Online Piracy and Counterfeiting: Ad Networks Adopt New “Best Practices Guidelines”

by Christina Frangiosa

On July 15, 2013, the US Intellectual Property Enforcement Coordinator (IPEC), Victoria Espinel, announced the adoption of best practices for online advertising, with an aim to reduce the influx of counterfeiting or pirating conduct. The IPEC explained that these practices are aimed at “reducing the flow of ad revenue to operators of sites engaged in significant piracy and counterfeiting.” Victoria Espinel, “Coming Together to Combat Online Piracy and Counterfeiting,” Office of Management and Budget (July 15, 2013). The participants in this program – at least at the outset, are 24/7 Media, AOL, Conde Nast, Google, Microsoft, SpotXchange and Yahoo! Id.   While supporting and encouraging initiatives like this, the IPEC also cautioned that these activities be undertaken in the context of other interests in the Internet marketplace:

“It is critical that such efforts be undertaken in a manner that is consistent with all applicable laws and with the Administration’s broader Internet policy principles emphasizing privacy, free speech, fair process, and competition. We encourage the companies participating to continue to work with all interested stakeholders, including creators, rightholders, and public interest groups, to ensure that their practices are transparent and fully consistent with the democratic values that have helped the Internet to flourish. We also encourage other participants in the online advertising space to consider adopting voluntary initiatives that protect ad networks, publishers, advertisers, creators, rightholders, and above all, consumers.”

Id. The IPEC’s blog post includes links to the public statements made by AOL, Google, Microsoft and Yahoo! about these best practices. A copy of the best practices themselves can be found here.

Earlier Online Advertising Initiatives

In March 2012, the IPEC announced another best practices initiative: IPEC, “Advertisers and Advertising Agencies Address Online Infringement Through Best Practices,” Spotlight at 3 (Mar. 2012). Specifically, the American Association of Advertisers (“4As”) and the Association of National Advertisers (“ANA”) strongly encouraged their members to take affirmative steps to prevent U.S. advertisers from placing their ads on predatory foreign websites (“PFWs”) – those websites based outside U.S. borders that target U.S. consumers and offer predominantly counterfeit products or pirated content. Press Release, “ANA, 4As Release Statement of Best Practices Addressing Online Piracy and Counterfeiting” (undated); Member Bulletin, “Media Matters: Statement of Best Practices to Address Online Piracy and Counterfeiting,” (June 1, 2012).

These affirmative steps include, for example, insertion of language in ad placement contracts that requires ad networks and other intermediaries involved in U.S.-originated advertising campaigns to take commercially reasonable measures to prevent ads from appearing on PFWs.  Member Bulletin (June 1, 2012). Other steps include requiring intermediaries involved in the serving of an advertisement to respond expeditiously to complaints by rights holders or advertisers and to provide remediation to advertisers whose ads have been misplaced on PFWs. Id.

Conclusions

The problem of online counterfeiting and piracy undertaken by PFWs causes serious damage to the U.S. economy and U.S. businesses. See, e.g., StopFakes.com, “Top 10 Ways to Protect Yourself From Counterfeiting and Piracy” (undated). Every initiative aimed at reducing the impact of these activities is welcome, assuming that other rights (such as First Amendment, privacy, competition and fundamental due process) are not sacrificed. Hopefully, we will see more initiatives from other key players in the Internet ecosystem that are not only aimed at reducing online piracy and counterfeiting, but also at effectively eliminating the incentive for PFWs to capitalize on U.S. intellectual property rights. By eliminating the incentive, perhaps the “cost” to offer pirated content and counterfeited goods will simply be too high, and these entities will choose to no longer offer them.