Learn best practices to protect your brand on the largest marketplace in Latin America
In this webinar, you will learn:
Mercado Libre’s Brand Protection Program
How to join Mercado Libre's Brand Protection Program
How Mercado Libre’s reporting process work
How does Mercado Libre differentiate real from fake items?
How to enforce your intellectual property with Mercado Libre’s Brand Protection Program
How has COVID-19 affected Mercado Libre's volume of IP infringements?
How brands can work with Mercado Libre to protect their intellectual property online
[Trevor Little] 00:01
Hello, everyone, and welcome to this Lexology and World Trademark Review Webinar. I’m Trevor Little, editor of WTR, and I’d like to thank everyone for tuning in today. We’ve got a great discussion lined up focused on How Brands can work with Mercado Libre to better protect their IP online. Mercado Libre is the largest marketplace in Latin America. In 2019, 379 million items were sold, and that represented a 13.2% increase on the prior year. The gross merchandise value was $14 billion. And 2020 started off strongly. In the first quarter, its numbers of active unique users grew by 30.9%. It’s therefore becoming increasingly and a key part of many brands’ and retailers’ ecommerce strategy. In Latin America, 47% of online shoppers buy a Mercado Libre, and this number is set to continue growing and beyond Latin America in the future. In short, it’s a platform that brands need to engage with. With that in mind, the following discussion is going to outline the latest developments in Mercado Libre’s brand protection efforts, including how to join its brand protection program. And it will also explore ways that technology can help streamline the reporting and takedown process.
Today’s discussion is presented by Red Points, which is a leading brand intelligence platform. By combining online brand protection, copyright enforcement and distributor monitoring capabilities, the company gives full visibility into brand’s presence online. More than 650 companies currently rely on Red Points to fight fakes, piracy, and distribution of use online, allowing them to maintain control, improve their brand value and increase revenues. Our moderator is therefore Bruno Klumpp, who is Platforms and Policy Manager. Bruno is an experienced Policy Manager with 10 years of experience working in the internet industry for various global online platforms, including YouTube, Twitter, and Facebook. At Red Points, he is currently in charge of managing intellectual property, anti-piracy, and anti-counterfeiting strategies, policymaking, risk management, online content, and languages. And joining Bruno are two representatives of Mercado Libre. Juan Cichero is Head of the Brand Protection Program. Before joining the company, he spent almost four years with PMI as manager of illicit trade prevention for Latin America and Canada. And before that, he worked with Nike for over a decade, leaving the brand protection program for the Southern Cone. Guadalupe Yamila García Crespo is IP Regional Counsel. Before joining Mercado Libre in 2016, she worked in the trademark department at Marval, O’Farrell and Mairal in Buenos Aires.
So, I’ve just got a few admin points before we start. First and foremost, please use the online speaking question tool to post any questions, and then after the presentation, the speakers will endeavor to answer them. Second, if you have any audio or visual problems during the presentation, please also let us know by using the online question tool, and we will do our very best to resolve them for you. And finally, just a note, the recording of this session and the accompanying slides will be posted online, and we will send a link to all webinar attendees. So, please use the link and also send it to any colleagues you think may be interested in today’s discussion. But without further ado, I’m going to hand over to the speakers.
[Bruno Klumpp] 03:22
Hi, thank you, Trevor, and hi everyone. I hope you enjoy today’s webinar. So, at Red Points, our mission is to make the internet a safer place for brands and consumers. Thanks to Artificial Intelligence, we have transformed an industry traditionally led by Intellectual Property lawyers and services-focused companies into a scalable, cost-effective solution to cut online infringements’ other source. As Trevor introduced me, I’m Bruno, and I manage the platforms & policy operations team at Red Points. We are currently five dedicated platforms and policy professionals from different backgrounds and specialize in different areas, from IP to Chinese culture and language, with a heavy focus on brand protection and risk mitigation.
In our team, our mission is threefold. We investigate and research international IP law in order to find new solutions, as well as to understand how we can scale the solutions for our clients. We also try to understand the policies of each of the platforms that we work with at social media websites and marketplaces, and that so that we can have a good knowledge on how we can collaborate with them in order to protect brands, as well as the platform users. And last, but not the least, we also create and foster relationships with those platforms, mutually exchanging feedback on enforcement policies, IP documentation, and also reporting off infringements, so that platforms in Red Points can constantly improve their internal processes, workflows, increasing efficiency handling IP infringement.
Over the past few years, one of our greatest partners has been Mercado Libre, and the brand protection team. So, talking a little bit about how we have been working with Mercado Libre. To date, more than half of our clients understand the importance of Mercado Libre due to its strong presence in Latin American, and they want to ensure that their brand is protected in that region. That said, in the past two years, with the help of Mercado Libre, we have reinforced over 20,000 infringing listings across the different countries where Mercado Libre is present. However, our data for 2020 has shown that the number of potential infringements that we have detected from January to today has doubled, showing a huge increase in the overall online activity by consumers and brands in that marketplace. The top verticals that we have identified the most IP infringements are beauty gadgets, personal care items, kitchenware, and as well as sports & clothing. This is not a complete surprise as people have been spending more time at home due to the lockdown and other movements restricting measures in place across the different countries in Latin America. We also noted that IP infringements on Mercado Libre are not restricted to counterfeits, but there’s a growing problem with piracy, especially for educational content, such as online courses.
Taking all of these into consideration, our team has been increasingly streamlining the way we work with Mercado Libre in the way we communicate with them and also how we collaborate. At the end of the day, we are all in the same site, right? Now, I would like to pass it over to Juan, the Head of Brand Protection at Mercado Libre, to cover the ins and outs of Mercado Libre’s brand protection program.
[Juan Cichero] 06:58
Thank you, Bruno. Thank you so much. As Trevor was mentioning, I’m the Head of the Brand Protection Program of Mercado Libre. I joined the company in October last year. So, I’ve been on the other side of the fence for many years, and now I jumped in, and I’m in marketplace, which is super exciting, and it’s been great that I can now provide all my expertise in this side of the business. So, first of all, it’s important to say that Mercado Libre is by far the leading ecommerce and Fintech technology company in Latin America. Mercado Libre has many business units, okay. It all started with a marketplace. The company was founded in 1999. So, it’s been 21 years already.
But we now have other business units, such as Mercado Pago, which is now the main business unit that we have in the company, which provides Fintech services, such as an online payment processor, so sellers can use online payment solutions to do transactions in the marketplace, but also we offer Mercado Pago as a payment solution to the brick and mortar business, such as retailers, restaurants, tractors or any other type of retail or services that would like to use Mercado Pago as a payment option. Then we have multiple shops, which is another business unit. And this gives the sellers the possibility to create their own ecommerce platform, their own site, and Mercado Libre provides all the expertise and the knowledge and the technological solutions in order to have their own ecommerce platform.
And at the same time, the good thing about having a Mercado shop site is that the seller can replicate their listings in our marketplace. Okay, so it’s kind of a combination of both. And then of course, the seller can have their Mercado shop site and use our Mercado Pago online payment solution. Then we have Mercado Libre publicity which is advertising. This gives the sellers the possibility to post their sales by having these advertising in their profile.
And then we have logistics. We have Mercado Envios. This is one of the key elements that Mercado Libre has been implementing in the last few years. One of the options that we have is fulfillment. We have different fulfillment centers in different countries such as Argentina, Brazil, Mexico, Colombia, and Chile, in which the seller sends their products to our work fulfillment center. And from our fulfillment center, we manage their inventory. And from there, we ship the products directly to the consumers, ensuring the best timeframe in terms of delivering of the goods, Mercado Libre operates in 18 countries. As most of you know, in Latin America, we have operations in eight of those countries. And by operations, we mean we have offices, we have physical presence in Argentina, Brazil, Uruguay, Chile, Colombia, Peru, Venezuela, and Mexico. And so far, we have more than 12,000 collaborators or employees working at Mercado Libre, and this number is becoming higher every month. It’s around I think 1,000 employees joining the company. So, the growth is being exponential.
And I have started with all this to give you an overview of our business and to let you know that, of course, our goal is to ensure that our users get the best experience when they buy and sell on our marketplace. We want to ensure that we have a clean marketplace to offer the best quality products and services to our buyers and consumers. And therefore, this is a reason why we need to work with brand owners. And of course, vendors or service providers such as Red Points in which we have an excellent relationship and partnership. And this is exactly why we look at what we’re looking for to create bridges and partnership between the right holders and those vendors that are acting on their behalf to protect their intellectual property rights because we want to ensure that their brands and our reputation is safe. This is basically why we work very closely with brand owners and other IP owners.
Now, I will pass over to my colleague Guadalupe, who is going to talk about the voluntary measures that Mercado Libre is carrying out. So, Guada, please.
[Guadalupe Yamila García Crespo] 12:56
Thank you, Juan. Good afternoon to everyone. So, Mercado Libre has different solutions or approaches to the collaboration, the fight against intellectual property infringement in our platform. One is the possibility for any user, either buyers or sellers, to report listings that offer counterfeit products and infringe our policies.
The second approach is our notice and takedown tool for IP owners, or their proxies, to report infringing content either against each listing individually, or by reporting them in bulk.
Finally, we have also entered into collaboration agreements with different stakeholders, both from the public and from the private sectors in different countries, like chambers and associations, law enforcement and authorities related to various matters, such as health regulation. In the field of Intellectual Property, our most recent collaboration agreement was signed with Indecopi in Peru. And through these agreements, we provide the monitoring and the reporting tool to authorities, and we work together with them sharing information on the body setups. Juan.
[Juan Cichero] 14:12
Thank you, Guada. So now Guada is going to talk a bit about our brand protection program and the IP rights that protects.
[Guadalupe Yamila García Crespo] 14:25
Thank you. So, more specifically about our notice and takedown tool, formerly known as the Intellectual Property Protection Program, and recently renamed as the Brand Protection Program, it was launched in the year 2000, shortly after Mercado Libre started operations. Initially, and given the lack of regulation in the region, the procedure was inspired by the DMCA taking concepts such as the counter notice for this interaction between the IP owners and the sellers. However, I will, as was mentioned before, our tool was not limited to copyrights and provided the possibility to enforce a wide range of intellectual property rights. So, from a single account and in all the 18 countries where Mercado Libre operates, owners of trademarks, patents, utility models, industrial designs and copyrights can enroll providing proof of the ownership and the validity of those rights by submitting certifications of grant in the case of industrial property rights, and evidence of the artwork or deposits in the case of copyrights and open an account in the program to start reporting.
[Juan Cichero] 15:38
Thank you, Guada. So, moving forward with the presentation, I think I specifically wanted to include this slide because I think it gives you a sense of this multidisciplinary approach, right? Before joining Mercado Libre, I wouldn’t have imagined that so many areas in the company, actually it’s nine areas, that are involved directly or indirectly in the protection program initiative, which is one of the top priorities for the year 2020 by the way for the company. So, the company is taking this matter really seriously. So we have sales, which is the area which I belong to, I am part of the marketplace. But then we have areas such as product, fraud prevention, which is a key area that works very closely with us because it works with all that has to do with the proactive moderations and proactive detections that we do from our end in order to prevent infringing listing from being posted in marketplace. Then we have the legal department, we have Guada with us, she’s giving a great support, you know, with IP-related matters. Then we have user experience, we have customer experience, we have of course it which is central for us. We have a team of machine learning who works in developing machine learnings and artificial intelligence solutions to enhance our practice moderations in the marketplace. And finally, we have a PR communications team who helped us in you know, giving visibility to our brand protection program and expand our communications.
One of the things that is very important for us to mention is teamwork. We are really keen to work in collaboration, in partnership, as I mentioned before, with brand owners, but also with service providers such as fight points, which by way we are working very closely, as you can see. So, we divided this teamwork in two parts. We have the reporting tool, which is an effective and easy to use reporting tool that allows IP owners and their proxies to report unless the infringing listings by using the notice and takedown procedure with the counter notice process. And then we have what we call the Mercado Libre or MELI efforts. This is all our proactive measures that we are taking and includes our rules in order to detect allegedly infringing listings, we use like set of expressions that may refer to a specific listing that may infringe IP rise. And finally, we have more sophisticated machine learning technology. As I was explaining to you before, what is very important, that for every listing that is removed, either by a report submitted by a member of the program or by moderation done by Mercado Libre, the system will trigger what we call the behavior seller analysis to determine whether the seller should be sanctioned or not. And this is an algorithm that analyzes several factors that are taken into consideration in order to apply the sanction or not. That will depend on how many listings the seller has in their portfolio, how many of those listings were reported, how many members reported listings that are allegedly infringing their IP rights, for how long. And basically, we start with a warning notice. We send a notice to the seller, letting him know that we have detected that he or she is offering infringing listings, and we invite the seller to remove all the infringing content, and we warn the seller that if he continues with this behavior, he or she may be sanctioned or may receive a more severe sanction, such as temporary suspension, which can be a suspension of 48 hours up to 5 days. And finally, if the seller continues with the malicious behavior, we proceed with the permanent shutdown of that sellers account. And what is more important is that every time we shut down an account, Mercado Libre runs an algorithm to determine whether other accounts may be related to that specific account. So we take into consideration, for instance, their personal data, their IP address, their transactional data, and their billing and shipping address of said account in order to determine whether other accounts may be linked or not. If we determine that other accounts are linked to that first one, those other accounts will be removed too.
So, how can you join the brand protection program of Mercado Libre? There is just four easy steps. The first one is you have to visit our website, which is www.brandprotectionprogram.com. You click on I want to enroll. And then you will need to fill out our form, and you will need to select if you are the IP owner or if you are acting on behalf of the IP owner as a proxy. Then you will be required to submit documentation. That could be trademark certificates, patent certificates, or any other documentation that you would like to submit in order to enroll in the program, and for each specific country because the system would let you enroll in our program in the 18 countries in which we operate. And as what I was saying before, by just using one single account, you will be able to monitor and report infringing listings in all our sites. Okay. Once you’ve filled out the form and you submitted the documentation, you will accept the terms and conditions. You click on ‘Submit’ and we will receive your request. We will provide you by email a number, so you can keep track of your request. And within 24 to 48 hours, we will give you the ‘Welcome to the Brand Protection Program’ and we will provide you the credentials. Of course, if we see that there is any missing detail, information, or documentation, we will be sending you an email requesting for that additional information in order to make sure that your account is all set before you, of course, start using the tool and start reporting. So now I’m hopping over to Guada who is going to explain how our reporting process works. The notice and takedown with a counter notice process. So, Guada, if you want.
[Guadalupe Yamila García Crespo] 24:01
Thank you, Juan So, regarding the process, what is important, we mentioned, is that the IP owner has the final decision. So, the process begins with a notice sent by the member of the program, after which the listing is paused, so it remains inactive during the entire procedure. Then the reported seller has the possibility to reply. And if it submits a counter notice, that response is sent directly to the member for its revision. So, if the member accepts the grounds of the seller, the listing is reinstated, but if not, if it rejects it, the listing is permanently eliminated, and as Juan was saying before, the seller could be penalized with a suspension or with a shutdown of the account.
[Juan Cichero] 24:56
Okay. So now I’m going to give you some information pertaining to the main features of the reporting tool. As I was saying before, the reporting tool is available in the 18 countries in which we operate. It’s free of charge, of course. One important thing is one single account. So, under one single account with one user and password, you will be able to monitor and report infringing listings in all our markets. Then, we ensure the protection of your full IP portfolio, as what I was mentioning before. The notice and takedown procedure with a counter notice process. So, we let the seller the opportunity to reply to the member of the program with their documentation or feature of the product to sustain that the product is genuine or not. But as what I was saying before, the member of the program has the final decision. Mercado Libre does not take part of the counter notice process.
One thing that is important in the tool is that you can manage all counter notices in one place. This is very important. There is a case management tab in the reporting tool in which the member can keep track on all the reports that have been submitted, and the member can see if the seller has replied or not. And if the seller has replied, the member can review the reply from the seller, and the system will let the member know how many days left it has in order to reply and confirm the report. This is very important because you, as a member of the program, have four running days to either confirm or dismiss the report. Another important element is that we have real time search. So, whatever you search in the search engine of the reporting tool is what you see live in the marketplace. You can apply special features, such as the URL. You can search by category, you can search by seller, you can also filter by price. I mean you have several options in order to narrow your search and make your search more time efficient.
Then you can audit sellers, you can blacklist or whitelist sellers, whatever you identify a seller that is potentially a malicious seller, you can blacklist that seller, and you can then keep track on those listings that are being posted by that specific seller. You can create several profiles. This is very interesting because maybe in your company you have more than one working on the tool, so you may want to have different profiles, and each of them can keep their own searches, they can select the language in which they want to see the tool, and they can also select the prices in which they want to see the listings because, depending on the company, the members or the different auditors may be in different countries. So, they may want to see the listings in different prices.
And finally, and this is a very important tool, the toll is available in English, Spanish and Portuguese. And it’s not mentioned in here, but there is a support section in the tool in which all our members can get in contact with our support team by filling in a form and attach any document that they want to attach. They can put in contact with us in case they submitted a claim by mistake or in case they want to report an error in the tool, or whatever reason they want to reach out to us, we can we can provide the support within 48 hours.
Okay, so I’ll go ahead and pass it over to Bruno.
[Bruno Klumpp] 29:37
Yeah. Thank you, Juan. Thank you, Guadalupe. For those of you who are interested, we have created a step-by-step guide in partnership with Mercado Libre for helping brands and to help people, understanding how they can remove counterfeits from their platform. This is going to be available in our website. However, if you want, you can contact me directly via LinkedIn, and I will be happy to send it your way. At this stage of the webinar, we are starting to get some questions. So, feel free to send your questions away to us. We have now a couple of questions, but please submit more. Engage with us and take profit of that. Juan, we have a question here that’s related to Mercado Libre. The question goes, how does Mercado Libre tell the difference between real and fakes on its platform?
[Juan Cichero] 30:42
You mean when we do these proactive moderations?
[Bruno Klumpp] 30:47
I suppose could be in both ways, right? Like could be either coming on when you do proactive measures or when people report to you, I suppose.
[Juan Cichero] 31:00
Well, I think this is more related with what we do from our end when we do proactive moderations. One of the key elements here is the reporting from our members. So, we learn from the reports of the members. So the more the member reports the better for us because this helps our proactive or our machine learning technology to learn from your reports. Of course, we are using machine learning technology in some specific markets. We are rolling out. We started to roll, to use this technology back in mid-2019. So it’s a kind of a new technology that we have started to implement. And we are focusing on those categories that are mainly affected by counterfeit and piracy. And again, we learn from the reports submitted by the members of the program. We also have a manual review team in Mercado Libre who review listings that could be potentially infringing listings. We take into consideration the pricing, we take into consideration the reviews from the buyers, we also take into consideration the Q&A sections and what we call the customer feedback. We use all that in order to identify potential infringements. And also we seek help from the brands. And in some cases, brand owners have provided us with these handouts to identify counterfeit versus genuine products. Usually this is the material that brand owners would give to law enforcement or capstones when they conduct training sessions, but we do engage in many cases with brands and we receive training from the brands too. So, it’s a combination of multiple things that help us in order to identify whether a listing is infringing or not. I don’t know, Guada, if you want to complement on this.
[Guadalupe Yamila García Crespo] 33:15
No, nothing to add.
[Bruno Klumpp] 33:17
Cool. Actually, I have a bunch of other questions. So, another one here was, does Mercado Libre gate a certain brand similar to how Amazon does with certain brands in the U.S.? In the sense of gating, being that Amazon, gating means that it doesn’t permit anyone other than the brand-designated seller to offer the product on the platform. Do you want to take this?
[Juan Cichero] 33:51
Yes. Well actually, I mean we are doing, we are running some specific projects with specific brands that we have been working for many years in the fight against counterfeit and piracy. So, we have reached to a point in which we agree that it would be relevant and necessary to get to the point in which we created like a whitelisting agreement. But yes, this is very rare. We usually do not do any sorts of whitelisting or gating unless there’s specific cases that we are running with specific brands in specific markets, but this is something that we run on a case-by-case basis. But yes, this is pretty much what we are doing now. And of course, it has to do with the business sense, right?
[Guadalupe Yamila García Crespo] 35:19
Yeah. Perhaps I can complement that those might be commercial agreements. And it’s important, we mentioned, that to be part of the program, you don’t need to have or to sell in the platform. And we don’t have a close program. So, anyone, even though they don’t sell in our platform, or they might not sell in Latin America, in all the countries, they can join the program, they can enforce the rights, and we provide the same treaty to all the members. So, everyone can enforce their entire portfolio, and that is not linked to any commercial agreement.
[Bruno Klumpp] 36:08
Thank you so much, both of you. We have a couple of other questions. There’s one here that I could answer myself, but I will let you guys because it’s related to Mercado Libre. The question is, do you require registrations in each of the 18 countries for being part of your brand program?
[Juan Cichero] 36:30
No, this is up to each member’s strategy. You can, of course, enroll in our program in just one country, in two, three, or in the 18. It’s up to the member of the program.
[Bruno Klumpp] 36:45
And do you need to create an account in each of those 18 countries or…
[Juan Cichero] 36:51
No. As we were saying before, one of the good things about this program is that by just using one single account, you can enroll as many countries as you want. Okay. Go ahead, Guada.
[Guadalupe Yamila García Crespo] 37:13
No. No. Perhaps in the past that was the situation. I mean, the program used to work as the marketplace, which is divided by country. So, you needed to have an account in each of the sites. But since last year, we made a huge improvement. And so, only for the program, not for the marketplace. From only one account, you can enforce in all the countries. And you can choose in which countries you want to enforce and which rights you want to enroll in each country. I’m sorry, Juan.
[Juan Cichero] 37:45
No, no, that’s fine. Thank you for complementing.
[Bruno Klumpp] 37:50
Yeah, this was one of the questions I said I could answer also because I remember when this change came into place…Exactly. We have a couple of other questions. One is what are the requirements for takedowns of patent infringements? Do you require a local patent, for example in Argentina, or will the U.S. patent suffice?
[Guadalupe Yamila García Crespo] 38:15
Yes. So, we need to follow the requirements, the law requirements, each of the rights has. So, for industrial property rights, they have to be granted in each of the country they want to enforce. There’s a different situation for copyrights because registration is not mandatory, and there’s a worldwide protection. But for patents, as well as for trademarks or for industrial designs, that is the reality because we have to follow the laws in each of the countries. Yeah.
[Bruno Klumpp] 38:55
Thank you so much. Let me see because, as I said, we’re getting loads of fresh questions. There is one, could you tell us more about how to do a brand owner training for Mercado Libre?
[Juan Cichero] 39:13
Sorry, could you please rephrase that one?
[Bruno Klumpp] 39:17
Yeah. It says, could you tell us more about how to do brand owner training for Mercado Libre? So, I guess it will be if brands work and training you on their brand?
[Juan Cichero] 39:32
This is a great question. I mean, you can of course get in contact with us, and we can easily coordinate and set up a training session with our fraud prevention and machine learning team, so we can all learn from the brand. And yes, we can, we can easily do that. And actually it’s what we are doing with several brand owners. So, if you want, you can put in contact with us, and we can easily arrange this training session for us. Thank you so much for the offer.
[Bruno Klumpp] 40:14
Thank you. Let me see other questions. So one is, do you have any tool to report expired products?
[Juan Cichero] 40:27
Well, I by expired products, I mean this is something that has to do with sanitary issues, right? I mean, this is out of the scope of protection program, but we do have other tools in which you can, of course, report these sort of products. I think that there is an option in each of the listings in which you can denounce, and you can select the reason why your reporting the listing. If this is the case, you can report it. But then I believe, Guada, maybe you can complement on this because we have several agreements with regulatory agencies, sanitary agencies that are also using the tool and reporting.
[Guadalupe Yamila García Crespo] 41:16
Yeah. Yeah. Among the collaboration agreements that I mentioned before, we have agreements with Indima and others, which are the regulatory authorities. But also, we are developing some other tools and some other programs inside of Mercado Libre, which are not addressing exclusively Intellectual Property matters as the brand protection program does. So, you can contact us if you want to explain better what the situation might be or your question, you can contact us, as Juan was saying, and we can put you in contact with a specific team that has been formed the last year for these matters.
[Bruno Klumpp] 42:06
Thank you so much. We have still a couple of other questions. There’s like three or four questions that are more or less related to the same thing. So, I will try to kind of put them together into one for you guys. It’s apparently related to your policy on repeat infringers. If you could tell us, like give us a little bit more details. There are people asking if there’s like a strikes rule, how many strikes. I know that this is kind of like maybe not alone that was something that you’re going to look into in terms of number of infringements. You have talked about that looking into different factors. But can you kind of like give us a summary again, I know you talked about it during the webinar, about your repeat infringement policy.
[Juan Cichero] 43:01
Yes, I’m going to start and then I will let Guada complement if I miss something. So, there is no such three strike rule. We have a policy in which we try to educate the sellers and try to prevent the sellers from selling infringing content. So, as I was mentioning during the presentation, the idea is to start with warning the seller that has been detected selling or offering infringing content and preventing him or her to continue offering the listing. So, we invite the seller to remove all those listings, in order for the seller not to be reported by any other member of the program or not to be detected by our proactive measures. The system takes into consideration many factors. As I was saying before, it’s not the same to have a seller with a portfolio of 1,000 items and just 2% or 1% of those listings are reported by a member of the program versus a seller in which 99% of their portfolio was reported by our members of the program. We understand that in that case the seller would be considered as malicious. So, eventually the seller will be removed from the platform more quickly and faster than the other one, in which we believe that it may be infringing IP rights because, in some cases, the seller wouldn’t even know that he or she is infringing IP rights, for instance.
We have similar cases in which the sellers are using proprietary images extracted from the internet, from an official website of a brand owner, and the seller wouldn’t even know that that is a copyright infringement. So, we try to educate, and we try to raise the point that that cannot be done. But in most of the cases, the seller wouldn’t even know. Some of the cases are, for instance, when the seller posts a listing and includes the logo or the trademark together with a product. So that, of course, is a trademark infringement because it’s non-authorized of a logo, a registered trademark. In that case, also, in most of the cases, the seller wouldn’t know that even though they are offering a genuine product, they are not allowed to use logos or trademarks that are registered to promote their products.
So, you know, it’s kind of a combination of several factors. We try to educate the sellers. And actually the ratio is that 60% of the sellers that are reported through our brand protection program are in a way re-educated. They prevent from continuing to infringe, okay. So, in a way, this is the idea, to explain, to teach the sellers. And actually we conduct training sessions specifically for sellers. We provide guidelines on how to avoid or how to prevent from being reported by a member of the program, what can they do and what can’t they do. We provide guidelines. We explain what is trademark, what is a copyright, what is a patent, and so on and so forth, in order for them to have more information to make sure that whatever they post in their listings is not infringing third party rights, because in most in most cases, when we shut down the account, the seller comes back to us complaining about this because they wouldn’t even know why the account was shut down. So, of course, we have a lot of malicious sellers that we don’t want them to be operating in the platform, those sellers that offer pirated goods or counterfeit goods, but in some other cases, those sellers wouldn’t even know that are infringing IP rights. So, this is why we try to find the right balance between shutting down accounts from malicious sellers from educating sellers that we know that they can continue operating in the site. I don’t know, Guada, if you want to complement with something else but…
[Guadalupe Yamila García Crespo] 48:10
No, I think you covered everything. Perhaps mentioning that we have a specific landing, where the education material, explaining each of the rights and what and infringements. So perhaps it’s a good material to go through if you want to visit it.
[Juan Cichero] 48:30
Yes. Thank you, Guada, for complementing on this. Yes, we do have a Help section for sellers, and actually we are introducing more material to that Help section in order to make sure the seller has all the information pertaining to the program. And I take this opportunity to let you all know that we are exploring an initiative that consists in including information directly from brand owners, similar to what eBay is doing in their referral program. Any brand owner that may want to submit, like a presentation of what the company is, what products they sell, like a Q&A session, why they reported the infringement, what are the sorts of products that are being offered, what sellers can do and what seller cannot do with their products, this is something that we’re exploring and eventually we will do. We are seeking for feedback from brand owners and proxies, and we are inviting them to provide us with that material, and we will post it in our site, so sellers can have information directly from the brand owners. Brand owners can also provide with a contact information in case the seller wants to contact directly the brand owner, in case he has any questions concerning the selling or the offering of their products. So, I take this opportunity also to tell you about this initiative.
[Bruno Klumpp] 50:23
So, I have a quick question and like following up on the last piece of your answer. Thank you actually for explaining everything before. But in terms of the information that you’re collecting from brand owners and rights holders, are you planning also to release a page like the viewer program of eBay, where they display the brands that are participating, and then this information is going to be there or?
[Juan Cichero] 50:49
Exactly, exactly, that’s in here.
[Bruno Klumpp] 50:52
Very interesting. We have another 10 minutes, more or less, and I think I have like a little bit more philosophical question that goes to both of you. And maybe we are going to run a little bit of time. So, let’s keep an eye on this. But the question is, the Coronavirus has exposed major vulnerabilities in global supply chains exploited by organized crime. How has COVID-19 impacted Mercado Libre’s volume of IP infringements on your platform?
[Juan Cichero] 51:34
Well, we haven’t seen any increase during the pandemic, and actually our figures shows that the number of claims are going down. We saw a peak of reports, I think it was 1.8 million reports submitted in February this year, but then after that the numbers started to go down. Just for you to know, in August 2020, we received around 400,000 confirmed reports from the members. And in average, there is between 901,000 active members reporting infringing listings, 80% or more than 80% of the reports are copyright infringements. Then we have counterfeit with 6.85% and then trademark infringement with 4.27%., and then the rest. So actually, we haven’t seen an increase in terms of counterfeiting because of the pandemia.
[Guadalupe Yamila García Crespo] 53:00
Yeah, but perhaps to complement, that could be the result, that a few days after lockdown in each of the countries, we have worked very closely with health authorities. So, they provided us the information on products and on prices. And so, we took voluntary measures and worked jointly with the authorities, with health authorities, as I mentioned before. So, from the very beginning of the pandemic, we were like prepared for this situation. So, we were able to take down a huge amount of listings that were offering and were recently posted in the marketplace. So, this is why we were able to control them. And also to have into consideration, some IP matters in those takedowns. So, it was the partnership with authorities was very very productive and very important for that.
[Bruno Klumpp] 54:11
Okay. I think that we’re kind of running out of time. So, for the remaining questions, I guess we can basically follow up individually on those questions and answer to those people who have written us directly. So, I guess both of you guys, plus us, can do a work on that side. So, thanks, Juan. Thanks, Guadalupe, for joining us today in this webinar. It was very interesting even for me that quite often. So yeah, thanks everybody who has attended to this webinar. Thank once again, Juan. Thanks, Guadalupe. And we go and then we can follow up on the questions then offline. Okay. Thanks everybody.
Head of Brand Protection - Marketplace at Mercado Libre
Guadalupe Yamila García Crespo
IP Regional Counsel at Mercado Libre
Platforms and Policy Manager at Red Points