Posted by Sarah Bird, Esquire
May It Please the Mozzers,
- 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.
Is The Lawsuit Just A Publicity Stunt?
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.
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:
- 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."
However, the domain name, the use of DSW pictures and the press-release style of the review tend to create the impression that DSW operates the site. The overall context of the prominent Click-Here-to-Buy-Shoes link suggests that it would take you to a site where you can purchase shoes from DSW. However, it allegedly takes you to Zappos.com instead. Further, the disclaimer under the Zappos banner ad is probably not enough to eliminate confusion about the "Click Here to Buy Shoes" link in the body of the "review."
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?
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.