DSW, a large shoe retailer, filed a federal trademark infringement case last month against Zappos.com and Commission Junction. Here's the background in brief:
- DSW has been operating DSWshoes.com since about 2000. The site includes information about its 200 plus brick-and-mortar stores, but does not offer direct, online shoe sales.
- Zappos sells shoes online. Over 840 million of them last year. It employs a successful affiliate marketing campaign with the assistance of Commission Junction. Some of its affiliates appear to have created "review" sites (dswreview.com, dsw-shoes.net etc.) that say a lot of positive things about DSW and allegedly use DSW's photographs. The review sites also contain affiliate links to Zappos.com.
- DSW opened an online store, DSW.com, in April 2008.
- Within weeks of opening its online store, DSW sued Zappos for trademark violations stemming from the affilates' allegedly infringing use of DSW trademarks.
- According to techdirt, DSW didn't call, email or send a demand letter to Zappos. Instead, it simply filed suit and issued a press release indicating that it would "rigorously defend" its intellectual property.
- Zappos CEO, Tony Hsieh, leveraged his large twitter following to respond quickly to the press release and garner support.
DSW's failure to try resolving the issue with Zappo outside of court and DSW's recent launch of its online store, has caused some to speculate that the lawsuit is merely part of a publicity stunt to get people linking to the new site.
Lawsuits are so expensive and time-consuming that I have a hard time believing that this is merely an orchestrated link grab. Couldn't an accidentally leaked demand letter have done the trick as well? Would DSW put the unwieldy and expensive wheels of justice in motion as a linkbait campaign? Doubtful, but stranger things have happened.
Why Isn't DSW Suing the Affiliate Instead of Zappo?
Even though all of the allegations of wrong-doing surround a few affiliates' pages, no individual affiliates are being sued or even mentioned. Instead, DSW is targeting relatively deep pockets, Zappos and Commission Junction.
What About the Case Against Commission Junction?
DSW's Complaint also inaccurately identifies Commission Junction as an affiliate marketer:
On information and belief, Commission Junction is a provider of online advertising using what Commission Junction refers to as affiliate marketing. Among the "affiliate marketing" methods used by Commission Junction for its clientele is to provide affiliate links to the client from a website having a name similar or the same as that of an established retailer to attract potential customers searching the Internet for the established retailer, or information about the established retailer, and to then redirect the customer to the Internet website of the client of Commission Junction.
On information and belief, and without the permission of DSW, Commission Junction is providing affiliate links for and on behalf of, Zappos to Internet websites at the domain names www.dswreview.com, www.dsw-shoes.net and www.dswshoesreview.com.
This description of CJ's services is misinformed and awkward. CJ doesn't provide online advertising per se. It's more like a dating service. It just matches advertisers and publishers and tracks their relationship metrics. The description above wrongfully suggests that CJ creates the websites, the content and the links. Once DSW's attorneys get a clear picture of how CJ operates, the case against them will likely settle.
What about the case against Zappos?
The case against Zappos is a little more risky because the affiliate advertisers that created the problem websites are acting as agents of Zappos. Merchants can sometimes be held liable for affiliate marketers' actions.
If Zappos can show that it has a policy that prohibits affiliates from infringing trademarks and that Zappos diligently monitors its affiliates and fires affiliates that break the rules, then it has a good shot at defeating such a lawsuit.
On the other hand, if Zappos doesn't monitor its affiliates, creating an environment where trademark and copyright infringement runs rampant, then Zappos could be in trouble. Zappos strikes me as a pretty savvy and organized corporation; I would be very surprised if they weren't monitoring their affiliates.
Did The Affiliate Violate the Law?
Review sites are an interesting trademark problem. Trademark law was never designed to allow corporations to shut down free speech rights. It was designed to protect consumer expectations and corporate branding investments. You can talk about your competitors, but you have to be careful about how you do it.
The affiliate who created dswshoes.net probably crossed the line between helpful information for the consumer and confusing the consumer. If the affiliate didn't use DSW's stock photography, used a different domain (such as shoestorereviews.com), had been more clear about his lack of relationship with DSW and more clear about his relationship with Zappos.com, he would probably have been okay. Unfortunately, the site does tend to create the impression that it has a formal relationship with DSW and that you can click to purchase DSW shoes. Check out this screen shot of one of the offending sites:
The case against Zappos is a little more risky because the affiliate advertisers that created the problem websites are acting as agents of Zappos. Merchants can sometimes be held liable for affiliate marketers' actions.
If Zappos can show that it has a policy that prohibits affiliates from infringing trademarks and that Zappos diligently monitors its affiliates and fires affiliates that break the rules, then it has a good shot at defeating such a lawsuit.
On the other hand, if Zappos doesn't monitor its affiliates, creating an environment where trademark and copyright infringement runs rampant, then Zappos could be in trouble. Zappos strikes me as a pretty savvy and organized corporation; I would be very surprised if they weren't monitoring their affiliates.
Did The Affiliate Violate the Law?
Review sites are an interesting trademark problem. Trademark law was never designed to allow corporations to shut down free speech rights. It was designed to protect consumer expectations and corporate branding investments. You can talk about your competitors, but you have to be careful about how you do it.
The affiliate who created dswshoes.net probably crossed the line between helpful information for the consumer and confusing the consumer. If the affiliate didn't use DSW's stock photography, used a different domain (such as shoestorereviews.com), had been more clear about his lack of relationship with DSW and more clear about his relationship with Zappos.com, he would probably have been okay. Unfortunately, the site does tend to create the impression that it has a formal relationship with DSW and that you can click to purchase DSW shoes. Check out this screen shot of one of the offending sites:
You can see that the affiliate made some gestures towards distinguishing his site from the official DSW site:
Finally, the URL is probably infringing because the TLD contains "DSW" in a way that suggests that the site is operated by DSW. Content aside, the domain name could confuse a consumer and amounts to brand-siphoning from DSW. The domain name issues are ideal for an ACPA or UDRP case. Notably, however, there were no ACPA claims in the Complaint.
- There is a reference and link to the "official store" in red in the last paragraph.
- There is also a disclaimer at the bottom of the page in small print that ironically states that DSW is a registered trademark and that the website is "not operated by DSW Inc."
Finally, the URL is probably infringing because the TLD contains "DSW" in a way that suggests that the site is operated by DSW. Content aside, the domain name could confuse a consumer and amounts to brand-siphoning from DSW. The domain name issues are ideal for an ACPA or UDRP case. Notably, however, there were no ACPA claims in the Complaint.
This brings me to next point...
What would I have done differently?
If I was in charge of the legal department at DSW, I wouldn't have taken such an expensive and time-consuming approach to this relatively common, minor problem.
I would have emailed Zappos and I'm sure Zappos would have dropped the affiliate.
If DSW wants to own the offending domains, I would have filed for a quick and cheap UDRP arbitration.
If DSW didn't want to own the domains, but wasn't satisfied having the affiliate kicked out of Zappos' affiliate network, then I would send a DMCA take-down notice to Google. The site's unauthorized use of DSW corporate photos (copyright infringement) would permit the nearly immediate de-indexing of the site and I'd be back to helping the company make money.
Of course, there may be things that I don't know about the case that are not public knowledge. Maybe the DSW legal department has reasons known only to itself for starting a lawsuit to solve this relatively common problem. Or maybe it is just linkbait. In which case, I totally fell for it.
Best Regards,
Sarah
I would have emailed Zappos and I'm sure Zappos would have dropped the affiliate.
If DSW wants to own the offending domains, I would have filed for a quick and cheap UDRP arbitration.
If DSW didn't want to own the domains, but wasn't satisfied having the affiliate kicked out of Zappos' affiliate network, then I would send a DMCA take-down notice to Google. The site's unauthorized use of DSW corporate photos (copyright infringement) would permit the nearly immediate de-indexing of the site and I'd be back to helping the company make money.
Of course, there may be things that I don't know about the case that are not public knowledge. Maybe the DSW legal department has reasons known only to itself for starting a lawsuit to solve this relatively common problem. Or maybe it is just linkbait. In which case, I totally fell for it.
Best Regards,
Sarah
What never ceases to amaze me is the number of folks who believe it - getting sued - won't happen to them, i.e., "Don't ask permission. Just ask forgiveness."
As my trial lawyer mentor once counseled: "When dealing with a bastard don't tell the bastard you are going to him him. JUST HIT HIM!" Sometimes "just sue the bastard" is a fitting response to someone who, him-/herself, never bothered to ask (nicely) but, instead, just started siphoning money away from you.
I"ve been a litigator for 25+ years and mostly - the vast majority of the time - I've attempted to work things out without resort to litigation. However, the handful of times that I - with my client's informed consent - launched the lawsuit bomb without a warning shot the choice of approach not only just "felt right" it also worked, in so many ways.
The classic motivating factors for the "just sue the bastard" approach is a person or company who appropriated money in a calculating way, i.e. someone who wasn't clueless but was clearly in it for the money - and likely "good at it".
Who owes such a person the courtesy of "asking" or settling for a promise to stop being bad?
Damn! I want you as a lawyer. The evilness. I love it! Seriously. Just what I would want in a lawyer. Hey, if it gets that far you want to bring a gun to sword fight. You sound like the gun.
Again . . . damn!
Brent
"The evilness"? Moi? Ouch. :-P
Brent, taking the "just sue the bastard" approach carries with it a certain degree of "slayer's remorse". I tend to hope for the best from humankind. So, no, I neither enjoy nor advocate the practice. It's best reserved for rabid dogs only, i.e., people for whom a conscience is nothing but a bother - something for whimps and chumps.
I'm mostly with Sarah in regards to thinking the "just sue 'em" approach might be unnecessary. OTOH, given the growing casualness with which folks online have been exploiting the intellectual property of others, I've been anticipating the day when corporations hang out the "Don't tread on me!" flag.
Shoot a few troublemakers and maybe the unruly mob will take note and move elsewhere?
Might work, figuratively speaking. Could also backfire and lead to an insurrection - so careful aim is advised. I guess we may find out more about DSW's aim in the near future.
This is an interesting point Jeff, I read a book (music related) covering exactly the same issues in relation to bootlegging vs music piracy. The heavy handed approach of music industry giants alienated a large number of their customers, and had the converse effect of increasing the (in their eyes) 'illegal' recordings.
This issue has really come to fore in our glorious digital age, but I'm drifitng off topic.
Anyway the book is called 'Bootleg: The Rise and Fall of the Secret Recording Industry' by Clinton Heylin - well worth a read!
When I was making an attempt to get LyricVault.com started (yep, one of those) a few years ago. I had the opportunity to speak with the VP of Legal Counsel for RIAA. He states that very little good came of their legal crusade. The music publishers took a different approach and partnered versus sueing 'most' lyric sites. I believe Gracenote now owns the ability to forge relationships with lyric sites and publishers. Good for them . . . they legitimized the industry.
Note: Gracenote is the only face-to-face interview I have had where I have wanted a job offer and not received it. Damn them. ;-)
Brent
LINKBAIT for sure!
I've dealt with this dozens of times.
1. Send an email to the offending affiliate.
2. Call up the reseller and tell them to cut-off the affiliate.
3. File a DMCA with Google.
4. Change your images to a new location and 301 redirect your old image file names to an appropriate landing page. (Never done this but would if I was in the same situation again).
5. Fire your lawyers for being overzealous (haven't done this but have wanted to on more than one occassion).
6. Go have a Dutch Baby at The Original Pancake House.
Brent
Of course, there may be things that I don't know about the case that are not public knowledge. Maybe the DSW legal department has reasons known only to itself for starting a lawsuit to solve this relatively common problem. Or maybe it is just linkbait. In which case, I totally fell for it.
Or maybe DSW's lawyers are behind on their billable hours?
Ha! Sounds to me like either:
(1) As noted a clever link bait charade to get the juice flowing
(2) Corporate beaurocracy at it's finest
I'd be tempted to go with number two (though this is purely on assumption as I do not know a huge amount about DSW), however I'm sure they are big enough for the Peter Principal to apply...
I can see how the site is misleading and would infringe on DSW trademark. It does lead the average person to think the main red link goes to DSW.
But you are right in that the lawsuit should not be at Zappos. I think CJ should do a little better job of keeping their affiliates in check, but overall, it's the affiliate that did wrong. While Zappos most liekly knew about it, it wasn't their decision to get the traffic that way. Comes right back down to ethics. If Zappos knew about the site (and they should have if it was bringing in some nice $$), someone should have said something. But I am not sure it's their liability in court. But you're the lawyer here.
Good what not to do look at affiliate sites. I'm curious to knwow hat's gonna happen to this one.
DSW should request a log file from that website to see if anyone for Zappo's IP address range visited that page.
Check it out, Kate... our comments are gone. We have officially joined the ranks of the rare few, whose comments were so highly inappropriate that a "mod" had to step in and filter them. You're pretty much a certified badass now. =P
No ... it was YOUR comment that got our comments deleted. I lost thumbs because of you. :P You LOVE to irritate don't you? Better be happy I like you ... :P
Sometimes I think the SEO world classifies things as "linkbait" way too easily. If you sepnd your day thinking of linkbait, then everything you see starts looking like linkbait. Of course, in the old days I guess they'd be called publicity stunts, and the motives of any action by a company would get called into question.
In general, I can see why DSW may want to bring Zappos into the fray since they're the ones funding the offenders, but they really should have gone after the owners of the offending websites at the same time, if not before this. It may have at least lessened the thoughts that this is just for PR/linkbaiting/etc.
The best kind of linkbait - the controversial kind. Get people talking (and linking) and the PR juice flows and flows. Even a well known Seattle based SEO company fell for it ;) Search engines can't (unless they are really a lot smarter than I think they are) spot a page full of negative comments as anything other than a "vote" for rather than against.
So true!
I have to wonder about the lawsuit as a linkbait campaign. Most (if not all) articles that link to DSW on this issue are also going to link to Zappos. This post is a good example.
Although this might help their rank it will also help their main competitor just as much. I guess they do have more to gain from a few links than Zappos does.
Perhaps they believe the links will be going to the offending pages and their pages. If they win, the offending pages will probably vanish or change ownership. Thus only their links are still good.
Advertisers can set rules regarding whether affiliates can use certain marketing tactics, bid on trademarked terms, etc. Such terms can be broad (no trademarked terms, no PPC marketing) or very specific (no trademarks involving these manufacturers, no bidding on these terms on PPC networks). It would be interesting to know what restrictions Zappos placed on affiliates, if any.
An interesting post, that talks about an area that I deal with for some pretty big names in th UK. To start with, Sarah, you have given actually the best possible advice possible, simple, and amicable - ruining relationships with a large online retailer may not be the way to go forward for a "online" fledgling, especially since they may have to one day rely on their expertise and or the network of resources being used such as Commision Junction.
The tactic they have taken may burn some pretty important bridges.
However, just by reading the description of CJ in the suit:
On information and belief, Commission Junction is a provider of online advertising using what Commission Junction refers to as affiliate marketing. Among the "affiliate marketing" methods used by Commission Junction for its clientele is to provide affiliate links to the client from a website having a name similar or the same as that of an established retailer to attract potential customers searching the Internet for the established retailer, or information about the established retailer, and to then redirect the customer to the Internet website of the client of Commission Junction.
See the areas I have bolded. CJ is as Sarah points out, a facilitator of marketing, and doesnt market anything itself. CJ doesnt "refer" to the service as affiliate marketing, its an established mode of marketing, and a name accepted worldwide. The same or similar name, again this although common in the affiliate world, is not a method that most affiliate networks encourage.
All the above lead me to believe that it may be that the legal counsel that DSW has taken is not an expert in online law and have just translated an offline methodology of attack to online. A Very common mistake in my experience.
Companies need to realise that there are several ways tro tackle online related legal battles, but using direct translation from offline doesnt just work the way you would think.
I also think its neccessary to get the legal counsel you plan to use to prove efficiency on online laws and resources. Otherwise its not only money and time wasted, but could lead in loss of reputation.
Link bait - of course. Good technique for DSW's new online store. Curiosity got the best of me...I had to check it out.
Little footnote:
One of SEOmoz' members, SEO Columbus, was involved in DSW website development.
How do you readily have this stuff at your fingertips? You are an animal.
Payne
I'm beginning to think Sean has some SEOmoz mind meld going.
SEO Columbus mentioned (in link Sean posted) that DSW's SEO efforts are phase II. Do we really think they would link bait if they didn't even consider SEO as primary for launch? Heck, look at their URL structure.
FYI: Zappos use of Twitter was my "launch pad" for finally jumping into 140-character conversations. Their use of Twitter to participate in Web 2.0 should be a case study in marketing courses.
Great point. They have gone way over the 1 dynamic parameter suggested by gooooogle.
https://www.dsw.com/dsw_shoes/catalog/collection.jsp?
searchType=category&new=true&category=cat20173&
level1=cat20173&level0=cat10006
:P
They must be following the "build your site like the engines don't exist" model.
Though they aren't following user friendly URLs, I like to be able to read and understand a link.
me thinks DSW is SEO clueless.. must be the PPC type of SEO..
lmao.
Good post. ;)
Not sure how I missed this post back in June, but there really isn't much I can comment on in regards to details or what I know. Disclaimer: I am no longer affiliated with their web / e-commerce project as I have moved on to more SEO focused projects. You can probably read between the lines there when trying to figure out if this was linkbait or not. I do have my personal opinions on what it was, but I'll go ahead and keep those to myself. ;)
Really interesting comments by a few here. Link-bait... sure. I guess. It seems plausible. Not sure if DSW is THAT forward-looking, are they?
From a corporate perspective, this is probably a belayed preemptive strike. DSW probably ignored the online landscape for far too long - and are now trying to play catchup. To me, unless you've been playing in the online landscape and have had a cohesive program to market online and via search engines, you probably don't know a lick. And link-baiting may be a side benefit to this litigation. It seems more appropriate to rush and attack with, as Jeff Libert says, "don't tread on me" as the battle cry
On the other hand, I feel success needs to be earned. If affiliates and others are doing the job of selling online, and DSW is not, intellectual property or not, they don't deserve to benefit. If someone else is doing the hustling and you are not, why should you get any benefit?
Fished in! Now this has me thinking who has spent the most ever on linkbait? I'm sure some Super Bowl commercials of yesteryear are in a healthy lead, but that could make a fun little chart & graph nonetheless.
My theory: The courthouse has a website where they publish the lawsuits to the public domain and DSW reeeeeally wants to get on that site.
seems like a great link bait method, but is this the kind of press coverage you want for your company? is it worth it longterm to use a few black hat methods to build your website company quick and fast?
Without a doubt, affiliate marketing has become a bit too wild wild west and there are many who have stepped way over the line.
Many affiliates themselves may be tempting fate based on FTC advertising guidelines ... but there is still more shades of grey online than I think the legal system and legislation know what to do with yet. This isn't all bad as we've already seen a few instances of leap before you look.
Many of the affiliate programs on CJ and other affiliate clearinghouses require or at least give the impression that your site will be reviewed by the merchant for final approval. This certainly adds in another element into these cases: did the merchant review the site? What level of oversight should the facilitator (CJ) provide? What if the merchant did review, but then the affiliate made "dramatic" changes?
At this rate, SEOs will be called to the stand to provide expert testimony and research.
One can only hope that DSW thought this out. Now that they launched their site, it is safe to say that they may decide to someday (don't believe they have yet) tap into affiliate marketing for their own site ... beware the beast you unleash as you never know when it may turn.
It wouldn't suprise me if Pepperjam got DSW on board, just to give CJ another kick in the teeth..
It will be really interesting to see what happens here. I'm wondering if it was in fact link bait, if that would make them more likely to drop the suit in the coming future.
Could their extreme actions be a way of making a point to other affiliate marketers out there? It seems a bit extreme but it may deter similar actions in the future against their company.
I'm thinking more in line with the fact that lawyers do not always want the eaiser and faster way to solve problems, let alone one that involves the internet and online commerce. It's free for all - and they are going after it the way they know best...
They should of sued them. More often then not in the era of "safe harbors" for these clowns emails and polite request to remove your intellectual property are simply ignored. The response is usually something along the lines of we didn't create it so we aren't responsible. So I applaud the lawsuit and I hope they bankrupt everyone of these irresponsible thieves.
As to linkbaiting, not a bad job.
looks like CJ has a case for libel?
CJ doesn't state that affiliates should do that.
but...
i would think the affiliate could get sued for punitive damages based on that page.
and the Zappos CEO is posting stuff on his twitter... like.. hello?
but to write a letter to each affiliate? no WAY... better to just have CJ shut down the affiliate program.
This is an extremely interesting and complicated post. Link bait is definitely involved in this issue which makes me side with DSW on this issue. I would love to hear more about this in upcoming posts because this is a nicely written blog that I truly enjoy reading.