World Wrestling Entertainment Inc. (WWE) was bleeding revenue dollars until an online auction monitoring firm helped it pin down counterfeiters selling bogus WWE products on the Web.
The Stamford, Conn.-based pro wrestling promotion house said Online Channel Protection, a software application from MarkMonitor Inc. of San Francisco, dramatically speeded up and sharpened the online fraud detection processes.
Online Channel Protection is a “Web-crawling” tool that searches the Internet for possible instances of brand infringement.
“The software saves me so much time,” said Stacy Papachristos, associate counsel, WWE. “Barely a month after deploying MarkMonitor, we were [preventing] hundreds of illicit online sales.”
Owner of the SmackDown and WrestleMania franchises, WWE obtains sizeable revenue from its online sales of DVDs, clothing and other WWE-themed consumer merchandise.
Some three years ago, Papachristos said, they were tipped off by wrestling fans that unauthorized WWE-marked merchandise was being sold on the Web. “I did an online search and found numerous sites selling fake WWE products and WrestleMania DVDs that we didn’t even produce.”
Papachristos discovered that when WWE airs a pay-per-view event, unauthorized DVD versions of the matches are sold online the very next day, even before the wrestling promoter can come up with an original disk.
Other counterfeiters also compiled older footage of WWE matches to create unauthorized DVD anthologies.
Searching the Web for vendors that hawk these and other bogus WWE items is a tedious task, according to Papachristos. “I often trawled Net auction sites such as eBay for hours,” the WWE assistant counsel said. “I performed keyword searches for our products on every site I visited and listed suspicious sites.”
She also notified online auction venues used by unscrupulous vendors that WWE products were being illicitly hawked on their sites. Notices were also sent out to defaulting vendors ordering them to stop selling such products.
The organization also tried several auction monitoring software products, but eventually opted for the MarkMonitor application as it was the best fit. “Their portal was much easier to use and the customer service was great,” said Papachristos.
Other auction monitors, she said, merely e-mailed them a list of suspicious sites, and left the rest of the work to WWE.
By contrast, Online Channel Protection does nearly all of the work for WWE, said Frederick Feldman, chief marketing officer, MarkMonitor.
“Our product searches all of the major online auction sites, e-commerce sites, and domains that capitalize on the WWE brand.”
He said the list of and links to the suspicious sites are made available to WWE through a Web portal. The portal also provides users with a range of other features such as the ability to generate in-depth reports, conduct further investigation, and send broadcast “cease and desist orders” via e-mail.
Site activity reports, Feldman said, are crucial when clients want to establish a case against repeat offenders.
“It’s no longer uncommon for us to shut down hundreds of unauthorized sales in a week,” said Papachristos.
She did not reveal how much WWE was losing as a result of illicit online sales, or how much the company was able to recoup with the deployment of the MarkMonitor software tool. A brand name company that earns US$250 million (Can$289 million) yearly, can potentially lose as much as 20 per cent – or around US$50 million (Can$57 million) – due to counterfeiting, Feldman said.
At a conservative estimate, preventing even five per cent of this loss using a tool such as Online Channel Protection, could result in savings of US$250,000 (Can$289,000), he said. Feldman also said the automation and collaboration features of Online Channel Protection can help cut legal fees.
The market for counterfeit products online is a “severe problem” for the e-commerce community, according to Lee Webster, a lawyer with Osler, Hoskin and Harcourt LLP in Toronto.
“A large part of the problem is that it’s difficult to trace online counterfeiters,” said Webster, who is also chair of the intellectual property committee at the Canadian Chamber of Commerce (CCC).
Canadian laws, he said, also “lag those of other countries, when it comes to providing intellectual property protection.”
Chamber recommendations recently read before the House of Commons include:
• Granting greater seizure powers to Customs authorities dealing with counterfeit goods;
• Amending the Criminal Code to define counterfeiting as a special criminal offense; and,
• Making it possible for law enforcers to seize illicit wealth generated from counterfeiting activities.
These recommendations nearly mirror the wish list of Canadian police and anti-counterfeiting organizations.