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Follow the money when hunting online trademark violators

By Jennifer Brown, AdvocateDaily.com Senior Editor

Counterfeiters and trademark violators thrive in the vast world of online marketplaces, says Jim Downs, managing director of MKD International Inc., who assists clients in researching and conducting surveillance to track down offenders.

He says it used to be that flea markets and strip malls were the hotbeds for hunting trademark violators, but now brands must also root out offenders online.

“Everything from perfume to jewelry, shoes, you name it — they steal the name and sell it for a fraction of the cost,” Downs tells AdvocateDaily.com. “And online makes it virtually impossible to enforce. These perpetrators could be anywhere in the world, and they are.”

He has been assisting clients — including large pharmaceutical and entertainment companies — for years, often being hired directly by the business or its lawyers.

“If a company is trying to issue a cease and desist order, MKD will do the research and conduct surveillance to try to track down the individuals so that the company can serve them the order or other documentation,” Downs says.

One client in the entertainment industry hired MKD to conduct surveillance so that the offenders who were posting content in violation of their trademark and proprietary licensing could be served, he says.

“They do their homework first and then come to us to see if we can find them and confirm where they live or work so they can be served. The last guy we found was living in California,” says Downs.

Tracking perpetrators online is often difficult as it’s easier to hide there than in a bricks-and-mortar or even pop-up retail situation, but ultimately payment has to flow somewhere, and it usually has at least a brief stop in Canada before moving elsewhere, he says.

“The counterfeiters have to collect money from a consumer who is purchasing, and those who are buying have to submit payment somehow, so there is usually some form of Canadian-based payment process. But it usually goes into one account and is gone. However, there is often a Canadian institution connected to it,” says Downs.

He says it’s almost impossible to get the police involved in trademark violation cases from the outset. The entire process can be extremely time-consuming with many dead ends.

“It’s very hard from a legal standpoint — it is difficult from an enforcement point of view to get the police involved on a fraud-related matter,” Downs says. “These perpetrators close up shop one day and move on to something else the next.”

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