Many federal lawsuits have been filed by Intellectual Property owners in recent years to try to address the intensifying on-line threat from “rogue web-sites.” In addition, the US Division of Justice and US Department of Immigration and Customs Enforcement have seized millions of dollars in assets, as nicely as shuttered a lot of such web sites by using existing criminal laws.
However, even though World-wide-web visitors to these web pages has been measured and determined to be substantial, tiny analysis has been completed to empirically survey the existing physique of information connected to this phenomenon.
fake euro of more than three,000 World wide web web-sites that federal courts have ordered shut down due to the fact of their sale of counterfeit goods has revealed that online counterfeiters can collect immense income by producing more than $10,000 in sales with a $1,000 initial investment.
An evaluation of an on the internet counterfeiters’ prospective profit margin can be summarized in the sample breakdown of typical income and charges as follows: The average expense of registering a single Net domain name: $10-$20 per domain name, annually. The average expense of hosting a number of e-commerce internet sites on a shared server: $120 to $160, annually. International shipping is either paid for by the buyer, or absorbed by seller if it is a nominal price (much less than $ten per item). Credit Card/online payment processing fees: three-5% of sale price. Wholesale expense of counterfeit goods varies by brand and solution category.
For instance, a standard counterfeit coat has a $40-$50 wholesale cost, retails for $230-$300 on a rogue site. A standard counterfeit handbag: $40-$50 wholesale expense, retails for $200-$300 on a rogue internet site. A common counterfeit bracelet: $10 wholesale price, retails for $70-$80 on a rogue web site. A common counterfeit watch: $ten wholesale expense, retails for $160 on a rogue web site.
Hence, beginning with a $1,000 investment, if one particular sets up a hosted e-commerce web-site ($160) linked to 5 domain names ($100), and invests the remaining funds ($700) in promoting and shipping wholesale counterfeit goods, 1 could generate: Up to $11,200 by promoting 70 counterfeit watches (11.2x the initial investment) Up to $5,600 by selling 70 counterfeit bracelets (five.6x the initial investment) or Up to $four,200 by promoting 14 counterfeit coats or handbags (four.2x the initial investment).
This low-risk organization model offers a comparable return on investment (ROI) to trafficking in illegal narcotics.
Since of this dramatic ROI, on-line counterfeiting networks are exponentially spreading on the Net like an infection. For example, the ROI from a single profitable site promoting counterfeit merchandise encourages the creation of lots of additional such websites.
Skilled programmers who have access to sophisticated technology and an extensive provide of counterfeit items are building and operating these web pages. To protect their business model, they are employing a variety of creative tactics to frustrate efforts to monitor them and take away them from the marketplace. For example, they dynamically redirect their websites across several servers located in distinctive nations.
Considerable server bandwidth is devoted to hosting such sites, with large blocks of server space and IP addresses dedicated to managing the Web targeted traffic to them.
Counterfeiters’ web sites are generating significant actual consumer confusion. One reason is that prices for counterfeit goods are developed to be credible to suggest genuine, discounted merchandise rather than low high quality counterfeits.
Goods received are usually shipped straight from locations throughout China and Hong Kong, and China is the country most typically named as the country of the Registrant. However, Registrants do not usually give genuine or constant make contact with data when registering new domain names, normally working with gibberish, nonsensical words and false addresses.
Further, some Registrants are applying the “Privacy Protection” solutions supplied by Registrars to obtain a cloak of further anonymity.
Application applications make it a lot easier for infringers to develop, register and warehouse thousands of domain names that include permutations of trademarked brands.