IP lawyer’s top tips to protect your e-commerce business from copycat scams

When running an e-commerce business, profitability, security, and customer satisfaction are all vital to your success.

Yet all three can be jeopardised by copycat scams, where an imposter either sells products masquerading as your own, or establishes a website under your own business’ name.

Australians lost $74 million to online scams, including website impersonation scams, in 2022 alone.

And some of the nation’s most renowned retail brands have been imitated: consider the case of Gorman, which is fighting a relentless battle against the imitators fooling the brand’s loyal customers.

Stephen Annicchiarico is a senior associate and intellectual property expert at WRP Legal & Advisory.

Speaking to SmartCompany, Annicchiarico outlined some of the steps a small business can take to challenge e-commerce pretenders and the ways a legal professional might be able to help.

First steps

If you discover another business copying your trademarks or outright selling fake products under your name, there are several no-nonsense options available to you.

If the copycat business is hosting a profile or running advertisements on social media, your first step should be contacting the platform and telling them what has occurred.

It’s in the best interests of the social media platforms to eliminate dodgy profiles and ads, as leaving them unchecked can cause legitimate brands to withdraw their advertising from the site.

“They will actually act quite swiftly and quite promptly to remove any potentially infringing content, even if it’s on the cusp,” Annicchiarico says.

“And that’s something you don’t need a lawyer to do.”

However, while platforms like Facebook’s Meta will remove fraudulent ads, a recent Crikey investigation found well-known brands like Mecca have been repeatedly copied on social media.

Website hosting services are unlikely to continue supporting scam websites, says Annicchiarico.

In these cases, business owners should try to identify which hosting provider is behind the website, and contact them directly.

For example, Australian domain name registrar Webcentral accepts complaints about suspected copyright infringement, and “bad faith intent of profiting from the goodwill or reputation of someone else’s trademark, service mark, company name, or personal name”.

“You can’t be using domain names in a bad faith, or leveraging from other people’s intellectual property rights,” Annicchiarico advises.

If those avenues fail, you can also consider contacting Australia’s domain name authority auDA directly, as set out here.

If the dodgy website uses a domain name that copies yours, or is deceivingly similar, you can even apply to have the offending domain cancelled or transferred to you.

Engaging an auDA panel to consider your dispute will not come cheap, starting at $2,000, but it may be a cheaper solution than engaging a lawyer to handle your complaint.

Engaging a legal professional

If the steps listed above do not eliminate the copycat website, legal professionals can help you take the next step.

Before they even file a matter with the courts, lawyers can help you map out precisely how your copyright and trademarks are being infringed upon.

If a domain name registrar has expressed doubt over your take-down claim, a clear and professional explanation of your complaint, as written by a legal professional, could help your case.

Going a step further, lawyers may be able to cut off the fraudulent website’s traffic by filing a complaint with search engine giants like Google.

“We put them on notice of the conduct, and they will actually remove these websites from the indexing, so when you search, they won’t come up,” Annicchiarico explains.

While search engine complaint functions are open to the general public, Annicchiarico says engaging legal professionals may boost your case with the Googles of the world.

“When you’re preparing something to Google, then you need clear, unequivocal explanations around what has happened, why it’s an infringement, and what’s the breach of the relevant law,” he says.

“While there’s not a different avenue for the way we do it, it’s generally a higher success rate when we do it than when our clients do it themselves, because of the difficulty in articulating the relevant breaches.”

Then comes the first real tool at the lawyer’s disposal: the cease and desist letter, advising the accused scammer that you are aware of the infringement, and will consider escalating the matter through the courts.

Many scammers go to great lengths to keep their actual identities under wraps, but locating a relevant email address will help your lawyer send the first cease and desist notice.

“What we always do is issue the initial letter, make clear deadlines to remove the trademark, and explain the reasons why,” Annicchiarico says.

The letter will then include the following statement, or something similar: “If you don’t undertake these corrective actions, which might include removing our client’s products from the website, removing our trademarks, or similar trademarks from the website, we’ll be taking further action.”

If the alleged scammer is based overseas, specialised law firms can liaise with international partners to address the issue in a foreign jurisdiction.

Pre-court steps

If contacting social media platforms, auDA, the search engines, and firing off cease and desist letters fails to address the issue, there’s still another option before engaging in pricey court action.

“Mediation before court is always an opportunity,” Annicchiarico says.

In the case of inadvertent errors, when an inexperienced website operator unintentionally rips off your brand but refuses to respond to prior legal notices, mediation can be a best-case scenario for both parties.

“Often, more often than not, they’ll say, ‘Sorry, we didn’t realise’,” Annicchiarico continues.

“Sometimes people go a little longer, but then they come to the table: ‘Let’s settle for X amount of money’, or, ‘We appreciate we’ve damaged your business, but we don’t want to take this any further’.”

You can also push for some sort of settlement during these pre-court discussions.

“If people are making millions of dollars off your brand, then we’re talking a large settlement. But if we’re talking as if someone is using one of our trademarks on a website, more often than not the remedy is: ‘Take it down, and let’s get on with it. You’re wasting everyone’s time and money,'” says Annicchiarico.

“And a lot of the time they agree with that, and walk away, unless there’s hundreds of thousands, or millions of dollars at stake, and that’s where the monetary settlement can come in.”

If this fails, and you have the evidence, financial backing, and desire to pursue the matter further, you can take your case to the courts.

At this point, your legal counsel should be crystal clear about whether you have a strong case, and the chances of you paying your opponent’s legal costs if your case fails.

“It is a bit of a tricky one,” Annicchiarico says.

However, “if you’re going to court, it’s usually when you know that you have quite a strong case, and you’re not leaving any stone unturned.”

Make sure it doesn’t happen again

In an ideal world, your actions will stop scammers from using your intellectual property to fleece customers who think they’re buying from you.

But that may not stop further copycats down the line, as evidenced by the repeated emulation of retailers like Gorman.

Securing extra domain names related to your brand, even if you have no intention of actually running an e-commerce store through them, can make it harder for crooks to copy your business.

“A lot of the time, what these websites do is they’ll have a name that’s very similar, and extra ‘E’ at the end of the name, or an extra ‘R’, and a lot of people don’t notice,” Annicchiarico says.

If your business is a habitual target, Annicchiarico says legal firms are now deploying advanced tools to stamp out copycat scams.

“For example, for some of our larger clients, we have technologies that notify us as soon as a third party intends to register a business name or a trademark,” he explains.

“And then we instantly act by issuing a cease and desist letter to stop that happening.”