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Why online marketplacesshould implement IP

protection programmesFernanda Díaz and Víctor Ramírez of Olivares discuss the role and

responsibilities of online intermediaries in connection with IP rights in Mexico

As a brief introduction, according to the MexicanAssociation of Internet (AMIPCI), e-commercehas increased rapidly since 2012 along with thefact that during 2015 three-quarters of onlineMexicans were purchasers. Derived from thepaper 12° Study regarding the Internet Habits of

Mexican Users 2016, approximately 59.8% of the Mexican pop-ulation has internet access, which means 65 million Mexicanshave Internet access every day.

In addition, the American Chamber of Commerce – ChapterMexico paper Understanding the Shadow Market in Mexico,revealed that 70% of the population knew that piracy had neg-ative effects on the country, although 58% considered that theseeffects are not serious. This shocking result for the protectionof IP rights in Mexico is mainly derived from the fact that Mex-ican society apparently does not understand the real impact ofcounterfeits and piracy products in our country.

Now, after having analysed all the aforementioned elements,we have to take into account that Mexico has increased, as itcan be appreciated, the currency of the society through theInternet. Moreover, we have to take into account that the so-ciety has begun to start implementing a culture of tradethrough internet. This can be represented through the in-crease of platforms such as MercadoLibre, Linio, De Remate,among others, and mainly derived from the arrival of one ofthe biggest platforms worldwide, Amazon, which only a yearago arrived in Mexico.

So from now on, we will analyse the impact of these newforms of trade, and the impact on the protection of intellectual

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property rights, not only regarding the right holders but thesociety.

First of all, we should define that this paper will be based mainlyon the online marketplaces, and the impact on the trade in Mex-ico, their liability in the trade related with the Intellectual Prop-erty rights, and the increase of counterfeit products. Because ofthis, we will define the online marketplaces as platforms thatoffer as intermediaries the opportunity to businesses or to per-sons to offer in sale and to purchase several products throughthe Internet.

Now, we have to remark that derived from this form of tradethrough the Internet, not only has the trade increased in theworld, and the possibility to acquire products that before werebeyond the possibilities of the society, at the time we can havethem in a couple of days in our offices.

Derived from the above, right holders have been affected be-cause of the increase of the trade of counterfeit and piracyproducts through the world. But the intermediaries also havebeen facing a great problem based on the fact that they haveto deal with suppliers, customers and sub-intermediaries.Furthermore, society has been affected directly due to theacquisition of products that apparently are authentic, but assoon as they arrive can be seen to be counterfeits, or worsecases where the buyers never realized that the products arenot authentic.

Derived from the above, and mainly due to the increase ofthe users, sellers and buyers through this online market-places, we have to establish the roles and responsibilities from

the intermediaries, mainly based on the trade of counterfeitand piracy products, not only to protect IP right owners butthe society itself.

This topic has become one of the most relevant issues to fightagainst counterfeits and piracy, mainly derived from the fact thatthe trade through Internet has increased rapidly through theworld, and Mexico is not an exception.

Suggesting several actions

We consider that several actions should be implemented inMexico, and we can take as part of a possible guideline theBusiness Action to Stop Counterfeiting and Piracy (BASCAP)paper Roles and Responsibilities of Intermediaries: Fighting coun-terfeiting and piracy in the supply chain to establish the adequateroad for all the countries regarding this crucial situation, mainlyto identify the supply chains of counterfeit and piracy trade inour country.

It is worth mentioning that several of the main marketplaces,such as eBay, have implemented programmes to protect the in-tellectual property rights of the right holders, along with pro-moting and establish a safe place where users can buy and selltheir products without any concern about their authenticity. Asmentioned, eBay created the Verified Rights Owner (VeRO)programme. Through this system, eBay has tried to establish anadequate form to fight against counterfeits online, providingusers along with sellers a safe online market, where they can beassured that the products are authentic. As a result, eBay hasbeen one of the most proactive companies (online market-

Fernanda Díaz

Fernanda is an Anti-Counterfeit/Piracy specialist,mainly working in administrative, criminal and civilprocedures in Mexico. Her practice includes protectingnon-traditional media and filing domain name actionsat the Arbitration and Media Center of the World Intel-lectual Property Organization (WIPO), as well as all on-line actions against counterfeits.

Víctor Ramírez

Victor joined the firm in 1999 and has a postgraduatemajor in IP law from the Pan-American University inMexico City as well as a certificate from the IP SummerInstitute at the Franklin Pierce Law Centre.

Victor has been working in trade mark related mattersthroughout his career and has a specialist focus in de-veloping anti-counterfeiting and anti-piracy strategiesto protect and enforce the intellectual property rights ofleading companies in a variety of industries -includinghigh-tech electronics and software- through both ad-ministrative and criminal venues, as well as on the re-spective appeal proceedings before the Courts of Law.

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places) on this issue. Moreover, they have provided the rightowners a safe place to discuss and to work along with them re-garding this type of problems.

In addition, MercadoLibre throughout all Latin America hasimplemented a similar programme, mainly giving the oppor-tunity to users along with the right owners to fight against thecounterfeit and piracy products that are being offered throughtheir website. With this we can consider that this type of actionsshould be implemented in all the market places.

As mentioned, when an internet user starts an account at anonline marketplace they are being forced to respect and tocomply with all the intellectual property rights. These type ofactions should also include that not only the online marketplaces can proceed with the download of the seller or theoffer, but with the information where the right holders cantrack the counterfeiters. With all of these actions, we will beable to identify the supply chain of the illegal products. Thiswill involve several amendments and inclusion on market-places as well as IP Laws, of several countries. But as it is es-tablished in several papers that associations that protectintellectual property rights through the world have published,this is one of the most important actions that we can imple-ment to stop this situation.

Identifying the supply chain should be the main goal of theright owners, the online marketplaces as well as the society,

because, even though we implement action to seize productsand to initiate legal actions against the importers or the sup-pliers, we will never be able to stop this illegal actions if we arenot able to identify and track down all the participants of thesupply chain.

After several years Mexico has implemented different intellec-tual property programs to fight against counterfeit and piracy.Nevertheless, none of these programs included the protection

Mexico has implemented differentintellectual property programs to fightagainst counterfeit and piracy.Nevertheless, none of these programsincluded the protection of theintermediaries, marketplaces, auctionsites, and so on

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of the intermediaries, marketplaces, auction sites, and so on,which once again not only generates a direct damage to theright owners but to the society itself. We also have to take intoaccount, that not only have these programmes not introducedthis topic as main discussion point, but the Mexican society,as mentioned at our introduction, does not consider as a seri-ous crime the fact of purchasing or trading counterfeits orpiracy products.

Protecting consumers

After analysing all the relevant main points of this discussion,including the social aspect, we consider that this topic shouldbe raised at the main discussions, associations, government pol-itics, etc., to start requesting and demanding all the intermedi-aries, mainly the online marketplaces to implement anintellectual property protection programme. All the Mexicansites should protect and warn the consumers and the usersabout acquiring counterfeit or pirate products. With this, notonly should the intellectual property rights of the world widecompanies be protected, but they should first be considered asa safe place, a secure intermediary where users can offer andpurchase their products without questioning if the products areauthentic or not. Moreover, not only should these intermedi-aries be implementing this type of programmes, but Mexicansociety should raise this awareness about the problem that weare facing and the risk that we will face in case of increasing thecounterfeit or piracy products in our country.

The main point of this article relies on the fact that as part of asystem the intermediaries, brand owners, right holders, buyers,society, and everyone involved in these type of trade, should beinvolved in protecting the safety, rights and society, hand inhand. Implementing systems that have been developed by

several intermediaries, online market places that could be usedas examples, take into account the interaction and collaborationthat has been established after several years, between the rightowners, intermediaries and society.

As a complete environment, all of us should bear in mind that,everyone is related with this type of illegal activities, and we willonly provide a resolution if we start working together, if the gov-ernment, the intermediaries, the right owners, their representa-tives and the society, understands the risks as well as thedamages that all of this will imply for the protection of the in-tellectual property rights among others.

As part of this, we recommend first of all establishing in all theintermediaries, contract terms that include the protection of in-tellectual property rights, as well as explicit prohibition to usetheir platforms to trade counterfeits or piracy products. Alongwith this, all the industry should understand and be involved inthese practices, including the education that every platform,services, intermediary, right owners, should provide or shouldpromote to impact the society, so we can generate a true con-sciousness regarding this situation.

Along with this, the Mexican government should participateand encourage all these companies and intermediaries, to raisethis topic, and try to generate a greater impact worldwide re-garding the supply chain that we will be able to identify if wework as a team, and not separately. This includes the implemen-tation of a better legal protection of the intellectual propertyrights in Mexico, mainly derived from the fact that since the im-plementation of new Criminal System, the ex officio actionshave been modified, to only include a list of crimes such ashomicide, kidnapping, rape, etc., but this does not include in-tellectual property crimes. Therefore it should be consideredto include once again the crimes related with copyrights in thelist of the crimes that should be persecuted ex officio by the Au-thorities.

Finally, we should once again mention, that this is not only anproblem that will be tackled by the right owners, or by thegovernment, all the elements of this new Internet trade systemshould be involved in protecting the users, Internet, Intellec-tual Property rights and mainly the society. We should be im-plementing actions step by step as a group, as Jeffrey Hardy,Director of the ICC initiative Business Action to Stop Coun-terfeiting and Piracy (BASCAP) mentioned during the An-nual Spring Conference of the InternationalAnticounterfeiting Coalition (IACC) held on May 2016: “Es-tablishing and enforcing clear contract terms, knowing who is tradingon their platform, identifying and guarding against high-risk behav-iour patterns, and adopting automated risk management tools areall tried-and-true business practices that are already available to on-line platforms today”, this will be a good way to start with thisfight in Mexico.

The Mexican government shouldparticipate and encourage all thesecompanies and intermediaries, to raisethis topic, and try to generate a greaterimpact worldwide regarding the supplychain that we will be able to identify ifwe work as a team, and not separately