Brand owners look forward to Cyber Monday with high hopes of strong online sales. Cyber Monday can also be extremely lucrative for counterfeiters. This year, however, dozens of counterfeiters received an unwelcome surprise. The Homeland Security Investigations (HIS) directorate of the U.S. Immigration and Customs Enforcement (“ICE”) agency, worked with the European Police Office (Europol), to lead an international law enforcement effort to seize domain names selling counterfeit merchandise. See Nov. 26, 2012 ICE Press Release. Dubbed “Project Cyber Monday 3,” the global endeavor resulted in the seizure of 132 domain names and the arrest of one U.S. resident. See Nov. 26, 2012 U.S. Attorney Press Release. The web sites at the seized domain names offered a wide variety of goods, ranging from professional sports jerseys, to jewelry, to DVDs, to luxury goods. See the National Journal List of 101 domestic websites.

Seizure Banner Greetings to Counterfeit Websites

Visitors attempting to reach the affected web sites are now greeted with this banner that notifies the visitor of the government seizure and educates the visitor about the federal crime of copyright infringement:

Europe and the UK Join Forces with ICE

Although this effort was the third consecutive year for ICE’s Cyber Monday initiative, it marked the first time that European law enforcement was involved. In addition to the European Police Office (Europol), law enforcement agencies from Belgium, Denmark, France, Romania, and the United Kingdom participated. The European agencies seized 31 of the 132 affected domain names. See U.S. Department of State Briefing with John Morton, Director of U.S. Immigration and Customs Enforcement (ICE).

U.S. Warrants Issued for Domain Names

The U.S. seizure effort resulted from warrants issued by U.S. Attorney’s Offices in the Districts of Colorado, Maryland, New Jersey, and the Central District of California, the Southern District of California, the Western District of New York, and the Western District of Texas. How did law enforcement know which domain names to seize? From leads they received from the brand owners. Undercover officers made purchases of the allegedly infringing goods. If the copyright holder confirmed that the purchased goods were counterfeit or otherwise illegal, law enforcement sought seizure orders from federal magistrate judges. The U.S. Attorney for the Western District of New York William J. Hochul Jr. underscored that counterfeit goods adversely affect not only brand owners:

Victims of these crimes include not only those who create intellectual property and the employees of the legitimate businesses who turn the ideas into products. Consumers are also hurt by unknowingly obtaining inferior or potentially harmful products, as are taxpayers who are unable to rely on taxes from legitimate sales to fund programs which benefit the community.

See ICE Update and Nov. 26, 2012 U.S. Attorney Press Release. Monday’s seizure was part of ICE’s “Operation in Our Sites,” a program that targets websites distributing counterfeit and pirated goods on the internet. “Operation in Our Sites” is managed by The National Intellectual Property Rights Coordination Center (IPR Center) in partnership with Homeland Security Investigations. According to ICE, since the operation began in the middle of 2010, more than 1,600 domains have been seized many of which have been forfeited to the federal government. In addition to the domain name seizure, officials have targeted for seizure PayPal accounts utilized by the allegedly infringing web sites. As reported by NetworkWorld, these account balances are reportedly in excess of $175,000. Sources: U.S. Immigration and Customs Enforcement website; European Police Office website; The United States Attorney’s Office, Western District of New York; Ribeiro, “US, European Agencies Seize 132 Domain Names for Selling Counterfeit Merchandise,” NetworkWorld, Nov. 27, 2012; http://www.nationaljournal.com/tech/101-u-s-websites-blocked-on-cyber-monday-20121126.

This article was prepared by Sue Ross (sross@fulbright.com / 212 318 3280) of Fulbright’s Intellectual Property and Technology Practice.