other infringing websites and sell the products to their users. 

Activity 

Scope  Description 

Liaison with platforms 

Increased communication among the stakeholders 

can  improve  the  detection  and  removal  of  the 

vendors  of 

the 

illicit 

items 

that  are  hosted, 

unknowingly, by the platform. 

Take-down procedures 

The  taking  down  of  websites  (in  the  case  of  an 

infringing  website)  or  accounts  (in  the  case  of  a 

vendor in a marketplace). 

Sale to customer 

Vendors of illicit product can also sell directly to the 

end customer, circumventing marketplaces or other 

distribution mediums. 

Production to retail 

The  illicit  products  can  be  delivered  to  the  retail 

industry.  Owners  of  retail  shops  can  be  found 

selling  counterfeit  products  –  knowingly  or  in  the 

belief  that  they  are  providing  original  products  to 

their customers. 

Production  distributed 

to 

Vendors of counterfeit products can take advantage 

large marketplaces 

of  the  infrastructure  and  popularity  offered  by  a 

marketplace and offer their items online. Depending 

on the vendor and the platform, some items can be 

sold  as  originals,  while  others  can  be  sold  as 

imitations, counterfeits, etc. 

Production  distributed 

to 

Illicit vendors can offer their items through websites 

infringing websites 

created  specifically  for  their  needs.  The  sites 

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contain  all  the  necessary  information  for  the 

products,  the  payment  and  the  delivery  method. 

These sites either sell products by advertising them 

as original or openly sell them as counterfeit. 

Evasion 

techniques 

for 

To  avoid  detection  and  having  their  accounts 

distribution 

through 

large 

removed,  the  vendors  use  a  series  of  evasion 

marketplaces 

techniques that can involve: fake credentials for the 

registration  process;  use  of  images  of  original 

products,  etc;  masking  the  order  by  linking  the 

purchase to a decoy product, etc. 

Detection 

evasion 

In order to avoid detection and having the products 

techniques 

for 

customs 

confiscated  in  customs,  the  vendors  use  multiple 

controls 

methods to hide the identity of the illicit items. For 

example, tape with instantly-recognisable logo and 

name of a major marketplace can be used to wrap 

items, shipments can contain both original and illicit 

items, or declare different products. 

Infringing websites 

Vendors may create and maintain their own website 

to  offer  the  products.  The  sites  can  be  unique  or 

there can be multiple different sites (with similar or 

different  names)  that  have  similar  or  identical 

structures,  contain  the  same  information,  and  are 

administrated by the same entity. 

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  Marketing 

5. Marketing

The marketing techniques refer to all the methods used by the infringers 

to make  the  products known  and/or  appealing  to  potential  buyers. The 

items for sale can be advertised as original products or even sold openly as counterfeit, and 

the  perpetrators  can  use  all the  possible options offered  by  technological advancements. 

Services  that  can  be  used  to  market  IP-infringing  products  include  paid  advertising  and 

promotion through public social media posts, using specific hashtags to attract users. 

Activity 

Follow flags 

Scope  Description 

There  are  several  indicators  that  may  alert  law 

enforcement with regard to a marketplace or online 

website, such as offers that are: 

• 

‘too good to be true’; 

•  have a substantial discount; 

• 

receive  an 

inflated  amount  of  positive 

feedback in a short time.  

This is considered a cyber-activity that is conducted 

by 

law 

and 

self-regulatory 

enforcement 

organisations.  

Monitor communications 

Law  and  self-regulatory  enforcement  agencies 

follow 

the  online  communications 

to 

identify 

counterfeiters  from  public  posts  or  live-streaming 

broadcasting on social media platforms. Monitoring 

communication via private networks such as peer-

to-peer  applications  (instant  messaging,  groups, 

etc),  and  advertising  applications 

requires 

intervention from law enforcement. 

Socmint 

(social  media 

This  activity  represents  a  category  of  cyber-

intelligence) 

for 

infringing 

intelligence  activities  that  are conducted  on  social 

websites 

media platforms. 

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Listing  and  advertisement 

This encompasses takedowns of ad keywords, de-

takedowns 

listing results on search engines, and removal of a 

particular product or complete seller account from a 

marketplace. 

Marketplace 

Counterfeiters  in  some  cases  register  on  well-

known marketplaces to use the marketplace’s value 

to advertise their infringing products.  

Infringing 

websites: 

Infringing websites that contain links to messaging 

advertising 

activity 

on 

platforms  chats  for  receiving  orders,  and  provide 

messaging platforms 

information  on  payment  and  shipments,  are 

involved in this activity. It is common for infringers 

to  guide  the  buyer  to  a  payment  website  with  no 

information/flag on the counterfeit product, to evade 

detection  or  legal  implications.  Therefore,  it  is 

important for them to establish one-to-one contact 

with the buyer through these messaging platforms. 

Furthermore, 

these  platforms  are  utilised 

to 

establish their customer portfolio. 

Infringing 

websites 

Referrals 

from 

low-profile  blogs 

to 

infringing 

advertising activity on blogs 

websites  are  used  to  advertise  the  counterfeit 

products. 

Online 

ads 

containing 

Marketing through online advertisements. 

infringing material 

Darknet marketplaces 

Marketing  on  Darknet  marketplaces.  The  buyers 

from these marketplaces generally know that they 

are buying counterfeit and in many cases the sale 

is wholesale. 

Obtain 

fake 

Fake 

credentials 

are 

obtained 

for 

use 

identification/stolen 

selling/distributing/shipping  counterfeit  products, 

credentials from Darknet  

registering the marketplaces and also to create fake 

identities  for  exchanging  cryptocurrency  to  fiat 

currencies. 

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Live stream sales 

Social  media  live-streaming  facilities  are  used  to 

market and demonstrate the product to buyers. One 

interesting characteristic of live-stream sales is that 

the orders are received via the chat of the live sale. 

Therefore,  once  the  stream  is  over,  there  is  no 

evidence left to trace. 

Marketing 

influencers 

through 

Influencers  from  major  social  media  platforms  are 

selected and used for marketing and promotion of 

the goods. 

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  Sales 

6. Sales

The actual financial transaction for the purchase of a counterfeit product 

is  either  a  digital  transaction  or  a  transaction  with  a  physical  monetary 

exchange.  In  both  cases,  a  series  of  steps  can  be  used  to  mask  the  activity.  Therefore, 

investigations  require  ‘follow-the-money’  procedures  and  cooperation  between  law 

enforcement and financial institutions. 

Activity 

Scope  Description 

Liaison with banks/ financial 

This  will  help  authorities  detect  and  identify  the 

institutions 

entities  behind 

the 

financial 

transaction,  and 

proceed  to  the  necessary  actions  required  for 

blocking the right bank accounts. 

Liaison with payment service 

This liaison can protect the customers by allowing a 

providers 

refund for unknowingly purchasing fake products or 

Follow-the-money 

investigations 

even  blocking  the  transaction,  when  it  comes  to 

identified illicit vendors. 

‘Follow-the-money’ investigations are the outcome 

of 

the  aforementioned 

liaison  activities.  The 

authorities,  once  they  collect  all  the  necessary 

evidence, can create a full profile of the vendors by 

analysing 

the 

financial 

transactions  under 

investigation. 

Test purchases 

Purchasing a fake product offers the authorities the 

evidence  required to  build  a  case  against  an  illicit 

vendor.  Usually,  two  test  purchases  are  required 

when an investigation reaches a courtroom. 

Cryptocurrency payment 

Darknet  purchases  can  be  accomplished  with  the 

use  of  cryptocurrency,  which offers  the  anonymity 

that  is  required  from  illicit  actors.  This  is  also 

applicable in cases of infringing websites. 

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Online  payment  –  digital 

‘Digital  wallet’  is  an  alternative  method  of  online 

wallet service 

payment that can also provide anonymity. It can be 

used to avoid online payment service providers and 

to set up quick payments by the illicit vendors.  

Online payment – credit card 

The  use  of  credit  card 

transactions  as 

the 

established  method  of  payment 

for  online 

transactions.  With  the  appropriate  liaison  with 

banking institutions and payment service providers, 

these  transactions  are  easier  to  follow  than  other 

payment methods. 

Cash payment – mules 

Where  a  cash  payment  is  feasible,  a  third  person 

can be used to deliver the payment from the buyer 

to the seller.  

Cash  payment  –  in  store 

Fake products can also be sold in physical stores. 

purchase 

In this case, cash payment is easier and can easily 

be masked.  

Cash payment – from seller 

Vendors  of  illicit  items  can  pay  the  producers  in 

cash, either by using a money mule, or directly. The 

process  can  be  hidden  and  remain  undetected, 

rendering 

the 

‘follow-the-money’ 

process 

challenging. 

Pay by postal order 

Payment  with  postal  orders  can  also  remain 

undetected and attract minimum attention. No bank 

accounts or other financial details are required for 

such payments. 

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  Shipping 

7. Shipping

Once the financial transaction is executed, the product is shipped to its 

new owner. The owner can either be the end-buyer or an entity that will 

distribute the product on the market. The products are delivered globally with the use of usual 

cargo procedures. The shipments differ in size and quantity. 

Activity 

Scope 

Description 

Liaison  with  courier/post 

Law and self-regulatory enforcement agencies can 

services 

liaise  with  courier  and  post  services  to  prevent 

distribution  of  counterfeit  products  and/or  identify 

the  address  of  the  vendor  through  the  postal 

addresses that the infringers use. 

Liaison with Customs 

Law and self-regulatory enforcement agencies can 

liaise  with  customs  to  prevent  distribution  of 

counterfeit  products  and/or  identify  the  addresses 

through  the  postal  addresses  that  the  infringers 

use. 

Monitor routes 

Routes of transfers  are  identified  in  this  activity  to 

discover  the  origin  of  the  product,  the  individual 

distributers and vendors, and how the products are 

handed  over  from  (underground)  factories  to  the 

buyers. 

Monitor suspects 

Monitoring  routes  of  shipment  leads  to  monitoring 

those  suspects  that  receive  unusual  amounts  of 

unexpected orders from regular routes. Monitoring 

suspects  and  their  shipment  activities  might  also 

lead to the identification of new routes and shipment 

methods. 

Seizure of goods 

Seizure of goods at the customs or postal services 

can be conducted by border forces. 

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Shipping in bulk amounts 

Infringers  may  ship  products  to  distributers  and 

vendors in one-off bulk amounts.  

Shipping in limited amounts 

Infringers  may  ship  products  in  small  amounts  to 

evade being detected at customs. 

Hybrid shipping models 

Infringers  may  ship  bulk  amounts  (containers)  of 

pre-prepared  small  parcels 

to  be  mailed 

to 

customers  once  the  container  has  entered  the 

Foreign Trade Zone. 

Changing 

routes 

for 

Infringers may regularly alter the routes they use to 

shipments 

evade being detected. 

Shipping mixed with original 

In  some  cases,  original  products  are  sent  at  the 

products 

same  time  to  avoid  detection  and  keep  a  legal 

profile with the courier services. 

Shipping 

part 

by 

part 

Some products can be sent as parts in an attempt 

(assembly at destination) 

to  evade  or  weaken  cases  of  copyright 

infringement. An example would be sending logos 

and  products  separately;  or  sending  left  and  right 

shoes separately. 

Dropshipping 

This  is  a  retail  method  where  a  vendor  does  not 

keep the products it sells in stock. Instead, when a 

vendor sells a product, it purchases the item from a 

third  party  and  has  it  shipped  directly  to  the 

customer. As a result, the seller does not need to 

handle the product directly (93). 

(93) https://www.shopify.com/blog/what-is-dropshipping#definition 

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2. ENFORCEMENT  AGAINST 
INTELLECTUAL 
PROPERTY  INFRINGEMENTS  ON  THIRD  PARTY 
TRADING PLATFORMS 

2.1 

MEASURES, POLICIES AND TACTICS 

This section presents a review of the key measures, policies and tactics that are available to tackle IP 

infringements on online trading platforms. The review starts with an analysis of the voluntary measures 

adopted as an effect of the ongoing collaboration between rights holders and platforms, and includes 

examples of good practice aimed at preventing infringing activities by vendors (‘proactive measures’) 

as well as at repressing or limiting the effect of those activities once they occur (‘reactive measures’). 

Furthermore,  the  review  looks  at  the  policies  and  tactics  adopted  by  rights  holders  and  law 

enforcement agencies to investigate IP infringements and enforce IP rights, taking into consideration 

the actions available at each stage of the supply chain discussed in the previous section. 

  Proactive measures 

A number of proactive measures have been developed by online trading platforms in the framework 

of voluntary agreements with rights holders. Of paramount importance in the EU is the Memorandum 

of Understanding (MoU) promoted by the European Commission in 2011 and revised in 2016, which 

is currently signed by 30 stakeholders, including major rights owners, online platforms and business 

associations (94). The MoU is a voluntary agreement to hinder the sale of counterfeit goods on online 

marketplaces,  based  on  a  principle  of  differentiated  responsibility  and  standards  of  ‘commercial 

reasonableness’ (95). 

( 94 )  European  Commission,  Memorandum  of  understanding  on  the  sale  of  counterfeit  goods  on  the  internet, 

https://ec.europa.eu/growth/industry/policy/intellectual-property/enforcement/memorandum-understanding-sale-counterfeit-

goods-internet_en. 

(95) Memorandum of Understanding, 21 June 2016, Brussels, p. 2. 

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On the one hand, rights holders commit to engage themselves in specific and commercially feasible 

measures such as (96): 

• 

• 

• 

effective fighting against counterfeiting at its source, including at points of manufacture and initial 

distribution; 

active monitoring of offers on the websites of online platforms, to identify counterfeit goods and 

notify online platforms of their existence; 

supplying online platforms with information that could help identify counterfeit goods, including 

information  on  goods  that  are  particularly  susceptible  to  being  counterfeited  and  keywords 

commonly used by vendors for offering for sale obviously counterfeit goods. 

On the other hand, online marketplaces commit themselves to engage in specific commercially and 

technically feasible measures such as (97): 

• 

• 

• 

requesting from the vendor all their contact information and verifying the vendor’s identity; 

considering  all  the  information  provided  by  rights  holders  that  could  help  identify  counterfeit 

goods; 

identifying,  and  blocking  the  sale  of,  counterfeit  goods,  and  blocking  the  offer  of  such  goods 

through their online services. 

As a result of the MoU, a number of good practices have been developed. These belong to two broad 

categories,  namely  a) proactive  and  preventive  measures  (PPM),  aimed  at  blocking  offers  of 

counterfeit or pirated goods from appearing online in the first place, and b) notice and takedown (NTD) 

procedures to promptly remove those offers from the marketplace (98). 

(96) Memorandum of Understanding, 21 June 2016, Brussels, p. 2. 

(97) Memorandum of Understanding, 21 June 2016, Brussels, p. 2. 

(98) European Commission, Report on the functioning of the Memorandum of Understanding on the sale of counterfeit goods 

on the internet, Brussels, 14.8.2020, SWD(2020) 166, final/2. 

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This  section  addresses  the  first  prong  of  these  good  practices,  namely  PPM  developed  by  online 

marketplaces. 

2.1.1.1  Contractual obligations deriving from Terms and Conditions (T&C) 

Registering a vendor account on an online marketplace implies acceptance of Terms & Conditions 

(T&C) as well as other policies that may apply to specific services. Typically, T&C prohibit the sale of 

goods that infringe third parties’ IP rights. Therefore, marketplaces can take immediate action against 

IP-infringing users on the basis of breach of contractual obligations. In particular, they can  remove 

listings, deny access to certain features or functionalities, or suspend or terminate accounts. 

T&C  may  include  specific  provisions  on  IP  infringement,  in  particular  policies  against  repeat 

offenders.  These  policies  make  clear  that  users  who  repeatedly  violate  the  T&C  may  have  their 

accounts  suspended  or  disabled.  However,  repeat  infringement  policies  are  effective  only  when 

coupled with ID verification and traceability systems, in order to prevent suspended or disabled users 

from returning and signing in with a different account. 

2.1.1.2  Identity verification and traceability of traders 

Some online marketplaces require users to provide valid identification, such as proof of identity or an 

address, as a condition for opening a vendor account. In a similar vein, users who intend to register 

as a corporate entity may be required to provide proof of a business licence or other relevant permits. 

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These requirements are not easy to implement and can be circumvented in many ways (99). However, 

they may represent a deterrent to users aiming to return after being disabled, or who open multiple 

accounts. Some social media platforms also allow users to report fake profiles (100). 

Identity verification requirements include measures to undermine the creation of multiple accounts by 

a single user. Additionally, marketplaces may also restrict the use of certain keywords in profile names 

– for example the use of well-known trade marks – and require proof of ownership or legal qualification 

before activating the profile (101). 

The  principle  of  trader  traceability,  also  known  as  the  ‘know  your  business  customer’  (KYBC) 

requirement, has been formally introduced in Article 22 of the proposed Digital Services Act (DSA) 

Regulation ( 102).  Once  in  force,  this  provision  will  oblige  online  platforms  to  receive,  store,  make 

reasonable efforts  to  assess the reliability  of, and publish specific  information on the traders  using 

their  services,  where  those  online  platforms  allow  consumers  to  conclude  distance  contracts  with 

those traders. 

(99) See, generally, Stephen Mason ‘Trust’ between machines? Establishing identity between humans and software code, or 

whether you know it is a dog, and if so, which dog?, C.T.L.R. 2015, 21(5), p. 135-148. 

(100) EUIPO Monitoring and analysing social media in relation to IP infringement (2021); EUIPO Social Media – Discussion 

Paper. New and existing trends in using social media for IP infringement activities and good practices to address them, June 

2021, p. 29. 

(101) See for example Alibaba Group, Intellectual Property Rights Protection Handbook, September 2019. 

(102) Proposal for a Regulation of the European Parliament and of the Council on a Single Market for Digital Services (Digital 

Services Act) and amending Directive No 2000/31/EC, COM/2020/825 final, Article 22. 

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2.1.1.3  Technological measures of prevention and traceability of products 

Many marketplace platforms have developed proactive measures to reduce listings for IP-infringing 

goods (103). Examples of the tools available to rights holders on major platforms are (104) the following. 

• 

Alibaba Intellectual Property Protection Platform, which is meant to ‘facilitate rights holders 

on intellectual property right protection in a cooperative manner over various Websites under 

the Alibaba Group’ (105). According to the group, proactive measures, enabled by AI technology, 

allowed up to 96 % of listings for IP-infringing goods to be detected and removed after posting, 

before a sale could be made (106). The group also claims to have 262 patents ‘tied to its core 

anti-counterfeiting  technology’  and  to  contribute  to  combating  counterfeit  sales  through  civil 

litigations and other actions. In 2020, for the first time, ‘blockchain-based evidence-preservation 

technology […] resulted in evidence recognition and admissibility in court for intellectual property 

right (IPR) infringement litigation’ (107). 

• 

Amazon  Brand  Registry,  which  provides  a  set  of  tools,  including  keyword  and  image 

recognition, and Amazon Standard Identification Numbers (ASINs) are used to prevent the sale 

of infringing products. Proactive services also include ‘Transparency’, a system where each item 

is  provided  with  a  unique  code  to  verify  its  authenticity  before  it  reaches  the  customer,  and 

(103) For an overview of technological PPM see Sylvia Polydor ‘The interplay between technology and trademark protection: 

a study of infringement, intermediary responsibility and protection measures in the digital age’, E.I.P.R. 2020, 42(1), p. 4-12. 

104

(

)  UK 

Intellectual  Property  Office  Protecting 

Intellectual  Property  Rights  on  e-commerce  stores 

https://www.gov.uk/government/publications/protecting-intellectual-property-rights-on-e-commerce-stores/protecting-

intellectual-property-rights-on-e-commerce-stores [accessed May 2021]. 

(105) https://ipp.alibabagroup.com/policy/en.htm 

( 106 )  Adam  Najberg  ‘Alibaba,  Partners  Notched  Strong  IPR  Protection  Gains  in  2020’,  Alizila  (News  from  Alibaba), 

26/03/2021, https://www.alizila.com/alibaba-partners-notched-strong-ipr-protection-gains-in-2020/. 

( 107 )  Adam  Najberg  ‘Alibaba,  Partners  Notched  Strong  IPR  Protection  Gains  in  2020’,  Alizila  (News  from  Alibaba), 

26/03/2021. In the 2018 Report, the Alibaba Group claimed to have initiated 83 civil litigation actions and delivered over 

1 900  suspects  and  the  closure  of  more  than  1 500  facilities  (Alibaba  Group  (2018)  Global  Intellectual  Property  Rights 

Protection 

Annual 

Report 

(May 

2019), 

https://www.alizila.com/wp-

content/uploads/2019/05/Final_Alibaba_2018_IPR_Report.pdf). 

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‘ProjectZero’, a tool for scanning and automatic removal of suspected counterfeit items based 

on machine-learning technology (108). 

• 

eBay  Verified  Rights  Owner  Program  (‘VeRO’),  consisting  of  keyword  filtering,  content 

moderation on flagged listings, and restrictions on the sale of selected ‘High Risk Brands’ (109). 

• 

Facebook Marketplace ‘Commerce & Ads IP’, a tool that allows IP owners to search for their 

registered trade mark in ads, Shops content, Instagram posts with product tags, Marketplace 

posts and Facebook group sale posts, and to identify and report infringing content. 

Social media and messaging applications also make tools available that let brand owners protect their 

identities and content on a proactive basis (110). For example, Weixin/WeChat has set up a keyword-

based interception mechanism to halt the registration of suspect accounts and require proof of ‘legal 

qualification’ (111). 

  Reactive measures 

Voluntary  measures  to  repress  or  minimise  the  impact  of  IP  infringements  include  ‘notice  and 

takedown’ procedures and other mechanisms to detect, identify and hinder the availability of infringing 

goods on online trading platforms. 

2.1.2.1  Notice and takedown procedures 

The  aim  of  NTD  procedures  is  to  streamline  the  process  of  notification  and  removal  of  infringing 

content  that  is  made  available  online.  These  procedures  have  been  introduced  in  the  EU  as  an 

(108) https://brandservices.amazon.co.uk/. 

( 109)  https://www.ebay.co.uk/help/policies/listing-policies/selling-policies/intellectual-property-vero-program.  The  system  is 

described by Arnold J. in L'Oreal SA v eBay International AG [2009] EWHC 1094 (Ch), p. 79-86. 

(110) EUIPO (2021) Social Media – Discussion Paper, § 6.1.2. 

(111) Weixin Report on Protection of Brand Owners, March 2018. 

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optional  condition  for  an  online  intermediary  which  seeks  to  take  advantage  of  liability  exemptions 

offered  by  the  e-commerce  Directive ( 112 ).  Indeed,  Article 14(1)(b)  of  the  e-commerce  Directive 

requires  ‘Information  Society  Service  Providers’  (ISSPs)  to  act  expeditiously  to  remove,  or  disable 

access  to,  the  information  upon  discovering  evidence  of  illegalities,  in  order  to  benefit  from  the 

exemption (113). NTD systems fit in this context, where notice by rights holders serves as disclosure or 

information of illegal activities, and expeditious action by ISSPs as a response to this disclosure or 

information. NTD systems (also known as ‘notice-and-action’) are a key component of the voluntary 

measures  implemented  in  the  context  of  the  2016  Memorandum  of  Understanding,  and  feature 

prominently in the Commission’s Recommendation on measures to effectively tackle illegal content 

online, published in March 2018 (114). 

However, it is notable that this procedure is not mandatory under EU law; there is no standardised 

procedure  that  Member States  are  obliged  to  comply  with. This  is  in  contrast  with the  law  in other 

jurisdictions, such as the US or China, where NTD systems are statutorily detailed (115). 

Nevertheless, NTD procedures represent the main way that rights owners currently work with online 

platforms  to  remove  listings  for  counterfeit  and  pirated  goods.  According  to  the  good  practices 

developed in the framework of the MoU, effective NTD procedures (as implemented by most online 

marketplaces) include the following: 

• 

a clear information package for rights holders, with detailed instructions on the information 

that must be submitted to identify the infringement, as well as the information required as proof 

of ownership or legal entitlement to enforce an IP right, and thereby activate the notification; 

(112) European Commission, Report on the functioning of the Memorandum of Understanding on the sale of counterfeit goods 

on the internet, Brussels, 14.8.2020, SWD(2020) 166, final/2, p. 23. For a thorough discussion of the legal basis of NTD see 

Knud Wallberg, ‘Notice and takedown of counterfeit goods in the Digital Single Market: a balancing of fundamental rights’, 

Journal of Intellectual Property Law & Practice (2017), 1. 

(113) See discussion infra, section 2.3.3. 

(114) Commission Recommendation of 1.3.2018 on measures to effectively tackle illegal content online (C(2018) 1177 final). 

( 115)  Graeme  Dinwoodie,  ‘A  Comparative  Analysis  of  the  Secondary  Liability  of  Online  Service  Providers’  in  Graeme 

Dinwoodie (ed), Secondary Liability of Internet Service Providers (Springer 2018) 40. 

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• 

tools to manage multiple notifications, or ‘in-bulk’ requests, enabling rights holders to include 

multiple infringing listings in a single takedown request; 

• 

‘trusted flaggers’ programmes, with fast-track, privileged channels for notifications and more 

expeditious  removal  for  ‘trusted’  rights  holders  with  specialised  expertise  and  dedicated 

technology for the detection and identification of infringing content; 

• 

search and report tools, to facilitate the process of searching potentially infringing content on 

the platform, by means of image recognition and other technologies (116); 

• 

information  for  users  on  the  reason  for  the  removal  and  the  potential  consequences  of 

repeated  infringements,  as  well  as  easily  accessible  information  on  the  right  to  appeal  or 

counter-notice procedure to challenge the notice of the IP owner. 

NTD procedures are, in principle, available to owners of any IP right enforceable in the EU, including 

owners of both EU and national trade marks. Additionally, platforms may allow users to report other 

vendors’ listings suspected of infringing trade marks, as well as other possible policy violations and 

inappropriate content. 

Online  marketplaces  can  exchange  information  related  to  NTD  procedures  with  law  enforcement 

authorities,  in  particular,  customs,  police and  market  surveillance  authorities (117).  Additionally,  they 

inform  the  relevant  actors  of  the  reaction  that  has  taken  place,  as  a  follow-up  to  the  notice.  For 

example: 

• 

acknowledging receipt of the notice, and informing the notifier of the outcome of the assessment 

and the proposed next steps; 

(116) See infra, section 2.1.2.2. 

(117) European Commission, Report on the functioning of the Memorandum of Understanding on the sale of counterfeit goods 

on the internet, Brussels, 14.8.2020, SWD(2020) 166 final/2, p. 31-36. 

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• 

in the case of a justified notice, and a removed offer, informing the vendor and explaining why 

the offer was removed, who submitted the notice, and what actions they can take to appeal (e.g. 

filing a counter-notice within a reasonable period; contacting the notifier) (118). 

Rights holders, for their part, should submit the notices as soon as possible after detecting the IP-

infringing offer, provide sufficiently detailed and substantiated notices, and exchange information on 

the  use  of  dedicated  automatic  reporting  tools  to  speed  up  the  processing  of  notifications  as  a 

prerequisite  for  platforms  to  learn  about  trends  and  improve  systems  (machine  learning,  training 

algorithms) (119). 

2.1.2.2  Automated detection measures 

Major  online  marketplaces  have  developed  technological  solutions  to  detect  suspected  infringing 

content  by  means  of  artificial  intelligence  and  machine  learning.  These  systems  constitute  an 

increasingly important part of the programmes developed in collaboration with rights holders, which 

have been already addressed in the context of voluntary proactive measures (120). 

Search tools made available to rights holders to identify infringing content involve the analysis of a 

wide range of ‘signals’, including, most notably: combinations of brand names and keywords in the 

title and text of the listing; price charged for a certain product;  detection of brand name or logo via 

image recognition. 

(118) European Commission, Report on the functioning of the Memorandum of Understanding on the sale of counterfeit goods 

on the internet, Brussels, 14.8.2020, SWD(2020) 166 final/2, p. 26-27. 

(119) European Commission, Report on the functioning of the Memorandum of Understanding on the sale of counterfeit goods 

on the internet, Brussels, 14.8.2020, SWD(2020) 166 final/2, p. 25. 

(120) See supra, section 2.1.1.3. 

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AI and machine-learning algorithms recognise patterns based on tell-tale signs of infringing activity, 

which include the following. 

Vendor’s profile characteristics: 

• 

• 

• 

• 

profiles selling too many brands and of different categories; 

profiles selling very similar types of products, some of them having already been identified as 

counterfeit or pirated goods; 

profiles  that  publish  an  instant  messaging  number  to  communicate  directly  with  the  buyers 

and/or links to live streaming sales of products; 

profiles that receive an unusual amount of very good feedbacks in a short period of time. 

Suspicious behaviours: 

• 

• 

• 

products listed for an improbably low price (‘too good to be true’ price for an authentic good); 

listings  that  have  links  to  redirect  users  to  websites  that  have  been  subject  to  takedown 

procedures or blocking orders; 

use of images where the brand name and logo is covered or blurred. 

Comments and rating: 

• 

• 

comments that complain about the quality of the product, or even expressly suggest or warn 

that the product is a fake (121); or alternatively, 

positive comments that are posted from the same account multiple times, or from suspended or 

disabled accounts. 

(121) See infra, case No 6 in Appendix. 

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  Investigation and enforcement 

Along  with  voluntary  measures  developed  in  collaboration  with  online  marketplaces,  rights  holders 

and law enforcement agencies adopt a series of policies and strategies to tackle IP infringement on 

online trading platforms. These include investigative and enforcement measures that are broader in 

scope and span across the whole supply chain discussed in the previous part of this report. 

2.1.3.1  Monitoring and ‘follow the money’ 

A  ‘follow  the  money’  approach  is  generally  used  to  tackle  forms  of  organised  crime.  It  consists, 

essentially, in monitoring and extracting information from the financial transactions involved in an illicit 

activity, with the purpose of collecting evidence and/or disrupting the activity. The procedures involved 

are complex and require cooperation between the different stakeholders involved, most importantly 

the payment services. 

The European Commission has adopted a ‘follow the money’ approach in a series of initiatives aimed 

at disrupting the revenue streams to the counterfeiters and hindering their ability to deliver IP-infringing 

goods to consumers (122). As part of these initiatives, two voluntary agreements between rights holders 

and  other  actors  have  come  into  effect:  the  2016  Memorandum  of  Understanding  on  the  sale  of 

counterfeit goods on the internet (123) and a second MoU on online advertising and IPR, signed in 2018 

and  designed  to  reduce  advertising  by  legitimate  brands  on  IPR-infringing  websites  and  mobile 

applications (124). 

(122) European Commission, The Follow the Money Approach to IPR Enforcement – Stakeholders’ Voluntary Agreement on 

Online Advertising and IPR: Guiding Principles. 

(123) See supra, section 2.1.1. 

(124) Memorandum of understanding on online advertising and IPR  https://ec.europa.eu/growth/industry/policy/intellectual-

property/enforcement/memorandum-of-understanding-online-advertising-ipr_en. 

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It  is  important  to  observe  that  the  sale  of  counterfeit  and  pirated  goods  is  one  of  the  22  predicate 

offences under the sixth Anti-Money Laundering Directive (125). This is reflected in the due diligence 

systems put in place by payment services providers, which must comply with anti-money laundering 

legislation.  As  seen  above (126),  some  marketplaces  are  also  providing  payment  services  to  their 

vendors  (and  are  even  registered  as e-money  institutions),  and  they  have  to  put  a  number  of  due 

diligences  in  place  to  monitor  illegal  activities,  including  sales  of  counterfeit  and  pirated  goods. 

Moreover, this implies that IP-enforcement activities, as part of ‘follow the money’ investigations, can 

be carried out on the basis of money laundering. 

An  example of how  anti-money-laundering  enforcement measures can  be  used  in the  context  of a 

‘follow the money’ approach to IP enforcement, is the Swedish case ‘SweFilmer’ (127). In this case, 

which  is  about  unlicensed  streaming  of  audio-visual  works,  the  defendant  was  charged  with  both 

copyright infringement and laundering the profits of the illicit activity. Since money laundering carries 

(125)  Directive  (EU)  2018/1673 of  the  European  Parliament  and  of  the  Council  of  23 October  2018  on  combating money 

laundering by criminal law, Article 2(1)(k). 

(126) See supra, section 1.2.2. 

(127) Hovrätten for western Sweden Case No B 3143-17, 18/03/2018. See EUIPO (2021) International judicial cooperation in 

intellectual property cases (March 2021), p. 87. 

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higher penalties than copyright infringement the ‘follow the money’ approach was allegedly ‘not only 

instrumental to unravelling the illicit activities and the persons responsible but also essential to the 

use of international cooperation investigative measures’ (128). 

2.1.3.2  Customs and border checks on small packages 

As seen previously in this report, an increasingly large proportion of global shipments is represented 

by small packages (129). This increase in the volume of small packages sent to consumers has been 

connected to an increased trade in counterfeit goods. In 2018, the OECD and the EUIPO observed 

that the trafficking of counterfeit goods in small packages through postal or express carrier services 

was a growing trend, and was becoming a significant problem in terms of enforcement (130). 

A  report  by  the  United  States  Government  Accountability  Office  (GAO)  from  September  2020 

compares  how  the  EU  and  US  agencies  responded  to  the  challenge  of  customs  checks  on  small 

packages (131). The report examines: 

1. 

how selected elements of the EU and US approaches to combating counterfeit goods in small 

packages compare; 

2. 

any common challenges reported by EU and US customs officials in conducting enforcement 

against such goods; and 

3. 

the extent to which the US Customs and Border Protection (CBP) has taken steps to address 

these challenges. 

(128) Ana Nordberg and Knud Wallberg (2018) ‘Intellectual Property Rights in a Digital Environment: An EU Wide Mapping 

of Available Legislative Enforcement Measures’, University of Copenhagen Faculty of Law Research Paper, p. 16. Available 

at SSRN: https://ssrn.com/abstract=3251841. 

(129) See supra, section 1.1.1. 

(130) Trade in Counterfeit and Pirated Goods. Mapping the Economic Impact, OECD/EUIPO (2016), OECD Publishing, Paris. 

(131) United States Government Accountability Office (GAO), Report to the Chairman, Committee on Finance, US Senate 

‘CBP Has Taken Steps to Combat Counterfeit Goods in Small Packages but Could Streamline Enforcement’, September 

2020. 

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Differences  in  EU  and  US  approaches  to  detecting  counterfeit  goods  in  small  packages  include 

procedures, time frames, cost sharing, and data sharing: 

i. 

the European Union uses a streamlined procedure to destroy suspected counterfeits in small 

packages,  whereas  the  US  authorities  are  required  to  conduct  seizure  and  forfeiture  for  all 

counterfeits; 

ii. 

the  EU  small  packages  procedure  uses  a  condensed  time  frame,  whereas  the  US  process 

includes more time for parties to respond; 

iii. 

in the European Union, rights holders can be billed for storage and destruction, whereas those 

in the US are not subject to cost sharing; and 

iv. 

in the EU, customs authorities provide data to rights holders upon request, and as appropriate 

after goods are destroyed, whereas in the US, the CBP is required to provide certain data to 

rights holders upon seizure of a good bearing a counterfeit mark. 

Although the EU and US customs authorities differ in several elements regarding how they address 

counterfeit goods in small packages, both report that they are confronting similar issues related to the 

lack of data on small packages, which blocks their ability to successfully move to enforcement actions. 

The  CBP  has  taken  initiatives  to  tackle  the  challenges  presented  by  counterfeit  goods  in  small 

packages. These initiatives include implementing and concluding a pilot programme that allowed for 

the  abandonment  of  suspected  counterfeit  goods,  so  that  such  goods  could  be  destroyed  more 

quickly,  and  thereby  removed  from  the  US  economy.  Additionally,  the  CBP  has  begun  to  obtain 

additional data for lower-value goods in small packages that typically enter the US with little or poor-

quality data about their contents, origin or destination. 

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Differences between EU and US approaches to combating counterfeit goods in small packages 

DESTRUCTION 

Streamlined procedure 

Authorities are required to 

EU 

US 

conduct seizure and forfeiture 

for all counterfeits 

TIME FRAME 

The procedure uses a condensed 

The process includes more time 

time frame 

for parties to respond 

COST 

Rights holders can be billed for 

Not subject to cost sharing 

storage and destruction 

PROVISION OF 

Customs authorities provide data 

Provision of certain data to 

DATA 

to rights holders upon request, 

rights holders upon seizure of a 

and as appropriate after goods 

product bearing a counterfeit 

are destroyed 

mark is required 

2.1.3.3  Enforcement on the darknet 

Evidence suggests that vendors of IP-infringing products and services are expanding their businesses 

to  marketplaces  operating  on  the  darknet,  primarily  the  TOR-network (132).  Given  the  anonymity  of 

online  providers  and  possible  affiliates,  identification  of  darknet  businesses  presents  specific 

(132) EUIPO (2016) Research on Online Business Models Infringing Intellectual Property Rights – Phase 1 Establishing an 

overview  of  online  business  models  infringing  intellectual  property.  ‘Tor’  is  an  anonymous  networking  software  program 

which works as an add-on to web browser software and is used to view websites in the ‘onion’ network, i.e. allowing vendors 

completely anonymous use. Some ‘onion’ sites have been identified that provide a laundry list of illicit goods and services, 

such as, among others, counterfeit currency and goods. For a further elaboration on the ‘Tor’ function, see the analysis of 

Roxanne  Elings  and  George  P  Wukoson, 

‘Going  deeper 

into 

the  dark  net’,  01/05/2014,  available  at 

https://www.lexology.com. 

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challenges.  Moreover,  ‘notice  and  takedown’  procedures,  which  are  provided  by  the  operators  of 

online marketplaces and other internet service providers on the open internet, do not appear to have 

any application on the darknet. 

Therefore, law enforcement agencies are mainly focused on shutting down these markets. As Prasad 

Vana and Pradeep Pachigolla demonstrate (133), there are three implications for law enforcement as 

regards closing down darknet marketplaces. 

Firstly,  buyers  are  highly  concerned  about  the  risk  of  shopping  in  a  darknet  marketplace  after  a 

shutdown.  Given  the  anonymity  of  darknet  marketplaces,  it  would  be  hard  to  know  whether  an 

unfamiliar  market  they  access  after  a  disruption  is  safe.  Additionally,  contrary  to  what  happens  in 

closures of illegal websites in the open internet environment, where often the publicity of the closure 

drives customers to search for alternative domain names of the same website, simply knowing the 

names of marketplaces on the  darknet (such as Evolution or Agora) would not be sufficient to find 

them again. 

Secondly, one particular way in which customers try to minimise high switching costs is by resuming 

transactions  with  vendors  they  were  familiar  with  in  the  marketplace  that  has  been  closed.  For 

example, ‘multihomer’ vendors may attract migrating customers from the closed marketplace through 

reduced  prices.  Consequently,  when  considering  closing  down  either  a  marketplace  with  several 

vendors  who  ‘multihome’  in  other  marketplaces,  or  a  marketplace  where  only  a  few  vendors 

‘multihome’, the latter alternative is recommended. In this way price reductions in other markets could 

be kept at a minimum after the market was closed down. 

Thirdly,  price  reductions  after  disrupting  a  market  are  significantly  deeper  for  digital  products  than 

physical products. Hence, when deciding between closing down a marketplace which has a mix of 

physical and digital products (such as Evolution) or a marketplace where the great majority of products 

sold are physical (such as Agora), the former is recommended. The reason for that is that after law 

(133) Prasad Vana and Pradeep Pachigolla, ‘Do Law Enforcement Busts of Darknet Markets Deter Criminal Activity in Other 

Darknet  Markets?’  (June  2020),  Tuck  School  of  Business  Working  Paper  No. 3474719,  Available  at  SSRN: 

https://ssrn.com/abstract=3474719. 

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enforcement  agencies  shut  down  the  marketplace  that  has  a  mix  of  physical  and  digital  products, 

vendors  in the  marketplace  with  predominantly physical  products  would  try  to reduce  their  price  to 

attract buyers. 

Notwithstanding legal and technological barriers in the fight against darknet marketplaces, there have 

been some significant successes by law enforcement authorities against darknet marketplaces selling 

counterfeit goods. 

• 

In August 2017, the US Justice Department announced that, together with other international 

law enforcement agencies, including Europol, ‘The largest darknet marketplace in history was 

shut  down’ ( 134 ).  The  marketplace  in  question  was  AlphaBay,  a  web  bazaar  where  users' 

identities were cloaked, and illicit goods and drugs were sold. AlphaBay was allegedly selling 

counterfeit goods and ‘other computer hacking tools, firearms, and toxic chemicals throughout 

the  world,’ through  ‘250 000 listings for  illegal  drugs  and  toxic  chemicals,’  and  100 000  other 

illicit items (135). 

( 134 )  Colin  Dwyer,  ‘Justice  Department  Announces  “Largest  Darknet  Takedown  In  History”’,  20/07/2017,  available  at 

https://www.npr.org. 

( 135 )  Colin  Dwyer,  ‘Justice  Department  Announces  “Largest  Darknet  Takedown  In  History”’,  20/07/2017,  available  at 

https://www.npr.org. 

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• 

In  March  2019,  a joint  operation  headed  by  OLAF  (the  European  Anti-Fraud  Office)  and the 

Belgium Customs service in collaboration with customs services from other Member States and 

Europol (‘Operation Postbox II’), resulted in the seizure of over 1 200 packages of counterfeit 

products  traded  on  darknet  marketplaces.  The  detentions  were  followed  by  the  creation  of  a 

specialised ‘cyber patrol’ to raid the open web and the darknet, and identify the infringers based 

on profiles of vendors and shippers (136). 

• 

A recent and significant operation of international law enforcement authorities against darknet 

marketplaces was announced by the US Department of Justice in September 2020. The case 

involved the arrest of hundreds of individuals worldwide operating on darknet marketplaces in 

the field of drugs and weapons trade. A number of darknet vendor accounts were identified and 

attributed  to  real  individuals  selling  illicit  goods  on  marketplaces  such  as  AlphaBay,  Dream, 

WallStreet, Nightmare, Empire, White House, DeepSea, Dark Market and others (137). 

2.1.3.4  Disruptive technologies 

Tracking darknet users is of utmost importance in the fight against online counterfeit trade. Identifying 

the real-world and real-life account owners behind the vendors – and cryptocurrencies accounts – by 

correlating  transactions  with  other  actions  of  connected  individuals,  tracked  through  traditional 

investigatory techniques, can give a major boost to enforcement. In the US, the Advanced Research 

(136) EUIPO (2020) Status report on IPR infringement, June 2020, p. 33. 

(137)  US  Department  of  Justice,  ‘International  Law  Enforcement  Operation  Targeting  Opioid  Traffickers  on  the  Darknet 

Results in over 170 Arrests Worldwide and the Seizure of Weapons, Drugs and over $6.5 Million. Darknet Narcotics Vendors 

Selling to Tens of Thousands of US Residents Charged’, 22/09/2020, available at https://www.justice.gov. 

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Projects Agency has developed a search technology known as Memex, which can search the darknet 

for law enforcement purposes, such as combating human trafficking (138). An analogous use could be 

adopted for online sales of counterfeit goods. 

The impact of so-called disruptive technologies on IP protection, infringement and enforcement, has 

been analysed by the EUIPO in a discussion paper published in 2020 (139). Such technologies include 

artificial intelligence, robotics, blockchain, 3D printing, nanotech and augmented reality. They have 

four stages of application in relation to IP: exploration, conversion, weaponisation and monetisation. 

Figure 5 – Simplified version of the ‘Intellectual Property Tech Chain’ 

Through  this  four-step  methodology,  called  ‘The  Intellectual  Property  Tech  Chain’,  the  new 

technologies  are  tested  and  assessed  with  regard  to  whether  they  can  serve  for  the  protection, 

infringement  and  enforcement  of  IP  rights.  It  is  noteworthy  to  observe  that  the  abovementioned 

disruptive technologies can be potential tools for both the protectors and enforcers of IP rights as well 

as for the IP infringers who are able to produce, market and distribute counterfeit goods and services 

(138) https://www.darpa.mil/about-us/timeline/memex. 

( 139 )  EUIPO  (2020)  ‘Intellectual  Property  Infringement  and  Enforcement  Tech  Watch  Discussion  Paper’,  available  at 

https://euipo.europa.eu. 

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more effectively. The above methodology is the process that will distinguish how, and to what extent, 

each technology can serve one side or the other. 

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2.2 

VENDORS’ LIABILITY: SELECTED CASE-LAW FROM EU MEMBER STATES 

Vendors on online marketplaces can be found liable of infringement of IP rights when they offer for 

sale counterfeit or pirated goods, as well as goods that infringe IP rights on other grounds, including 

authentic goods imported into the EEA without rights holder’s authorisation (140). The legal basis to 

determine infringement is to be found in both EU and national legislation. As far as EU-harmonised IP 

rights are concerned, the most important instruments are the Regulations on, respectively, European 

Union Trade Marks (141) and Community Designs (142), and the Directives that constitute the acquis on 

copyright and related rights (143). The scope of these provisions has been subject, in turn, to extensive 

harmonisation by the CJEU. 

GOODS ON SALE 

MAIN LEGAL BASIS TO DETERMINE INFRINGEMENT 

Counterfeit goods: fakes and replicas  EUTM Regulation 2017/1001, Article 9(2)(a) 

Pirated goods (physical) 

Pirated goods (digital) 

InfoSoc Directive 2001/29, Articles 2 and 4 and Article 6(2) 

Community Designs Regulation 6/2002, Article 19 

InfoSoc Directive 2001/29, Articles 2 and 3 

Computer Programs Directive 2009/24, Articles 4 and 7 

Confusingly similar goods  

EUTM Regulation 2017/1001, Article 9(2)(b) 

Goods exploiting a famous brand 

EUTM Regulation 2017/1001, Article 9(2)(c) 

Grey-market goods 

InfoSoc Directive 2001/29, Article 4 

EUTM Regulation 2017/1001, Article 9(3)(c) and Article 15 

Community Designs Regulation 6/2002, Articles 19 and 21 

IP infringement in the EU can result in civil and criminal liability. This section presents a selection of 

judgments  from  national  courts  on  criminal  proceedings  against  vendors  of  IP-infringing  goods  on 

(140) See supra, section 1.2.1. 

(141) Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union 

trade mark (codification). 

(142) Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs. 

(143) In particular, Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation 

of  certain  aspects  of  copyright  and  related  rights  in  the  information  society,  and  Directive  2009/24EC  of  the  European 

Parliament and of the Council of 23 April 2009 on the legal protection of computer programs (codified version). 

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third-party  online  marketplaces. While  civil  liability for IP  infringement  is broadly  harmonised  at  EU 

level (144), criminal liability remains the competence of national legislators. Under the provisions of the 

TRIPs Agreement, member states ‘shall provide for criminal procedures and penalties to be applied 

at  least  in  cases  of  wilful  trademark  counterfeiting  or  copyright  piracy  on  a  commercial  scale’ (145). 

Such procedures are available in all EU Member states, where national criminal law requires a degree 

of  wilful  intent  (or  mens  rea)  and  a  commercial  scale  infringement  for  an  act  to  be  criminally 

sanctioned. However, national jurisprudence constructs these criteria differently (146). 

  Sale of pirated software on an auction marketplace 

The case Ranks and Vasiļevičs v Microsoft (147), referred to previously in this report (148), arose in 

Latvia. Two defendants were accused of selling pirated copies of Microsoft software on eBay. Civil 

proceedings were brought on several counts, including copyright and trade mark infringement related 

to  the  reselling  of  32  backup  copies  of  Microsoft  Windows  operating  systems.  A  separate  count 

indicted the defendants for copyright infringement related to the illegal reselling of more than 3 000 

Microsoft  software  products.  Criminal  charges  were  brought  for  the  unlawful  resale  of  copyright-

protected products, for trade mark infringement, and for engaging in an entrepreneurial activity without 

a licence. 

The case resulted in five court rulings, each one partly adding to or modifying the interpretation of the 

defendants’ criminal  responsibility  for the  elements  highlighted  above.  During the  proceedings,  the 

CJEU was also asked to provide a preliminary ruling on the application of the exhaustion of rights rule 

to backup copies of software. In its (so far) only decision in a case on vendor accounts on third party 

trading platforms, the CJEU clarified that backup copies may only be made and used by the legitimate 

(144) Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual 

property rights. 

(145) TRIPs Agreement, 1994, Article 61. 

(146) EUIPO (2018) Study on legislative measures related to online IPR infringements, p. 65. 

(147) Court of Cassation (Latvia), 23 February 2018. 

(148) See supra, section 1.2.1. The business model related to this case is presented in appendix, case no. 11. 

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owner of the computer program and cannot be sold to a third party (149) Both defendants were found 

guilty for the sale of 36 backup copies, but were acquitted from the charge of the sale of 3 000 copies, 

as  the  Court  was  not  presented  with  sufficient  evidence.  They  were  sentenced  to  6 months 

imprisonment. Microsoft was awarded EUR 7 000 damages for the sale of 36 backup copies. 

Ranks and Vasiļevičs v Microsoft, 23 February 2018 

Point 1 

Back-up copies of computer programs are for exclusive use of the legitimate  user of the 
computer program. 

Point 2 

The rule of exhaustion of rights does not apply to back-up copies. 

Point 3 

The  sale  of  back-up  copies  on  third-party  marketplace  without  authorisation  of  the  right 
holder amounts to copyright and trade mark infringement and triggers both civil and criminal 
sanctions. 

. 

In a case from the Frankfurt am Main Higher Regional Court on 12 December 2016 (the names of 

the parties are not provided), the court ruled that a punishable trade mark infringement already exists 

if data carriers are provided with software certificates of authenticity without there being a physical 

connection. This decision means that even the mere addition of the certificates constitutes a trade 

mark infringement, since it is a new compilation. 

The  defendants  purchased  used  original  equipment  manufacturer  (OEM)  versions  and  attached 

software authenticity certificates to them. This is software available under a licence agreement from 

the  software  manufacturer.  The  computer  manufacturer  acquires  the  right  to  sell  the  software  in 

packages  based  on  that  licence  agreement,  by  installing  it  on  the  hardware  it  manufactures.  The 

defendants  purchased the  DVDs from  a  vendor  in England,  and sixty  percent  of  the  certificates  of 

(149) Ranks and Vasiļevičs v Microsoft (12/10/2016, C-166/15, EU:C:2016:762, § 43). 

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authenticity came from China. However, they knew that the  vendor from China also dealt in illegal 

software. The defendants purchased forty percent of the certificates of authenticity in Germany and 

Italy. 

There was a division of labour among the defendants, with one doing the administrative and clerical 

work and making occasional sales, while the other made the purchases and sales. The defendants 

purchased the products in tranches of various sizes, and then assembled the software from various 

units. In addition to purchase invoices, the defendants were unable to provide proof of origin or other 

supporting  documentation  and  did  not  offer  such  documentation  when  reselling.  Frequently,  the 

software was purchased for cash. The defendants were also aware that the prices for the purchased 

products were conspicuously low, and they in turn sold for far less than the normal market price for 

the product. Although they hoped that they were not purchasing illegal and counterfeit goods, they 

were aware that the products they were selling were protected by trade mark law. They then sold the 

software via the eBay platform. However, the certificates of  authenticity did not belong to the OEM 

versions sold, but came from other computer programs. 

The Court classified this action as a punishable trade mark infringement under the German Trademark 

Act. From a legal point of view, the defendants modified the sold computer software to such an extent 

that a new compilation existed, since they provided it with third-party certificates of authenticity. The 

trade mark owner concerned did not have to accept this, because a trade mark always functions as 

both an origin and a guarantee. This legal requirement was no longer fulfilled by the new combination 

of data carrier and certificate of authenticity. A physical connection was not necessary, because the 

rights holder had a great interest in ensuring that only the data carriers it puts on the market itself were 

provided with the certificates of authenticity that were the subject of the complaint. By attaching the 

certificates of authenticity to the data carriers, the  (incorrect) impression was created that the right 

holder had authorised and certified the software. Because of this certificate of authenticity, consumers 

placed increased trust in the product. 

By distributing the disputed software with third-party certificates of authenticity, the defendants had 

used a protected mark in a distinctive manner. By doing so, they unjustifiably distinguished their own 

product from similar products of foreign origin. Therefore, there was a likelihood of confusion under 

the German Trademark Act. The protected signs were used without the consent of the rights holder. 

Since the goods in question were counterfeit, it can be assumed that the rights holder did not consent 

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to  such  use  of  its  protected  mark.  For  the  operating  systems,  which  could  not  be  established  as 

counterfeiting, exhaustion of the trade mark right could theoretically have occurred by way of the first 

sale within the EU/EEC, on the basis of the licence agreement. 

Frankfurt a/Main Higher Regional Court, 12 December 2016 

Point 1 

A  punishable  trade  mark  infringement  already  exists  if  data  carriers  are  provided  with 
counterfeit software certificates of authenticity. 

Point 2 

Point 3 

A vendor liability is established when the defendant is unable to provide proof of origin of 
products or other supporting documentation and does not offer such documentation when 
reselling the counterfeit products. 

Distributing  pirated  software  with  third-party  certificates  of  authenticity,  a  vendor  uses  a 
protected mark in a distinctive manner, and by doing so, he unjustifiably distinguishes its 
own product from similar products of foreign origin. Thus, there is a likelihood of confusion 
under the German Trademark Act. 

  Sale of counterfeit spare parts and pirated diagnostic software on an auction marketplace 

The Higher Regional Court in Koblenz, with its ruling on 15 January 2014 (the names of the parties 

are  not  provided),  ruled  on  two  joined  cases  with  the  same  defendant:  the  former  concerning 

unauthorised  commercial  exploitation  of  copyright  protected  works,  and  the  latter  concerning 

commercial criminal trade mark infringement based on the German Trademark Act. 

The  defendant  was  charged  with  obtaining  ‘Mercedes  Benz  Star  Diagnostics’  systems  that  were 

copied commercially from China on a large scale, and with selling these systems via the internet to 

customers  in Germany  and  abroad,  together  with  the  diagnostic  software  ‘Xentry  Diagnostics’  and 

‘Xentry DAS’, the repair database ‘WIS/ASRA’, and the spare parts database ‘EPC’. The sale of these 

products had taken place mainly via the eBay platform under the dealer name ‘newcarmedia’. 

Access to the plaintiff company’s original software’s content was supposed to be technically protected 

by  a  so-called  ‘start  key’,  which  could  be  purchased  for  a  limited  period  of  time.  This  protection 

mechanism  was said to have  been  circumvented  in the  distributed  devices by  a pre-installed  valid 

start key and new valid start keys that were generated by the device when the previous one expired. 

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In addition, the defendant was alleged to have made large-scale purchases of counterfeit car radio 

systems with GPS navigation from China, and to have resold them via the eBay platform. In the sales 

offers, the device was said to have been advertised with the VW trade mark shown on the display and 

to have been described as ‘GPS Navigation VW Golf Skoda Seat MD211S DVD GPS DVB-T’. After 

the  devices  were  switched  on,  the  ‘VW’,  ‘Seat’  or  ‘Skoda’  brand  logo  was  allegedly  visible  on  its 

display, depending on the vehicle type specified as compatible with the device. 

Higher Regional Court Koblenz, 15 January 2014 

Point 1 

The vendor/defendant has purchased, on a large scale, counterfeit car radio systems with 
GPS navigation from China, and then resold them via the eBay platform. 

Point 2 

In reaching its ruling, the Court considered whether the potential preliminary measures, either 
the forfeiture of value replacement or an arrest, would cause the defendant a considerable 
disadvantage. 

Point 3 

The German Local Court ordered an injunction in rem against the defendant’s assets in the 
amount of EUR 130 791.18 to secure the civil claims of the injured parties arising from the 
criminal acts. 

  Sale of counterfeit clothing on an auction marketplace 

On  11 November  2007,  the  District  Court  of  Mühlhausen  (the  names  of  the  parties  are  not 

provided), ruled on a case concerning the production and sale of counterfeit clothing products on the 

eBay platform. 

The defendant, having been registered as a member of the eBay platform, registered an eBay shop, 

through which he intended to sell fan articles.  He ordered T-shirts, sweaters, and girly blouses, on 

which the registered word/figurative mark ‘Böhse Onkelz’ was attached. The T-shirts were then offered 

for  sale  on  the  eBay  platform  and  sold  individually.  The  defendant  was  not  entitled  to  use  the 

aforementioned  word/figurative  mark,  protected  by  registration  in  the  trade  mark  register  of  the 

German Patent and Trademark Office, because the trade mark owners had not agreed to this use. 

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The  defendant  knew  this.  Earlier,  he  had  also  tried  to  obtain  authorised  trade  marked  goods  from 

other  owners  of  well-known  trade  marks  in  the  music  industry,  but  he  had  to  give  up  because  the 

authorised  branded  goods  were  too  expensive.  The  defendant  chose  the  band  ‘Böhse  Onkelz’ 

because he knew that textiles bearing their brand could be sold easily and profitably. 

After a while, the defendant decided to produce the textiles he was selling on eBay himself. To this 

end, he bought a textile printing carousel and drying tunnel on eBay. After deducting additional costs 

for  personnel,  rent  and  printing  material,  the  defendant  achieved  a  gross  profit  of  approx. 

EUR 5 000.00 from the EUR 24 215.00 generated from the sale of goods. 

The  defendant,  after  discovery  by  the  German  authorities,  admitted,  among  other  things,  that  he 

wanted to initiate the permanent production of counterfeit branded goods by purchasing the printing 

press. 

The discovery court’s examination revealed that the trade mark owners had not consented to the use 

of the trade mark by the defendant. The trade mark used in the online sales was identical to or at least 

similar to the protected trade mark. In addition to the brand identity, product identity was also involved, 

because  the  protected  brands  related  to  a  specific  protected  class  (textiles).  With  regard  to  the 

required product identity, it was sufficient that the product belonged to the protected class. Complete 

identity with products already sold by the authorised users of the brand was not required. 

The Court, in its legal reasoning, tried to draw an analogy between this case and other cases with 

similar facts. The Court referred to another case, in which it was found that obtaining counterfeit money 

with the intention of selling it at a favourable opportunity and the subsequent realisation of this intention 

as two separate acts is to be regarded as an act within the meaning of the relevant provision of the 

German Criminal Code. Likewise, the German Constitutional Court decided in the area of copyright 

infringement for the relationship between duplication and distribution. If these principles were to be 

transferred to the current case, it would mean that the sale of clothing items in violation of the ‘Böhse 

Onkelz’ brand, as shown in the indictment, could not be viewed as a majority act with regard to every 

item sold, nor as a violation of the German Trademark Act. The individual sales transactions related 

to the unlawfully trade marked goods previously procured or manufactured with the intention of then 

selling them, are bracketed into a single action. 

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In  this  case,  there  were  a  total  of  six  actions,  ordering,  printing,  placing,  selling,  printing their  own 

clothing, and selling again on the eBay platform. Each of these actions was to be punished according 

to the German Trademark Act with imprisonment of up to 5 years or a fine. Finally, considering the 

defendant’s credible confession of his actions, he was fined, for all the actions, with an overall fine of 

160 daily rates of EUR 10.00 each, and all the instruments and textiles were confiscated. 

District Court of Mühlhausen, 11 November 2007 

Point 1 

A vendor selling unauthorised products on the eBay platform was also the manufacturer of 
counterfeit products. 

Point 2 

The trade mark owners had not consented to the use of the trade mark by the defendant, 
and the trade mark used in the online sales was identical to or at least confusingly similar 
to the protected trade mark. 

Point 3 

The Court found that in this case there were a total of six illicit actions on the eBay platform: 
ordering,  printing,  placing, selling, printing their  own  clothing,  and  selling again.  Each of 
these  actions  was  to  be  punished  according  to  the  German  TradeMark  Act  either  with 
imprisonment of up to 5 years or with a fine. 

  Sale of counterfeit luxury goods from an online shop 

On 22 December 2016, the Helsinki District Court (the names of the parties are not available), ruled 

on a case concerning the Finnish Criminal Code as well the Finnish Trademarks Act. 

In  this  case,  counterfeit  products  were  sold  from  a  specific  online  shop.  The  defendant  imported 

counterfeit luxury bags from Asia, and sold them in their own online shop. 

The District Court found that it is general knowledge that counterfeit products are made in Asia and 

sold considerably cheaper than the authentic products. According to the Court, it was undisputed that 

the  products  were  counterfeit  and were  also sold  in the  defendant’s  online  shop  at  a  considerably 

cheaper price than that of the authentic products. Based on the circumstances, the defendant must 

have known the products were counterfeit. The Court concluded that because the products were sold 

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through the defendant’s online shop, and considering the volume of the activity, they were guilty of 

committing an intellectual property offence. 

Helsinki District Court, 22 December 2016 

Key 
point 

Criminal  liability  could  be  established  on  the  following  objective  grounds:  a) general 
knowledge  that  counterfeit  products  are  made  in  Asia,  b) counterfeit  products  are  sold 
considerably cheaper than the authentic products, and c) the infringer’s activity generated 
considerable volume. 

  Sale of pirated design articles on an auction marketplace 

Another Finnish Court, the District Court of Ylivieska, ruled on 1 April 2016 on a case concerning 

the Finnish Trademarks Act, the Finnish Copyright Act, and the Criminal Code of Finland. 

In this case, the defendant had sold in an online auction marketplace Sony PlayStation DualShock 

controllers, controller batteries, PlayStation steering wheels, and bags that incorporated a trade mark 

owned by Marimekko Oyj and which resembled bags made by Marimekko Oyj. 

The District Court ruled that the defendant had known that the bags were counterfeit. But the Court 

did not consider that there was evidence that the volume of the defendant’s activity was sufficient to 

constitute an intellectual property offence, as defined by Finnish law. However, the Court did find that 

the  defendant  had  acted  for  profit  and  in  violation  of  the  Copyright  Act  in  a  manner  conducive  to 

causing  considerable  detriment  or  damage  to  Marimekko  Oyj.  The  defendant  was  therefore  found 

guilty  of  a  copyright  offence.  Regarding  the  PlayStation  controllers,  the  District  Court  found  the 

defendant guilty of trade mark infringement of Sony’s trade mark ‘DualShock’. The Court dismissed 

the case regarding the controller batteries and steering wheels. 

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Ylivieska District Court, 1 April 2016 

Point 1 

Although  the  defendant  was  found  to  know  that  the  products  sold  on  an  online  auction 
marketplace were counterfeited, the Court did not consider that there was evidence that the 
volume of the defendant’s activity was enough to constitute a criminal offence. 

Point 2 

Nevertheless, the Court did find the defendant guilty for violating the Copyright Act as well the 
Trademark  Act.  The  defendant  had  acted  for  profit  in  a  manner  conducive  of  causing 
considerable detriment or damage to the copyright holder as well as to the trade mark holder. 

On 3 March 2020, in Hungary, the Municipal Court of Appeals (the court of appeals in Community 

design cases), ruled on a case concerning Council Regulation No 6/2002 on Community designs and 

the Hungarian Act XLVIII of 2001 on design protection. 

In this case, the vendor/defendant was selling gift boxes that resembled the registered  Community 

designs of the plaintiff. The vendor’s website, as well as the links directing to the plaintiff’s Instagram 

page and YouTube channel, included visual advertisements that called for the order of the gift boxes, 

if purchasers ordered other products as well. The second defendant was allegedly the ‘face’ of the 

advertisements for example they made endorsements of the first defendant’s products). The plaintiff 

claimed that both defendants had infringed its Community design rights by making, offering, putting 

on the market, and stocking the gift boxes. 

The court of appeals found that the plaintiff’s registered boxes and first defendant’s boxes should be 

compared, and that the differences should be the focus of this comparison rather than the similarities. 

The  colours,  shape,  exact  sizes,  proportions  of  various  parts,  and  accompanying  texts  all  had 

relevance in this analysis. The court of appeals agreed with the trial court that the first defendant’s gift 

boxes showed significant differences from the plaintiff’s boxes. A purchaser having a higher degree 

of knowledge  about the relevant  products  would  easily  be  able  to differentiate  between them. The 

court of appeals also stated that the second defendant did not ‘use’ the first defendant’s boxes, even 

though they endorsed the products. 

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2.3 

INJUNCTIONS AGAINST INTERMEDIARIES 

Key Points 

Point 1 

Intermediaries,  including  online  marketplaces,  can  be  liable  for  their  wrongdoing  by 
conducting primary or secondary infringement of IP rights. 

Point 2 

With  enhanced  responsibility  or  accountability,  intermediaries,  including  even  innocent 
intermediaries, can be subject to injunctive relief (limited to non-monetary obligations). 

Point 3 

The  e-commerce  Directive  exempts  intermediaries’  monetary  liability  where  the  acts  of 
intermediaries relate to mere conduit, caching or hosting, and according to established case-
law, hosting must be of a mere technical, automatic and passive nature. 

Point 4 

Where  intermediaries  are  ordered  by  injunction  to  take  necessary  measures,  there  is  no 
uniform rule at EU level on cost allocation for implementation of the measures; it is currently 
up to each of the Member States to decide. 

As  seen  in  the  previous  sections,  rights  holders  and  law  enforcement  agencies  can  act  against 

vendors directly, via legal actions, or through non-judicial measures, developed in collaboration with 

online marketplaces. However, these actions may not always be available, or may not be effective in 

tackling  the  infringement.  For  example,  judicial  proceedings  against  vendors  may  not  be  pursued 

because  the  identity  of  the  infringers  is  unknown,  or  because  they  are  based  in  remote 

jurisdictions (150).  Likewise,  non-judicial  measures  such  as  effective  NTD  procedures  may  not  be 

successful in stopping the infringement, or may not be available in the first place (151). It must be borne 

in mind that the EU legal framework (including both ‘hard’ and ‘soft’ law) creates strong incentives for 

marketplaces to actively collaborate in the fight against the sale of IP-infringing goods. However, these 

collaborative measures are voluntary and principally rely on business decisions. 

(150) See discussion infra, section 2.4. 

(151) This is the case of ‘rogue’ marketplaces operating on the darknet (see supra, section 2.1.3.4). 

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This section discusses the judicial remedies available to rights holders to seek redress from online 

marketplaces  and  other  intermediaries  along  the  supply  chain.  These  include,  in  particular, 

warehouses, advertising platforms, payment services and shipping services (152). The available judicial 

remedies  consist  of  injunctions,  which  may  be  granted  by  the  judicial  authority  even  when  the 

intermediary is not liable for the infringement or is exempt from liability. 

  Legal basis for injunctions against intermediaries 

Liability  of  online  marketplaces  and  other  intermediaries  arises  where  they  engage  in  an  act  that 

constitutes infringement of an IP right, such as those conferred by the registration of a trade mark or 

a design in the EU (153). Moreover, liability may also arise when they contribute to an infringing act 

committed  by  their  users.  This  latter  form  of  liability,  commonly  termed  ‘secondary’,  ‘indirect’  or 

‘accessory’ liability, is not harmonised by EU law and is left to the legislation of Member States (154). 

However,  online  intermediaries  may  benefit  from  the  exemptions  to  liability  laid  down  by  the  e-

commerce directive for ‘Information Society Service Providers’ (ISSPs) (155). 

(152) See supra, section 1.3. Major operators of online marketplaces offer some of all of those services to their customers 

(see supra, section 1.2.2). 

(153) Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union 

trade mark [2017] OJ L154/1, Article 9-16, and Directive (EU) 2015/2436 of the European Parliament and of the Council of 

16 December  2015  to  approximate  the  laws  of  the  Member  States  relating  to  trade  marks  (Recast)  [2015]  OJ L336/1, 

Articles 10-15; Council Regulation (EC) No 6/2002 of 12 December 2001 on Community designs, Article 19. 

(154) Matthias Leistner, ‘Structural Aspects of Secondary (provider) Liability in Europe’ (2014), JIPLP 75, Jaani Riordan, The 

Liability  of  Internet  Intermediaries  (Oxford  University  Press  2016)  p. 12-14;  Frederick  Mostert  ‘Intermediary  Liability  and 

Online  Trade  Mark  Infringement:  Emerging  International  Common  Approaches’,  in  Giancarlo  Frosio  (ed),  The  Oxford 

Handbook of Online Intermediary Liability (Oxford University Press 2020), p. 369; Richard Arnold, ‘Intermediary Liability and 

trade mark infringement: a common law perspective’ in ibid., p. 406. For a comparative analysis of secondary liability in EU 

Member States and internationally see Graeme Dinwoodie (ed), Secondary Liability of Internet Service Providers (Springer 

2018).  For  a  comparative  analysis  across  EU  member  states  see  European  Observatory  on  Counterfeiting  and  Piracy, 

Injunctions in Intellectual Property Rights. 

(155)  Directive  2000/31/EC  of  the  European  Parliament  and  of  the  Council  of  8 June  2000  on  certain  legal  aspects  of 

information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) 

[2000] OJ L178/1 (e-commerce Directive), Articles 12-15. 

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Irrespective of primary or secondary liability, and notwithstanding the e-commerce special exemptions 

from secondary liability, intermediaries may still be subject to injunctive reliefs aimed at terminating or 

preventing  an  infringement  taking  place  on  their  services,  or  at  obtaining  information  about  an 

infringer. Under EU law, these remedies are available against all ‘intermediaries whose services are 

used  by  third  parties  to  infringe  an  intellectual  property  right’ ( 156 ).  The  notion  of  ‘intermediary’ 

encompasses a wide range of entities that provide services to third parties, and includes both online 

and  physical  services (157).  A  noteworthy  point  is  that  this  injunctive  relief  is  also  available  against 

innocent  intermediaries.  The  basis  for  such  injunctive  relief  has  been  described  as  a  principle  of 

enhanced  responsibility  or  ‘accountability’,  which  imposes  certain  obligations  on  intermediaries 

irrespective  of  any  liability (158).  The  underlying  rationale  for  imposing  enhanced  responsibility  on 

intermediaries is that, as stated in Recital 59 to the Information Society Directive (159), in the digital 

environment, services of intermediaries are widely used for infringing activities and intermediaries are 

best  placed  to  bring  infringing activities to  an  end.  In the  same  vein,  Article 11  of the  Enforcement 

Directive (160)  provides  legal  grounds  for  injunctions  against  intermediaries  by  stating  that  Member 

(156) Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual 

property rights [2004] OJ L195/16, Article 11. See also, in relation to copyright infringement, Directive 2001/29/EC of the 

European Parliament and of the Council of 22 May 2001 on the harmonisation of certain aspects of copyright and related 

rights in the information society, Article 8(3). 

(157) An economic operator is construed as an ‘intermediary’ where ‘it provides a service capable of being used by one or 

more  other  persons  in  order  to  infringe one  or more  intellectual  property  rights,  but  it  is not necessary  that it maintain a 

specific relationship with that or those persons’ (07/07/2016, C-494/15, Tommy Hilfiger, EU:C:2016:528, § 23). ‘The fact that 

the provision of sales points concerns an online marketplace or a physical marketplace such as market halls is irrelevant in 

that connection’ (07/07/2016, C-494/15, Tommy Hilfiger, EU:C:2016:528, § 29). See also AG Opinion in Case C-567/18: ‘If 

it is ultimately found that the defendants [Amazon etc.] have not used the trade mark, their liability could still be analysed 

either  under  Directive  2000/31/EC […],  if  they  act  as  e-commerce  intermediaries,  or  under  Directive  2004/48/EC’ 

(28/11/2019, C-567/18, COTY GERMANY, EU:C:2019:1031, Part 2, § 3). 

(158) See Martin Husovec, Injunctions against Intermediaries in the European Union: Accountable but Not Liable? (Cambridge 

University Press 2017). 

(159) Directive 2001/29/EC of the European Parliament and of the Council of 22 May 2001 on the harmonisation of certain 

aspects of copyright and related rights in the information society [2001] OJ L167/10. 

(160) Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual 

property rights [2004] OJ L195/16. 

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States  shall  also  ensure  that  rights  holders  are  in  a  position  to  apply  for  an  injunction  against 

intermediaries whose services are used by a third party to infringe an intellectual property right. 

Figure 6 – The threefold legal basis for injunctions in the EU 

  Primary and secondary liability for trade mark infringement 

Liability of online marketplaces may arise in the context of both primary and secondary infringement, 

depending  on  the  types  of  acts  conducted  as  intermediary  and  the  degree  of  involvement  in  the 

transaction (161). 

In acts in relation to registered trade marks, primary infringement depends on the notions of ‘use in 

the course of trade’ and use ‘in relation to goods or services’ (162). According to settled case-law, a 

trade mark is used ‘in the course of trade’ where it occurs ‘in the context of commercial activity with a 

(161) Carina Gommers and Eva De Paw, ‘Liability for trade mark infringement of online marketplaces in Europe: are they 

“caught in the middle”?’, JIPPL&P, 2020, Vol. 15, No. 4, p. 276. 

(162) Regulation (EU) 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union 

trade mark (codification), Article 9(2). 

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view to economic advantage and not as a private matter’ (163). Moreover, the use is ‘in relation to goods 

of services’ whenever a ‘link’ can be established between the sign and the goods or services. This 

requires ‘at the very least’ that the operator ‘uses the sign in its own commercial communication’ (164). 

This was found to be the case where an operator of an auction marketplace used a third party’s trade 

mark as a keyword in an online advertising platform to promote the offerings made by vendors on its 

marketplace (165). However, the purpose of such ‘keyword use’ is crucial: no link can be established 

when the marketplace uses a keyword corresponding to a third party’s trade mark to promote its own 

marketplace services (where those services are not identical or similar to the goods or services of 

the  trade  mark  owner) ( 166 ).  Moreover,  in  relation  to  other  ancillary  services  provided  by  online 

marketplaces, no ‘link’ can be established when the intermediary provides purely technical or logistical 

solutions, such as packaging (167) or warehouse services (168). In ‘Coty Germany v Amazon’ the CJEU 

has recently confirmed that ‘creating the technical conditions necessary for the use of a sign and being 

paid for that service’ does not itself amount to ‘use’ of the sign (169). In that particular case, the Court 

found that the provision of storage facility for goods which infringe trade mark rights, ‘without being 

aware of that infringement’, must not be regarded as an act of storing those goods for the purpose of 

putting them on the market, where the operator does not, itself, pursue those aims, namely offering or 

putting the goods on the market (170). 

When  an  online  marketplace  is  not  liable  for  trade  mark  infringement  it  may  be  still  be  subject  to 

secondary liability based on other rules of law, such as general laws on tortious liability. In most EU 

Member States such liability can be established if the operator has ‘contributed’ to the infringing act, 

(163)12/11/2002, C-206/01, Arsenal, EU:C:2002:651, § 40. 

(164) 23/03/2010, C-236/08 - C-238/08, Google-Louis Vuitton, EU:C:2010:159, § 56. 

(165) 12/07/2011, C-324/09, L’Oréal-eBay, EU:C:2011:474, § 85-97. 

(166) 12/07/2011, C-324/09, L’Oréal-eBay, EU:C:2011:474, § 89-90. In case of non-identical or confusingly similar goods or 

services,  the  ‘keyword  use’  may  still  be  subject  to  scrutiny  as  a  possible  infringement  of  Article 9(2)(c)  of  the  EUTM 

Regulation (enhanced protection for trade marks with reputation). 

(167) 15/12/2011, C-119/10, Red Bull, EU:C:2011:837. 

(168) 16/07/2015, C-379/14, BACARDI, EU:C:2015:497. 

(169) 02/04/2020, C-567/18, COTY GERMANY, EU:C:2020:267, § 43. 

(170) 02/04/2020, C-567/18 COTY, GERMANY, EU:C:2020:267,, § 53. 

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in the sense that it has acted negligently or incorrectly, and a causal link can be established between 

their conduct and the damage suffered by the trade mark owner (171). 

  e-commerce exemptions from liability 

Online intermediaries may be exempted from liability to an extent that they act within the scope of the 

e-commerce Directive (172). Articles 12-15 of the e-commerce Directive provide a set of exemptions 

(safe harbours) (173) for Information Society Service Providers (ISSPs). The exemptions offered by the 

e-commerce  Directive  are  limited  to  monetary  liability.  Therefore,  ISSPs  can  still  be  subject  to 

injunctions  such  as  orders  by  courts  or  administrative  authorities  that  require  the  termination  or 

prevention of any infringement, including the removal of illegal information or the disabling of access 

to it (174). 

An ISSP is any natural or legal person providing an information society service (175), which spans a 

wide range of economic activities taking place online (176). The CJEU established that various types of 

activities can fall within the definition of an information society service, and these include, inter alia, 

selling  goods  online ( 177 )  and  operating  an  online  marketplace  that  facilitates  relations  between 

vendors and buyers of goods (178). The Court has also clarified that no specific contractual relationship 

with  the  end-user  is  required  for  the  supplier  of  these  services  to  qualify  as  an  intermediary (179). 

(171) Carina Gommers and Eva De Paw, ‘Liability for trade mark infringement of online marketplaces in Europe: are they 

“caught in the middle”?’, JIPPL&P, 2020, Vol. 15, No 4, p. 278. 

(172)  Directive  2000/31/EC  of  the  European  Parliament  and  of  the  Council  of  8 June  2000  on  certain  legal  aspects  of 

information society services, in particular electronic commerce, in the Internal Market (‘Directive on electronic commerce’) 

[2000] OJ L178/1 (e-commerce Directive). 

(173) For discussion of the origin of the term ‘safe harbour’, see Jaani Riordan, The Liability of Internet Intermediaries (Oxford 

University Press 2016) p. 377-78. 

(174) Recital 45 to e-commerce Directive. 

(175) e-commerce Directive, Article 2(b). 

(176) Recital 18 to e-commerce Directive. 

(177) However, the supply of goods following the online sale of goods is not covered within the meaning of information society 

services (02/12/2010, C-108/09, Ker-Optika, EU:C:2010:725, § 23-40. 

(178) 12/07/2011, C-324/09, L’Oréal-eBay,EU:C:2011:474, § 109. 

(179) 27/03/2014, C-314/12, UPC Telekabel Wien, EU:C:2014:192, § 32-35. 

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Similarly, it is not necessary to provide services beyond ‘basic’ internet services, as long as they can 

be used by third parties to infringe an IP right (180). 

ISSPs are not liable for mere conduit (181), caching (182) and hosting (183), and no general obligation to 

monitor, or to actively seek facts or circumstances indicating illegal activities is imposed (184). Of those 

exemptions, the hosting exemption is certainly the most important and contentious area, and the one 

that applies to all the categories of online marketplaces discussed in the previous chapters (185). 

2.3.3.1  Passive or active role 

Pursuant to Article 14 of the e-commerce Directive, ISSPs providing storage of information (hosting) 

are not liable for the information stored at the request of a recipient of the service. The scope of an 

ISSP’s  activity,  in  respect  of  storage  of  information,  must  be  of  a  merely  technical,  automatic  and 

passive nature (186). In effect, if ISSPs play ‘an active role of such a kind as to give it knowledge of, or 

control over, the data stored’ (187), they will be unable to benefit from the hosting exemption. The CJEU 

further elaborated the meaning of an active role in ‘L’Oréal v eBay’, by holding that ‘where the operator 

has provided assistance that entails, in particular, ‘optimising the presentation of the offers for sale in 

question or promoting those offers’, it must be considered not to have taken a neutral position between 

the customer/vendor concerned and potential buyers, but to have played an active role of such a kind 

as to give it knowledge of, or control over, the data relating to those sale offerings (188). 

(180)19/02/2009, C-557/07, LSG-Gesellschaft zur Wahrnehmung von Leistungsschutzrechten, EU:C:2009:107, § 43. 

(181) e-commerce Directive, Article 12 

(182) e-commerce Directive, Article 13 

(183) e-commerce Directive, Article 14 

(184) e-commerce Directive, Article 15. 

(185) Jaani Riordan, The Liability of Internet Intermediaries (Oxford University Press 2016) p. 401-409. 

(186) Recital 42 to e-commerce Directive. 

(187) 23/03/2010, C-236/08 - C-238/08 Google-Louis Vuitton, EU:C:2010:159, § 120. 

(188) 12/07/2011, C-324/09, L’Oréal-eBay, EU:C:2011:474, § 116 (emphasis added). 

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2.3.3.2  Knowledge of illegal activity 

In order to benefit from liability exemptions, the following conditions must be further met. First, ISSPs 

must not have actual knowledge of illegal activity or information, and, as regards claims for damages, 

must  not  be  aware  of  facts  or  circumstances  from  which  the  illegal  activity  or  information  is 

apparent (189).  And  upon  obtaining  such  knowledge  or  awareness,  they  must  act  expeditiously  to 

remove, or to disable access to, the information (190). 

In relation to the assessment of ISSPs’ knowledge of illegal activity or information, the CJEU clarified 

that it is sufficient for ISSPs to have been aware of facts or circumstances on the basis of which a 

diligent economic operator should have identified the illegality in question and acted in accordance 

with Article 14(1)(b) of the e-commerce Directive (191). In effect, where ISSPs could have uncovered 

an illegal activity or illegal information, as the result of an investigation undertaken on its own initiative, 

as  diligent  economic  operators,  it  is  likely  that  they  would  be  deemed  to  have  been  aware  of  the 

illegalities (192). This also applies where ISSPs are notified of the existence of such an activity or such 

information;  however,  given  that  the  notification  can  be  insufficiently  precise  or  inadequately 

substantiated, this will not automatically preclude the hosting exemption (193). 

The scope of proactive investigation to detect potentially infringing content has been addressed by 

national courts in Germany and the Netherlands in cases involving Stokke AS. A Dutch court of appeal 

found  that  an  online  marketplace  having  a  ‘neutral’  role  could  not  be  expected  to  proactively 

investigate  all  listings  advertising  Stokke  chairs, since  95 %  of  Stokke  products  traded  through  the 

marketplace were legitimate. Such an expectation would be disproportionate and would constitute a 

barrier  to  trade,  since  the  marketplace  already  had  NTD  procedures  in  place (194).  Similarly,  the 

(189) e-commerce Directive, Article 14(1)(a). 

(190) e-commerce Directive, Article 14(1)(b). 

(191) 12/07/2011, C-324/09, L’Oréal-eBay, EU:C:2011:474, § 120. 

(192) 12/07/2011, C-324/09, L’Oréal-eBay, EU:C:2011:474, § 122. 

(193) 12/07/2011, C-324/09, L’Oréal-eBay, EU:C:2011:474. 

(194)  Court  of  Appeal  Leeuwarden,  22 May  2012,  Stokke  AS  v  Marktplaats  BV.  See  Carina Gommers  and  Eva  De  Paw, 

‘Liability for trade mark infringement of online  marketplaces in Europe: are they “caught in the middle”?’, JIPPL&P, 2020, 

Vol. 15, No. 4, p. 281-282. 

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German  Supreme  Court  ruled  that  an  investigation  assisted  by  image-recognition  software,  but 

requiring a manual check for each and every listing, would be ‘unreasonable for the defendant in view 

of the effort involved’ (195). 

2.3.3.3  Expeditious removal of information 

There is no statutory definition of what is required from an ISSP to ‘act expeditiously’ upon receiving 

knowledge of an infringement. The period for responding depends on the circumstances, including 

the nature of the unlawful activity and the clarity and specificity of the notification (196). In this respect, 

it should be observed that the mere provision of a NTD system may not be sufficient, per se, to ensure 

compliance with the requirement of expeditious removal, especially when the unlawful activity has the 

potential  to  cause  serious  harm.  This  is  suggested  by  recent  decisions  of  the  European  Court  of 

Human Rights (ECHR) on the publication of defamatory content on news platforms (197). No guidance 

has yet been provided by the CJEU on the requirement of expeditious removal of the information. 

2.3.3.4  Monitoring obligations 

In accordance with Article 15(1) of the e-commerce Directive, ISSPs cannot have general obligations 

to monitor imposed upon them. Accordingly, injunctions imposed on ISSPs requiring them to install a 

filtering system that actively monitors all the data relating to all their service users, in order to prevent 

any future IP infringement, are not allowed (198). However, this does not preclude specific monitoring 

obligations ordered by courts or administrative authorities in the form of injunctions (199). Such specific 

(195) Bundesgerichtshof, 22 July 2010, Stokke/Tripp Trapp, I ZR 139/08, § 48. 

(196) Jaani Riordan, The Liability of Internet Intermediaries (Oxford University Press 2016), § 12.144. 

( 197 )  Delfi  v  Estonia,  App.  No. 64569/09,  ECHR  16 June  2015  and  Magyar  Tartalomszolgáltatók  v  Hungary,  App. 

No. 22947/13, ECHR, 2 February 2016. See Eleonora Rosati, ‘The direct liability of intermediaries’, in Giancarlo Frosio (ed), 

The Oxford Handbook of Online Intermediary Liability (Oxford University Press 2020), p. 346. 

(198) 16/02/2012, C-360/10, SABAM, EU:C:2012:85, § 34-38; 24/11/2011, C-70/10, Scarlet Extended, EU:C:2011:771, § 47-

54. 

(199) Recital 45 to e-commerce Directive. 03/10/2019, C-18/18, Glawischnig-Piesczek, EU:C:2019:821. 

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monitoring obligations are particularly relevant in the case of injunctions aimed at preventing future 

infringements. 

The proposed DSA Regulation, while reaffirming the prohibition of general monitoring or active fact-

finding  obligations ( 200),  specifies  that  ‘voluntary  own-initiative  investigations’  do  not  disqualify  an 

intermediary service from the exemptions for mere conduit, caching or hosting (201). 

  Injunctions to prevent further infringements 

Injunctions against intermediaries must be effective, proportionate, and dissuasive. They must neither 

create barriers to legitimate trade (202), nor impact on fundamental rights and freedoms (203). Therefore, 

an injunction that obliges ISSPs to take measures which could represent a significant cost for them, 

for example, cannot be permitted, as this can considerably impact on ISSPs’ free use of the resources 

at their disposal (204). 

The  scope  of  injunctions  against  ISSPs  includes  both  terminating  existing  infringements  and 

preventing  further  infringements  of  that  kind.  In order  to  be  effective,  these  injunctions  require  the 

implementation of some proactive monitoring duties, whose scope is limited by Article 15(1) (205). In 

the case of online marketplaces, these measures cannot comprise a duty to monitor all information 

submitted by their customers, or the banning of all sales of goods bearing a certain trade mark. The 

(200) Proposal for a Regulation of the European Parliament and of the Council on a Single Market for Digital Services (Digital 

Services Act) and amending Directive No 2000/31/EC, COM/2020/825 final, Article 8. 

(201) Proposal for a Regulation of the European Parliament and of the Council on a Single Market for Digital Services (Digital 

Services Act) and amending Directive No 2000/31/EC, COM/2020/825 final, Article 7. 

(202) 12/07/2011, C-324/09, L’Oréal SA-eBay, EU:C:2011:474, § 125-144. 

(203) 29/01/2008, C-275/06, Promusicae, EU:C:2008:54, § 61-70; 16/02/2012, C-360/10, SABAM, EU:C:2012:85, § 51-52. 

(204) 27/03/2014, C-314/12, UPC Telekabel Wien, EU:C:2014:192, § 45-50. See also Article 11 of Enforcement Directive. 

(205) See cases cited supra, note 198. 

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criterion  for  determining  the  scope  of  these  kinds  of  injunctions  can  be  derived  from  the  ‘double 

identity’ approach suggested by Advocate General Jääskinen in the ‘L’Oréal v eBay’ case: 

[a]n appropriate limit for the scope of injunctions may be that of a double requirement of 

identity. This means that the infringing third party should be the same and that the trade 

mark infringed should be the same in the cases concerned. Hence, an injunction could 

be  given  against  an  intermediary  to  prevent  the  continuation  or  repetition  of  an 

infringement  of  a  certain  trade  mark  by  a  certain  user.  Such  an  injunction  could  be 

followed by an information society service provider by simply closing the client account 

of the user in question (206). 

This ‘double identity’ approach is not limited to trade mark infringement, as confirmed by the CJEU in 

a recent judgment concerning the removal of defamatory content from a social media platform. In that 

case, the Court ruled that Article 15(1) of the e-commerce Directive does not preclude a national court 

from ordering a platform to remove content which is not only identical, but also ‘equivalent’ compared 

to  the  content  that  was  declared  illegal;  this  on  condition  that  the  equivalence  can  be  established 

without requiring the ISSP to carry out an independent assessment of the that content (207). 

The  CJEU  jurisprudence  suggests  that  injunctions  to  prevent  further  IP  infringements  are  allowed, 

provided  the  service  can  comply  with  the  order  by  using  automated  search  tools.  However,  they 

cannot go  as far  as  to require the  service provider to  carry  out  an  independent  assessment  of the 

content. 

(206) Opinion of AG Jääskinen (12/07/2011, C-324/09, L’Oréal SA-eBay, EU:C:2010:757, § 182). 

(207) 03/10/2019, C-18/18, Glawischnig-Piesczek, EU:C:2019:821, § 53. On the relevance for trade mark infringement see 

Carina Gommers and Eva De Paw, ‘Liability for trade mark infringement of online marketplaces in Europe: are they “caught 

in the middle”?’, JIPL&P, 2020, Vol. 15, No. 4, p. 284. 

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  Allocations of costs of injunctions 

There are no harmonised rules on cost allocation of injunctions against intermediaries at EU level. As 

the UK Supreme Court highlighted in ‘Cartier v British Telecommunications’ (208), neither EU directives 

nor  CJEU  judgments  offer  specific  guidelines  as  to  the  cost  allocation  of  injunctions  against 

intermediaries (209). Therefore, cost allocation is at the discretion of Member States (210). For example, 

a general rule in the UK was that intermediaries bear the costs of implementation, whilst rights holders 

pay  the  costs  of  application (211).  However,  in  ‘Cartier  v  British  Telecommunications’ (212),  the  UK 

Supreme Court set a new guideline for cost allocation by holding that ‘unless there are good reasons 

for a different order an innocent intermediary is entitled to be indemnified by the rights-holder against 

the costs of complying with a website-blocking order’ [emphasis added] (213). 

(208) [2018] UKSC 28. 

(209)  Eleonora  Rosati,  ‘UK  Supreme  Court  holds  that  intermediaries  have  to  bear  no  costs  of  injunctions  against  them’ 

JIPL&P, 2018, Vol. 13, p. 933. 

(210)  Eleonora  Rosati,  ‘UK  Supreme  Court  holds  that  intermediaries  have  to  bear  no  costs  of  injunctions  against  them’ 

JIPL&P, 2018, Vol. 13, p. 933. 

(211) Twentieth Century Fox and others v British Telecommunications PLC (Newzbin 2) [2011] EWHC 1981 (Ch). 

(212) [2018] UKSC 28. 

(213) [2018] UKSC 28, [31]. 

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2.4 

JURISDICTION OF IP INFRINGEMENT CASES 

Key Points 

Point 1 

In  settling  conflicts  of  law  in  IP  cases, national  IP  rights  are  governed  by  the  Brussels  I 
Regulation (recast) (lex generalis), whereas pan-EU IP rights, such as Community design 
rights or EU trade marks, are regulated by the relevant EU regulations (lex specialis). 

Point 2 

Point 3 

Point 4 

Claimants  are  generally  obliged  to  bring  a  case  to  the  courts  where  the  defendant(s)  is 
domiciled, but it is also possible to start proceedings, alternatively, in the place where the 
damage or the event that caused the damage to arise occurred, or where the infringement 
has been committed. 

In  relation  to  allocation  of  jurisdiction  in  online  infringement,  one  of  the  key  factors  to 
consider  is  whether  infringers  targeted  either  the  EU  (in  case  of  pan-EU  IP  rights)  or  a 
Member State (in case of national IP rights). If the targeting requirement is established, IP 
rights holders may start proceedings in the courts of the targeted jurisdiction. 

Recognition and enforcement of foreign judgments between EU Member States is uniformly 
provided by the Brussels I Regulation (recast), while enforcing judgments in jurisdictions 
other than EU Member States can be extremely challenging, due to discrepancies in the 
national laws. 

Over the last few decades the European Union (EU) has fought against IP rights infringement, with 

two clear goals: the first is to seek to combat IP rights infringement within the internal market and at 

the EU’s external borders, and the second is to pre-empt IP theft taking place at the source, such as 

in third countries (214). In order to strengthen the EU IP regime for tackling IP rights infringement, the 

EU  has  introduced  a  number  of  Regulations  and  Directives,  such  as  the  Border  Measures 

Regulation (215) and the Enforcement Directive (216) offering legal grounds for  the enforcement of IP 

(214) Olivier Vrins and Marius Schneider, ‘Cross-border enforcement of intellectual property: The European Union’ in Paul 

Torremans (ed.), Research Handbook on Cross-border Enforcement of Intellectual Property (Edward Elgar 2014) 174. 

(215)  Regulation  (EU)  No 608/2013  of  the  European  Parliament  and  of  the  Council  of  12 June  2013  concerning  customs 

enforcement of intellectual property rights and repealing Council Regulation (EC) No 1383/2003 [2013] OJ L181/15. 

(216) Directive 2004/48/EC of the European Parliament and of the Council of 29 April 2004 on the enforcement of intellectual 

property rights [2004] OJ L195/16. 

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rights and remedies, in relation to physical goods produced within the internal market or imported into 

the EU (217). Meanwhile, the Brussels I Regulation (recast) (218) was amended various times to improve 

access to justice in the EU Member States. 

EU goals fighting against IP rights infringement: 

•  Goal 1: Seek to combat IPR infringement within the internal market 
•  Goal 2:  Pre-empt  IP  theft  taking  place  at  the  source,  such  as  in  third 

countries 

The aim of this section is to provide an overview of the law on jurisdiction and conflicts of law in relation 

to  IP  rights  infringement  that  take  place  in  connection  with  the  sale  of  infringing  goods  on  online 

marketplaces.  The  Brussels  I  Regulation  (recast)  sets  out  general  rules  governing  conflict  of 

jurisdiction in civil and commercial matters, unifying differences between national rules in the Member 

States (219).  In  terms  of  settling  conflicts  of  jurisdiction,  the  Brussels  I  Regulation  (recast)  directly 

applies  to,  and  binds,  the  EU  Member  States,  taking  priority  over  national  laws.  However,  the 

Regulation has  limited  effects  on  disputes regarding  pan-EU IP  rights,  such  as Community  design 

rights or EU trade marks. This is because the specific rules on international jurisdiction for those rights 

are  provided  in  the  relevant  regulations  and  take  precedence  over  the  Brussels  I  Regulation 

(recast) (220).  In  effect,  the  latter  will  generally  apply  in  settling  conflicts  of  jurisdiction  in  disputes 

(217) See Olivier Vrins and Marius Schneider, ‘Cross-border enforcement of intellectual property: The European Union’ in 

Paul Torremans (ed), Research Handbook on Cross-border Enforcement of Intellectual Property (Edward Elgar 2014) 182-

195. See also European Commission Staff Working Document, ‘Analysis of the application of Directive 2004/48/EC of the 

European  Parliament  and  the  Council  of  29 April  2004  on  the  enforcement  of  intellectual  property  rights  in  the  Member 

States’ (SEC(2010) 1589-final). 

(218) Regulation (EU) No 1215/2012 of the European Parliament and of the Council of 12 December 2012 on jurisdiction and 

the recognition and enforcement of judgments in civil and commercial matters (recast) OJ L351/1. 

(219) Recital 4 to the Brussels I Regulation (recast). 

(220) Regulation (EU) No 2017/1001 of the European Parliament and of the Council of 14 June 2017 on the European Union 

trade  mark  [2017]  OJ L154/1  (EUTMR),  Article 125  and  Council  Regulation  (EC)  No 6/2002  of  12 December  2001  on 

Community  designs  [2002]  OJ L3/1  (CDR),  Article 82.  To  avoid  confusion, it should  be  noted that  the  term ‘international 

jurisdiction’ adopted in the EUTMR and the CDR indicates ‘pan-EU jurisdiction’. See David Stone, European Union Design 

Law: A Practitioner’s Guide, 2nd edition (Oxford University Press 2016) § 22.56-22.95. 

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concerning national IP rights, whereas a matter of international jurisdiction in EU IP rights will be 

governed by the relevant regulations (221). 

IP RIGHTS 

LEGAL BASIS TO ESTABLISH JURISDICTION IN 

INTERNATIONAL (PAN-EU) IP DISPUTES 

EU Trade Marks 

EUTM Regulation No 2017/1001, Article 125 

Community designs 

Community Designs Regulation No 6/2002, Article 82 

National  IP  rights  (national 

trade  marks,  copyright  and 

Brussels I Regulation (recast) 

related rights, patents, …) 

The  provisions  laid  down  by  EU  legislation  only  apply  to  civil  proceedings.  The  rules  to  determine 

jurisdiction on criminal proceedings are not harmonised under EU law, and are left to the legislation 

of Member States and international law (222). 

This section addresses pan-EU jurisdiction issues arising in relation to online infringement of national 

and EU IP rights, as well as disputes with non-EU undertakings, and recognition of foreign judgments. 

Finally, it briefly addresses jurisdiction issues in criminal proceedings. 

(221) Olivier Vrins and Marius Schneider, ‘Cross-border enforcement of intellectual property: The European Union’ in Paul 

Torremans (ed), Research Handbook on Cross-border Enforcement of Intellectual Property (Edward Elgar 2014) 206-11; 

05/09/2019, C-172/18, AMS Neve and others, EU:C:2019:674, § 36. 

(222) EUIPO (2018) Study on legislative measures related to online IPR infringements, September 2018, and EUIPO (2021) 

International  Judicial  Cooperation  in  Intellectual  Property  Cases  –  Study  on  Legislative Measures  Related  to  Online  IPR 

Infringements Phase 2, March 2021. 

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  Conflict of law in online infringement of national trade marks 

The Brussels I Regulation (recast) states that, as a general rule, persons domiciled in a Member State 

will,  whatever  their  nationality,  be  sued  in  the  courts  of  that  Member  State (223).  Article 63  of  the 

Brussels  I  Regulation (recast) enlarges upon the  meaning  of  being  domiciled:  a company  or  other 

legal  person  or  association  of  natural  or  legal  persons  is  domiciled  at  the  place  where  it  has  its 

statutory  seat,  central  administration  or  principal  place  of  business,  whereas  determination  of  an 

individuals’ domicile will be in accordance with national laws (224). 

However, a person domiciled in a Member State may be sued in another Member State in exceptional 

situations (225). Article 7(2) of the Brussels I Regulation (recast) states that in matters relating to tort, 

delict or quasi-delict, a person may be sued in the courts of the place where the harmful event occurred 

or may occur. In other words, IP infringement cases can be heard in the courts where the harmful 

event occurred or may occur due to the infringement (226). 

In ‘Wintersteiger v Products 4U’ (227), the CJEU clarified the meaning of Article 5(3) of the Brussels I 

Regulation, which is now Article 7(2) of the Brussels I Regulation (recast). The claimant, Wintersteiger, 

was  an  undertaking  that  was  established  in  Austria  and  manufactured  and  sold  winter  sports 

equipment such as ski and snowboard servicing tools. The defendant, Products 4U, was a company 

that  was  established  in  Germany,  and  also  developed  and  sold  ski  and  snowboard  tools.  The 

defendant reserved the keyword ‘Wintersteiger’ on Google.de, so that when  internet users entered 

the  keyword  into  the  search  engine  they  were  directed  to  the  defendant’s  website.  The  claimant 

brought an action for infringement of an Austrian trade mark in the Austrian courts but the defendant 

contested  the  international  jurisdiction  of  the  Austrian  courts,  contending  that  Google.de  and  the 

advertisement that appeared on that website exclusively targeted German users. 

(223) Brussels I Regulation (recast), Article 4(1). 

( 224)  Brussels  I  Regulation  (recast),  Article 62.  See  also  David  Stone,  David  Stone,  European  Union  Design  Law:  A 

Practitioner’s Guide (2nd ed., Oxford University Press 2016) § 22.66. 

(225) Brussels I Regulation (recast), Article 7. 

(226) Paul Torremans, ‘Jurisdiction in intellectual property cases’ in Paul Torremans (ed),  Research Handbook on Cross-

border Enforcement of Intellectual Property (Edward Elgar 2014) p. 383. 

(227) 19/04/2012, C-523/10, Wintersteiger, EU:C:2012:220. 

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The CJEU held that the place where the harmful event occurred or may occur within Article 5(3) of the 

Brussels I Regulation (now Article 7(2)) meant both the place where the damage occurred and the 

place of the event giving rise to it, and that the defendant could be sued in either of those places (228). 

However,  national  IP  rights  are  limited  by  their  territoriality.  Therefore,  proprietors  of  the  IP  rights 

cannot generally rely on protection outside their jurisdiction (229). The CJEU held, therefore, that the 

court of the Member State in which the IP rights are registered (in this case, an Austrian trade mark) 

may have the power to assess and determine the case in the most effective manner (230). As for the 

place  of  the  event  giving  rise  to  the  damage,  the  CJEU  pointed  out  that  in  the  context  of  online 

advertising, the event should be construed as arising where the advertiser  is using the referencing 

system  for  its  own  commercial  communications,  rather  than  the  place  of  the  servers  providing  the 

display of advertisements (231). 

  Conflict of law in online infringement of EU trade marks 

More recently, an issue of jurisdiction in the context of online trade mark infringement was dealt with 

in ‘AMS Neve v Heritage Audio’ (232). The claimant (AMS Neve) was a company that was established 

in  the  UK  and  manufactured  and  sold  audio  equipment.  The  defendant  (Heritage  Audio)  was  a 

company that was established in Spain and sold and supplied audio equipment. The defendant was 

alleged to have offered for sale counterfeit goods bearing a sign that was identical or similar to the 

claimant’s  EU  and  national  trade  marks,  to  consumers  in  the  UK  via  the  defendant’s  website  and 

(228) 19/04/2012, C-523/10, Wintersteiger, EU:C:2012:220, § 17-20. 

(229) 19/04/2012, C-523/10, Wintersteiger, EU:C:2012:220, § 25. Similarly, in Argos Ltd v Argos Systems Inc [2018] EWCA 

Civ 2211;  [2019]  FSR3,  the  Court  of  Appeal  (UK)  held  that  those  who  conduct  their  business  entirely  outside  the  UK 

jurisdiction should not be subject to UK trade mark law on the simple facts that UK residents can visit their website especially 

where such visit is not intended by the trader. See Mark Hyland and Michael Howard, ‘The doctrine of targeting in the context 

of international trade mark disputes’ (2019) 41 European Intellectual Property Review 464. 

(230) 19/04/2012, C-523/10, Wintersteiger, EU:C:2012:220, § 28-29. 

(231) 19/04/2012, C-523/10, Wintersteiger, EU:C:2012:220, § 30-38. 

(232) 05/09/2019, C-172/18, AMS Neve and others, EU:C:2019:674. For a succinct analysis of jurisdiction issues of trade 

mark 

in 

the  EU, 

see  also 

‘International 

Jurisdiction 

in 

IPR  Disputes’ 

(European 

IP  helpdesk) 

http://www.iprhelpdesk.eu/blog/international-jurisdiction-ipr-disputes, accessed 29 October 2020. 

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social media accounts, such as Facebook and Twitter (233). For this ground, the claimant brought an 

action for infringement to the Intellectual Property and Enterprise Court (IPEC) in the UK. However, 

the defendant contended that the UK courts had no jurisdiction to hear the case. 

As mentioned above, in the case of EU trade mark infringement, rules on international jurisdiction in 

the  relevant  EU  regulations  take  precedence  over  the  Brussels  I  Regulation  (recast),  where  the 

disputes  arise  internationally.  In  this  case,  the  applicable  provision  was  Article 97  of  the  Council 

Regulation (EC) No 207/2009, which is reproduced in Article 125 of the EUTMR. Article 97(1) of the 

Council Regulation (EC) No 207/2009 states that actions for infringement  should be brought in the 

courts  of  the  Member  State  in  which  the  defendant  is  domiciled  or,  if  not  domiciled  in  any  of  the 

Member States, in which they have an establishment (234). Alternatively, pursuant to Article 97(5), it is 

also possible that infringement actions may be brought before the courts of the Member State in which 

the act of infringement has been committed or threatened (235). 

Having referred to Article 97 of the Council Regulation (EC) No 207/2009, the IPEC concluded that 

the court had no jurisdiction over EU trade mark infringement cases because, pursuant to Article 97(1) 

of  the  Regulation,  the  Kingdom  of  Spain  was  the  Member  State  in  which  the  defendant  was 

domiciled (236). Regarding the place where the act of infringement had been committed, the IPEC held 

that jurisdiction lay in the court of the Member State where the third party had decided to place the 

relevant advert, or to offer for sale products on the relevant site or platforms, and took steps to give 

effect to that decision (237). The claimant brought an appeal to the Court of Appeal (England & Wales) 

which sought a preliminary ruling on the interpretation of Article 97(5) of the Regulation. 

Referring  to  the  established  case-law  (e.g.  that  in  ‘Coty  Germany’ ( 238 )),  the  CJEU  held  that 

Article 93(5) of the Regulation relates to active conduct on the part of the person causing the alleged 

(233) 05/09/2019, C-172/18, AMS Neve and others, EU:C:2019:674, § 19-21. 

(234) Article 125(1) EUTMR provides the same rule. 

(235) Article 125(5) EUTMR. 

(236) 05/09/2019, C-172/18, AMS Neve and others, EU:C:2019:674, § 26. 

(237) 05/09/2019, C-172/18, AMS Neve and others, EU:C:2019:674, § 27. 

(238)  05/06/2014,  C-360/12,  Perfume  bottle/Perfum  bottle  (3D),  EU:C:2014:1318,  which  concerns  issues  of  international 

jurisdiction in the context of offline EU trade mark infringement. 

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infringement (239). It went on to say that where the alleged infringement consisted of advertising and 

offering  for  sale  counterfeit  products,  the  place  in  which  the  infringement  was  committed  was  the 

territory where the consumers or traders targeted by those adverts or offers for sale, irrespective of 

whether the defendant was established elsewhere; whether the server of the electronic network that 

the  defendant  used  was  located  elsewhere;  or  whether  the  products  that  were  the  subject  of  the 

adverts and offers for sale were located elsewhere (240). 

  Conflict of law in online infringement of copyright and related rights 

Jurisdiction  in  online  copyright  infringement  was  first  addressed  by  the  CJEU  in  ‘Pinckney  v  KDG 

Mediatech’.  The  dispute  concerned  the  unauthorised  reproduction  on  compact  disc  (CD)  by  an 

Austrian company of 12 songs, recorded by their French author on vinyl, and the sale of those CDs 

on the internet. The defendant challenged the jurisdiction of the French court on the ground that the 

CDs  had  been  pressed  in  Austria  at  the  request  of  a  UK  company,  which  marketed  them  on  the 

internet. In response to the questions of the French Court of cassation, the CJEU clarified that the fact 

that the internet site where the allegedly infringing product was sold was accessible from a Member 

State,  was  sufficient  to  establish  jurisdiction  in  that  Member  State,  although  the  court  only  had 

jurisdiction to determine the damage caused in the Member State in which it was situated (241). 

The 

‘accessibility  approach’ 

to 

the 

jurisdiction 

issue  was 

then  confirmed 

in 

‘Hejduk  v 

EnergieAgentur’ ( 242),  a  case  on  the  unauthorised  offering  of  photographs,  taken  by  an  Austrian 

professional photographer, on the website of a German company. The defendant raised the objection 

that  the  Austrian  court  lacked  jurisdiction,  since  the  website  operated  under  a  country-specific, 

German top-level domain and targeted a German public. The mere fact that it was ‘accessible’ from 

(239) 05/09/2019, C-172/18, AMS Neve and others, EU:C:2019:674, § 44. For a critical review of the case, see Eleonora 

Rosati, ‘International jurisdiction in online EU trade mark infringement cases: where is the place of infringement located?’ 

(2016) 38 European Intellectual Property Review 482. 

(240) 05/09/2019, C-172/18, AMS Neve and others, EU:C:2019:674, § 47. 

(241) 03/10/2013, C-170/12, Pinckney, EU:C:2013:635. 

(242) 22/01/2015, C-441/13, Hejduk, EU:C:2015:28. In both this case and 03/10/2013, C-170/12, Pinckney, EU:C:2013:635, 

the jurisdiction issue was decided under Regulation (EC) No 44/2001, now repealed by Brusslels I Regulation (recast). 

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Austria was insufficient to confer jurisdiction to that court. However, the CJEU rejected that argument 

and clarified that ‘accessibility’ of a website in a Member State was sufficient to establish jurisdiction, 

subject to the limitation that the national court had jurisdiction only to rule on the damages caused in 

that Member State. 

In  a  case  of  infringement  of  the  sui  generis  database  right,  however,  the  CJEU  ruled  that  the 

localisation of an act of reutilisation requires something more than just ‘accessibility’ in a given territory 

of the website containing the data extracted from the database. This is because due account must be 

taken of the ‘ubiquitous nature’ of internet websites, which can be consulted instantly everywhere by 

everyone ‘irrespective of any intention of the operator of the website’ and ‘outside of [their] control’ (243). 

Therefore, to establish that the infringing act occurs in a Member State, at least an ‘intention’ to target 

the public in that Member State must be shown. However, jurisdiction cannot be refused on the ground 

that  the  servers  are  located  in  a  different  place,  as  this  would  undermine  the  effectiveness  of  the 

protection given to databases under EU law (244). 

  Conflict of law in online infringement of Community designs 

Jurisdiction  in  cases  of  infringement  of  Community  designs  was  addressed  by  the  CJEU  in 

‘Nintendo/BigBen’ (245). The Court clarified that, in a case with multiple defendants, when infringement 

proceedings  are  brought  against  a  defendant  domiciled  in  a  Member  State,  the  court  also  has 

jurisdiction  over  all  the  other  co-defendants  for  infringing  acts  committed  on  the  territory  of  other 

Member States. In particular, where a  vendor is sued for infringement of a Community design in a 

Member  State,  and  the  manufacturer  is  based  in  another  Member  State,  the  national  court  has 

jurisdiction in relation to both of them. Moreover, where a design is reproduced and offered for sale 

on a website, the place where ‘the process of putting the offer for sale online […] was activated’ (246) 

is to be considered the place where the event giving rise to the damage occurred. Where the damage 

(243) 18/10/2012, C-173/11, Football Dataco and Others, EU:C:2012:642, § 35. 

(244) 18/10/2012, C-173/11, Football Dataco and Others, EU:C:2012:642. 

(245) 27/09/2017, C-24/16 & C-25/16, Nintendo, EU:C:2017:724. 

(246) 27/09/2017, C-24/16 & C-25/16, Nintendo, EU:C:2017:724, § 108. 

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has  occurred  in multiple jurisdictions,  an  overall  assessment  of the  defendant's  conduct  should be 

made, rather than referring to each individual act of infringement. 

  International disputes with undertakings domiciled in non-EU Member States 

In  France,  the  claimant  (Louis  Vuitton),  a  French  company,  started  proceedings  against  the 

defendants (eBay), an American company and a Swiss company, for trade mark infringement (247). 

The defendants used keywords included in some of the claimant’s trade marks to generate adverts 

that directed internet users to their websites (e.g. ebay.fr and ebay.com). The defendants appealed 

the case, contending that the French courts had no jurisdiction, but American and Swiss courts did. 

The  French  Supreme  Court  dismissed  the  appeal  by  holding  that  the  French  internet  users  were 

solicited  by  contentious  keywords  leading  to  offers  of  leather  goods  on  various  eBay  auction  sites 

managed by the eBay companies concerned (248). In support of its decision, the French Supreme Court 

highlighted, in particular, that: 

(1)  an eBay platform to which the internet user was directed offered leather goods in French, with 

a price in Euros or converted into Euros; 

(2) 

the advertisements came from various vendors undertaking to deliver the goods in France and 

that these auction sites were managed by the eBay companies involved (249). 

However, it was held that the UK courts had no jurisdiction in the case between a UK-based company 

(easyGroup, the owner of a brand of budget airline ‘easyJet’) and a company based in Bangladesh 

(EasyFly  Express,  a  company  providing  airline  cargo  services),  despite  the  defendant’s  allegedly 

infringing use of the claimant’s trade marks (250). 

(247) Louis Vuitton Malletier (Société) v eBay Inc and eBay International AG [2011] I.L.Pr. 16 (Cour de Cassation). 

(248) Louis Vuitton Malletier (Société) v eBay Inc and eBay International AG [2011] I.L.Pr. 16 (Cour de Cassation), § 11. 

(249) Louis Vuitton Malletier (Société) v eBay Inc and eBbay International AG [2011] I.L.Pr. 16 (Cour de Cassation), § 11. 

(250) Mark Hyland and Michael Howard, ‘The doctrine of targeting in the context of international trade mark disputes’ (2019) 

41 European Intellectual Property Review, 464. 

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The defendant (EasyFly Express) put their ‘EasyFly’ logo onto their airplanes, and displayed it on their 

website. This logo used a typeface, colours and design that were markedly similar to the  ‘easyJet’ 

trade mark. The claimant (easyGroup) brought an action to the High Court (England and Wales) for 

infringement  of  UK  and  EU  registered  trade  marks ( 251 ).  Arnold  J,  applying  the  principles  on 

international  jurisdictions  established  in  ‘AK  Investment  CJSC  v  Kyrgyz  Mobile  Tel  Ltd’ (252)  to  this 

case, held that in order for use of a sign to qualify as use in the UK or elsewhere in the EU – and 

therefore amount to trade mark infringement – the use must target the UK or elsewhere in the EU (253). 

Upon considering the factual evidence, Arnold J held that the claimant did not have a real prospect of 

establishing that the defendant has targeted the UK or the EU. 

In particular, according to Arnold J, the mere fact that the defendant’s website and Facebook page 

were in English would not directly lead to the assumption that the website and webpage target the 

UK.  This  is  because  English  is  widely  spoken  in  Bangladesh  in  business  contexts,  as  well  as 

globally (254).  Furthermore, online  advertising  on  the  defendant’s  website using  statements  such  as 

‘our network provides a global reach for customers in Africa, Europe, North America, South America, 

the Middle East, South East Asia and North Asia’ would also not directly lead to the assumption that 

the defendant was targeting Europe, especially where such statements were likely to be perceived by 

average consumers as advertising hype (255). 

(251) Easygroup Ltd v Easy Fly Express Ltd [2018] EWHC 3155 (Ch), § 5-6. 

(252) [2011] UKPC 7; [2012] 1 WLR 1804, § 71, 81, § 88 (summarised by Arnold J: First, the claimant must satisfy the court 

that, in relation to the foreign defendant to be served with the proceedings, there is a serious issue to be tried on the merits 

of the claim, i.e. a substantial question of fact or law or both. Second, the claimant must satisfy the court that there is a good 

arguable case that the claim against the foreign defendant falls within one or more of the classes of case for which leave to 

serve out of the jurisdiction may be given (often referred to as ‘the gateways’) which are set out in paragraph 3.1 of Practice 

Direction 6B.  Lastly,  the  claimant  must  satisfy  the  court  that  in  all  the  circumstances  England  is  clearly  or  distinctly  the 

appropriate forum for the trial of the dispute and that in all the circumstances the court ought to exercise its discretion to 

permit service of the proceedings out of the jurisdiction.). 

(253) Easygroup Ltd v Easy Fly Express Ltd [2018] EWHC 3155 (Ch), § 10. 

(254) Easygroup Ltd v Easy Fly Express Ltd [2018] EWHC 3155 (Ch), § 18. 

(255) Easygroup Ltd v Easy Fly Express Ltd [2018] EWHC 3155 (Ch), § 20-21. 

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  Recognition and enforcement of foreign judgments 

So far, this section has discussed the law on jurisdiction in international IP disputes. According to the 

key cases discussed above, it was established that IP rights holders may initiate proceedings not only 

in the national courts in the place where the defendant is domiciled, but also in the national courts 

where the claimant is based. However, this is on the condition that it is deemed to be the place where 

damage occurred or the infringement was committed. 

However,  owing  to  the  separation  of  national  judicial  systems,  the  effects  of  a  judgment  are,  in 

principle, confined within the territorial boundaries of the country where the court that delivered the 

judgment is located (256). As a corollary, the convenience for the rights holders provided by the ability 

to start lawsuits and obtain judgments against foreign defendants in their home country may be offset, 

or even futile, without the recognition and enforcement of those judgments in the country in which the 

foreign defendant is domiciled. 

Therefore,  uniform  recognition  and  enforcement  of  judgments  relating  to  IP  rights  may  only  be, 

available  where  there  are  legal  grounds  such  as  international  agreements  in  place  between  the 

countries  in  which  the  claimant  and  defendant  are  domiciled  –  whether  those  be  international, 

multilateral, or bilateral treaties, or regional agreements. 

Currently  at  an  international  level  there  are  no  uniform  international  rules  on  the  recognition  and 

enforcement  of  judgments  relating  to  IP  rights.  International  frameworks  for  IP  rights  such  as  the 

Agreement of Trade-Related Aspects of Intellectual Property Rights (TRIPs) or the World Intellectual 

Property  Organisation  (WIPO)  Treaties  do  not  provide  rules  on  cross-border  recognition  and 

enforcement of judgments (257). 

(256) Pedro A. De Miguel Asensio, ‘Recognition and enforcement of judgments: Recent developments’ in Paul Torremans 

(ed), Research Handbook on Cross-border Enforcement of Intellectual Property (Edward Elgar 2014), p. 469. 

(257) Pedro A. De Miguel Asensio, ‘Recognition and enforcement of judgments: Recent developments’ in Paul Torremans 

(ed), Research Handbook on Cross-border Enforcement of Intellectual Property (Edward Elgar 2014), p. 472. 

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At an EU level, both EUTMR and CDR lack provisions on recognition and enforcement of judgments 

in civil matters, as does the Enforcement Directive (258). On the other hand, Chapter III of the Brussels 

I Regulation (recast) (259) deals with recognition and enforcement of judgments by providing that, as a 

general rule, a judgment given in a Member State will be recognised (260) and enforceable (261) in the 

other  Member  States,  without  any  special  procedure  being  required.  The  effects  of  the  Brussels  I 

Regulation (recast) are, however, limited to EU Member States. Therefore, a judgment rendered in an 

EU Member State may or may not be recognised and enforced in non-EU countries, and the extent 

to which it is recognised and enforced will vary from country to country, depending on the content of 

the agreement, if any, between the countries and their national laws (262). 

For  example,  there  was  a  case  where  issues  of  recognition  and  enforcement  of  judgments  arose 

between  French  design  companies  and  an  American  news  report  company (263).  Although  it  was 

related to copyright, this case proved that enforcement of judgments in other jurisdictions may well be 

contested by their national laws, leading to difficulty in pursuing foreign infringers (264). 

Two French companies (Sarl Louis Feraud International and S.A. Pierre Balamain) dealing with high-

fashion clothing and other items for women brought an action to the High Court of Paris (Tribunal de 

grande  instance  de  Paris)  for  trade  mark  and  copyright  infringement  against  the  defendant 

(Viewfinder, a US-based corporation with its main office in New York) (265). The defendant uploaded 

(258) Pedro A. De Miguel Asensio, ‘Recognition and enforcement of judgments: Recent developments’ in Paul Torremans 

(ed), Research Handbook on Cross-border Enforcement of Intellectual Property (Edward Elgar 2014), p. 474. 

(259) Articles 36-57 of the Brussels I Regulation (recast). 

(260) Article 36(1) of the Brussels I Regulation. 

(261) Article 39 of the Brussels I Regulation (however, the judgment given in a Member State is required to be enforceable in 

that country in the first place to be enforceable in the other Member States). 

(262) Pedro A. De Miguel Asensio, ‘Recognition and enforcement of judgments: Recent developments’ in Paul Torremans 

(ed), Research Handbook on Cross-border Enforcement of Intellectual Property (Edward Elgar 2014), p. 476. 

(263) Sarl Louis Feraud International v View finder, Inc., 489 F.3d 474 (2d Cir. 2007). 

(264) Marketa T Landova, ‘The potential worldwide application of the US fair use defence’ (2008)  30 European Intellectual 

Property Review, p. 38. 

(265) Sarl Louis Feraud International v View finder, Inc., 489 F.3d 474 (2d Cir. 2007). For case comments, see Marketa T 

Landova, ‘The potential worldwide application of the US fair use defence’ (2008) 30 European Intellectual Property Review, 

38. 

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photographs of fashion shows held by designers around the world – including those of the claimants’ 

fashion  shows  – to the website  it  operates. The  High  Court  of  Paris  held that the  act of  uploading 

photographs  of  the  claimants’  fashion  shows,  without  the  necessary  authorisation,  amounted  to 

counterfeiting  and  violation  of  royalties,  pursuant  to  Articles L716-1  and  L122-4  of  the  Intellectual 

Property Code. 

Upon obtaining the judgment, the claimant filed separate complaints to the US District Court for the 

Southern  District  of  New  York  to  enforce  the  judgment,  in  accordance  with  New  York’s  Uniform 

Foreign Money Judgment Recognition Act. This Act made it possible for foreign judgments (which are 

final,  conclusive and enforceable in the  country where there were  rendered) to  be  recognised  and 

enforced in New York (266). 

The defendant disputed the enforceability of French judgments in the US, by contending that, inter 

alia, enforcing the French judgment would be repugnant to the public policy of New York, as it would 

violate  the  defendant’s  First  Amendment  rights (267).  The  District  Court  accepted  the  defendant’s 

submission on the ground that the ‘First Amendment simply does not permit plaintiffs to stage public 

events  in  which  the  general  public  has  a  considerable  interest,  and  then  control  the  way  in  which 

information about those events is disseminated in the mass media’ (268). 

In the appeal, the US Court of Appeals for the Second Circuit highlighted that the District Court had 

erred in applying First Amendment rights in this case, by holding that First Amendment rights coexist 

with copyright laws. Therefore, even though the defendant’s ability to gather and report the news may 

have been incidentally restricted, the defendant was not permitted to use other’s copyrighted works 

without  complying  with  the  copyright  laws ( 269 ).  It  further  noted  that  conflicts  between  interests 

protected by the First Amendment and the copyright laws could be resolved by application of the fair 

use doctrine. Applying the fair use doctrine, the Court of Appeals for the Second Circuit held that there 

(266) Sarl Louis Feraud International v View finder, Inc., 489 F.3d 474 (2d Cir. 2007), 477. 

(267) Sarl Louis Feraud International v View finder, Inc., 489 F.3d 474 (2d Cir. 2007), 478. (N.Y. C.P.L.R § 5304(b)(4) states 

that “a foreign country judgment need not be recognised if … the cause of action on which the judgment is based is repugnant 

to the public policy of this state”). 

(268) Sarl Louis Feraud International v View finder, Inc., 489 F.3d 474 (2d Cir. 2007), 478. 

(269) Sarl Louis Feraud International v View finder, Inc., 489 F.3d 474 (2d Cir. 2007), 480-81. 

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was insufficient factual evidence presented and analysed by the District Court and decided to vacate 

the judgment of the District Court (270). 

  Criminal jurisdiction 

Jurisdiction in criminal law matters is generally based on the principle of territoriality. Currently, there 

are no binding instruments under EU law to resolve conflicts of jurisdiction in criminal matters (271). In 

cases  where  EU  law  prescribes  extraterritorial  jurisdiction,  thereby  triggering  potential  conflict,  the 

principle of non bis in idem (i.e. the right to not be prosecuted twice for the same offence), which is 

enshrined in primary EU law, applies (272). 

An important instrument of international law that can be of assistance in determining adjudication in 

criminal  proceedings  against  online  IP  infringers  is  the  Council  of  Europe  Cybercrime  Convention 

2001 ( 273).  Jurisdiction  is  addressed  in  Article 22,  which  applies  to  all  substantive  crimes  in  the 

convention, including Article 11 ‘Offences related to infringements of copyright and related rights’. The 

offences covered by the provision include wilful copyright infringement on a commercial scale carried 

out by means of a computer system. The principles of adjudication laid down by the convention are: 

i. 

ii. 

ubiquity (territory of origin or territory of effect of the crime); 

nationality (offence committed by a national from outside the territory); 

iii. 

legislative extraterritoriality (nationals are obliged to comply with domestic law, even when they 

are outside the territory); and 

iv. 

representation (act carried out by a national and extradition is refused) (274). 

(270) Sarl Louis Feraud International v View finder, Inc., 489 F.3d 474 (2d Cir. 2007), 482-84. 

(271) European Law Institute (2017) Draft legislative proposals for the prevention and resolution of conflicts of jurisdiction in 

criminal matters in the European Union. p. 9. 

(272) EU Charter of Fundamental rights, Article 50. 

(273) Convention on Cybercrime, ETS No 185. 

(274) EUIPO (2021) International judicial cooperation in intellectual property cases (March 2021), p. 33. 

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Moreover, Article 25, which lays down general principles on mutual assistance, determines that, when 

assistance is sought for a criminal offence, the condition of ‘dual criminality’ is fulfilled irrespective of 

whether the laws of one of the countries place the offence in the same category or denominate the 

offence by the same terminology. This provision provides wide scope for adjudication in criminal cases 

related to online copyright infringement. 

Conclusion 

The  misuse  of  online  marketplaces  and  social  media  platforms  to  advertise,  sell  and  distribute  IP-

infringing  goods  poses  specific  enforcement  challenges  to  rights  holders,  intermediaries,  and  law 

enforcement  agencies  alike.  The  available  measures  to  tackle  IP  infringements  involve  a  range of 

both voluntary good practices developed in collaboration between rights holders and intermediaries, 

and legal instruments for law enforcement. The existing EU legal framework creates strong incentives 

for intermediaries to actively collaborate with rights holders and law enforcement agencies across the 

whole  supply  chain  of  IP-infringing  goods.  Online  marketplaces  have  implemented  and  developed 

effective  measures  in  the framework  of  the  MoU  signed  in  2011,  later  revised  in  2016 (275).  These 

measures  are  aimed  at  preventing  and  repressing  the  misuse  of  their  services  by  vendors  of  IP-

infringing goods. However, infringers apply a number of techniques to elude detection, takedown, and 

the  suspension  of  vendor  accounts.  Among the current  and  emerging trends, the following  pose a 

particular challenge to enforcement efforts: 

• 

Opening multiple vendor accounts. Infringers open multiple accounts under different names 

on  the  same  platform  and  across  different  media  to  elude  repeat  offender  policies.  Under 

these  policies,  users  that  repeatedly  violate  the  platform’s  T&C  may  have  their  accounts 

suspended or disabled. 

( 275 )  European  Commission,  Memorandum  of  understanding  on  the  sale  of  counterfeit  goods  on  the  internet, 

https://ec.europa.eu/growth/industry/policy/intellectual-property/enforcement/memorandum-understanding-sale-counterfeit-

goods-internet_en. 

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• 

Misuse of online advertising. Vendors manipulate online advertising services by associating 

their illicit activity with famous brands, and by placing adverts aimed at directing traffic to external 

websites or to the listings of online marketplaces offering IP-infringing goods. 

• 

Misuse  of  social  media  functionalities.  Vendors  misuse  the  functionalities  of  social  media 

platforms  to  reach  a  high  number  of  consumers (276).  An  emerging  trend  is  the  use  of  live-

streaming sales to advertise IP-infringing goods. Vendors adopt various techniques to elude 

the platforms’ enforcement measures; for instance, orders are received either via links and/or 

codes shared during the streaming or directly from the stream’s live-chat. Therefore, once the 

stream is over, there is no evidence left to trace. 

These trends call for enhanced cooperation in enforcement actions. At legislative level, some of the 

measures proposed in the DSA Regulation are clearly going in this direction. The proposal builds on 

the  best  practices  adopted  by  online  marketplaces  in  the  framework  of  the  MoU  and  introduces 

specific  obligations  for  online  platforms.  These  include,  in  particular,  mandatory  notice-and-action 

mechanisms (277), ‘trusted flaggers’ programmes (278), the suspension of repeated misusers (279) and 

the  notification  of  suspected  criminal  offences  to  law  enforcement  agencies ( 280 ).  Of  particular 

relevance  for  the  efficacy  of  enforcement  actions  against  repeated  offenders  is  the  provision  on 

traceability of traders, namely the obligation that online marketplaces obtain and verify the identity 

(276)  EUIPO  (2021)  Monitoring  and  analysing  social  media  in  relation  to  IP  infringement;  EUIPO  (2021)  Social  Media  – 

Discussion Paper. New and existing trends in using social media for IP infringement activities and good practices to address 

them, June 2021. 

(277) Proposal for a Regulation of the European Parliament and of the Council on a Single Market for Digital Services (Digital 

Services Act) and amending Directive No 2000/31/EC, COM/2020/825 final, Article 14 and 15. 

(278) Proposal for a Regulation of the European Parliament and of the Council on a Single Market for Digital Services (Digital 

Services Act) and amending Directive No 2000/31/EC, COM/2020/825 final, Article 19. 

(279) Proposal for a Regulation of the European Parliament and of the Council on a Single Market for Digital Services (Digital 

Services Act) and amending Directive No 2000/31/EC, COM/2020/825 final, Article 20. 

(280) Proposal for a Regulation of the European Parliament and of the Council on a Single Market for Digital Services (Digital 

Services Act) and amending Directive No 2000/31/EC, COM/2020/825 final, Article 21. 

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of traders (281). As discussed above on this report (282), the traceability of traders is a powerful deterrent 

against the misuse of marketplaces by individuals holding multiple vendor accounts. In the same vein, 

the provision on advertising transparency will help repress the abuse of online advertising services 

of IP-infringing goods (283). 

These provisions are part of a broader Commission’s Action Plan to reinforce cooperation between 

all involved players to curb IP infringement. The IP Action Plan announced the establishment of an 

EU  toolbox  against  counterfeiting,  setting  out  principles for  coordinated  action,  cooperation  and 

data sharing among right holders, intermediaries and law enforcement authorities (284). The toolbox 

will  also  promote  the  use  of  new  technologies  such  as  image  recognition  and  AI  to  tackle  IP 

infringements. 

The proposed actions reaffirm the commitment of the EU legislator to incentivise collaboration among 

all stakeholders involved in tackling illegal activities online. Rights holders and law enforcers in the EU 

have a range of judicial and extra-judicial instruments to counteract IP infringement that is occurring 

via vendor accounts on third-party trading platforms. Increased communication among rights holders, 

online  platforms,  and  law  enforcement  agencies  can  improve  the  detection  and  removal  of  IP-

infringing goods that  are  offered for  sale,  unknowingly,  on  the marketplace  or  advertised  on  social 

media.  Follow-the-money  investigations  can  provide  the  necessary  evidence  to  initiate  judicial 

proceedings  against  the  vendor.  Overall,  a  better  understanding  of  the  business  models  and  the 

supply  chain  of  IP-infringing  goods  can  help  determine  where,  when,  and  how  to  effectively  apply 

those instruments. 

(281) Proposal for a Regulation of the European Parliament and of the Council on a Single Market for Digital Services (Digital 

Services Act) and amending Directive No 2000/31/EC, COM/2020/825 final, Article 22. 

(282) section 2.1.1.2. 

(283) Proposal for a Regulation of the European Parliament and of the Council on a Single Market for Digital Services (Digital 

Services Act) and amending Directive No 2000/31/EC, COM/2020/825 final, Article 24. 

(284) Making the most of the EU’s innovative potential – An intellectual property action plan to support the EU’s recovery and 

resilience. Brussels, 25.11.2020. COM(2020) 760 final, p. 21. 

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APPENDIX: Case studies 

The  case  studies  reported  in  this  Appendix  are  illustrative  of  the  range  of  IP-infringing  activities 

committed by vendors on third-party online marketplaces, as discussed in the report. The cases are 

analysed and presented according to the model canvas developed in Phase 1 – Research on Online 

Business Models Infringing Intellectual Property Rights (285). For the purpose of this study, a further 

dimension has been introduced, namely the category of infringing goods object of a transaction (as 

defined in subsection 1.2.1). 

CASE  DESCRIPTION 

INFRINGING GOODS 

MARKETPLACES 

1 

2 

3 

4 

5 

6 

7 

8 

9 

10 

11 

12 

13 

Listings  on  marketplace  for  handcrafted 
items 

Sale of digital artwork bearing a famous 
brand on marketplace for NFT 

Brand exploitation 

Brand exploitation 

Counterfeit medicines and drugs 

Grey market 

Marketplace for 
independent retailers 

Marketplace 
goods 

for 

digital 

Stand-alone  website  with 
social media presence 

Sale of clones of branded mobile phones  Confusion 

Wholesale marketplace 

Advertisement of counterfeit sale on live-
streaming channel 

Fake  luxury  goods  sold  as  pre-owned 
items on auction marketplace 

Vendor of counterfeit perfumes on social 
media marketplaces 

Vendor  of  counterfeit  luxury  brands  on 
social media platform 

Counterfeit (fakes) 

Social media marketplace 

Counterfeit (fakes) 

Marketplace 
and second-hand goods 

for  auctions 

Counterfeit (fakes and replicas) 

Social media marketplace 

Counterfeit (replicas) 

Social media marketplace 

Vendor on dark web marketplace 

Counterfeit (replicas) 

Dark web marketplace 

Network  of  websites  selling  high  quality 
replicas of luxury goods 

Counterfeit (replicas) 

Sale  of  back-up  copies  of  computer 
programs on marketplace for auctions 

Pirated goods 

Sale  of  subscriptions  to  major  online 
streaming services 

Vendor  of  subscriptions  to  pay-TV  and 
online streaming services 

Pirated goods 

Stand-alone  website  with 
social media presence 

Marketplace 
and second-hand goods 

for  auctions 

Stand-alone  website  with 
social media presence 

Pirated goods 

Wholesale marketplace 

(285) EUIPO (2016) Research on Online Business Models Infringing Intellectual Property Rights, Phase 1 – Establishing an 

overview of online business models infringing intellectual property rights, July 2016. 

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CASE 
No 1 

Vendor Accounts on Third Party Trading Platforms: 

Listings on marketplace for handcrafted items 

Case study based on an investigation performed by the project team 

Date of analysis: 17/02/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

or 
Physical 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
Contributing 
to 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

items. 

Listing  on  a  marketplace  for 
The 
handcrafted 
marketplace  enables  artists  to 
promote 
their  designs  and 
creations.  Customers  can  buy 
phone  cases,  mugs,  pins,  and 
many  other  goods,  with  an 
artist’s design printed on them. In 
this case, an artist sells a phone 
case  with  the  logo  of  a  popular 
sportswear brand. 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

Marketplace 
items. 

for  handcrafted 

Brand  exploitation:  use  of  a  sportswear 
brand’s logo on handicraft items. 

Trade marks, design. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Vendors located in France. 

Direct sale to customers. 

Payment  methods:  PayPal  and  bank 
transfer (via Sofort). 

Shipping methods: UPS, FedEx, DHL. 

Items  were  promoted  through  a  Telegram 
group with approximately 3 500 members. 

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Resilience Against Enforcement Action 

The brand name is not mentioned in the title of the listing. 

Marketing Channels and Internet Traffic Features 

The marketplace hosting the shop. 

Customer Incentives 

Products with attractive designs and an artistic touch. 

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CASE 
No 2 

Vendor Accounts on Third Party Trading Platforms: 

Sale of digital artwork bearing a famous brand on marketplace for non-fungible tokens 

Case study based on an investigation performed by the project team 

Date of analysis: 06/04/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

or 
Physical 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
Contributing 
to 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

a 

tokens 
depicted 
the 

Digital  artwork  produced  by  a 
digital  artist  was  uploaded  on  a 
for  non-
popular  marketplace 
(NFT).  The 
fungible 
ghost 
artwork 
branded  with 
logo  of  a 
famous  luxury  brand.  The  artist 
made  45  copies  of  this  work 
available and sold all of them for 
USD 200  each.  Some  of  the 
copies were on sale for as much 
as  USD 180 000,  and  one  had 
already 
for 
GBP 13 000. 

re-sold 

been 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

NFT 
marketplace. 

(non-fungible 

token) 

Brand exploitation: use of a famous luxury 
brand on NFT. 

Trade marks. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Based  on  the  leaks  from  their 
standalone  website,  the  artist  is 
most likely based in the USA. 

Payment methods: Ethereum (ETH). 

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Resilience Against Enforcement Action 

All  information  on  the  provenance  and  ownership  of  the  item  (including 
historical information of ownership transfers) is captured on a blockchain. This 
information  is  accurate  and  immutable  but,  at  the  same  time,  can  depict  an 
anonymous user, requiring further investigation. 

Marketing Channels and Internet Traffic Features 

The marketplace hosting the item as uploaded by the digital artist. 

The artist also maintains their own site selling physical goods using the Shopify 
platform. 

Customer Incentives 

Like all art items, ownership of digital art can be seen as an investment, as the customer can easily resell the digital item at a 
higher price. 

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CASE 
No 3 

Vendor Accounts on Third Party Trading Platforms: 

Counterfeit medicines and drugs 

Case study based on an investigation performed by the project team 

Date of analysis: 11/03/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

or 
Physical 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
to 
Contributing 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

The  investigation  started  from  a 
suspicious  subdirectory  of  a 
hospital’s  website  in  Ecuador. 
This 
revealed  a  network  of 
websites  selling  medicines  that 
had been imported illegally from 
foreign countries. The medicines 
were  mainly  sexual  enhancers. 
Investigations  led  to  a  company 
registered  in  Cyprus  connected 
with this case. It uses a custom-
developed  portal  for  payments 
which is used by websites linked 
to  this  case.  There  is  a  high 
probability  of  credit  card  fraud. 
They  usually 
logos 
claiming that they are certified by 
pharmacy associations. 

include 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

Website controlled by infringer. 

Grey market products: pills, mainly sexual 
enhancers. 

Patents, 
certificates, trade marks. 

supplementary 

protection 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Vendors  located  in  Russia  and 
Ukraine. 

Company registered in Cyprus. 

Direct sales to customer. 

Payment method: credit card only. 

Shipping options: EMS/airmail. 

The  pharmacy  only  allows  payments  made 
via major credit card vendors such as Visa, 
Mastercard,  AMEX,  Discover,  Diners  Club, 

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Resilience Against Enforcement Action 

n/a 

Marketing Channels and Internet Traffic Features 

- 

JCB, and e-checks. They do not support any 
other options. 

However,  the  pharmacy  is  using  fake  SSL 
certificates  from  reputed  vendors,  such  as 
GeoTrust, SecurityMetrics, on their website 
instead of genuine ones. This suggests that 
a customer might fall victim to identity theft 
on the platform during checkout without prior 
knowledge. 

reviews 

The  website  has  some 
from 
customers  on  its  platform.  However,  some 
customers  have  noted  that  the  reviews  are 
either  fake  or  they  were  purchased.  The 
website cannot be trusted. 

Customer Incentives 

High-quality medical products, a professional customer service team that is always available to answer queries, generous 
bonuses and discounts, as well as a secure and reliable platform. All these claims are appealing to the customer. 

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CASE 
No 4 

Vendor Accounts on Third Party Trading Platforms: 

Sale of clones of branded mobile phones 

Case study based on an investigation performed by the project team 

Date of analysis: 13/03/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Manufacturer  of  smartphones, 
tablets and smart watches based 
in  China.  The  company  earned 
notoriety  for  releasing  clones  of 
popular high-end smartphones. 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

or 
Physical 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
Contributing 
to 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

Wholesale marketplaces. 

Confusingly  similar  products:  clones  of 
popular  high-end  smartphones,  smart 
watches and tablets. 

Patents, design, trade marks. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Vendors  and  producers  located 
in China. 

Direct sale to customers or to resellers. 

There  is  no  store  with  the  name  of  the 
selling 
company.  However, 
specifically  these  products  and  nothing 
else can be found. Therefore, we assume 
the  revenue  sources  are  both  from  direct 
sales and resellers. 

stores 

Customers are aware that they are buying a 
clone  of  a  high-end  smartphone  which  is 
different from the original. 

the 

Based  on 
feedback  on  vendors’ 
accounts  on  a  wholesale  marketplace, 
buyers seem to be satisfied with the quality 
of the product. 

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the  vendors  use 
Payment  methods: 
payment systems made available by third 
party marketplaces. 

Delivery  method:  ePacket,  TNT  Express, 
DHL. 

Resilience Against Enforcement Action 

The  brand  logo  is  removed  from  the  product  images.  The  product  looks 
different from what is presented in the listing. 

Marketing Channels and Internet Traffic Features 

Reviews videos on YouTube. There is an inactive Facebook page from 2013. 

Customer Incentives 

The company offers a product which is a close replica of the original in terms of design and user interface at a really low price. 

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CASE 
No 5 

Vendor Accounts on Third Party Trading Platforms: 

Advertisement of counterfeit sale on live-streaming channel 

Case study provided by expert interviews 

Date of analysis: 23/11/2020 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

or 
Physical 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

Sale of counterfeit luxury bags. 

The  product  is  advertised  in  the 
course of a live stream sale on a 
major  social  media  site.  During 
the  live  stream,  the  speaker 
provides  a  code  and  a  link  to  a 
listing  published  on  an  online 
marketplace. The listing does not 
refer 
is 
apparently unrelated to infringing 
products.  By  including  the  code 
in  the  order  and  completing  the 
payment,  the  user  receives  the 
product  advertised  in  the  live 
stream. 

the  product  and 

to 

The  business  comprises  a 
livestream  facility  with  8  rooms 
and  30-40  employers  working 
24/7.  Every  room  is  designed 
with  backdrop  shelves  and 
streaming equipment. 

6 

Advertising for or 
Contributing 
to 
Infringement 

A6 

B6 

C6 

D6 

E6 

F6 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

Fake products: luxury bags. 

Trade marks. 

Marketplace livestream sales. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Vendors located in China. 

Payment  is  made  through  known  online 
marketplaces. 

Counterfeiters work continuously, in three 8-
hours shifts, as they are advertising 24/7. 

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Resilience Against Enforcement Action 

The infringers avoid any reference to trade marks in the live stream and in the 
listings, in order to elude detection. The transaction is made on a product page 
that is completely unrelated to the counterfeit product. 

Marketing Channels and Internet Traffic Features 

Live streaming sales. 

Customer Incentives 

Customers in this specific example know that they are buying counterfeit products as they pay for some other product and 
expect the product that was advertised on live stream. 

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CASE 
No 6 

Vendor Accounts on Third Party Trading Platforms: 

Fake luxury goods sold as pre-owned items on auction marketplace 

Case study based on an investigation performed by the project team 

Date of analysis: 07/03/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

Profile  on  auction  marketplace 
selling  pre-owned  luxury  items 
mainly through auctions. There is 
feedback 
user 
suspicious 
indicating 
counterfeit 
that 
products  are  being  sold  among 
original  ones.  The  target  has 
been operating for 9 years on the 
platform and has sold more than 
15 000 items. 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

A1 

B1 

C1 

D1 

E1 

F1 

or 
Physical 
Virtual  Product 
Marketing 

A2 

B2 

C2 

D2 

E2 

F2 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
Contributing 
to 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

Auction marketplace. 

Fakes  and  replicas  sold  as  pre-owned 
products, mainly bags and wallets. 

Trade marks. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Vendor located in Japan. 

Direct sale to customers. 

Payment method: PayPal only. 

Shipping methods: EMS, ePacket, DHL. 

There  is  negative  feedback  from  a  buyer 
claiming  that  their  bag  came  with  a  non-
existent  serial  number.  Another  customer 
claimed that the product they received was 
a fake. 

Resilience Against Enforcement Action 

n/a 

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Marketing Channels and Internet Traffic Features 

Twitter account with zero activity. 

Customer Incentives 

The profile has a great many positive reviews and has been operating for many years, offering more than 900 different items 
at the time of writing. 

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CASE 
No 7 

Vendor Accounts on Third Party Trading Platforms: 

Vendor of counterfeit perfumes on social media marketplaces 

Case study extracted from a news article 

Date of analysis: 20/02/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

or 
Physical 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C3 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
to 
Contributing 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

The  sales  and  live  streams  of 
fake  perfumes  took  place  at  a 
shop  in  Turkey.  The  Turkish 
Police  raided  the  vendors  after 
seeing a notice during an online 
streaming  session  on  a  major 
social media platform and caught 
the infringers at the very moment 
they were streaming. 

Counterfeit  perfumes  and  other 
fake goods (smart watches) were 
advertised 
live 
streaming  on  social  media 
websites. 

through 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

Social  media  marketplaces  and 
live streaming sales. 

Fakes  and 
products: perfumes and wrist watches. 

replicas  sold  as  original 

Trade marks. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Vendors located in Turkey. 

Direct sale to consumers at physical shop 
and on social media marketplaces. 

Through  social  media  accounts  and  online 
marketplaces. 

Resilience Against Enforcement Action 

n/a 

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Marketing Channels and Internet Traffic Features 

A shop in Turkey and social media presence. 

Customer Incentives 

Products are advertised as genuine and the sale takes place in an actual shop. Hence customers are tricked into believing 
that they are buying ‘bargain’ genuine products. 

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CASE 
No 8 

Vendor Accounts on Third Party Trading Platforms: 

Vendors of counterfeit luxury brands on social media platforms 

Case study based on an investigation performed by the project team 

Date of analysis: 12/03/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

or 
Physical 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
Contributing 
to 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

The 

is  a 

This 
large  network  of 
counterfeit vendors operating on 
media 
various 
social 
marketplaces. 
main 
marketplace 
is  on  Facebook, 
with  over  10 000  users.  There 
are  also  two  Telegram  groups. 
One  for  DHgate  listings  and 
another  one 
for  AliExpress. 
There  is  a  blog  in  Teletype  with 
detailed  information  related  to 
high quality counterfeit products. 
Many  of  the  products  listed  on 
groups 
the  Telegram 
are 
showcased  on 
the  Yupoo 
platform. 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

Replicas: watches, clothing and bags. 

Trade marks. 

Wholesale  marketplaces  and 
social media. 

Luxury brands. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Network  of  vendors  located  in 
China. 

Direct sale to customers. 

the  vendors  use 
Payment  methods: 
payment systems made available by third 
party marketplaces. 

Delivery method: ePacket. 

Customers  are  provided  with  detailed 
instructions related to the ordering process. 
Each  product  has  a  unique  ID  which  the 
customer must mention in the ordering steps 
as a message to  the seller. Customers are 
also  advised  to  avoid  mentioning  the  real 
product or the brand. 

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Resilience Against Enforcement Action 

Listings  on  marketplaces  do  not  mention  brand  names  and  appear  to  sell  a 
different product, often just a white T-shirt. 

Marketing Channels and Internet Traffic Features 

Private Facebook groups, Telegram group, Teletype blog. 

Customer Incentives 

Luxury goods of extremely high quality at low prices. 

There are numerous reviews and comments 
regarding the delivery and the quality of the 
products in the Facebook group. There are 
a  few  customers  who  had  trouble  with 
customs and other members provided them 
with advice on how to deal with the situation. 
Screenshots with the shipping path can also 
be found. 

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CASE 
No 9 

Vendor Accounts on Third Party Trading Platforms: 

Vendor on dark web marketplace 

Case study based on an investigation performed by the project team 

Date of analysis: 02/02/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace 

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

or 
Physical 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
Contributing 
to 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

Vendor  on  Versus.  Versus  is  a 
marketplace  operating  on  the 
dark  web.  Like  most  dark  web 
marketplaces,  they  attempt  to 
moderate  and  arbitrate 
the 
transaction  between  the  vendor 
and the buyer, through the use of 
escrow accounts. This particular 
vendor  sold  over  200 
items 
through this platform in the past 
year.  They  advertised  a  ‘high-
end  replica’  of  famous  brand  T-
shirt  and  claimed  to  ship  it  from 
Hong Kong. The vendor received 
high 
them  a 
popular  vendor.  However,  the 
marketplace  itself  was  accused 
of exit scam behaviour, affecting 
the  hosted  vendors,  some  of 
which were looking to move their 
businesses 
other 
marketplaces. 

ranks,  making 

to 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Dark web. 

Versus. 

Replicas: famous brand T-shirts. 

Trade marks. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Unknown 
goods from Hong Kong. 

vendor, 

shipping 

Direct sale to customers by cryptocurrency 
(escrow wallet). 

The vendor does not hide the fact that their 
product is counterfeit; they make the case of 
being a high-quality counterfeit (ΑΑΑ) as the 
transaction  is  only  completed  upon  the 

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Resilience Against Enforcement Action 

Use  of  IP  address  anonymisation  (The  Onion  Routing  protocol)  to  hide  the 
location  of  the  marketplace.  The  vendor  uses  PGP  to  encrypt  direct 
communication with them. 

customer receiving and confirming that they 
are happy with the product. Reputation is of 
utmost importance in the dark web. In many 
cases the vendor posts their own photos of 
the product to prove possession. 

Marketing Channels and Internet Traffic Features 

Listing directly on the dark web marketplace. 

Customer Incentives 

Low price, customer is aware that the product  is counterfeit and they can trigger remedial actions  if the product  is not as 
expected or advertised (in terms of replica quality). 

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CASE 
No 10 

Vendor Accounts on Third Party Trading Platforms: 

Network of websites selling high quality replicas of luxury goods 

Case study based on an investigation performed by the project team 

Date of analysis: 17/02/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

or 
Physical 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
Contributing 
to 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

for  promotion 

This  business  model  involves  a 
network  of  websites  selling 
counterfeit goods of high quality. 
Most of the domains use the ‘.ru’ 
top-level domain and contain the 
same  products.  However,  the 
websites  have  different  domain 
names. Online personas are also 
used 
through 
social  media  platforms.  Each 
website  has  its  influencers  with 
their  contact  information.  Many 
of  the  websites  contain  links  to 
YouTube 
where 
products  are  being  presented 
and  reviewed.  Another  strategy 
is to send products to YouTubers 
with  low-medium  reach  for  free. 
Content  creators  publish  a 
detailed review and promote the 
corresponding website. 

channels 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

Independent group of websites. 

Replicas:  watches, 
clothes, belts, socks, etc. 

sneakers,  bags, 

Trade marks. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Networks  of  vendors  located  in 
China. 

Payment  methods:  PayPal,  Western 
Union, Cash App. 

Shipping methods: UPS, FedEx, DHL. 

The  websites  come  with  a  blog  containing 
instructions on how to order a product, and 
articles  regarding  the  latest  trends  and 

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Resilience Against Enforcement Action 

The brand name is not mentioned  in  the title  of the listing. Another strategy 
against  enforcement  is  to  keep  the  nominal  prices  high  enough  to  avoid 
detection from automated systems. 

Marketing Channels and Internet Traffic Features 

The marketplace hosting the shop, presence on major social media platforms 
and instant messaging groups. 

releases.  There  are  a  lot  of  Instagram 
profiles  posing  as  employees  of  the  shop. 
Potential  customers  can  contact  them  on 
WhatsApp  or  view  customer  reviews  under 
the  highlights  section  of  their  profile.  The 
marketing strategy through content creators 
seems  to  work  even  better  as  the  reach  is 
maximal,  with  minimal  exposure  of  the 
supplier. 

Customer Incentives 

Prices are low but still expensive giving the impression that the products are ‘good bargain’ originals. There are thousands of 
videos on YouTube related to this business, creating a sense of security and reliability. 

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CASE 
No 11 

Vendor Accounts on Third Party Trading Platforms: 

Sale of back-up copies of computer programs on marketplace for auctions 

Case study based on Latvian Courts’ civil and criminal proceedings leading to the final ruling of the Court of Appeal on 26 September 2017 
and involving a referral to the CJEU for preliminary ruling (12/10/2016, C-166/15, Ranks and Vasiļevičs, EU:C:2016:762). 

Date of analysis: 12/03/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

Physical 
or 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
to 
or  Codes 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
Contributing 
to 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

as 

Initially, 

Two Latvian citizens engaged in 
selling CDs with  back-up copies 
of  various  editions  of  Microsoft 
Windows and Office software on 
eBay. The vendors registered on 
persons, 
natural 
eBay 
frequently  changing  their  user 
name. 
they  operated 
from  the  USA,  but  then  they 
moved  to  Germany  and  Latvia, 
from  where 
to 
different  countries.  They  used 
their  private  eBay  account  to 
licensed  Microsoft 
purchase 
software.  Some  of  the  copies 
were  sold  with  a  Microsoft 
certificate of authenticity, that the 
vendors  bought  separately  and 
attached to the copies in order to 
demonstrate their authenticity. 

they  shipped 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

Marketplace for auctions (eBay). 

Pirated goods: back-up copies of Microsoft 
software and activation codes of Microsoft 
software. 

Trade marks. 

Copyright. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Vendors located in Germany and 
Latvia. 

Direct sale to customers. 

Customers bought copies in good faith, with 
a  presumption  that  they  were  authentic. 

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Payment  methods:  the  vendors  used  the 
payment  system  made  available  by  third 
party marketplaces (PayPal). 

Delivery method: normal shipping. 

In  the  court  proceedings  the  claimant 
presented  evidence  that  the  transactions 
through  eBay  vendor  accounts  related  to 
overall activities totalling USD 293 543. 

customers, 

experiencing 
Some 
installation  problems,  contacted  Microsoft 
for assistance. 

after 

The  vendors  provided  customers  with  user 
manuals.  In  response  to  complaints  from 
customers  who  were  dissatisfied  with  the 
state  of  the  user  manuals,  they  bought 
second-hand  printed  manuals  on  eBay  for 
the operating system they were selling. 

Resilience Against Enforcement Action 

n/a 

Marketing Channels and Internet Traffic Features 

eBay listings. 

Customer Incentives 

Microsoft products were sold at significantly lower prices than the original ones (about three times lower). 

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CASE 
No 12 

Vendor Accounts on Third Party Trading Platforms: 

Sale of subscriptions to major online streaming services 

Case study based on an investigation performed by the project team 

Date of analysis: 05/03/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

or 
Physical 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
Contributing 
to 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

subscriptions 

A Greek citizen set up a website 
for 
selling 
streaming services. They exploit 
the fact that a premium version of 
most  of  the  mentioned  services 
can  run  on  multiple  devices. 
Shared  accounts  are  sold  to 
individuals  for  a  cheap  monthly 
subscription.  There  are  also 
accounts  for  VPN  services  with 
subscriptions  varying  from  24 
to  3  years.  Affiliate 
months 
marketing 
features  are  also 
available. 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

Website 
infringer. 

controlled  by 

the 

Pirated  goods:  access  accounts  to  major 
online  streaming  services  (Netflix,  HBO 
Max,  Spotify,  Tidal,  etc.)  and  to  VPN 
services  (Surfshark,  NordVPN,  IPVanish 
VPN premium). 

Copyright and related rights. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Vendor located in Greece. 

Sale of monthly or yearly subscriptions to 
customers. 

Payment methods: PayPal, credit card. 

Instant delivery. 

There  is  an  active  server  on  Discord  with 
increasing  day  by  day. 
many  users, 
Members communicate daily and report any 
problems  or  make  requests  related  to  the 
shared accounts. There are also giveaways 
to keep members engaged. 

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Resilience Against Enforcement Action 

n/a 

Marketing Channels and Internet Traffic Features 

Instagram account and Facebook page. 

Customer Incentives 

Cheap streaming services, sense of community with active members and giveaways. 

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CASE 
No 13 

Vendor Accounts on Third Party Trading Platforms: 

Vendor of subscriptions to pay-TV and online streaming services 

Case study based on an investigation performed by the project team 

Date of analysis: 27/02/2021 

Based on ‘Business Model Canvas’ by Strategyzer.com 

Business Model Summary 

Matrix 

A 

B 

C 

D 

E 

F 

Internet  Site 
Controlled 
by Infringer 

Third  Party 
Marketplace  

Social Media 
or Blog 

Gaming  or 
Virtual 
World 

E-mail, 
Chatroom  or 
Newsgroup 

Mobile 
Devices 

A1 

B1 

C1 

D1 

E1 

F1 

A2 

B2 

C2 

D2 

E2 

F2 

1 

2 

Domain Name or 
Digital 
Identifier 
Misuse of IPR 

or 
Physical 
Virtual  Product 
Marketing 

3  Digital  Content 

Sharing 

A3 

B3 

C2 

D2 

E2 

F2 

4 

5 

Account  Access 
or  Codes 
to 
Digital  Content 
Sharing 

Phishing, 
Malware 
Dissemination or 
Fraud 

6 

Advertising for or 
Contributing 
to 
Infringement 

A4 

B4 

C4 

D4 

E4 

F4 

A5 

B5 

C5 

D5 

E5 

F5 

A6 

B6 

C6 

D6 

E6 

F6 

is 

platform. 

individual 

An 
selling 
subscriptions  to  streaming  and 
through  an  e-
VPN  services 
commerce 
They 
promote  their  online  shop  on 
public  forums.  They  have  been 
operating  for  a  long  time  and 
their strategy is to change the link 
of  their  shop  to  avoid  detection. 
As  described  in  Case  No 6,  the 
accounts  offered  are  shared. 
Resellers are welcome. 

Digital Platform & Technology  Products and Services 

Involved IPR(s) 

Open internet. 

E-commerce platform. 

Pirated  goods:  access  accounts  to  major 
online  streaming  services  (Netflix 
for 
different  countries,  such  as  Denmark, 
France, Germany, UK, USA; Disney+). 

Copyright and related rights. 

Identification of Infringer 

Revenue Sources 

Customer Relations 

Unknown. 

Sale of monthly or yearly subscriptions to 
customers. 

Contact through email and forums. 

Payment method: PayPal. 

Instant delivery. 

148 

 
 
 
 
 
 
 
 
 
Vendor accounts study – Final report 

------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ 

Resilience Against Enforcement Action 

n/a 

Marketing Channels and Internet Traffic Features 

Public forums. 

Customer Incentives 

Affordable prices and a 5-month warranty with support. 

149 

 
 
 
 
 
 
 
VENDOR ACCOUNTS ON THIRD PARTY TRADING 
PLATFORMS 

RESEARCH ON ONLINE BUSINESS MODELS INFRINGING 
INTELLECTUAL PROPERTY RIGHTS – PHASE 4 

Report 

ISBN 978-92-9156-298-5 doi:10.2814/279240 TB-09-21-391-EN-N  
© European Union Intellectual Property Office, 2021 

Reproduction is authorised provided the source is acknowledged