Introduction

The rapid growth of the Internet creates unique opportunities for trademark owners to develop their brands and reach a massive number of users. But the counter side to a growing online presence is the unauthorized use of trademarks by third parties: how can trademark owners ensure control over their trademarks and enforcement of their rights over the Internet?

In recent years, online trademark infringement has become an urgent concern. It is estimated that the value of global counterfeit trade will hit 1.77 trillion US dollars in 2015.[1] And a large part of such trade and supporting marketing activities take place over the Internet.

In this landscape, traditional legal solutions are not always practicable or efficient in online infringement cases. Resorting to courts may be too expensive and too slow in light of the fast evolution of online infringers. Infringements develop so quickly that it is often impossible for a trademark holder on its own to monitor and manage enforcement against all infringements that occur online. The picture is worse for smaller but growing companies, who usually do not have enough resources to pursue a complete legal enforcement strategy.

In this scenario, a number of solutions have emerged. On one side, owners of internet service providers (ISPs), who host third-party generated content, launched compliance programs. Inspired in the Digital Millennium Copyright Act notice-and-takedown mechanisms,[2] these programs allow trademark owners to report infringing content, which the ISP evaluates and voluntarily takes down. On the other side, legal informatics solutions emerged to help businesses, mainly in the United States, Europe and India. These solutions were designed to detect online infringement and keep track of legal enforcement. They started with monitoring domain names, and expanded to surveilling other types of online activity, such as mentions in websites, online marketplaces like eBay or AliBaba, and usernames in social networks. The most notorious of these legal solutions is MarkMonitor, launched in 1999 and currently owned by Thomson Reuters.

While these solutions have been successful in developed markets, to date no solutions are being presented for the Latin American market. This is surprising given that Latin America is one of the regions with the highest rates of Internet penetration[3] and e-commerce growth.[4] Unfortunately, the existing solutions cannot provide adequate services in the region given the financial, legal and cultural differences that exist when compared to developed markets, which I will explore in more depth in Section 2. For that purpose, I have evaluated the solutions of leading eight companies operating in such markets, as well as conducted qualitative interviews with ten practicing lawyers and potential companies in the technology and e-commerce space based in Argentina.

The goal of this legal technology project is to design the first trademark alert legal informatics for Latin America, building the existing solutions in other geographic areas and adapting them to the local user’s needs. The aim of the proposal is to create a pioneer service in this market and a leading solution for the region, which could be acquired by ThomsonReuters or a similar player in the mid-term.

The Problem: Adapting Trademark Alert Solutions to Latin America

Why are the current solutions designed in the United States, Europe and India not readily adaptable to Latin America? Below I analyze some of the problems encountered when evaluating the solutions of existing providers.

Alerts

• Language: To date, the solutions are not tailored for expressions in the Spanish or Portuguese language. While comparison algorithms for the English language are still relevant (because terms like brand + “store”, “e-”, or “online” are also popular in local countries), Spanish language comparisons are also of utmost importance and have not been included yet in these software tools.

• Marketplaces: Local online marketplaces, such as MercadoLibre (the local eBay), OLX and AlaMaula are not being surveilled by the currently existing solutions. Alerts are not provided for these marketplaces, and no streamlined solutions are provided to manage notifications and takedowns in these sites.

• Costs: Current solutions are not only designed but also charged with a developed economy framework in mind. Standard fees are charged in USD and Euros, starting at around 15,000 USD/year for alerts only, and with a volume of multiple trademarks. These prices are over what the average e-commerce company in Latin America can afford.

Enforcement

• Case Management: In Latin America, cease and desist letters may not be sent electronically yet. The only valid notifications are those sent by official post, under a special seal provided by the local post office. For this reason, software solutions adapted for the region must not provide management or templates for online cease & desist notices (which are invalid and irrelevant), but instead, provide management tools foroffline official notifications and online monitoring after those notifications are served.

• Offline Procedures: Many procedures for recovery of local domain names (ccTLDs) require offline filings, to be prepared in Spanish.[5] This demands the support of specialized local lawyers to pursue enforcement, navigate complex bureaucracies and obtain timely recoveries. Unfortunately, local enforcement is only minimally automatized.

• Importance of Personal Relationships: Related to the above two points, enforcement in Latin America depends in great part on personal relationships with intermediaries (such as the legal teams of Google, Yahoo and online marketplaces) to obtain rapid takedowns. Even when court orders of cease and desist are issued by courts, proper enforcement of said orders is expedited by case-by-case informal communications with the intermediaries involved. For these reasons, successful solutions should be backed by a local team who can provide these sort of support and connections.

Current solutions

For this analysis, I studied the solutions of the following companies:

BrandProtect (US)[6]

Brandshield, Ltd. (Israel)[7]

CheckMark Network (US)[8]

Corsearch (Europe)[9]

CSC Digital Brand Services (US)[10]

LexSynergy (South Africa)[11]

MarkMonitor (US)[12]

NetNames (UK)[13]

The analysis was done in most cases through personal interviews with company representatives at the International Trademark Association (INTA) Annual Meeting in San Diego, in early May 2015.

Our solution

Our vision is to make trademark protection accessible to all Latin American businesses, starting with mid-sized businesses in Argentina; starting with merely detecting infringement, and then subsequently expanding to resolving conflicts found, and finally growing to pro-active prevention.

In order to implement such local solution, we would start the following way.

• Language Adaptation

For the Spanish adaptation of the software, we could not only provide alerts for identical appearances of the trademark, but also for the following variations:

• Spelling mistakes: In Spanish, spelling mistakes are different than in the English language. For example, “y”, “sh” and “ll” are often mistaken for one another. “h” has a silent sound and is often overlooked. “q” is commonly replaced by “k” in Internet and mobile jargon.

• Typing mistakes: common keyboard typos (in Azerty, Qwerty and Qwertz)

• Missing letters: variations of a word by removing a letter (e.g. legalacil.com)

• Changes in order: inversing and changing the order of letters (e.g. legalafcil.com)

• Letter-number changes: numbers are converted into letters and vice versa (e.g. enamora2.com instead of enamorados.com)

• Singular and plural variations

• Similar sounding (e.g. feisbuk.com)

• Synonyms: variations of trade marks by using synonyms (e.g. pampalinda.com instead of pampahermosa.com)

• Antonyms: variations by replacing words in name with their opposite (e.g. pampafea.com instead of pampalinda.com)

• Domain name hacks: where extensions are used to complete a word (e.g. garbari.no, frave.ga)

• Price Structure

We believe that companies will be willing to pay fees that are substantial by local standards – starting at 5000 ARS/month (approximately $500 USD/month) – for such monitoring.

On top of that, we believe that a substantial portion of these companies will need specialist lawyers to help solve the conflicts found, and we can refer trusted specialist trademark lawyers for a fee of the client billings. While paying lawyers for referrals constitutes a violation of the professional ethical standards of the legal profession in the United States, the issue is not regulated in Argentina, where we would launch the service.

• Case Management and Offline Support

Because of the relevance of offline operations to carry out online enforcement, (both in domain disputes and in takedown procedures in online marketplaces and Google Ads), we would keep a specialized team of lawyers and paralegals to assist in these procedures, or work with the client’s local law firm to provide the necessary evidence for a successful offline case.

• Technology Implementation

In the beginning, we would implement these solutions by obtaining licenses from third party technologies, and working together with them to adapt the solutions to Spanish. Some of the third party technologies we would use would be KeywordSpy for online ads, and Mention.com for alerts in social networks. Moreover, at the moment, I have initiated discussions of potential joint ventures with two small foreign companies in this field. Upon launch, some of the work would be done manually for those technologies for which we have not found a third party solution and are too expensive to build in the beginning, such as online surveillance in marketplaces. Once we start running this system successfully and profitably, we would then scale up from there to develop our own technology.

Website
I have prepared a pilot website with a description of the services, which can be found at alertas.legalfacil.com.

Business Aspects

• Distribution: How will our clients find out about us?

The biggest risk factor to this plan, that we see, is that even if our system is unique, no one will find out about it. However, an advantage we have is that we have been solving this problem for the last 4 years, before this idea was even born: my partner at the law firm and I have built up substantial professional relationships with various Argentine business associations with online presence, such as the Argentine Chamber of Electronic Commerce,[14] through whom we have direct access to the decision-makers at thousands of companies in our target market. Our plan is to work our network to find a small number of clients to beta the product with and, once that is successful, to continue using our networks to grow. In addition, we plan a small and targeted online advertising campaign to see if there is a market to acquire clients directly.

• Exit Strategy & Competition: How do we sell the company?

The leading global companies in a similar business – such as MarkMonitor and NetNames – have not yet expanded to Latin America. However, through my professional networks, I am aware that MarkMonitor has hired at least one person to develop the Latin American aspect of their business.

But I do not believe that MarkMonitor would be a local competitor in the near term, because expanding global trademark monitoring to Latin America is complex. First, by international standards, it may be considered a small market. Secondly, the local legal systems are substantially more complex than the legal system in developed countries, and as mentioned above, the right local partners are needed to implement successful legal strategies. Thirdly, there are many cultural differences and idiosyncrasies to the Latin American e-commerce market that are challenging for foreign companies to accept local transactions, such as the majority of the economy being entirely in cash, and most ecommerce needing to be paid in cash, for example.

These are substantial barriers to investing directly in Latin America. For these reasons, I believe that foreign companies are not likely to compete with us anytime soon – and, more than that, if we can build this business successfully and profitably, we think they will be more likely to buy us than compete with us.

 

[1] International Chamber of Commerce / BASCAP, Estimating the Global Economic and Social Impacts of Counterfeiting and Piracy (2011), cited by the International AntiCounterfeiting Coalition, at < http://www.iacc.org/counterfeiting-statistics>.

[2] 17 U.S. Code § 512, Limitations on liability relating to material online, paragraph (c).

[3] Internet Society, Global Internet Report 2014, at <http://www.internetsociety.org/sites/default/files/Global_Internet_Report_2014_0.pdf>, p. 22.

[4] European Commission’s E-Commerce Europe, Latin America B2C E-Commerce Report 2014, at http://goo.gl/CmGwrS.

[5] ccTLD stands for “country code top level domain” and refers to local domains such as “.ar” (Argentina), “.br” (Brazil), “.cl” (Chile), and so forth.

[6] BrandProtect, http://www.brandprotect.com/

[7] Brandshield, https://www.brandshield.com/

[8] CheckMark Network, www.checkmarknetwork.com

[9] Corsearch, http://www.corsearch.com

[10] CSC Digital Brand Services, https://www.cscglobal.com/global/web/csc/digital-brand-services.html

[11] LexSynergy, www.lexsynergy.com

[12] MarkMonitor, www.markmonitor.com

[13] NetNames, www.netnames.com

[14] Cámara Argentina de Comercio Electrónico, http://www.cace.org.ar/. Our law firm: http://www.estudiorosz.com.ar/