United States: Cutting Off The Counterfeiter's Lifeline

Last Updated: April 24 2015
Article by Joshua J. Kaufman

When it comes to counterfeiters, I try to be the leach that sucks their blood dry. Cease-and-desist letters are fine, DMCA takedown letters are helpful, but if you really want to cause them pain and stop them from infringing, you need to cut off their lifeline: cash flow.

Most counterfeiters operate online and hide their identities through a variety of privacy services, anonymous sites, false information in WHOIS, changed locations, and different aliases. But what they cannot do is provide false or out-of-date information to their banks, credit card companies, or PayPal. Failure to provide up-to-date and accurate bank and contact information to the payment providers will prevent them from getting paid and curtail their customers' use of credit cards and PayPal on their websites, thereby cutting off their income stream. In short, if they want to be paid, they have to be honest with their payment provider companies.

The major credit card companies—Visa, MasterCard, American Express, Discover Card, and PayPal—all have procedures in place by which they will cut off counterfeiters, or at least attempt to get their local branches to cut them off.

In June of 2011, the major payment processors mentioned above entered into an agreement where they established best practices designed to withdraw payment-processing services from websites selling counterfeited or pirated goods.

Recently, Senator Patrick Leahy (D-Vermont), chair of the Senate Committee on the Judiciary, wrote a letter to Visa and MasterCard asking them to double down on their efforts to curtail counterfeiting when it comes to cyberlockers, who have been hosting infringers.

During previous congressional hearings, a MasterCard executive testified that "we prohibit and deplore the use of our systems for all of the illegal activity, including copyright infringement."

Using the payment processor's anti-counterfeiting systems can ultimately be the most effective way of preventing infringements of one's products. Sometimes, a cease-and-desist letter sent to the right place will evoke an appropriate response. That is usually the situation when dealing with entities that are counterfeiting on an inadvertent basis. Most hard-core counterfeiters ignore cease-and-desist letters, or provide lame excuses, or make up some unbelievable denial and continue their activities either blatantly or surreptitiously (by using another website or name). DMCA takedown letters to Internet Service Providers are effective in the United States; however, they are not universally recognized and are voluntary in most countries.

When you identify an online infringement and go to the WHOIS database to try to ascertain the owner of a website in order to contact them, more likely than not you will be stymied because the website operations are using privacy companies that shield the actual owners' identities on WHOIS.

After getting the runaround and when all else fails, look to the payment processors for help. When you review their procedures, they make it clear they want to be the avenue of last resort, not the first approach in the battle against counterfeiters. In their anti-counterfeiting programs, they generally ask for proof that you have done everything you possibly can to get the infringement to stop, such as previously sending out cease-and-desist letters or DMCA letters, and other efforts. They are the final roadblock against counterfeiters, not the first or initial barriers.

Their policies and practices differ, but are similar. Visa describes its policy as follows:

Illegal Transactions Prohibited

Visa voluntarily provides assistance to IP Owners to address e-commerce transactions involving IP infringing products. Upon receiving complete information and credible evidence directly from the IP Owner establishing that a merchant ("Merchant") is engaged in transactions involving the sale of infringing goods on the Internet using Visa-branded payment cards, Visa will attempt to identify and notify the Merchant's Acquiring Bank ("Acquirer"). The Acquirer will be asked to investigate the allegations of infringement and take any appropriate action, which may include, but is not limited to, directing the Merchant to cease selling infringing goods identified by the IP Owner or terminating the merchant account.

After providing all the required information, proof of ownership and the infringing activities, Visa will identify the merchant's bank, forward the IP owner's submission to them, and instruct them to initiate an investigation into its merchant. If the merchant does not agree to cease selling the goods at issue, or if the merchant does not provide evidence that supports a genuine issue regarding the lawfulness of the merchant's sale of the goods at issue, the bank will be expected to terminate processing Visa payments for the merchant. If the merchant provides evidence that supports a genuine issue regarding the lawfulness of the merchant's sale of the goods at issue, such written evidence will be provided to the IP owner. If Visa determines that there is a genuine dispute between the IP owner and the merchant regarding the lawfulness of the merchant's sale of the goods at issue, Visa will direct the IP owner to directly address its concerns with the merchant and its bank.

PayPal is a particularly good venue to use for blocking counterfeiters, because PayPal may be the sole processor for all of the various credit cards. Rather than having to send different notices to individual credit card companies, just contact PayPal. By contacting PayPal and working with them, if they shut down the counterfeiter's access to PayPal, that will effectively shut down the counterfeiter's access for all credit card companies at once, making it much easier and more effective for someone attempting to turn off the cash flow spigot of an infringer than by separately contacting each credit card company.

Counterfeiters simply cannot exist without having access to payment processing companies, and knowing how to use their anti-counterfeiter procedures is an excellent tool in the never-ending whack-a-mole battle against infringement.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement

Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of www.mondaq.com

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

*** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at enquiries@mondaq.com.

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.