Skin in the Game: World IP Day 2019

The theme of year’s World IP Day celebration is sports.  And although I’ve never been what you might call a major sports fan, it does occur to me that the business of athletics is about as IP-rich and environment as one might imagine.  Covering all the bases, as it were, the world of professional sports is steeped in every kind of intellectual property you can name—from broadcast rights under copyright that enable the majority of fans to watch games and events, to trademarks and patents for all that equipment, to publicity rights that popular athletes negotiate for their endorsements of goods and services.  And that doesn’t even include all the IP-related activity spawned by sports like photography, journalism, biography, gaming, etc.

The World Intellectual Property Organization (WIPO) summarizes this year’s attention on athletics as follows:

The global sports ecosystem is made up of a complex web of players and commercial relationships underpinned by IP rights. The strategic use of these rights has, to a large extent, enabled the rapid growth of the global sports industry, and will continue to play a central role in the future evolution of sports in a rapidly evolving and evermore technology-driven landscape. A focus on IP and sports also offers significant opportunities to foster the social, economic and cultural development of all nations.

And that’s all well and good from the thirty-thousand-foot perspective, but perhaps one of the most significant narratives in regard to athletics is not so much that we could unpack all the IP related to the career of Serena Williams or Lionel Messi, but that we might instead recognize the significance of IP for the kid who just signed up for little league or junior hockey or Tae Kwon Do.  Because the likelihood that her parents are going to buy equipment online is quite high, and unfortunately the growth of global e-commerce has also fueled a companion growth in e-counterfeiting.  And right now, the safeguards for that new athlete are inconsistent at best.

A counterfeit jersey is bad for business, but it isn’t going to get anyone killed.  That may not be the case with counterfeit ski boots or a face-mask or padding.  While that comment may seem alarmist, the present condition is that online counterfeiting is already outpacing enforcement—especially for any business that is not yet a mega-brand.  I don’t mean to suggest that the mom buying sporting goods on Amazon for will automatically be presented with counterfeits more often than the real thing, but the probability is increasing that she will see counterfeits alongside the real thing and will not be able to tell the difference.

How often have you shopped for a product online and found what you were looking for at a price that seemed unrealistically low?  That’s because the counterfeiter, most likely operating in China, has infringed the brand’s trademarked logo, infringed the copyrighted photograph of the real product to feature online, and will ship you an inferior-grade knock-off made by some company you’ve never heard of and never will.  Again, if it’s earbuds that don’t work well, lesson learned.  If it’s protective gear, different story.

Unfortunately, neither the current legal frameworks nor prevailing cultural attitudes about online infringement have kept pace with the counterfeiters’ ability to move very fast and break many things.  The narrative that began more than twenty years ago as the alleged “victimless crime” of music piracy today frustrates the urgency to address online counterfeiting of physical goods where the clearly-identifiable victims may be consumers buying inferior products and/or small businesses that can been wiped out by rampant counterfeiting.  (See 2018 article in the Atlantic.)

While Amazon states that it devotes considerable resources to weeding out bogus suppliers—and no doubt they do—the fulfillment giant (along with many other e-commerce sites) remains shielded by 90s-era “safe harbors” that indemnify web platforms for third-party copyright infringement under the DMCA and for third-party harm in nearly all other forms under Section 230 of the CDA.  So, inasmuch as Amazon may indeed be working to mitigate counterfeits, the fact remains that, to-date, the company has no skin in the game.  It’s buyer beware.  Except you will not actually see that warning at the top of their webpages.  

And that point raises one of the most blatant hypocrisies when it comes to intellectual property in the digital age.  As a trademarked brand itself, Amazon et al are a beneficiaries of the underlying value of trademark law, which is to foster consumer confidence.  But the brand identities protected by those marks are anathema to the aforementioned lack of liability when it comes to protecting consumers or the trademarks of the legitimate suppliers that sell their products on their platforms.  

To be clear, I’m not dinging Amazon because they’re so terrible but rather because they are the largest and almost certainly the best in the business.  Removing infringing material from Amazon can be costly and time-consuming, but it’s a cakewalk compared to, say, Alibaba whose obfuscating takedown process is like following assembly instructions written in badly-translated Chinese to English.  But foreign-based sites and trade negotiations notwithstanding, it is time to get our own house in order when it comes to the presumed “neutrality” of web platforms, and WIPO’s attention to sports this year makes a good a case as any for doing so.

E-commerce sites like Amazon, EBay, Wal-Mart, et al are not strictly “neutral highways on which goods travel.”  They are toll roads that collect fees for every transaction, and they have brand names protected by law for the benefit of the consuming public.  While it seems neither fair nor tenable to hold these platforms responsible for every bad actor who slips through the cracks, it is likewise unacceptable to resign ourselves to a lazy policy of saying “cracks happen.”  

In this regard, I am reminded of former Senator Franken’s pointed question to Facebook in November 2017 as to why the company could not connect two dots linking American political ads being paid for in rubles and conclude that there might have been a problem.  By the same principle, we should expect a robust data company like Amazon to identify various yellow flags that would indicate the Rawlings product being offered is not the real deal.  So, while it is certainly true that the world of professional sports is complexly intertwined with every type of IP, sometimes it is the most basic stories that make the best policy arguments.  And what can be more basic than buying your kid a batting helmet?

© 2019, David Newhoff. All rights reserved.

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