Intellectual Property

Impulsive Infringement

Every time we choose convenience over careful consideration of a purchase is another increased opportunity for us to unwittingly buy an infringing product.

By Gaston Kroub on November 27, 2018 10:04 am

Sometimes, we have a sense that things are trending in a certain direction, but aren’t sure whether we are correct. And then a well-researched and -written article comes out confirming that our sense was a correct one. Which makes us feel both good and a little uneasy. Good, because we have our intuition validated. Uneasy, because we realize that the trend we have been sensing raises a number of challenging questions, whether in our personal or professional lives. It may not happen often, but when it does, we can’t help but think more deeply about the issue we have just read about.

All that happened to me this past Thanksgiving Eve. With the kids in school, little on the pre-holiday work agenda, and no holiday travel in sight for at least another day, I was intrigued by an article I saw on the Ringer by Molly McHugh, one of the site’s tech writers. Even better, I had the chance to read it without interruption. A worthy read, the article looks at the existing state of impulse buying, driven by technological advances such as “one-click checkout, browser credit-card storage, and Amazon Dash buttons.” As McHugh notes, “[t]hese improvements laid the groundwork for an increase in mobile shopping.” And apparently buying while using a smartphone is not only convenient, but also likelier to result in an impulse buy. Unsurprisingly, ecommerce retailers are doing whatever they can to encourage mobile shopping, as shoppers choose efficiency and convenience over the “time-sucking” investment in “comparing prices and researching options.” To that end, sports retailer Fanatics has even figured out how the speed up website performance when there is more demand, using something called “elastic computing.” I imagine that technology came in handy during yesterday’s Cyber Monday frenzy.

The use of technology to separate customers from their money is nothing new of course. But the article got me thinking about how the rise of mobile shopping — when coupled with increasing customer unwillingness to comparison shop — will place further strain on an already difficult intellectual property enforcement environment for patent and brand holders. We have already discussed on these pages the challenges to policing intellectual property theft (for both IP owners and alleged infringers) on Amazon. Keeping in mind that Amazon remains the world’s most pervasive ecommerce marketplace — and one that is easily accessible from all kinds of mobile computing devices — the impact of impulse buying on perpetuating infringement via that platform can’t be ignored. Amazon is not alone of course, as any of the “bazaar”-style ecommerce websites are at various times times hotbeds of counterfeit products.

From a brand-owner’s perspective, policing counterfeits on an Amazon or eBay may actually be easier than having to hunt through the proverbial Chinatown street-corner brick and mortar shop for fake goods. At the same time, the ease with which shopping is done on these online platforms, when coupled with the efficiency with which these companies seem to near-instantly ship out ordered goods, makes it more likely than an infringing item will receive wide-scale distribution in a short period of time. Add in the possibility that a knockoff vendor pays for prime placement with respect to search results, and you have a recipe for speedy sales of infringing items. While large brand-owners can afford to police and register complaints on an Amazon or eBay in short order, the impact of rapid infringement on smaller IP owners may be disproportionately worse. Either because they can’t monitor for infringement as easily, or because they are less sophisticated regarding registering effective take-down complaints with the ecommerce vendor.

The problem may be even more acute on the patent infringement side. While it is easier to police for counterfeit products bearing unauthorized brand names, identifying products that infringe patents is often a more involved process. Every patent lawyer knows the amount of work that goes into preparing a simple claim chart — and clients surely know the costs of that analysis. Because identifying patent infringement is more difficult, an infringing product could make more headway on an ecommerce site before a complaint is even registered. And while Amazon has a quick trigger when it comes to responding to trademark-related complaints, the complexity of determining whether a patent infringement complaint is valid slows response times. Giving the infringing products more time on the digital shelves, which further increases the harm to the patent holder is ostensibly losing sales to the knockoffs.

There is another consequence of technology-induced impulse buying leading to more pervasive IP infringement. Many customers look askance at buying knockoff products, preferring to pay more for “authentic” items. Especially if the customer knows that the knockoff is simply a cheaper copy of an innovative product developed by someone else. But when that same customer is literally buying without thinking, the likelihood that they will care about whether or not the product they are buying infringes another’s IP rights is necessarily reduced. This is less of a concern with a customer proudly buying a clear fake, but is much more of a potential harm for IP owners trying to compete against infringing products that are not clearly counterfeit.

Ultimately, the race to reduce the time between our desire for a product and us putting that product in our digital shopping cart is being won by the ecommerce titans. Every time we choose convenience over careful consideration of a purchase is another increased opportunity for us to unwittingly buy an infringing product. Yes, IP owners also benefit from consumers making online purchases on an impulse. But that same benefit is a detriment when infringing products are just as easily purchased as innovative ones. Smart companies will recognize the threat of impulsive infringement and take steps like demanding better handling of infringement complaints by the major online sellers. And IP lawyers must take into account the increasing importance of mobile sales online, when calculating damages or trying to measure the scope of infringement. Because as long as customers are clicking, the impulse to infringe will continue to exist.

Please feel free to send comments or questions to me at [email protected] or via Twitter: @gkroub. Any topic suggestions or thoughts are most welcome.

Gaston Kroub lives in Brooklyn and is a founding partner of Kroub, Silbersher & Kolmykov PLLC, an intellectual property litigation boutique, and Markman Advisors LLC, a leading consultancy on patent issues for the investment community. Gaston’s practice focuses on intellectual property litigation and related counseling, with a strong focus on patent matters. You can reach him at [email protected] or follow him on Twitter: @gkroub.