Quite a few federal lawsuits have been filed by Intellectual Property owners in current years to attempt to address the intensifying on the web threat from “rogue sites.” Moreover, the US Division of Justice and US Division of Immigration and Customs Enforcement have seized millions of dollars in assets, as properly as shuttered numerous such sites by utilizing existing criminal laws.

Nonetheless, although World wide web website traffic to these websites has been measured and determined to be substantial, tiny research has been accomplished to empirically survey the current physique of data connected to this phenomenon.

fake euro notes of over three,000 Web internet websites that federal courts have ordered shut down due to the fact of their sale of counterfeit goods has revealed that on the net counterfeiters can gather immense income by creating over $ten,000 in sales with a $1,000 initial investment.

An evaluation of an on line counterfeiters’ possible profit margin can be summarized in the sample breakdown of common revenue and costs as follows: The average cost of registering a single World wide web domain name: $10-$20 per domain name, annually. The average expense of hosting a number of e-commerce internet websites on a shared server: $120 to $160, annually. International shipping is either paid for by the client, or absorbed by seller if it is a nominal expense (less than $ten per item). Credit Card/online payment processing charges: 3-5% of sale cost. Wholesale cost of counterfeit goods varies by brand and solution category.

For instance, a common counterfeit coat has a $40-$50 wholesale price, retails for $230-$300 on a rogue web page. A common counterfeit handbag: $40-$50 wholesale expense, retails for $200-$300 on a rogue web site. A standard counterfeit bracelet: $ten wholesale expense, retails for $70-$80 on a rogue internet site. A standard counterfeit watch: $10 wholesale cost, retails for $160 on a rogue internet site.

Therefore, starting with a $1,000 investment, if 1 sets up a hosted e-commerce site ($160) linked to 5 domain names ($100), and invests the remaining funds ($700) in promoting and shipping wholesale counterfeit goods, one particular could create: Up to $11,200 by selling 70 counterfeit watches (11.2x the initial investment) Up to $5,600 by promoting 70 counterfeit bracelets (5.6x the initial investment) or Up to $4,200 by selling 14 counterfeit coats or handbags (4.2x the initial investment).

This low-risk small business model delivers a comparable return on investment (ROI) to trafficking in illegal narcotics.

Because of this dramatic ROI, on-line counterfeiting networks are exponentially spreading on the Internet like an infection. For example, the ROI from a single prosperous site selling counterfeit solutions encourages the creation of a lot of extra such web sites.

Skilled programmers who have access to sophisticated technology and an substantial provide of counterfeit products are building and operating these web pages. To protect their enterprise model, they are employing a selection of creative techniques to frustrate efforts to monitor them and get rid of them from the marketplace. For instance, they dynamically redirect their websites across a number of servers located in distinct nations.

Important server bandwidth is devoted to hosting such web sites, with significant blocks of server space and IP addresses devoted to managing the World wide web site visitors to them.

Counterfeiters’ websites are producing significant actual consumer confusion. 1 reason is that costs for counterfeit goods are developed to be credible to recommend genuine, discounted products rather than low excellent counterfeits.

Goods received are generally shipped directly from places throughout China and Hong Kong, and China is the nation most normally named as the nation of the Registrant. Even so, Registrants do not commonly provide reputable or constant contact information when registering new domain names, often applying gibberish, nonsensical words and false addresses.

Additional, some Registrants are employing the “Privacy Protection” solutions provided by Registrars to buy a cloak of further anonymity.

Software applications make it a lot easier for infringers to generate, register and warehouse thousands of domain names that contain permutations of trademarked brands.

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